Along with the enactment of Law of the PRC on Promoting the Transformation of Scientific and Technological Achievements (2015 Amendment), China has issued several supporting policies such as Several Provisions of Implementing Law of the PRC on Promoting the Transformation of Scientific and Technological Achievements and Action Plan of Promoting the Transformation of Scientific and Technological Achievements, etc. Over the past year, local governments have issued “new policies” in succession. Some of these “new policies” are very groundbreaking, indicating the great resolution of both the central government and the local governments in promoting the transformation of scientific and technological achievements at the universities.

However, in the author’s understanding, if we really want to remove the “obstacles” hindering the transformation of scientific and technological achievements in the real sense, besides creating a favorable policy environment, we should also motivate people who participate in this scientific and technological innovation, such as teachers and other staff at the universities or in the departments responsible for the transformation of scientific and technological achievements, etc. To be more specific, we should try every possible means to make them give full play to their energy and initiative.

Though the policies are becoming more flexible, “The Sword of Damocles” is still hung over the head of the management at the universities.

Besides education, scientific research, and cultural transmission, there is still another important function that universities ought to perform: social services. Up till now, although preferential policies are issued one after another, quite a few universities are offering “great cry and little wool” while promoting the transformation of scientific and technological achievements. No strong initiative can be seen inside. There are several reasons accounting for it.

The first reason is that universities are evaluation-oriented. In the current system of university management and the current mode of resource allocation, the ranking of a university and the resources it can get are determined by various kinds of evaluations guided by the government. Such evaluations play a decisive role in the existence and development of universities. However, these evaluations do not attach much importance to the transformation of scientific and technological achievements. To take the ongoing 4th round of discipline ranking in China as an example, the evaluation is carried out mainly from four aspects, that is, faculty and resources, quality of education, level of scientific research, as well as social services and academic reputation. In the evaluation system of science and engineering, which is highly related to the actual application of science and technology, the indicators of the transformation of scientific and technological achievements are only listed among the secondary indicators of “social services and contribution”. The universities, whose disciplines are being evaluated, are required to provide information about their major contribution and typical cases in terms of social services, the content of which can be either “promoting the transformation of scientific and technological achievements” or “carrying out academic activities such as organizing symposiums, founding journals, etc.” From this, we can see that the attention attached to the transformation of scientific and technological achievements in discipline ranking is inadequate.

Led by the “baton” of discipline evaluation, naturally universities would focus on meeting the requirements such as publishing high quality papers, leading projects supported by the state key programs, receiving academic rewards, and building a strong team for high-level scientific research. They would not pay enough attention to the transformation of scientific and technological achievements.

The second reason is that universities are duty bound to manage the state-owned assets. In order to simplify and shorten the reviewing process of the transformation of scientific and technological achievements and to lift the restrictions on such transformation activities, the central government and many local governments have issued new policies that stressed the power decentralization, namely that universities are entitled to make use of, deal with, and make profits from scientific and technological achievements made by themselves. Nonetheless, the scientific and technological achievements made at the universities are still a special type of state-owned assets. When they are given the related right by the government, universities are also required to assume the responsibility to supervise and manage the state-owned assets and to establish concrete procedures and detailed provisions for management, both of which are originally regarded as the responsibility taken by the government. The transformation of scientific and technological achievements is a form of business venture, which is highly risky. If such venture fails or if there is operating loss, the state-owned assets will definitely be affected and suffer loss. Now the government’s interpretations of the related exemption clause are still vague, which has become “The Sword of Damocles” over the head of the management at the universities.

The third reason is that the power and responsibility of the universities and the faculty is asymmetrical. Both the central government and the local governments have issued policies to adjust the income distribution mechanism for the transformation of scientific and technological achievements and to greatly increase the proportion of rewards for people who have accomplished the transformation. For instance, the Shanghai government permits rewarding scientific research teams with no less than 70% of income from the transformation. The universities have responsibility for supervising and managing the state-owned assets in the process of transformation of scientific and technological achievements, but most of the income from the transformation belongs to the faculty, so of course the universities are not active. Besides, the central government and the local governments have issued new policies to encourage the teachers and students to leave the universities for business venture. However, after the teachers leave the universities, universities should find other teachers to take their place and fulfill their tasks of teaching and doing scientific research. What is more, if the teachers apply for the research projects after they start the business venture, then the projects will be passed to the company, which will not only bring a negative impact on the teaching and scientific research at the universities, but also affect the income of the universities.

【Advice and Suggestions】 We should reform the evaluation system at the universities. We need to study and understand the guidelines mentioned in the State Council’s Several Provisions of Implementing Law of the PRC on Promoting the Transformation of Scientific and Technological Achievements. Based on these guidelines and the premise that we should first guarantee the basic research and student education, we had better make the transformation of scientific and technological achievements one of the important criteria for university evaluation and discipline ranking. To deal with specific issues such as teachers’ decision to leave their positions for business venture, evaluation and pricing of scientific and technological achievements, procedures of implementing the transformation, and income distribution for the transformation, etc., universities should issue feasible policies and detailed guidelines for implementation so that the whole process can be more standardized and there can be more procedures to follow. Furthermore, we should also accelerate the design of Fault Tolerance and Fault Rectification Mechanism that tolerates failures, and give a clear statement of what universities are responsible for when they are supervising and managing the issues related to the transformation. Only in this way can we help the management at the universities to do away with their worries and fears of the unnecessary troubles.

The transformation of scientific and technological achievements is a professional service, and the administration is not capable of it.

Now most universities have already set up specific departments to deal with the transformation of scientific and technological achievements. These departments are in charge of collecting the information of the scientific and technological achievements from the faculty and the information of technological demand from the enterprises. What they are trying to do is matching these two types of information and carrying out activities to facilitate the Industry-University-Research integration, so as to turn the transformation of scientific and technological achievements into the real productivity. However, in reality, the function performed by these departments is still very limited.

At the western universities, there are not only related departments that are responsible for the transformation of scientific and technological achievements, but more importantly, there are also motivation systems established to motivate these departments.

For instance, Stanford University and MIT, etc. decide that 15% of income from patent exploitation will go to the departments responsible for the transformation so that they can spend the money on operation and staff motivation and the rest of the income will be distributed among the inventor, the university, and the schools. Besides, Georgia Institute of Technology and Johns Hopkins University, etc. have set different tiers in the income distribution of patent exploitation. When the exploitation income increases, the proportion of income to the departments responsible for the transformation at those universities decreases, but the absolute value of their income still increases.

These motivation systems have guaranteed and maintained the running of the departments responsible for the technological transformation at the universities, and these systems have even aroused people’s work passion there. These departments are now more motivated and more capable of hiring outstanding talents to work for them in the field of transformation of scientific and technological achievements. On the contrary, most departments responsible for the transformation of scientific and technological achievements in China are still part of the administration of the universities. Even though a small number of them have become enterprises with legal licenses, they are still state-owned and should be managed by the universities in the administrative way. When they want to hire staff and make decisions on staff’s salary, they still need to follow the standards and criteria set by the universities.

Compared with the western departments responsible for the transformation of scientific and technological achievements at the universities, the Chinese counterparts also have a weakness in their ability of providing professional services, which always draws complaints and mockery.

The transformation of scientific and technological achievements at the universities is something extremely professional. In the West, versatile and professional talents, a group of people who understand technology and culture and are equipped with the knowledge of laws and skills of business negotiation at the same time, constitute the core competencies of the departments responsible for the transformation of scientific and technological achievements at the universities. Those professional people can integrate various kinds of resources, to make sure the technology is protected effectively and there are continual increments of value by means of pricing and packaging of the scientific and technological achievements, and to create the maximum market value through niche marketing of technology and business negotiation.

Contrarily, constrained by the employment and motivation mechanism, the departments responsible for the transformation of scientific and technological achievements at the Chinese universities find it very hard to hire professional and high-end talents. Many people who work in those departments do not have the professional skills that are crucial for the transformation of scientific and technological achievements. Even though they have the ambitions to promote the transformation, with limited professional knowledge, they can only play the role as an agent, receiving and sending information about the demand and supply of technology. The ultimate result would be: without the knowledge and ability needed for the transformation, people in those departments will not dare to or will not be willing to do more work to realize the goal of transformation.

【Advice and Suggestions】 For the departments responsible for the transformation of scientific and technological achievements, universities should try hard to reform the motivation system and set the salary standard in accordance with the law of market economy so as to attract more professional talents. The governments should give more direct supports to this type of departments, lift government funds’ restrictions on the payment of remuneration, and encourage the employment of high-end versatile talents in the field of transformation of scientific and technological achievements.

Faculties still have worries and fears after they leave their positions for business venture, so preferential policies should be issued to solve these problems.

Faculties are the people who make the scientific and technological achievements, and the property rights belong to them. Their performance determines the quantity and quality of the achievements and how actively they participate in the transformation process directly affects the quality of the transformation activities.

It is widely acknowledged that it is easier for the faculties at the universities to establish a good reputation in the society, receive various kinds of awards, and get promoted if they publish high quality academic papers. Compared with publishing academic papers, the transformation of scientific and technological achievements takes longer time, the investment in it is larger, the risk of it is higher, the success rate is lower, and the difficulty is bigger. Besides, transformation of scientific and technological achievements is not included as a criterion for the promotion, so faculties at the universities often pay more attention to their publications and they are not willing to spend too much time on transforming the scientific and technological achievements.

Furthermore, the path of the transformation of scientific and technological achievements is not smooth and the costs of it are high. This is another reason why faculties at the universities do not dare to focus on the transformation. Now, the central government and the local governments are making the greatest efforts ever to encourage the transformation of scientific and technological achievements, but the related implementation guidelines and the related systems are still not well-prepared, many of which still focus on the statement of the principles and are not feasible enough. For instance, concerning the issue that teachers leave their positions for business venture, though policies issued by the central and local governments all encourage teachers’ behavior of leaving their positions for business venture and allow them to go back to work at the universities if they fail in the business venture, there are still no detailed statements of many concrete issues as to how much salary should be given to the teachers when they leave for business venture and how to evaluate their performance, etc. Normally the universities hire teachers based on the post-appointment system, which means once they fail in their business venture, they may lose their teaching posts and there may be no classes for them to teach. Moreover, concerning the tax on the transformation of scientific and technological achievements, even though the present tax policies exempt teachers from income tax when they get the shares, when they get the actual income from these shares, they still need to pay the taxes and the tax rates are very high, which cannot help motivate the teachers. Besides, these problems have caused the situation that teachers are forced to transform a certain number of scientific and technological achievements secretly, just like using the “extracorporeal circulation” or the underground “sewer”.

【Advice and Suggestions】On the basis of maintaining the daily teaching and research activities, the universities had better set a separate development path, in terms of evaluation or in terms of promotion, for teachers who have made great contributions to the transformation of scientific and technological achievements. Also, the universities had better optimize the system and make sure the teachers who leave their positions for business venture can still be protected. The government had better lower the tax rates for income from the transformation of scientific and technological achievements, to really bring the income from the transformation to every single person involved in it and get everyone motivated.

Note: Qiang Chen is a professor in the School of Economics and Management at Tongji University, and Yuehua Bao is an engineer in Tongji Technology Transferring Center. This article first appeared in Wen Hui News on the following website: https://wenhui.news365.com.cn/html/2016-07/08/content_441063.html