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National report: University of Utah No. 1, BYU No. 3 in tech startup companies

Most professors must teach for years, publish books or perform multiple research experiments to earn tenure or promotions. The University of Utah offers another track to academic success — commercialization efforts.

Maybe that's why the U. leads the nation in creating the most startup companies through university research, according to a new survey.

The Association of University Technology Managers measured the 2010 fiscal year. Utah developed 18 startups from July 2009 to June 30, 2010.

Utah was No. 1 for the 2009 fiscal year, too, when the U. launched 19 tech startups. Utah tied for first the year before.

BYU ranks third this year. MIT was sandwiched between the two Utah universities in second place.

"The first thing is that the University itself has decided that this is a very important objective," said Bryan Ritchie, the director of university's technology commercialization office. "It's a hard process and requires support from the president on down. There's also a cultural aspect as well. It's a very entrepreneurial community. You have faculty members in the university that can be promoted and tenured based on their commercialization projects. Not very many universities have that. We're perfecting that process."

MIT research launched 17 new businesses in 2010, and BYU generated 13 companies.

The director of tech transfer at BYU said interest in the companies has shot up in the past few years. He said one switch that affected the increase was how they contact alumni — social media. The program found a LinkedIn account with thousands of BYU alumni and started using the site to communicate the program's breakthroughs and garner support.

"We have not gone out of our way to increase interest in the startup companies," Director Mike Alder said. "It has been faculty and students and alumni that have become interested."

He also said of the 24 licenses BYU tacked on the promising technology list, 17 of them dealt with biotechnology or biomedical and 11 of those were for medical device companies. He said investors and spectators wonder how BYU racks up those numbers when the university doesn't even have a medical school. Some of the most notable companies started at BYU include Sonic Innovations, the sixth-largest hearing aid manufacturer in the world. Or take Moxtek, a company that holds 60 percent of the market share of X-ray windows — a technology that allows for higher resolution X-rays.

"It does surprise me that the investment community doesn't visit us more often because we have started to become almost a startup factory," Alder added. "Those not coming to see what we have are missing really good opportunities."

Both schools seem to be right on par with each other not only athletically but academically and entrepreneurially as well.

The University of Utah Technology Venture Development office opened in 2005 and has since consistently ranked at or near the top in the country for its commercialization efforts.

"Our success is a credit to our exceptional faculty, students and community," department vice president Jack Brittain said in a press release. "We have a tremendous culture of innovation and entrepreneurs, and everyone in the state benefits from the resulting economic growth. We are also fortunate to have state and university programs that support technology development so we can create companies in Utah."

Utah's research is relatively cost-friendly, too.

The U. spent a mere $450 million in 2010 compared to MIT, which spent $1.4 billion, more than three times as much.

Many of the companies are skewed toward the medical field, and Bryan Ritchie added that big companies like Coherex Medical, Myriad Genetics and Cephalon have origins through the program.

"We've got computer-controlled feeding tubes, contact lenses that deliver medicine to the eye, software that helps young cancer patients do physical therapy," Ritchie said. "It's truly amazing technology."

While many view the commercialization as purely a university project, Ritchie told of some nurses working in a local hospital who created a company called Catheter Connection that the program helped launch. He said the product and idea were impressive, but the company most likely would not have reached million dollar sales if it weren't for the commercialization office.

"People are starting to recognize that the University of Utah has this capacity," Ritchie said. "It can extend beyond the university." A Deseret News story this summer pointed out that the U.'s tech startups not only create jobs in the Utah economy, but good jobs. For example, the average Utah employee earns about $38,000 per year, according to the Utah Workforce Services, while the average technology venture job produces a $60,000 annual salary.

Not only do the jobs pay well, they last. The companies have an 80 percent survival rate.

The U. averaged five startups a year from 1970 to 2005, when it opened the Technology Venture Development team, bringing gratudate business students into the mix to create business plans and creating an investment model.

The U. program has created 5,937 direct jobs, along with 9,830 indirect jobs started through spin-offs of the services.

"We believe the future is very bright for the University of Utah and the state," Brittain said. "All of our efforts to commercialize technologies help create high-paying, career jobs in Utah."

AUTM found that the 10-campus University of California system created 75 startups and the nine campuses of the University of Texas system had 33. The survey results didn't break down those startups by school.

The top 10 startup-creation schools, according to AUTM: