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Breakthroughs Magazine

Special Report - Commercial Partnerships: Working with a National Laboratory

Out of the lab and into the park

Connecting world-class science with industry and community

Battelle has managed the Pacific Northwest National Laboratory for the U.S. Department of Energy for more than four decades with the mandate that discoveries in the Laboratory find useful application for the greater common good. And while commercialization has been a way of life at PNNL for many years, last year management reorganized the business arm of the company to become a single-purpose group called the Commercial Partnerships Directorate (CPD).

Director Mike Schwenk captains the team toward stronger partnerships with industry that result in returns to the Laboratory, taxpayers, and the community at large. Since October 2005, Mike has assembled a business development team to meet the challenge of finding big industry problems and then solving them with world-class scientific capabilities using the commercial business tools at PNNL's disposal. Over a cup of coffee, Mike discussed his vision for commercial victory.

Why did the Lab create a separate directorate for commercial business?

PNNL is a $700 million taxpayer-financed research and development institution. With that kind of investment, people naturally want to know how this benefits the nation. One of the best ways to show return back to the taxpayer is when our research finds its way into the commercial marketplace as a product or service. CPD was created to think about that every day. We consider how government research can be leveraged by other companies who create products and services. By creating this directorate, we now have a group of folks who are totally focused on making this happen.

What kinds of goals have been set forth for the CPD?

There are financial goals that we have that are important to the Laboratory because the returns that we are able to generate in our commercial business go right back into the Laboratory to refresh equipment, mature our technology and help hire strategic staff. It's basically about how we sustain a world-class national laboratory.

We also have what I call anecdotal goals that are basically great stories about how our research got put into use in every-day life. One of the best examples from PNNL is one that people are so familiar with-the compact disc technology.

There are economic development goals as well. Like other businesses, we are concerned about the business climate and quality of life in our community. It is a business imperative that we think about our neighbors and take an active role in making our community strong, healthy and technology-oriented so we can thrive in it. That means looking at the commercial business that we do and using it to help the local economy.

Why "Commercial Partnerships" and not "Commercial Business" or some other name?

We aspire to have long-term strategic partnerships with our industrial clients, not a one-off business transaction. That's the short answer. But there's a little more to it. In a partnership, both sides bring something to the table and both sides get something in return. Together we're stronger, which is what makes it a partnership. That accurately reflects the client relationships we want to have.

The other thing about partnerships has to do with our economic development agenda. We partner with a lot of groups interested in bettering the environment within which we operate and live. They may be economic development councils, state government or other nonprofits. Together we create jobs and wealth for our neighbors. So that's part of this partnership theme, too.

What do you mean by client contributions?

Our clients bring several things to the table. Obviously, if they're going to work with us, they become the financial source for the R&D we're going to do. But also we recognize that typically they have their own first-class people who have been working on the problem. And so generally when we go into a relationship, the work is happening in both places-their lab and ours. We recognize and respect that it's a team effort to solve the problem. So they have a financial contribution but there's also an intellectual asset contribution that they are making along with ours. The third thing they bring to the table is their connection to the marketplace. We don't have that. To the degree that there will ultimately be a great outcome and returns to both parties, that can only occur if they are successful in the marketplace. And they bring that to the partnership.

Why would an industrial client come to PNNL?

It all begins with the client's problems. If they have a problem they can't solve with their internal R&D resources, they look around for existing capabilities that they don't have-be it intellectual property, facilities and equipment, expertise, or a combination of all three. Our client set tends to be industrial companies engaged with problems that relate to the work we do on a national level: energy, environment, and national security. An example could be an energy company looking at alternative energy technologies. Since they seek ways to be competitive, they watch to see who is working on new developments. In that market space, a lot of those technologies have been created at the national labs. So that makes for an easy partnership. We have it. They want to put it into practice.

If you could summarize what PNNL has to offer industry in a couple of sentences, what would you say?

What industry needs to know is that PNNL has enormous capability that we can tap to solve big problems. At this laboratory there is great deal of depth in three core fields: energy, environment, and national security. That research takes advantage of some best-in-class capabilities in computational sciences, unique instrumentation and equipment, and a systems science approach to chemistry, biology, life sciences and physics.

It's one thing to work on a small project here or there, but that doesn't fully utilize this taxpayer-financed resource called PNNL. We work on huge national problems such as securing our nation's borders, and we aspire to solve similar-scale problems for industry. So if you're from industry and you have a big problem needing high-value research, we should be talking.

What does success look like for CPD?

I think ideally success would have three big elements. We have the ability to do contract research. We generate IP and we can license it. We're interested in industrial competitiveness and economic development that can come from those activities. So for us, success is when those three activities align and maximize the effect of each other. A home run is when all three overlap.

I can imagine in the near future a scenario where we provide the foundational intellectual property for a research project with industry and together we generate new IP. We conduct the research project on a national-scale problem and solve the problem with a new product or process. The pilot-scale testing and demonstration of that new product or process is located across the street in our research park. So the problem is grand in scale and significant beyond our community. And yet the solution is being developed in our community. Now there you've got a grand slam for commercial partnerships.

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