This article first appeared in Forum, The Edge Malaysia Weekly on December 1, 2025 - December 7, 2025
When Stanford University researchers developed the technology behind Google, the university’s Technology Transfer Office (TTO) negotiated a deal that would generate over US$330 million for the university. Meanwhile, in Malaysia, promising university innovations often struggle to secure even seed funding. This stark contrast reveals a fundamental question: What prevents Malaysian university spin-outs from achieving the commercial success of their American counterparts? The answer lies not in the quality of Malaysian research but in the ecosystem surrounding its commercialisation and perhaps the interplay with venture capital.
In FY2023, US higher education institutions invested some US$108.8 billion in research and development with significant contributions from the federal government and venture capital. This diversified funding base contrasts sharply with Malaysian universities which primarily rely on federal funding with industry contributions remaining limited. This restricts commercialisation incentives and resources necessary to support successful spin-outs.
A critical factor for successful commercialisation in the US is the effective functioning of TTOs. According to the Association of University Technology Managers, US universities produced 903 new start-ups based on academic intellectual property in FY2023 alone. These weren’t merely paper companies — many attracted significant venture capital and achieved meaningful exits.
The University of Michigan’s Geminus AI and Stanford’s Kosei, both co-created by The Hive venture fund, exemplify how faculty-led research can evolve into fundable ventures that attract professional management and institutional investment. TTOs play a crucial role as they are not mere administrators; they act as translators and risk mitigators, ensuring that research innovations are both legally protected and commercially viable.
TTOs guide researchers through the complex landscape of scaling technologies, handling regulatory approvals and managing potential conflicts of interest. They create structured pathways for involvement and clarify legal and ethical aspects for researchers contributing to ventures where they hold equity.
The path to promotions in academia often overlooks contributions to commercialisation, which can dissuade researchers from engaging actively with industry. However, some universities, like Universiti Putra Malaysia (UPM), are now recognising technology transfer and start-up engagement in their promotion criteria. UPM’s InnoHub programme promotes deep-tech start-ups and has seen significant commercial success, reflecting a positive shift towards recognising entrepreneurial efforts.
Despite these efforts, many Malaysian spin-outs still fall short of aligning with market needs, often driven by academic motivations rather than entrepreneurial success. A predominant culture where “academics manage academics” may also hinder innovation and reduce the quality of ventures that seek investments.
To address these systemic issues, Malaysia needs a clearly defined ecosystem for intellectual property (IP) management, technology transfer and spin-out policies that include stakeholders from academia, TTOs and venture capital. Researchers who lead start-ups should have explicit support through policies that promote secondment, sabbaticals and research appraisal related to commercialisation.
Involving industry partners and venture capitalists early on can help shift the focus from traditional academic metrics to market-driven ones. These investors provide not just funding but also vital guidance to turn innovative ideas into market-ready products. However, they may be hesitant to engage early due to perceived risks and unclear university policies.
Technology transfer professionals play a pivotal role in bridging these gaps, effectively translating academic concepts into terms investors can understand. Their expertise must be recognised and universities should invest in their development and retention to ensure continuity and build trust with the investment community.
Malaysia could adopt effective strategies from US institutions, such as the National Science Foundation’s Innovation Corps, which trains researchers in entrepreneurship. By embedding entrepreneurial training into research culture, Malaysia can enhance its start-up ecosystem. Initiatives in various Malaysian universities focused on entrepreneurship are a step forward but should align more closely with market needs to ensure the ventures are viable.
Furthermore, fostering collaborations that contribute to local economic growth can attract both domestic and international investors, creating a supportive infrastructure for start-ups. Promising examples, such as Qarbotech, birthed from the Institute of Nanoscience & Nanotechnology at UPM and accelerated through the InnoHub programme at Putra Science Park — where the researcher collaborated with a CEO studying at the Asian School of Business — demonstrate the importance of streamlined IP processes and industry connections in driving growth.
To move forward, Malaysia needs to establish clearer policies concerning IP rights, enhance the capabilities of TTOs and create academic incentives that promote commercialisation. It is essential to develop a unified national agenda that recognises university-venture capital collaboration as a key component of innovation policy. Initiatives such as those from Cradle Fund, in partnership with various public and private universities and supported by the CIP SPRINT grant programme, represent positive strides in this direction.
In summary, building closer connections between academia and venture capital is vital for Malaysia as it works to improve its innovation landscape. By adopting effective practices from the US and tailoring them to fit local conditions, Malaysia can fully utilise its university-driven innovations, fostering stronger economic growth and enhancing its competitive position on the global stage.
Datuk Syed Haizam Jamalullail is managing partner of The Hive Global AI Fund, vice-chairman of the Malaysian Venture Capital and Private Equity Association and also sits on the Board of UPM.Prof Dr Samsilah Roslan is director of Putra Science Park and oversees management and technology transfer of UPM’s intellectual properties, innovations and technology.
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