As non-profit organizations, universities serve the public good through their primary missions of teaching and conducting fundamental research. In the past, American universities obtained the bulk of their funding in the form of basic research grants from U.S. government agencies such as NSF, NIH, USDA, DOE and the DoD. These grants funded graduate students and their faculty advisors who published their research results to benefit society through the free dissemination of knowledge.Though the academic research model still adequately describes most university research programs, a new model has emerged that can accommodate new requirements imposed by government agencies and can provide R&D services for commercial companies. The model serves sponsors who want to see university technology applied in settings directly relevant to their mission or business operations. This allows the sponsors to see “what's possible” with the technology without making a large investment to build or acquire an internal development capability. Those applications that show operational viability get transferred to the sponsor by imparting know how to sponsor employees, licensing, and providing well-documented technical data packages.One example of this model is the National Robotics Engineering Center (NREC), part of Carnegie Mellon University's Robotics Institute. NREC has enjoyed tenfold growth since its founding in 1996 providing applied robotics research and technology transfer to government and commercial clients. This paper describes the unique operating and business practices, personnel make-up and client mix that underpin its success and illustrates a new and valuable approach to university research. The paper concludes by comparing the nascent service robotics market with the early automotive industry and projects how an NREC-like organization could have contributed to automotive innovation at that time.