There is national and international recognition of the importance of innovation, technology transfer, and entrepreneurship for sustained economic revival. With the decline of industrial research laboratories in the United States, research universities are being asked to play a central role in our knowledge-centered economy by the technology transfer of their discoveries, innovations, and inventions. In response to this challenge, innovation ecologies at and around universities are starting to change. However, the change has been slow and limited. The authors believe this can be attributed partially to a lack of change in incentives for the central stakeholder, the faculty member. The authors have taken the position that universities should expand their criteria to treat patents, licensing, and commercialization activity by faculty as an important consideration for merit, tenure, and career advancement, along with publishing, teaching, and service. This position is placed in a historical context with a look at the history of tenure in the United States, patents, and licensing at universities, the current status of university tenure and career advancement processes, and models for the future.