2012.06.13 economic growth and academic entrepreneurship: lessons and implications for industry,...
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“Economic Growth and Academic Entrepreneurship: Lessons
Learned and Implications for Industry, Academia, and
Policymakers”
Professor Donald Siegel
Dean-School of Business
University at Albany, SUNY
President, Technology Transfer Society
Editor-Journal of Technology Transfer
InterTradeIreland All-Island Innovation Conference
NUI Galway
June 13, 2012
Outline
Theoretical Rationale for R&D and Technology-
Based Economic Development (TBED)
Policies/Importance of Evaluation
Background Information on University Technology
Transfer/Academic Entrepreneurship
Summary of Key Research Quantitative and
Qualitative Results
Lessons Learned For Industry, Academia, and
Practitioners
Shameless Self-Promotion: University at Albany-
School of Business-Entrepreneurial Initiatives and Plugs
For Technology Transfer Society/Journal of Technology
Transfer
Economics of Innovation and Entrepreneurship
Joseph Schumpeter (1939)-
Stresses the Importance of Technological Competition,
Not Price Competition-The Role of the Entrepreneur
Technological Change is a Force of “Creative
Destruction”
Zvi Griliches/Edwin Mansfield/Richard Nelson-Diffusion
of Innovations/R&D is a Key Source of Economic Growth
(Especially Basic Research)/Technology Transfer/Role of
Universities
Why a Government Role in R&D?
Economic Rationale-Market Failure
Scientific Knowledge as a Public Good
Technical and Commercial Uncertainty
Associated With Basic Research
Complementary Assets May be Required for
Successful Innovation
Externalities
Government Actions
Financier
Lead User (e.g., Transistors, Integrated Circuits)
Provider of Complementary Assets (e.g.,
Infrastructure)
Establishing Price and Quantity Regulations
(e.g., Tariffs, Quotas, Price Floors, Price Ceilings,
and Subsidies)
Other Regulations That Affect Innovation
(e.g., Environmental and Safety Regulations)
Why do Governments Have R&D Policies?
Social Return > Private Return
Private Sector Under-invests in R&D? Why? –
Difficult to Evaluate and Fund Some Types of Research
External financing means revealing ideas
Benefits so diffuse recipients hard to organize or identify
Need large organization for implementation/commercialization,
but such organizations not necessarily good innovators
Standards-related R&D-public goods nature of standards
National Security and/or Strategic Industries
“Ripe” for technical advance
Closely linked to other industries
Enables program in many other industries (e.g. semiconductors)
Why do Governments Have R&D Policies? (cont.)
Education/human capital and imperfect human
capital markets
Individuals facing differing financial constraints in
investing in human capital-equality of opportunity
argues in favor of education subsidies
Externalities for society from human capital
formation by individuals (assuming they do not
capture all the benefits in their wages).
Institutions and Agents Who Receive
Public Support for R&D and TBED
Agents
University Scientists
Industry Scientists
Institutions
Universities/Technology Transfer Offices
University-Industry Research Centers (e.g., NSF-
ERC, NSF-IUCRC, CATs)
Science Parks
Incubators/Accelerators
Firms (both small and large-e.g., SBIR and ATP/TIP)
Key Points About Evaluation of Technology Programs and
Institutions
Outcomes
Most Important Criteria For Public Investment
-Fields With the Highest Social Returns
Also important to provide support when private
returns are insufficient to overcome ”hurdle
rates” (Link and Scott (1998), Siegel (1999))
Evaluation Should be Built Into the Design of
R&D and TBED Programs
Key Points About Evaluation of Technology Programs
and Institutions (cont.)
Quantitative and Qualitative Assessment
Multiple Indicators
Time Frame is Critical: Analyze Short-Run,
Medium-Run, and Long-Run Impacts
Indicators of Output/Performance Will Differ
According to the Unit of Observation
Control Group
Four Types of Measurements
Resources
Scientific Labor (to conduct research)
Equipment
Facilities
Outputs
The Funded Research Projects
Collaborative Research Relationships Arising From the Funded Research
Publications
Patents
Licenses
Models and Algorithms
Prototype Products and Processes
Four Types of Measurements (cont.)
Outcomes
Citations (both Patents and Articles)
Presentations and Other Forms of Dissemination
Revenue Generated by New/Improved Products
Productivity Effects on Firms
Firm Growth, Survival
New Firm Creation Changes in the Propensity of Firms to Collaborate
Four Types of Measurements (cont.)
Longer-Term Impacts (Broader Societal Goals)
Job Creation
Measures of Regional/State Economic Growth
Ability to Attract More Firms to A Region or State
Improvements in Quality of Life (e.g., Health, Safety,
Environment)
Effects on Ability of Region or State to Innovate
Technology (Primary) Industry Period Developed University Created Electronic University of 1940s Calculator Pennsylvania Computers Fiber 1960s Optics MIT Telecommunications Stanford, 1970s rDNA California Biotechnology 1980s Supercomputing Illinois Internet Sequencing of DNA/ Human Genome Cal Tech, 1990s Project Johns Hopkins Pharmacogenomics 2000s Nanotechnology UAlbany ?????
Universities, “GPTs”, and The Creation of New Industries
William Baumol-The Free Market Innovation Machine-
Analyzing the Growth Miracle of Capitalism
Routine/Systematic Innovation-Large Firms
Entrepreneurial Innovation-Small Firms
“David and Goliath Symbiosis”-Joint Efforts of
Individual Entrepreneur and Large Industrial
Firm Unprecedented Wealth Creation
Siegel (2006)-Universities Increasingly Developing
and Nurturing Startups; Also Linking Small and
Large Firms Who Engage in Entrepreneurial
Innovation
Background Information on
University-Industry Technology Transfer
U.S.-1960’s, 1970’s Decline in Competitiveness
(“Japanese Challenge”, Productivity Slowdown)
Dramatic Changes in U.S. National Innovation Policy
Expansion of Programs to Support Public-Private
Partnerships (e.g., Advanced Technology Program-
ATP/TIP, NSF-ERC, IUCRC)
Relaxation of Antitrust Enforcement to Promote
Collaborative Research (e.g., NCRA)
Policies Promoting More Rapid Diffusion of
Federally-Funded Technologies From Universities
and Federal Labs to Firms (e.g., Bayh-Dole,
Stevenson-Wydler, SBIR )
Legacy of the Bayh-Dole Act
Bayh-Dole Act of 1980: Universities Own the Rights to
Technologies That Arise from Federal Research Grants
Purpose: Accelerate the Rate of Technological
Diffusion, Promote Economic Development
Almost All Universities Have Established a Technology
Transfer or Licensing Office
Rapid Growth in Commercialization of University
Technologies:
U.S. Universities
1980 2010
University Patents 300 4469
Licensing Agreements 276 4284
Startups 35 651
Research on Institutions and Agents Involved in
Academic Entrepreneurship
Agents and Institutions
University Scientists
Industry Scientists
Entrepreneurs
Industry-University Cooperative Research Centers
University Technology Transfer Offices (TTOs)
Science Parks
Incubators/Accelerators
Firms That Interact With Universities
Venture Capital Firms
Selected Research Questions
How Does the Process of University Technology
Commercialization/Academic Entrepreneurship Work?
Which Universities “Perform” Best?
What is the Role of the TTO?
How Should We Measure Performance?
Which Factors “Explain” Variation in Relative
Performance? (e.g., Incentives, Organizational, and
Environmental Factors)
Do Incubators/Accelerators and Science Parks Add
Value?
Interdisciplinary Research on Institutions and Agents
Involved in Academic Entrepreneurship
Indicators of Output/Performance
Invention Disclosures
Patents
Number of Licensing Agreements
Licensing Revenue
Research Productivity of Industry Scientists/Firms
Research Productivity of University Scientists
“Productivity” of Universities in Technology Transfer
Start-Up Formation
Survival
Employment Growth
Changes in Stock Prices
Key Results for University and Regional Policymakers
Bayh-Dole Type Legislation Appears to Have Been
“Effective”
TTO Staff Add Significant Value Because Scientists Are
Not Disclosing Inventions
Important for TTOs to Educate Academics on Technology
Transfer and For TTO Staff to Interact With
Entrepreneurs (“Surrogate” Entrepreneurs)
Key Results for University and Regional Policymakers
(cont.)
Private Universities and Those With Medical Schools
Appear to Be Somewhat More Productive
Universities Are Becoming More “Strategic” in Technology
Transfer (More On That Later) –More Heterogeneity and
Application of Management Theories to Practice
Property-based Institutions (Incubators and Science
Parks) Appear to Enhance Commercialization
Incentives Matter (e.g., Royalty Distribution Formulas),
But So Do Organizational Practices and Institutional
Policies
Key Results for University and Regional Policymakers (cont.)
Universities Increasingly Focusing on the Entrepreneurial
Dimension (Evidence Mixed on Success of University Based
Startups)
Academic Entrepreneurs Are Not Less Productive in Their
Academic Research After Commercialization
Foreign-Born Scientists Are More Likely to Become
Academic Entrepreneurs
Social Networks of Star Scientists Key for New Firm
Creation
Key Stylized Facts From Qualitative Research
Major Impediments to University Technology Transfer:
Informational and Cultural Barriers Between
Universities and Firms (Especially for Small Firms)
Insufficient Rewards for Faculty Involvement in
Technology Transfer at Some Institutions, Especially
w.r.t. Entrepreneurial Activity
Key Stylized Facts From Qualitative Research (cont.)
Major Impediments to University Technology Transfer (cont.):
Technology Transfer Office Staffing and Compensation
Practices (High Rate of Turnover, Insufficient Business/
Marketing Experience, Possible Need for Incentive
Compensation)
Education/Training is Needed for Faculty Members, Post-
Docs, and Graduate Students in the Specifics of the
Entrepreneurial Process, the Role of Entrepreneurs, and
How to Interact with the Business/Entrepreneurial
Community
Key Stylized Facts From Qualitative Research (cont.)
A Failure to Address These Barriers Will
Induce More Faculty Members and Firms to
Circumvent the TTO and Engage in
“Informal” UITT
University Technology
Transfer/Commercialization/Academic
Entrepreneurship Should be Considered From a
Strategic Perspective
Strategic Implications of University Technology Transfer
/Academic Entrepreneurship-Formulation Issues
Setting Institutional Goals/Priorities
Resources Devoted to University Technology Transfer
Choices Regarding Technological Emphasis
Strategic Choices Regarding Modes of University
Technology Transfer:
Licensing
Startups
Sponsored Research
Other Technology Transfer Mechanisms That are
Focused More Directly on Stimulating Economic
Development (e.g., Incubators and Science Parks)
Strategic Implications of University Technology Transfer
/Academic Entrepreneurship-Implementation Issues
Improving Information Flows
Organizational Design/Structure
HRM Practices-Staffing/Compensation of TTO
Personnel
Reward Systems for Faculty Involvement in University Technology Transfer (perhaps including P&T- e.g., 6/-06-Texas A&M)
Implementation Issues Regarding Modes of University Technology Transfer
Different Ways of Structuring Licensing Agreements
Academic vs. Surrogate Entrepreneurs
Different Ways to Manage University-Based
Incubators and Science Parks
Recommendations Based on
Studies of Academic Entrepreneurship
Stressing Entrepreneurship (As Opposed to Patenting and Licensing) Promotes Technology Commercialization and Enhances Economic Impact of University
Strong Need to Enhance Incentives for Faculty Members to Be Engaged in Entrepreneurial Activity (and Perhaps For Successful Ones to Serve As Mentors)-Including P&T
More “Open” Immigration Policy for Scientists and Engineers Promotes Academic Entrepreneurship
Recommendations Based on
Studies of Academic Entrepreneurship
Important to Increase Participation/Success of Women & Minorities in Academic Entrepreneurship (as we found in the NRC Evaluation of SBIR)
Entrepreneurship Research, Education, and Community-Based Initiatives Are Key Complements
Important To Develop An Entrepreneurial Culture at the University and in the Local Region (More on That Later)
Corporate Partnerships Yield Better Results With Respect to Academic Entrepreneurship
Entrepreneurship As An Academic Field
Entrepreneurship (2007) vs. Strategy (1989)
Returns to Studying This Topic Are High (e.g., NSF-IGERT, Kauffman, development/fund-raising for the university)
Universities Focusing on Start-up Formation Should
Develop a Technological Entrepreneurial Curriculum,
Applied to Stakeholders-Role of Faculty Conducting
Research on Technological Entrepreneurship
Interdisciplinary Theory
Evaluation/Policy Research
Practitioner Research
Academic Conferences
Research Workshops
Ph.D. program
Aspects of a Technological Entrepreneurship Curriculum
-Institutional Level
Incubator/Accelerator
Science/Technology Park
Technology Transfer Office (Link to Business Schools)
Knowledge Clusters
Angel Network
Venture Forum
Senior Administrative Position in Entrepreneurship (e.g., Vice Provost-Entrepreneurship)
Enhance Pecuniary and Non-Pecuniary Incentives for Faculty Members to Be Engaged in Academic Entrepreneurship
Aspects of a Technology Entrepreneurship Curriculum
-Relating to (Internal and External) Stakeholders
Focused Graduate Courses and Executive Programs for the Growing Class of Managers Involved in Technology Commercialization (e.g., AUTM, Federal Labs, Teaching Hospitals, Lawyers )
Additional Entrepreneurship Courses (e.g., on TBED, cognitive, sociological, and economic aspects)
Add Evaluation and Assessment Tools to Existing Courses in Technology Management/Strategy
Technology Familiarization
Internships
Idea Labs
Business Plan Competitions
Venture Forum
UAlbany School of Business-Refocusing on Entrepreneurship
and Regional Economic Development
School of Business, UAlbany, SUNY Strategies
Converge
Strong Support From Central Administration for
New Focus on Entrepreneurship (Chancellor, President,
Provost)
At All Levels–Emphasis on University’s Role in Job
Creation, Economic Development and
Entrepreneurship
Key Tactic: Collaboration (With Other Colleges on
Campus and Other Universities in the Region)
UAlbany School of Business-Entrepreneurial Initiatives
New Undergraduate Concentration in Entrepreneurship
Entrepreneurship Track in Full-Time MBA Program
New York State Student Business Plan Competition
Collaborations with Community Colleges
Life Sciences Entrepreneurship-RNA Institute
Thermo Fisher Student Venture Fund
Entrepreneurial Finance Research Conferences
Small Enterprise for Economic Development (SEED)
Program (Winner of 2012 Tribeca Disruptive Innovation
Award)-Focus on “Bottom of the Pyramid”
Young Entrepreneurs Academy Chapter
“Small Enterprise for Economic Development (SEED) Program Launched With SBDC and the School of Social Welfare ($2.6 Mil) and ESD (State) Grants of $200K
Key/Unique Features
“Character-Based” Lending-Recipients Take Business
Courses And Are Assigned To A Local Mentor
Teams Of Students From Both Schools Assist Recipients
Evaluation Built Into Design of the Program
The First Character-Based Micro-loan fund project
(with evaluation) Ever Based at a University (and the
partnership between a School of Social Welfare and a
School of Business is unprecedented!)
UAlbany SEED Program
Young Entrepreneurs Academy Chapter at UAlbany
Young Entrepreneurs Academy (YEA!)–Kauffman
Foundation Sponsored Program –Established at the
University of Rochester and High Schools in Rochester
A Year-Long Program Teaching Middle and High School
Students How to Start and Run Their Own REAL
Businesses-“Start as a Student, Finish as a CEO!”
($1000, $900 for a Student With a UAlbany Connection)
Lead Sponsor-Turf Hotels, Inc. -Thanks to Michael
Hoffman and Brian Straughter!!!
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