“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 TechnologyBased 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 AlbanySchool 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., NSFERC, 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
Universities, “GPTs”, and The Creation of New Industries
Technology
(Primary)
Industry
Period Developed
University
Created
Electronic
University of
1940s Calculator
Pennsylvania
Computers
Fiber
1960s
Optics
MIT
Telecommunications
1970s
rDNA
1980s Supercomputing
Stanford,
California
Illinois
Biotechnology
Internet
Sequencing of DNA/
Human Genome
Cal Tech,
1990s
Project
Johns Hopkins Pharmacogenomics
2000s Nanotechnology
UAlbany
?????
William Baumol-The Free Market Innovation MachineAnalyzing 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 ProgramATP/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, PostDocs, 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 CommunityBased 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., NSFIGERT, 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
UAlbany SEED Program
 “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!)
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!!!