Paper
Series on Academic Entrepreneurship
by
Professor Tom Allen and Dr. Rory O’Sheas
August
30, 2005
The
creation of start-up companies is
an important way of transferring research
results from universities into the
marketplace. The aim of this paper
series on academic entrepreneurship
is to explore, explain and describe
why some universities are more successful
than others at generating technology-based
spinoffs from a U.S. system of innovation
context.
Once
the concern of several ‘enlightened’
land grant institutions in the US,
the goal of enhanced spinoff company
formation has become a common part
of institutional and university planning.
The growing acceptance of the importance
of spinoff activity to national economies
has been reflected in the explosion
of policy and research publications
seeking to better understand and address
the forces that shape spinoff activity
in higher education.
The
explosion of recent research on this
topic has served to refine, supplement,
and, in some cases, challenge our
understanding of the complex forces
shaping university spinoff creation.
It has given rise to a much needed
debate in both research and policy
circles about the adequacy of past
theory and the effectiveness of existing
programs to enhance spinoff formation
on campus.
The
consequence of this growth in spinoff
activity from higher education is
not trivial. According to the AUTM,
university spinoffs have created over
140,000 jobs and $16.5 billion in
value-added activities for the U.S.
economy (Shane, 2004). Interest in
the spinoff phenomenon amongst national
policy makers and university heads
has been sparked by the belated recognition
of the emergence of the knowledge-based
economy and the need for knowledge
based jobs. Globalization of the economy
means that the only way that developed-western
economies such as the U.S. can compete
with lower paying economies worldwide
is with technology, talent and entrepreneurship.
And with these changing dynamics the
role of higher education becomes critical
for the growth of national economies,
in particular their role at generating
technology-driven enterprises.
Little
wonder then that US universities are
actively looking to contribute indirectly
to regional societies through the
creation of spinoff companies. However
for many institutions the path to
enhanced start-up creation is not
an easy or smooth one. Successful
spinoff efforts are difficult to mount,
if only because of our continuing
inability to make sense of its longitudinal
character and the complex forces which
give rise to spinoff creation. Furthermore,
our knowledge of successful forms
of action is no less limited. Despite
having acquired information from a
variety of spinoff programs, we have
yet to distinguish attributes of successful
programs that are institutional specific
from those that are more generally
essential. Though we have a sense
of what seems to work, we are not
yet able to tell administrators how
and why spinoff rates vary between
institutions in the US. Moreover,
we have not been able to tell institutional
officials what procedures they should
follow to initiate successful retention
programs suited to their own financial
needs and resources. As a consequence,
the advice has been quite general
and descriptive, rather than explanatory
in nature.
What
we have yet to do, and what we clearly
need to do, is to produce a synthesis
of what we know about the character
and causes of spinoff behavior and
the nature of successful spinoff programs.
We need to develop a theory of spinoff
behavior, which clearly explains from
a longitudinal perspective the complexity
of determinants that underlie the
phenomena. And we must do so in a
fashion that leads to concrete answers
to the questions administrators ask
about enhancing university start-up
activity.
In
this paper series on academic entrepreneurship,
we have developed a series of articles
that begin to address the limitations
of this research domain. In our first
paper “Determinants and Consequences
of Spinoff Behavior: A Conceptual
Framework”, we give order to
the extensive body of research in
spinoff departure by proposing a theory
of departure from institutions of
higher education which focuses on
the ‘individual’, ‘organizational’,
‘institutional’ and ‘environmental’
dimensions of spinoff behavior. The
theory provides a view of spinoff
behavior, which stresses the limits
of institutional action and the unique
responsibility institutions share
in the development of academic entrepreneurship
on campus. Our second article “Creating
the Entrepreneurial University: The
Case of MIT” builds further
on this topic and explores the dynamic
factors contributing to the development
of a top ranked entrepreneurial university
in the US, Massachusetts Institute
of Technology (MIT). Utilizing qualitative
and quantitative data sources, the
paper brings together the mutual roles
of the ‘environmental’,
‘institutional’, ‘organizational’
and ‘individual’ perspectives
and uncovers the interrelated micro-
and macro-level factors contributing
to successful academic entrepreneurship
at MIT. The third paper of the series
“Entrepreneurial Orientation,
Technology Transfer and Spinoff Performance
of U.S. universities”, utilizes
panel data from 141 U.S. universities
between 1980-2001, and provides a
systematic account of why some universities
in the US are more successful that
others at generating technology based
spinoffs. Drawing from evolutionary
and resource-based perspectives, we
develop a theoretical and econometric
model to capture the non-linear process
of university spinoff creation, wherein
learning effects from previous success
partially determines current spinoff
counts. The random effect negative
binomial estimators of our study reveal
evidence of history dependence for
successful technology transfer to
occur. Our results also find quality
of faculty, commercial capability
and size and nature of science &
engineering funding as significant
determinants of higher rates of university
start-up formation.
To
access our working papers, please
click here.
Should
you wish to join our research team
and contribute to this emerging area
of university technology transfer
research, we would be glad to hear
from you. You can contact us at roshea
"at" mit.edu / tallen
"at" mit.edu.
Publications
to date:
Journal
Articles
O’Shea, R., Allen, T., Roche
F. and Chevalier, A. (2005) “Entrepreneurial
Orientation, Technology Transfer and
Spinoff Performance of U.S. Universities”,
Research Policy 34 (In Press).
O'Shea,
R., Allen., T., O’Gorman, C.
and Roche F. (2005) “Universities
and Technology Transfer: A Review
of Academic Entrepreneurship Literature”,
Irish Journal of Management 26 (In
Press).
Book
Chapters
O’ Shea, R., Allen, T. (2006)
“Determinants of University
Start-Up Activity”, in F. Therin
(ed) Handbook of Research on Techno-entrepreneurship,
Edward Elgar, forthcoming 2006.
Conference
Papers
O’Shea, R., Allen, T., and Morse,
K (2005) “Creating the Entrepreneurial
University: The Case of MIT”
in Entrepreneurial Universities: Constituents,
Consequences and Concerns session,
at Academy of Management Conference,
Hawaii, USA, August 2005.
O’Shea,
R., Allen, T., Roche, F. (2005) “Internal
Determinants of University Spinoff
Activity: A Longitudal Study of 141
U.S. universities”, in New Contexts
for Innovation and Entrepreneurship:
International Perspective on University
Spinoffs session, at Academy of Management
Conference, Hawaii, USA, August 2005.
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