University Spinoffs and Wealth Creation
New Horizons in Entrepreneurship series
Chapter 1: Introduction
What do Cirrus Logic, the semiconductor company, Lycos, the Internet search engine, and Genentech, the biotechnology firm, have in common? All were firms founded to exploit technological inventions made by faculty, staff or students of American universities. Throughout the history of the modern university, but particularly in the United States since the passage of the Bayh–Dole Act in 1980, these types of firms, called university spinoffs, have become important parts of the economic landscape. Moreover, university spinoffs are becoming a significant global phenomenon. In the United Kingdom, university technology commercialization activities accelerated in the late 1990s, a period when many UK institutions established university technology transfer offices (Wright et al., 2002). Charles and Conway (2001) report that United Kingdom universities have generated 338 spinoffs over the past five years. In fact, in the United Kingdom, 175 spinoff companies were incorporated in 2001, a figure equal to approximately 31 percent of the 554 university spinoffs formed in the 1996 to 2001 period (Wright et al., 2002). Other countries are also seeing significant growth and interest in spinoff activity. Governments in continental Europe are devoting increasing amounts of money to universities, with the goal of turning them into engines of economic growth through spinoff company formation. Asian universities are increasing their production of university spinoffs by adopting new policies that favor the formation of these companies. For instance, the Japanese government recently changed its intellectual property laws to favor spinoff company formation, and universities in other Asian countries are reporting significant...