University Spinoffs and Wealth Creation
New Horizons in Entrepreneurship series
Chapter 4: Variation in Spinoff Activities Across Institutions
This chapter discusses an important empirical observation about university spinoffs: the wide variance across universities in their tendency to produce spinoff companies. This chapter will explain why some universities, like Arizona State University and Harvard University, produce virtually no new companies, despite generating a large number of technological inventions, whereas other universities, like Carnegie Mellon University and Emory University, produce a large number of spinoffs, given their level of technological production. As this chapter explains, three key factors appear to explain cross-university variation in spinoff activity: university policies, technology licensing office expertise, and university goals and culture. Each of these explanations will be explored in turn, but first some evidence of the concentration in spinoff activity in a relatively small set of universities is provided. THE CONCENTRATION OF SPINOFF ACTIVITY Many observers have noted that university spinoff activity is concentrated in a small number of academic institutions. Describing her interactions with 70 different academic institutions as a representative of the Howard Hughes Medical Institute, Leonard (2001) points out strong variance across the institutions in their interest in, and support of, spinoffs. In a more quantitative observation, Pressman (2002) reported that, in 2000, 121 academic institutions in the United States generated spinoff companies, while 69 institutions (36 percent) did not.1 The variance across universities in the rate of spinoff company formation is not limited to the United States. Charles and Conway (2001) reported that, in 2000, 24 universities accounted for 75 percent of all spinoffs in the United Kingdom. In fact,...
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