Academic Entrepreneurship

Academic Entrepreneurship

University Spinoffs and Wealth Creation

New Horizons in Entrepreneurship series

Scott Shane

In this unique and timely volume, Scott Shane systematically explains the formation of university spinoff companies and their role in the commercialization of university technology and wealth creation in the United States and elsewhere. The importance of university spinoff activity is discussed and the historical development of university spinoff ventures is traced over time.

Chapter 7: The Industries Where Spinoffs Occur

Scott Shane

Subjects: business and management, entrepreneurship, management and universities, education, management and universities


One notable characteristic of university spinoffs is that they are more likely to be founded and to commercialize technology in certain industries than in other industries. This chapter discusses the variation across industries in the creation of university spinoffs. The first section of the chapter provides empirical evidence of the uneven distribution of spinoffs across industries. The second section discusses why spinoffs are more common in biomedical industries than in other industries. The third section of the chapter identifies specific industry characteristics that are associated with higher rates of spinoff formation. The last section of the chapter discusses why spinoffs are more likely to commercialize university technologies successfully in some industries than in others. THE UNEVEN DISTRIBUTION OF SPINOFFS ACROSS INDUSTRIES University spinoffs are not evenly distributed across all high technology industries. Rather, several studies have shown that these firms are concentrated in only a few industries. The most common industry for university spinoffs is biotechnology, followed by computer software. As Table 7.1 shows, more than half of all of the spinoffs founded at MIT between 1980 and 1996 are biotechnology and software companies. Similarly, Sobocinski (1999) found that over two-thirds (68 percent) of new ventures at the University of Wisconsin over the past decade were life sciences firms. Lowe (2002) found that two-thirds of the inventor-founded spinoffs from the University of California system were biotechnology, pharmaceutical or medical device firms. Golub (2003) reports that half of Columbia University’s spinoff companies are biomedical firms, with the remainder found in electronics...

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