Economic Development Through Entrepreneurship

Economic Development Through Entrepreneurship

Government, University and Business Linkages

New Horizons in Entrepreneurship series

Edited by Scott Shane

Despite a wealth of efforts that examine separately the role entrepreneurs and universities play in economic development, no systematic effort has been made to examine the role universities play in promoting economic development through entrepreneurship. This book fills that gap, focusing on policy aspects of government–university partnerships with a discussion both of best practices and problematic strategies. The book begins by tracing the history of American government–university–industry partnerships that have promoted economic development. In succeeding chapters, well-known scholars focus on linkages in different domains such as: technology transfer, innovation networks, brain drain, cluster-based planning, and manufacturing. Practitioner commentaries follow many of the chapters in order to present an evaluation of the arguments from the perspective of someone directly involved in the fostering of these relationships.

Chapter 2: Government Policies to Encourage Economic Development through Entrepreneurship: The Case of Technology Transfer

Scott Shane and Casey Porto

Subjects: business and management, entrepreneurship, economics and finance, industrial organisation


Scott Shane INTRODUCTION The federal and state governments in the United States have long partnered with universities to promote economic development through entrepreneurship. In fact, even the land grant system that led to the formation of many American universities is, itself, based on the idea that universities should be established so as to create knowledge that entrepreneurs could use to improve local agriculture and manufacturing (Golub, 2003; Rosenberg and Nelson, 1994). Over the past 25 years, American universities have become even more important contributors to economic development through entrepreneurship. Moreover several policies that have been put in place to encourage the formation of companies to exploit new knowledge created in academia by faculty, staff and students of research universities (university spin-offs) over this period have contributed to this increase in the contribution of university entrepreneurship to economic development. This chapter reviews many of the policies adopted by federal and state governments to enhance economic development through the creation of university spin-off companies to identify some best practices for the enhancement of economic development through the encouragement of university entrepreneurship. The chapter is divided into three parts. The first section reviews evidence that the creation of spin-off companies indeed enhances economic development. The second section reviews the policies designed to promote economic development through the creation of new companies to exploit academic inventions to evaluate the case for the value of different policies. The third section offers some implications from the review of policies about best 33 34 Economic development through...

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