University Spinoffs and Wealth Creation
- New Horizons in Entrepreneurship series
Chapter 14: Conclusions
As explained in Chapter 1, university spinoffs are an important, but little investigated, topic. Several important technology companies, including Cirrus Logic, Lycos, Google and Genentech, were founded to exploit technological inventions made by faculty, staff or students of American universities. Moreover, on average, university spinoffs are very high-performing companies. From 1980 to 1986, 18 percent of the spinoffs from MIT’s TechnologyLicensing Office experienced an initial public offering, a rate 257 times higher than the IPO rate of the average start-up firm. The economic importance of university spinoffs has generated significant interest in these companies among university administrators and public policy makers. As a result of this interest, many, if not all, universities have created technology transfer operations designed to exploit university-assigned intellectual property. Most universities also have incubators, venture capital funds and business plan competitions to help inventors and other entrepreneurs start new companies to commercialize university inventions and, it is hoped, revolutionize industries, generate wealth for the founders and the university, and spur local economic development. Topping all of this off is the community of practitioners who help people to found university spinoffs. Not only has the number of universities with technology licensing offices grown rapidly over the past 20 years, but also the volume of spinoff activity and employment at these offices has also grown significantly. Moreover, the Association of University Technology Managers (Pressman, 2002) reports that the proportion of university technology that is exploited through the creation of university spinoffs has grown in every year that data...
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