Einar Rasmussen

1. Science-based entrepreneurial firms and regional impact – Evidence, myths and future research needs Einar Rasmussen

2. Science-basedentrepreneurialfirms Even the most casualobservationofthespinoffphenomenondemonstratesthatsomeofthe most importanttechnologycompanies ever createdwereoriginallyuniversityspinoffs (Shane 2004)

3. Innovation’s Golden goose the sole purpose of the Bayh-Dole legislation was to provide incentives for academic researchers to exploit their ideas. The culture of competitiveness created in the process explains why America is, once again, pre-eminent in technology. A goose that lays such golden eggs needs nurturing, protecting and even cloning (The Economist 2002)

4. Economicimpact Source: Bank of Boston 1997

5. Societalimpact?

6. Criticalvoices UK: • “Mr Lambert said that spin-out creation had instead been driven by the University Challenge Funds, bankrolled by the government. […] There were no figures in the accompanying survey to prove that costs - including public investment - were less than sales of products, intellectual property or spin-out equity. The businesses could as easily have been destroying value as creating it.” (Financial Times, 2004) • “these companies are technology lifestyle businesses not dynamic high-growth potential start-ups, and it is suggested that the prominence given to spin-offs in the analysis of technology transfer and in discussions of the economic impacts of universities is misplaced.” (Harrison and Leitch, 2010) Norway: • “The median firm turnover is around one million and its value added and employment are close to zero NOK and one employee respectively. Approximately five percent of the firms display patterns that are consistent with a high growth path and a strong future potential for employment and value added contribution.” (Borlaug et al., 2009)

7. Literaturereview • Examine the academic literature on Science-Based Entrepreneurial Firms (SBEFs): • the types and extent of impacts generated by SBEFs • the links between the start-up conditions and the subsequent performance and impacts generated by SBEFs • the different methodologies and indicators used to measure the impacts of SBEFs?

8. Method • Extensivesearchofkeywords in ISI Web of Science • Title and abstract, 1995 – to date • 919 articlesretrieved • 127 hadSBEFs as a keytopic • New search in 15 most cited journals • Full text search in these journals • 946 articles retrieved, 35 new articles added • Final sample of 162 articles (prior literature reviews as reliability check)

9. Yearofpublication

10. Journals

11. Countrieswithempirical data

12. Type ofstudy

13. ImpactofSBEFs • Impact of SBEFs rarely explicitly discussed • Only 14 of 162 articles included impact as a key theme • The majority of these is related to one university/region • Two views of impact • Direct economic impact (often regional focus) • SBEFs as technology transfer agents • Data over long time periods seems necessary to identify significant impacts • Vincett 2010: “We argue that the spin-off impacts represent incremental contributions to GDP, much larger than the government funding and directly attributable to it.” • Lack of rigorous studies of technology transfer impacts • Autio 1997: The most important economic impact delivered by new, technology-based firms may be a catalyzing one, delivered through technology interactions between the firms and their operating environment. • No studies of societal impact • Surprisingly weak documentation of the impacts of SBEFS

14. Start-upconditions and performance • More studies of what lead to start-up than what lead to performance • 28 of 162 articles included performance as a key theme • A broad set of issues explored • Individual • University context • Wider regional and industry context • Process oriented studies • Comparative studies (USOs and CSOs) • Several factors influencing performance has been identified • Lack of (theoretical) understanding of the mechanisms behind performance • Results likely to be highly context specific • Growing literature, but still fragmented picture

15. Methods and indicators • Assessed the indicators used in the 42 studies (14 + 28) • A broad range of indicators used at firm level • Survival • Employment and financial indicators • Intermediary (e.g. VC funding, speed) • Few technology transfer indicators • Patents, co-publishing, networking, interaction (all are proxies) • Usually short term indicators or restricted by data availability

16. Furtherresearch • Widespread belief that SBEFs are important, but empirical evidence on their impact is thin and mainly anecdotal • Need for longitudinal datasets (> 10 years) • Vincett 2010: “successful spin-offs grow over several decades” • Lawton Smith and Ho 2006: “the acceleration of growth takes up to 10 years to start.” • Need to follow the technology rather than the firm level • Second order impacts and firm transformations (e.g. acquisitions) has not been considered • Need to go beyond single universities • Difficult to generalize from single cases (usually highly successful ones) • Difficult to separate university capabilities from the role of external actors (regional)? • Need to go beyond direct economic effects • Technology transfer (spillovers) • Societal impact

17. Further research agenda • What leads to impact? • Need to understand the venture creation process • Need to consider different contexts • Need longitudinal and multi-level data • Measure impacts • Sufficient time lag • Avoid survival bias • Include user impact • Include societal impact

18. Thank you einar.rasmussen@uin.no