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<ul><li>Faculty Disclosures, University Invention and Entrepreneurship   </li></ul><ul><li>2006 </li></ul><ul><li>Celestin...
<ul><li>Why do faculty disclose new inventions? </li></ul><ul><li>I study the factors that contribute to faculty disclosin...
Relevant Literature <ul><li>The theoretical literature has predominantly focused on the effects of the Bayh-Dole Act, and ...
Relevant Literature <ul><li>Lach and Schankerman (2002) examine royalties and the value each disclosure adds to licensing ...
Chukumba 2006 <ul><li>I argue that Bayh-Dole legislation and increased profit sharing use by universities (Penn State 40 i...
Technology Transfer Flows:  The Who Cares? <ul><li>Inventor </li></ul>TTO Firms   VC SBIR
Data <ul><li>The National Research Council 1993 (NRC 1995) Survey of Ph.D. Granting Institutions </li></ul><ul><li>The Ass...
University Faculty Disclosures 1993 = 6,075 2003 = 11,147
 
 
Expected Signs <ul><li>INVENTOR CHARACTERISTICS </li></ul><ul><li>Engineering Quality (+ ), Science Quality (+ ), Quality ...
Results <ul><li>-The estimated coefficient for  engineering faculty quality  is positive and significant </li></ul><ul><li...
Results -Adding an additional full time technology transfer officer results in a .003 change in disclosures. The estimated...
Conclusions <ul><li>Attract venture capital to your state and university.  Venture Capital spending matters.  Faculty in h...
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University Faculty Disclosures April3 2006

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Transcript of "University Faculty Disclosures April3 2006"

  1. 1. <ul><li>Faculty Disclosures, University Invention and Entrepreneurship </li></ul><ul><li>2006 </li></ul><ul><li>Celestine O. C., Chukumba </li></ul><ul><li>www.torycapital.com </li></ul><ul><li>[email_address] </li></ul><ul><li>“ use with permission only” </li></ul><ul><li>Please contact author </li></ul>
  2. 2. <ul><li>Why do faculty disclose new inventions? </li></ul><ul><li>I study the factors that contribute to faculty disclosing new inventions to technology transfer officers (TTOs). </li></ul><ul><li>I determine the conditions under which this occurs by empirically examining the affects of venture capital spending, small business spending and financial market conditions on faculty disclosures. </li></ul><ul><li>I examine whether TTO, inventor and invention characteristics such as TTO size and age help to explain the growth of disclosures in recent years. </li></ul>The purpose of this paper
  3. 3. Relevant Literature <ul><li>The theoretical literature has predominantly focused on the effects of the Bayh-Dole Act, and the behavior of inventors and technology transfer officers (TTOs): </li></ul><ul><li>Jensen, Thursby, and Thursby (2003) find that higher quality faculty disclose inventions at earlier stages of development . </li></ul><ul><li>Jensen and Thursby (2004) study the effects of increased incentives to commercialize university research on the trade-off between applied and basic research, and the quality of education. </li></ul><ul><li>Thursby and Thursby (2004) show that the age of the inventor seems to affect faculty disclosures. </li></ul>
  4. 4. Relevant Literature <ul><li>Lach and Schankerman (2002) examine royalties and the value each disclosure adds to licensing income. Universities with higher royalty shares for their faculty invent less and their inventions have higher average value in terms of royalty income per disclosure. </li></ul><ul><li>Shane (2002) Inventor-founded start-ups have cost advantages due to the inventor's superior knowledge of the technology, which can limit transactional and informational problems. Faculty that disclose are needed for start-ups ……later. </li></ul><ul><li>Di Gregoriao and Shane (2003), find evidence that inventor quality has a positive impact on start-up activity using the Gourman Report. Does quality matter? </li></ul><ul><li>Thursby and Thursby and Mukherjee (2005) argue that faculty incentives to disclose are not due to financial motives but are caused by an increase in faculty desires to expend effort in licensing activities. </li></ul>
  5. 5. Chukumba 2006 <ul><li>I argue that Bayh-Dole legislation and increased profit sharing use by universities (Penn State 40 inventor/40 university/ 20 administrative) and increased venture capital spending, and TTO willingness to use cashed-in-equity and start-ups contribute this increased desire to expend effort. </li></ul><ul><li>Previous efforts have not focused/connected financial characteristics such as the availability of venture capital and faculty willingness to disclose. </li></ul><ul><li>I use specific inventor quality measures as opposed to general school rankings. I construct a measure for each university by forming a weighted average of the engineering and science department quality scores, where the weights are faculty size. </li></ul><ul><li>The relationship between venture capital, small business spending and faculty disclosures is clarified. Financial Variables add value to current literature. </li></ul><ul><li>Financial conditions/financial incentives matter. When venture capital spending occurs  financial incentives for inventors rise  more disclosures. When financial conditions are better such as increasing returns to capital  financial incentives for inventors rise  more disclosures. </li></ul>
  6. 6. Technology Transfer Flows: The Who Cares? <ul><li>Inventor </li></ul>TTO Firms VC SBIR
  7. 7. Data <ul><li>The National Research Council 1993 (NRC 1995) Survey of Ph.D. Granting Institutions </li></ul><ul><li>The Association of University Technology Managers (AUTM) FY’s 1993-2000 </li></ul><ul><li>Dependent Variable = Faculty Disclosures </li></ul><ul><li>Unbalanced Panel of 110 Universities </li></ul><ul><li>The National Venture Capital Association Yearbook </li></ul><ul><li>SBIR, STTR database from SBIR world </li></ul>
  8. 8. University Faculty Disclosures 1993 = 6,075 2003 = 11,147
  9. 11. Expected Signs <ul><li>INVENTOR CHARACTERISTICS </li></ul><ul><li>Engineering Quality (+ ), Science Quality (+ ), Quality (+), University is Private(?) </li></ul><ul><li>TTO CHARACTERISTICS </li></ul><ul><li>TTO Size - FTE’s(+), TTO Age – Program Year (+), Start- up Companies Formed (+), Gross Licensing Income (+), Cashed-in-Equity(+), </li></ul><ul><li>INVENTION CHARACTERISTICS </li></ul><ul><li>Medical School(+), Ind/Fed Ratio(?) </li></ul><ul><li>VENTURE CAPITAL CONDITIONS </li></ul><ul><li>Log of Venture Capital Expenditure US (+), Log of Venture Capital State (+), University is located in High Venture Capital State (+) </li></ul><ul><li>SMALL BUSINESS CONDITIONS </li></ul><ul><li>SBIR awards phase 1 (+), SBIR awards phase 2 (+), SBIR dollars phase 1 (+), and SBIR dollars phase 2 (+), </li></ul><ul><li>FINANCIAL MARKET CONDITIONS </li></ul><ul><li>S & P 500 Level (+), Nasdaq Index Level (+) </li></ul>
  10. 12. Results <ul><li>-The estimated coefficient for engineering faculty quality is positive and significant </li></ul><ul><li>-Moving from a 3 to a 4 in engineering faculty quality results in a 0.52946 change in average disclosures. </li></ul><ul><li>-The estimated coefficient for life sciences faculty quality is negative and not significant </li></ul><ul><li>- Private Universities receive .46 less disclosures. </li></ul><ul><li>-Universities with medical schools receive .34 more disclosures. </li></ul><ul><li>-The estimated coefficients for TTO size and TTO AGE are positive and significant. </li></ul><ul><li>-A 10 year increase in age results in .09 percent increase in disclosures. </li></ul><ul><li>“ TTO’s Learning by doing?” </li></ul>
  11. 13. Results -Adding an additional full time technology transfer officer results in a .003 change in disclosures. The estimated coefficient for the cumulative start-ups is positive and significant. -Industrial to federal research support ratio helps to predict disclosures. Jensen, Thursby and Thursby (2003) found that the ind/fed ratio did not help to predict the stage of development at which inventions are disclosed proof, prototype, etc. -Each new dollar of venture capital at the state level funding results in a .02 change in disclosures. -Faculty located in high venture capital states are .04 more likely to disclose. -SBA phase 2 awards and dollars impact disclosures positive and significant in several estimations
  12. 14. Conclusions <ul><li>Attract venture capital to your state and university. Venture Capital spending matters. Faculty in high venture capital states invent more. </li></ul><ul><li>Choose the best quality engineering faculty that can be obtained. If constraints in budgeting exist. Life sciences quality is less important than engineering quality. (for generating disclosures – these may not be commercialized) </li></ul><ul><li>SBIR Program stimulates innovation </li></ul><ul><li>Affiliate institution with a medical school or develop links/ties to medical institutions for training faculty and conducting faculty research. </li></ul><ul><li>TTO age, size and cumulative licensing experience with start-ups impact faculty invention disclosures </li></ul><ul><li>Faculty motives ……Faculty money driven?/Aware of surroundings? </li></ul>
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