Professor Donald Siegel, University at Albany, State University of New York, presented the second keynote address "Economic Growth and Academic Entrepreneurship: Lessons and Implications for Industry, Academia and Policymakers" at the IntertradeIreland All-Island Innovation Programme annual conference 2012, Exploiting Industry and University Research, Development and Innovation: Why it Matters held at National University of Ireland, Galway, 12 - 13 June 2012. Part 1

1. “Economic Growth and Academic Entrepreneurship: Lessons Learned and Implications for Industry, Academia, and Policymakers”
Professor Donald Siegel
Dean-School of Business University at Albany, SUNY
President, Technology Transfer Society
Editor-Journal of Technology Transfer
InterTradeIreland All-Island Innovation Conference
NUI Galway
June 13, 2012

2. Outline
 Theoretical Rationale for R&D and Technology- Based Economic Development (TBED) Policies/Importance of Evaluation
Background Information on University Technology Transfer/Academic Entrepreneurship
Summary of Key Research Quantitative and
Qualitative Results
 Lessons Learned For Industry, Academia, and Practitioners
 Shameless Self-Promotion: University at Albany- School of Business-Entrepreneurial Initiatives and Plugs For Technology Transfer Society/Journal of Technology Transfer

3. Economics of Innovation and Entrepreneurship
Joseph Schumpeter (1939)-
Stresses the Importance of Technological Competition, Not Price Competition-The Role of the Entrepreneur
Technological Change is a Force of “Creative Destruction”
Zvi Griliches/Edwin Mansfield/Richard Nelson-Diffusion of Innovations/R&D is a Key Source of Economic Growth (Especially Basic Research)/Technology Transfer/Role of Universities

4. Why a Government Role in R&D? Economic Rationale-Market Failure
 Scientific Knowledge as a Public Good
 Technical and Commercial Uncertainty
Associated With Basic Research
 Complementary Assets May be Required for
Successful Innovation
 Externalities

5. Government Actions
 Financier
 Lead User (e.g., Transistors, Integrated Circuits)
 Provider of Complementary Assets (e.g.,
Infrastructure)
 Establishing Price and Quantity Regulations
(e.g., Tariffs, Quotas, Price Floors, Price Ceilings,
and Subsidies)
 Other Regulations That Affect Innovation
(e.g., Environmental and Safety Regulations)

6. Why do Governments Have R&D Policies?
 Social Return > Private Return
Private Sector Under-invests in R&D? Why? –
Difficult to Evaluate and Fund Some Types of Research
External financing means revealing ideas
Benefits so diffuse recipients hard to organize or identify
Need large organization for implementation/commercialization, but such organizations not necessarily good innovators
Standards-related R&D-public goods nature of standards
 National Security and/or Strategic Industries
“Ripe” for technical advance
Closely linked to other industries
Enables program in many other industries (e.g. semiconductors)

7. Why do Governments Have R&D Policies? (cont.)
 Education/human capital and imperfect human capital markets
Individuals facing differing financial constraints in investing in human capital-equality of opportunity argues in favor of education subsidies
Externalities for society from human capital formation by individuals (assuming they do not capture all the benefits in their wages).

8. Institutions and Agents Who Receive Public Support for R&D and TBED
Agents
University Scientists
Industry Scientists
Institutions
Universities/Technology Transfer Offices
University-Industry Research Centers (e.g., NSF- ERC, NSF-IUCRC, CATs)
Science Parks
Incubators/Accelerators
Firms (both small and large-e.g., SBIR and ATP/TIP)

9. Key Points About Evaluation of Technology Programs and Institutions
Outcomes
Most Important Criteria For Public Investment -Fields With the Highest Social Returns
Also important to provide support when private returns are insufficient to overcome ”hurdle rates” (Link and Scott (1998), Siegel (1999))
 Evaluation Should be Built Into the Design of R&D and TBED Programs

10. Key Points About Evaluation of Technology Programs and Institutions (cont.)
Quantitative and Qualitative Assessment
Multiple Indicators
Time Frame is Critical: Analyze Short-Run, Medium-Run, and Long-Run Impacts
Indicators of Output/Performance Will Differ According to the Unit of Observation
Control Group

11. Four Types of Measurements
Resources
Scientific Labor (to conduct research)
Equipment
Facilities
Outputs
The Funded Research Projects
Collaborative Research Relationships Arising From the Funded Research
Publications
Patents
Licenses
Models and Algorithms
Prototype Products and Processes

12. Four Types of Measurements (cont.)
Outcomes
Citations (both Patents and Articles)
Presentations and Other Forms of Dissemination
Revenue Generated by New/Improved Products
Productivity Effects on Firms
Firm Growth, Survival
New Firm Creation
Changes in the Propensity of Firms to Collaborate

13. Four Types of Measurements (cont.)
Longer-Term Impacts (Broader Societal Goals)
Job Creation
Measures of Regional/State Economic Growth
Ability to Attract More Firms to A Region or State
Improvements in Quality of Life (e.g., Health, Safety, Environment)
Effects on Ability of Region or State to Innovate

14. Technology (Primary) Industry
Period Developed University Created
Electronic University of
1940s Calculator Pennsylvania Computers
Fiber
1960s Optics MIT Telecommunications
Stanford,
1970s rDNA California Biotechnology
1980s Supercomputing Illinois Internet
Sequencing of DNA/
Human Genome Cal Tech,
1990s Project Johns Hopkins Pharmacogenomics
2000s Nanotechnology UAlbany ?????
Universities, “GPTs”, and The Creation of New Industries

15. William Baumol-The Free Market Innovation Machine- Analyzing the Growth Miracle of Capitalism
Routine/Systematic Innovation-Large Firms
Entrepreneurial Innovation-Small Firms
“David and Goliath Symbiosis”-Joint Efforts of Individual Entrepreneur and Large Industrial Firm  Unprecedented Wealth Creation
Siegel (2006)-Universities Increasingly Developing and Nurturing Startups; Also Linking Small and Large Firms Who Engage in Entrepreneurial Innovation

16. Background Information on University-Industry Technology Transfer
 U.S.-1960’s, 1970’s Decline in Competitiveness
(“Japanese Challenge”, Productivity Slowdown)
 Dramatic Changes in U.S. National Innovation Policy
Expansion of Programs to Support Public-Private Partnerships (e.g., Advanced Technology Program- ATP/TIP, NSF-ERC, IUCRC)
Relaxation of Antitrust Enforcement to Promote Collaborative Research (e.g., NCRA)
Policies Promoting More Rapid Diffusion of Federally-Funded Technologies From Universities and Federal Labs to Firms (e.g., Bayh-Dole, Stevenson-Wydler, SBIR )

17. Legacy of the Bayh-Dole Act
 Bayh-Dole Act of 1980: Universities Own the Rights to Technologies That Arise from Federal Research Grants
 Purpose: Accelerate the Rate of Technological
Diffusion, Promote Economic Development
 Almost All Universities Have Established a Technology
Transfer or Licensing Office
 Rapid Growth in Commercialization of University
Technologies:
U.S. Universities
1980 2010
University Patents 300 4469
Licensing Agreements 276 4284
Startups 35 651

18. Research on Institutions and Agents Involved in Academic Entrepreneurship
Agents and Institutions
University Scientists
Industry Scientists
Entrepreneurs
Industry-University Cooperative Research Centers
University Technology Transfer Offices (TTOs)
Science Parks
Incubators/Accelerators
Firms That Interact With Universities
Venture Capital Firms

19. Selected Research Questions
 How Does the Process of University Technology
Commercialization/Academic Entrepreneurship Work?
 Which Universities “Perform” Best?
 What is the Role of the TTO?
 How Should We Measure Performance?
 Which Factors “Explain” Variation in Relative
Performance? (e.g., Incentives, Organizational, and
Environmental Factors)
 Do Incubators/Accelerators and Science Parks Add Value?

20. Interdisciplinary Research on Institutions and Agents Involved in Academic Entrepreneurship
Indicators of Output/Performance
Invention Disclosures
Patents
Number of Licensing Agreements
Licensing Revenue
Research Productivity of Industry Scientists/Firms
Research Productivity of University Scientists
“Productivity” of Universities in Technology Transfer
Start-Up Formation
Survival
Employment Growth
Changes in Stock Prices

21. Key Results for University and Regional Policymakers
Bayh-Dole Type Legislation Appears to Have Been “Effective”
TTO Staff Add Significant Value Because Scientists Are Not Disclosing Inventions
Important for TTOs to Educate Academics on Technology Transfer and For TTO Staff to Interact With Entrepreneurs (“Surrogate” Entrepreneurs)

22. Key Results for University and Regional Policymakers (cont.)
Private Universities and Those With Medical Schools
Appear to Be Somewhat More Productive
Universities Are Becoming More “Strategic” in Technology Transfer (More On That Later) –More Heterogeneity and Application of Management Theories to Practice
 Property-based Institutions (Incubators and Science
Parks) Appear to Enhance Commercialization
Incentives Matter (e.g., Royalty Distribution Formulas), But So Do Organizational Practices and Institutional Policies

23. Key Results for University and Regional Policymakers (cont.)
Universities Increasingly Focusing on the Entrepreneurial Dimension (Evidence Mixed on Success of University Based Startups)
Academic Entrepreneurs Are Not Less Productive in Their Academic Research After Commercialization
Foreign-Born Scientists Are More Likely to Become Academic Entrepreneurs
Social Networks of Star Scientists Key for New Firm Creation

24. Key Stylized Facts From Qualitative Research
Major Impediments to University Technology Transfer:
Informational and Cultural Barriers Between
Universities and Firms (Especially for Small Firms)
Insufficient Rewards for Faculty Involvement in Technology Transfer at Some Institutions, Especially w.r.t. Entrepreneurial Activity

25. Key Stylized Facts From Qualitative Research (cont.)
Major Impediments to University Technology Transfer (cont.):
Technology Transfer Office Staffing and Compensation Practices (High Rate of Turnover, Insufficient Business/ Marketing Experience, Possible Need for Incentive Compensation)
Education/Training is Needed for Faculty Members, Post- Docs, and Graduate Students in the Specifics of the Entrepreneurial Process, the Role of Entrepreneurs, and How to Interact with the Business/Entrepreneurial Community

26. Key Stylized Facts From Qualitative Research (cont.)
A Failure to Address These Barriers Will
Induce More Faculty Members and Firms to
Circumvent the TTO and Engage in
“Informal” UITT
 University Technology Transfer/Commercialization/Academic Entrepreneurship Should be Considered From a Strategic Perspective

27. Strategic Implications of University Technology Transfer /Academic Entrepreneurship-Formulation Issues
 Setting Institutional Goals/Priorities
 Resources Devoted to University Technology Transfer Choices Regarding Technological Emphasis
 Strategic Choices Regarding Modes of University Technology Transfer:
 Licensing
 Startups
 Sponsored Research
 Other Technology Transfer Mechanisms That are Focused More Directly on Stimulating Economic Development (e.g., Incubators and Science Parks)

28. Strategic Implications of University Technology Transfer /Academic Entrepreneurship-Implementation Issues
Improving Information Flows
Organizational Design/Structure
HRM Practices-Staffing/Compensation of TTO
Personnel
Reward Systems for Faculty Involvement in University Technology Transfer (perhaps including P&T- e.g., 6/- 06-Texas A&M)
 Implementation Issues Regarding Modes of University Technology Transfer
Different Ways of Structuring Licensing Agreements
Academic vs. Surrogate Entrepreneurs
 Different Ways to Manage University-Based
Incubators and Science Parks

29. Recommendations Based on Studies of Academic Entrepreneurship
Stressing Entrepreneurship (As Opposed to Patenting and Licensing) Promotes Technology Commercialization and Enhances Economic Impact of University
Strong Need to Enhance Incentives for Faculty Members to Be Engaged in Entrepreneurial Activity (and Perhaps For Successful Ones to Serve As Mentors)-Including P&T
More “Open” Immigration Policy for Scientists and Engineers Promotes Academic Entrepreneurship

30. Recommendations Based on Studies of Academic Entrepreneurship
Important to Increase Participation/Success of Women & Minorities in Academic Entrepreneurship (as we found in the NRC Evaluation of SBIR)
Entrepreneurship Research, Education, and Community- Based Initiatives Are Key Complements
Important To Develop An Entrepreneurial Culture at the University and in the Local Region (More on That Later)
Corporate Partnerships Yield Better Results With Respect to Academic Entrepreneurship
Entrepreneurship As An Academic Field
Entrepreneurship (2007) vs. Strategy (1989)
Returns to Studying This Topic Are High (e.g., NSF- IGERT, Kauffman, development/fund-raising for the university)

31. Universities Focusing on Start-up Formation Should Develop a Technological Entrepreneurial Curriculum, Applied to Stakeholders-Role of Faculty Conducting Research on Technological Entrepreneurship
Interdisciplinary Theory
Evaluation/Policy Research
Practitioner Research
Academic Conferences
Research Workshops
Ph.D. program

32. Aspects of a Technological Entrepreneurship Curriculum -Institutional Level
Incubator/Accelerator
Science/Technology Park
Technology Transfer Office (Link to Business Schools)
Knowledge Clusters
Angel Network
Venture Forum
Senior Administrative Position in Entrepreneurship (e.g., Vice Provost-Entrepreneurship)
Enhance Pecuniary and Non-Pecuniary Incentives for Faculty Members to Be Engaged in Academic Entrepreneurship

33. Aspects of a Technology Entrepreneurship Curriculum -Relating to (Internal and External) Stakeholders
Focused Graduate Courses and Executive Programs for the Growing Class of Managers Involved in Technology Commercialization (e.g., AUTM, Federal Labs, Teaching Hospitals, Lawyers )
Additional Entrepreneurship Courses (e.g., on TBED, cognitive, sociological, and economic aspects)
Add Evaluation and Assessment Tools to Existing Courses in Technology Management/Strategy
Technology Familiarization
Internships
Idea Labs
Business Plan Competitions
Venture Forum

34. UAlbany School of Business-Refocusing on Entrepreneurship and Regional Economic Development
 School of Business, UAlbany, SUNY Strategies Converge
 Strong Support From Central Administration for New Focus on Entrepreneurship (Chancellor, President, Provost)
At All Levels–Emphasis on University’s Role in Job Creation, Economic Development and Entrepreneurship
 Key Tactic: Collaboration (With Other Colleges on Campus and Other Universities in the Region)

35. UAlbany School of Business-Entrepreneurial Initiatives
New Undergraduate Concentration in Entrepreneurship
Entrepreneurship Track in Full-Time MBA Program
New York State Student Business Plan Competition
Collaborations with Community Colleges
Life Sciences Entrepreneurship-RNA Institute
Thermo Fisher Student Venture Fund
Entrepreneurial Finance Research Conferences
Small Enterprise for Economic Development (SEED) Program (Winner of 2012 Tribeca Disruptive Innovation Award)-Focus on “Bottom of the Pyramid”
Young Entrepreneurs Academy Chapter

36. “Small Enterprise for Economic Development (SEED) Program Launched With SBDC and the School of Social Welfare ($2.6 Mil) and ESD (State) Grants of $200K
Key/Unique Features
“Character-Based” Lending-Recipients Take Business Courses And Are Assigned To A Local Mentor
Teams Of Students From Both Schools Assist Recipients
 Evaluation Built Into Design of the Program
 The First Character-Based Micro-loan fund project (with evaluation) Ever Based at a University (and the partnership between a School of Social Welfare and a School of Business is unprecedented!)
UAlbany SEED Program

37. Young Entrepreneurs Academy Chapter at UAlbany
Young Entrepreneurs Academy (YEA!)–Kauffman Foundation Sponsored Program –Established at the University of Rochester and High Schools in Rochester
A Year-Long Program Teaching Middle and High School Students How to Start and Run Their Own REAL Businesses-“Start as a Student, Finish as a CEO!”
($1000, $900 for a Student With a UAlbany Connection)
Lead Sponsor-Turf Hotels, Inc. -Thanks to Michael Hoffman and Brian Straughter!!!