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Start-Up Businesses Are a Significant Result of University Research

Newswise - Reports that focus solely on technology transfer offices established by colleges and universities tend to underestimate the commercial activity resulting from academic research, according to a new study by Indiana University researchers.

Authors David B. Audretsch and Taylor Aldridge, writing in the June 2010 issue of the journal Research Policy, find that a significant number of productive researchers bypass university patent and licensing offices, an approach that is more likely to produce start-up companies.

"We learned that there are more start-up businesses coming out of university research than had been measured," Audretsch said. "This is something that's important, and therefore it's important that we start to measure it."

Audretsch is Distinguished Professor and Ameritech Chair of Economic Development and director of the Institute for Development Strategies at the School of Public and Environmental Affairs at Indiana University Bloomington. Aldridge is a research fellow at the Institute for Development Strategies. Both are also affiliated with the Max Planck Institute of Economics in Jena, Germany.

Studying a sample of highly productive scientists who received patents for research funded by the National Cancer Institute, part of the U.S. National Institutes of Health, Audretsch and Aldridge found:

-- 30 percent chose a "backdoor route" to commercialization and did not assign at least some of their patents to the university TTO.

They found a clear link between the route chosen by the scientists and whether their research was commercialized by licensing their patents to existing companies or by starting new businesses.

"Scientists choosing the backdoor route for commercialization, by not assigning patents to their university to commercialize research, tend to rely on the commercialization mode of starting a new firm," they write. "By contrast, scientists who select the TTO route by assigning their patents to the university tend to rely on the commercialization mode of licensing."

The article discusses the Bayh-Dole Act of 1980, which shifted the rights for intellectual property produced by federally funded research from the government to the universities where researchers work. The act, which the Economist called "Viagra for campus innovation," produced a proliferation of campus technology transfer offices and a dramatic increase in university patents.

But there were suggestions that university research created more businesses than were being counted by TTOs and their organization, the Association of University Technology Managers. To determine the extent to which that was the case, Audretsch and Aldridge developed a database of the largest one-fifth of National Cancer Institute grant awardees between 1998 and 2002. From that group, they identified 392 scientists who had earned patents, and examined how the research was commercialized.

Among their findings: Researchers who chose the backdoor route to commercialization were more likely to have their work cited in subsequent patent applications, suggesting that "those innovations with a potentially greater value are less likely to be commercialized through the technology transfer office."

Audretsch and Aldridge note that several factors may influence scientists to bypass technology transfer offices. Inventions and discoveries are different and may call for different approaches. TTOs are more effective and better staffed at some universities than at others. And different universities, academic departments and regions have different cultures with respect to the disclosure of intellectual property.

While concerns have been expressed that women scientists are less likely to be involved in start-up businesses than are men, the study didn't find gender, by itself, to be a factor. Audretsch said it appears that women are as likely as men to commercialize their research if they are engaged with researchers and institutions that value entrepreneurship.

The study concludes that technology transfer offices record only "the tip of the iceberg" of commercialization, and policy makers must examine what scientists actually do in order to understand the entrepreneurial success of government-funded research.

Source: NewsWise