Facilitating Academic Entrepreneurship

Research universities continually struggle with issues related to commercialization of faculty research. Increasingly, they must hire and support faculty conducting cutting-edge science, but also facilitate commercialization of their research. Many universities provide resources to faculty through venture labs and/or entrepreneurial sabbaticals. The topic has been front and center for decades, but little systematic is known about whether faculty members take advantage of these mechanisms. We use a life-cycle model of faculty research to examine the extent to which a faculty researcher engages in entrepreneurial activity. In each period, she allocates her time among applied and basic research, entrepreneurial activity, and leisure. Entrepreneurial e¤ort is a possibility only if she has an innovative idea, the probability of which is a function of her stocks of research and entrepreneurial knowledge. If she has an idea, she may ignore it, pursue it within the consulting limits of her contract, or take an entrepreneurial sabbatical. In each period, we compute the probability of an idea, the probabilities she is a full time faculty member, a hybrid professor, or a full time entrepreneur, and the optimal time allocations and knowledge stocks. Without substantial income supplements, she is unlikely to ever take a sabbatical leave. Even when she does, it is late in her career. Mechanisms designed to make her entrepreneurial e¤ort more productive reduce the likelihood that she will take sabbaticals, but increase the likelihood of hybrid behavior. Our model also highlights the importance of having an idea and lends theoretical justi\u85cation for the low rates of participation in commercial pursuits found in prior empirical work. Preliminary Draft. Please do not cite or quote. We thank Carol Espy Wilson and seminar participant from the University of Maryland for insightful comments. Thursby gratefully acknowledges NSF Award 0965289, and Jensen and Pham thank the Ewing Marion Kau¤man Foundation for support. 1