Inside or outside the IP-system. Business creation in Academia

Research and public policy on academic entrepreneurship, especially in the United States, are largely based on the assumption that the entrepreneurial activity of academics is represented by faculty efforts to commercialize inventions that they have disclosed within the intellectual property (IP) system established by university administrators (Rothaermel et al., 2007). Some recent evidence, however, suggests that a number of entrepreneurial activities by academics occur outside of this system (Bekkers and Freitas, 2008). This evidence leads us to ask: Are the entrepreneurial activities of academics that take place outside the formal IP system different from those conducted within the system? Differences in the types of entrepreneurial activities that occur inside and outside the formal IP system (and, by extension, differences in the characteristics of the individuals involved with those activities) may have major consequences if unacknowledged by researchers and policymakers. First, researchers might systematically underestimate the depth and breadth of academic entrepreneurship. Second, various types of university researchers from a range of technical fields and institutions may be more likely to engage in outside-the-formal-system entrepreneurial activities than in entrepreneurial activity through formal IP channels. As a result, policies aimed at stimulating only formal IP-based entrepreneurial activities might fail to influence entire categories of individuals and entire academic disciplines thereby hampering efforts to generate more entrepreneurial activity from universities. This paper is based on a survey of 11,572 university professors, representative of the population of 58,646 academics who are affiliated with Carnegie I and II United States universities and employed in National-Research-Council-tracked disciplines. We find that a large share of academic entrepreneurship occurs outside the IP system and that the academics who undertake this activity differ from those who engage in academic entrepreneurship within the formal IP system. In particular, our findings reveal that approximately two-thirds of businesses started by academics are not based on disclosed and patented inventions. Moreover, we show that researchers whose entrepreneurial activities are based on inventions disclosed to universities are younger than academics whose entrepreneurial outputs are not based on inventions disclosed to universities. We also show that researchers who undertake entrepreneurial activities inside the IP system trade off research and teaching for entrepreneurship if compared to the ones who operate outside the system. Finally, academics whose entrepreneurial activities are based on disclosed and patented inventions tend to be involved in the bio-sciences whereas academics who engage in entrepreneurial activities that are not based on such inventions tend to be involved in the social sciences and engineering. These findings have implications for the development and testing of theories of academic entrepreneurship, for devising public policies for knowledge transfer from academia to the business world, and for managers and entrepreneurs interested in collaborating with academics. First, an accurate understanding of academic entrepreneurship requires researchers to capture the entire range of efforts by academics to profit commercially from their scholarly activities. A focus solely on the commercial activities that result from patented inventions underestimates the importance of academic entrepreneurship and leads, potentially, to misunderstandings about academics’ motivations for engaging in entrepreneurial activity, the types of academic efforts that faculty seek to commercialize, and the characteristics of those who engage in this activity, among other aspects. Second, if policymakers believe that academic entrepreneurship is a valuable activity and intend to encourage it, then they need to have accurate estimates of..