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

Research and public policy on academic entrepreneurship in the United States is based on the assumption that entrepreneurial activity of U.S. academics is accurately represented by efforts of faculty to commercialize inventions that they have disclosed to university administrators (Mowery et al., 2002 ). Most studies of the commercialization of academic research, and virtually all efforts to develop related policies, consider only entrepreneurial activities generated as a result of a formal disclosing process, put in place by university administrators, that occurs within the so-called “Intellectual Property System” (IP-System) (Rothaermel et al., 2007 ). Casual and anecdotal evidence, as well as the characteristics of certain technologies that are not easy to protect through the IP-System, however, suggest that a number of entrepreneurial activities by academics occur outside of the IP-System. A failure to acknowledge the presence of these activities, and a lack of knowledge of individual characteristics and institutional affiliation of those academics involved in them, may have some major consequences. First, we might systematically underestimate the extent and diffusion of entrepreneurial activities by academics, and neglect the analysis of some specific forms of knowledge commercialization, such as collaborations and consulting, which may represent a non-negligible share of the overall knowledge creation process from academia to business. Second, these commercial activities may be associated to university researchers with different characteristics then those commercializing trough standard tech-transfer and IP channels. The differences need not be only at the individual level, but may also concern the disciplinary areas and departments to which academic entrepreneurs are affiliated. Therefore, policies aimed at stimulating only certain type of knowledge commercialization might leave out entire classes of individuals and disciplines, thus hampering the overall process of knowledge transfer from academia to business. In this paper, we provide empirical evidence on the existence of commercial activities within academia that occur either inside the IP-System, such as starting a business based on a disclosed and patented invention, or outside the IP-System, such as establishing a firm not on a formal intellectual property disclosed to universities. In particular, we compare the two types of technology transfer activities showing that individual characteristics, departmental and organizational affiliation, as well as working time allocation, of academics starting business inside the IP-System are systematically different from those who have started businesses not on disclosed and patented inventions. Our evidence is based on a survey that was administered to 58,646 tenured or tenure track faculty members and post doctoral researchers at all Carnegie I and II categorized universities (except Case Western Reserve University) in National Research Council (NRC) tracked departments, during the second half of 2007. At the close of data collection (at the end of 2007), 11,572 usable responses were received, yielding a 20 percent response rate. The questionnaire encompassed questions on demographics (such as gender, age, academic rank, and years of experience); department of affiliation; nature and types of academic activities (number of publications, amount and the sources of research funding, the level of interaction with industry, as well as the time allocation of academic work across different activities); and questions directed at collecting information on the commercialization of a respondent’s academic research. Professors were asked, in particular, whether they had disclosed inventions, whether they held US patents (as inventors or assignees), whether they have started businesses based on their research, and, within the business started, how many of them were based on a patent. As a consequence, we could also derive whet...