IA “Fostering Entrepreneurship and the Role of the University” OEDC Conference: Fostering Entrepreneurship The Role of Higher Education 23-24 June 2005 Presented by: Diane Palmintera President, Innovation Associates [email protected]

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IA Fostering Entrepreneurship and University Technology Transfer Universities Are a Major Source of Entrepreneurial and Technology-Based Economic Development

 In the US, since the passage of the Bayh-Dole Act in 1980, universities have been an increasing source of entrepreneurial development.  In FY 2001, US universities performed more than $30 billion of R&D. This research provides the pipeline for technology transfer and entrepreneurial activities including patenting, licensing, and launching of start-up enterprises. www.InnovationAssociates.us Slide 2

IA Fostering Entrepreneurship and University Technology Transfer Universities Are a Major Source of Entrepreneurial And Technology-Based Economic Development

 There is no doubt about the major impact of university technology transfer on economic development. The FY 2003 AUTM Licensing Survey™ found that reporting universities:  Established more than 4,100 new companies since 1980, the majority of which were still operating.

  Executed almost 4,500 new licenses and options in FY 2003, and a total of more than 26,000 licenses were active from current and previous years.

Launched more than 2,200 new commercial products between FY 1998 and FY 2003.

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IA Fostering Entrepreneurship and University Technology Transfer Universities are Commercializing Technologies and Starting Up Enterprises

 University technology transfer is a complex process. It operates as part of the university’s internal culture and environment and as part of the external environment in the community and state.

 Internally, the “culture” of a university is one of the strongest influences on its technology transfer and commercialization performance. This includes incentives, rewards, and leadership that encourage faculty to commercialize research.

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IA Fostering Entrepreneurship and University Technology Transfer Universities are Commercializing Technologies and Starting Up Enterprises.

 Universities successful in commercializing technologies and starting up enterprises understand that engineers and scientists make poor business people.  Entrepreneurial-engaged universities provide, or facilitate access to sources of risk capital, management capacity building, and networking.

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IA Fostering Entrepreneurship and University Technology Transfer Entrepreneurial-Engaged Universities Facilitate Access to Risk Capital

 University technology transfer offices often have close linkages to private seed and venture capital firms. Successful offices facilitate linkages between researchers and firms.  Some universities sponsor or encourage linkages to enterprise forums or “springboards” that screen, mentor and showcase promising academic entrepreneurs to potential investors. www.InnovationAssociates.us Slide 6

IA Fostering Entrepreneurship and University Technology Transfer Entrepreneurial-Engaged Universities Facilitate Access to Risk Capital

 A number of US universities have their own seed capital funds that invest in university-based entrepreneurs. Some funds build management capacity in enterprises in which they invest.

 Some universities also have commercialization funds designed to advance research to near-market stages. www.InnovationAssociates.us Slide 7

IA Fostering Entrepreneurship and University Technology Transfer Entrepreneurial-Engaged Universities Build Management Capacity in Start-Ups

 Some universities hire consultants to devise business models, recruit management, secure financing and launch start-up enterprises. They do not permit academics to have management or fiduciary roles.  Other universities work with start-up enterprises from “cradle to grave”. Some have mentoring and “CEO-in-Residence” programs that use experienced entrepreneurs to help new ones.

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IA Fostering Entrepreneurship and University Technology Transfer Entrepreneurial-Engaged Universities Provide Opportunities to Network

 Networking is a critical ingredient in all university activities.

Events may be sponsored by the university or closely linked to those sponsored by technology councils, economic development organizations, and cluster groups.  Formal seminars, enterprise forums, technology breakfasts/ luncheons, and awards dinners all facilitate networking. Informal activities – coffees, holiday parties, etc. – are often more important than formal ones. www.InnovationAssociates.us Slide 9

IA Fostering Entrepreneurship and University Technology Transfer Figure 1 Selected U.S. Universities by Technology Transfer and Commercialization Metrics FY 2003 Metrics CMU Georgia Tech MIT Penn U.S. Patent Apps. U.S. Patents Issued New Licenses License Income (in US$ M) Start-ups Launched

85 81 48 2.3 1

R&D Expends (in US$ M)

238.0 67 41 30 2.3 12 386.4 238 152 90 17 442 112 83 31.7 77.0 12 472.0 704.5

Source:

Innovation Associates Inc.

Purdue UCSD

154 92 80 4.4 3 347.0 182 52 51 10.7 7 438.9

UW-M

204 87 156 32.0 4 662.1

Stanford

334 117

Wash Univ.

62 54 128 45.4 17 639.9 41 12.8 3 474.0 www.InnovationAssociates.us Slide 10

IA Fostering Entrepreneurship and University Technology Transfer Entrepreneurial-Engaged Universities Train and Support Student Inventors

 Business plan competitions are an effective way of exposing students to investors. Many competitions add value through business development and mentoring activities.

 Internships and practicum with start-up enterprises and venture capital firms expose students to real-world entrepreneurial development.  Entrepreneurship coursework, “boot camps”, and internships should involve engineering and science students as well as business students.

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IA Fostering Entrepreneurship and University Technology Transfer Entrepreneurial Climates Can Be Enhanced by Research Parks and Incubators

 University i ncubators and research parks contribute to an entrepreneurial culture and provide a visible ”technology presence”.  Incubators and research parks are only as good as the networking opportunities that they facilitate, and the investment and business development services that they provide.

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IA Fostering Entrepreneurship and University Technology Transfer Lessons for Entrepreneurial-Engaged University “Want-To Be’s”

 A strong and focused university research base provides the pipeline for transferring and commercializing university technologies, and launching start-up enterprises.

 Champions are often key to creating an entrepreneurial climate in and around the university. These champions are usually the university’s President or Chancellor.

 Risk capital is a critical ingredient in launching university-based, start-up enterprises. Universities should provide opportunities for entrepreneurs to prepare for and network with investors.

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IA Fostering Entrepreneurship and University Technology Transfer Lessons for Entrepreneurial-Engaged University “Want-To Be’s”

 Management capacity building is particularly important for university scientists and engineers who want to become entrepreneurs.  Business plan competitions, internships, practicum, and boot camps provide good opportunities for students to learn from experienced entrepreneurs.

 Networking is an integral part of a university’s entrepreneurial culture.

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IA Fostering Entrepreneurship and University Technology Transfer Lessons for Entrepreneurial-Engaged University “Want-To Be’s”

 Incubators and research parks can provide a visible “technology presence” at a university, but are only as good as the business services and networking opportunities they provide.

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IA Fostering Entrepreneurship and University Technology Transfer Download From IA’s Website:

 Accelerating Economic Development Through University Technology Transfer and Commercialization  Partners on a Mission: Federal Laboratory Practices Contributing to Economic Development  Developing High-Tech Communities: San Diego www.InnovationAssociates.us Slide 16

IA Fostering Entrepreneurship and University Technology Transfer INNOVATION ASSOCIATES Providing Consulting Services to International Organizations, Communities, States, Universities and Private Sector www.InnovationAssociates.us

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