ACADEMIC ENTREPRENEURSHIP

The public expectations towards the universities have been shifting. Instead of focusing only on the traditional teaching and research activities, the mission of universities has expanded to include wide range of economic and social goals (Etzkowitz, 2003). Entrepreneurial university can be viewed as an academic institution in which the traditional teaching and research role has been expanded with the entrepreneurial role. The entrepreneurial role lies in capitalization of the created knowledge through commercialization and in development of organizational mechanism and support framework to encourage and support the movement of commercializable research across institutional borders (Etzkowitz, 2003). Entrepreneurial universities develop different structures such as joint research and development centers, science parks, technology transfer and patent offices, incubators, joint ventures to facilitate the commercialization (Bronstein & Reihlen, 2014).

Academic entrepreneurship can be defined as the practices related to the “transfer knowledge between the university and the external environment in order to produce economic and social value both for external actors and for members of the academia, and in which at least a member of academia maintains a primary role” (Cantaragiu, 2012, lk 687). Knowledge transfer refers to the exchange of available information between different parties. In academic setting, the main forms of codified knowledge are publications, patents (European Commission, 2009).

Academic entrepreneurship can take place in different forms such through collaboration with industry, university-based venture funds or incubation, spinoffs by academic staff or startups by students (Pilegaard, Moroz, & Neergaard, 2010). Academic entrepreneurship is mostly associated with the creation of new spinoff enterprises by academic staff in order to exploit the knowledge, technology and research created within academic institution (Pirnay, Surlemont, & Nlemvo, 2003; Shane, 2004). A broader approach to academic entrepreneurship relates to a wider range of formal and informal entrepreneurial activities such as licensing, spinoffs, consultancy, contract research, public lectures, informal advice and different types of collaborations (Abreu & Grinevich, 2013).

Academic entrepreneurship as a process contains same stages of entrepreneurship process starting with idea and opportunity recognition, opportunity evaluation, execution that incl. resource acquisition, performance. However, it has its own peculiarities, e.g. spinoff vs. new enterprise in non-academic setting. Academic spin-offs are autonomous legal entities created within particular type of parent organization with the goal of exploiting accumulated scientific and technical know-how (Pirnay, Surlemont, & Nlemvo, 2003).    Spinoffs can be differentiated from start-ups by the relationship with the university: spinoffs maintain the relationship (licensing, joint R&D) whether the academic staff continues to work for the university or not, while start-ups created by students do not maintain relationship with the university (Pérez-Hernández, Calderón, & Noriega, 2021). Early in the process of academic entrepreneurship, the entrepreneurs are required to develop the “twin skills” of balancing and navigating the research, the institutional and incentives structures and the commercial goals and commercial landscape (Pilegaard, Moroz, & Neergaard, 2010).  As the spinoffs are established in a parent organization, they depend on them for establishment of legitimacy and access to the resources, including from other departments and entities that may require spanning existing boundaries (Pilegaard, Moroz, & Neergaard, 2010). The specifics of the university milieu, the availability of resources and professional capabilities and support structures (e.g. technology transfer offices), the social norms and the institutional policies regulating commercialization incentivize or hinder the entrepreneurship process (Sandström, Wennberg, Wallin, & Zherlygina, 2018).

The increasing pressure to measure the performance of universities has been facilitated by trends such as the need to demonstrate that the research funding has been used for economic and social value for the society and demand for information on the efficiency and transparency of policies and actors, the need to evaluate different stakeholders and their competitiveness (Secundo & Elia, 2014). Most common measures for academic entrepreneurship include disclosure of inventions to the university, number of patents, licensing, number of spinoffs that are easy to quantify and compare (Abreu & Grinevich, 2013). Those can be viewed as “hard” activities in the spectrum of entrepreneurial activities on which the traditional academic paradigm and the related entrepreneurial activities such as producing academic graduates, publishing, grants, consulting that form the other, “soft” end of the spectrum (Philpott, Dooley, O’Reilly, & Lupton, 2011).  Those and the more informal activities such as consulting, public lectures tend to be harder to quantity and can “fly under the radar“ (Abreu & Grinevich, 2013).

(Secundo & Elia, 2014, lk 29- 30) propose a detailed model for measuring performance by the stage of the entrepreneurship process:

• Entrepreneurial capital development: years of experience of researchers, number of publications, number of graduate students, students’ involvement with industrial research, number of entrepreneurial education programs, number of collaborations with local companies, international companies, research institutions, governmental bodies; applications for R&D funding, researchers’ involvement in R&D activities, share of international researchers.
• Opportunity recognition: number of business concepts generated, number of successful joint project proposals with industry and other stakeholders, number of signed agreements with national and international stakeholders, invitations for participation in projects, technologies or methodologies adopted by other stakeholders.
• Early stage technology development: number of business plans developed, number of patent request, number of prototypes, number of demonstrations of the concept, number of stakeholders involved, number of investments and investors, number of spinoffs and start-ups launched, number of people hired.
• Product and service development and commercialization:  number of product and services developed, number of collaboration and partnership agreements, number of patent extensions, number of product and services launched to the market, number of customers, customer satisfaction and retention.
• Profit and harvesting: market share and turnover, share of new product or service revenue in total revenue, types and location of markets, number of jobs created, export share, number and types of funding rounds.

Research commercialization

Academic entrepreneurship is a vehicle for research commercialization. Research commercialization is the process of conversion of research results into marketable products and services (Rogers, 2003). This encompasses also the technology transfer. Technology transfer refers to the process in which individuals and organizations share information, knowledge, cost and benefits (Chais, Ganzer, & Munhoz Olea, 2018) with another party that acquires those in order to transform them  into new competitive technologies for creating new products, services or processes (Quetglas & Grau, 2002). In academic contexts it means the transfer of ideas, knowledge, scientific and technological know-how and technologies developed by the academic institution to the industry (Prodan, Drnovsek, & Ulijn, 2009). Institutions may or may not retain the property rights.

The transfer process starts with the creation of knowledge in the research organizations (higher education institutions, research institutes, hospitals), who will be the knowledge contributors. The knowledge can be in the form of codified knowledge (publications, patents), carried by people or embedded in artefacts or technology (machinery, software) (European Commission, 2009).

Channels for transferring knowledge (European Commission, 2009):

• Patenting
• Licensing
• Contract research
• Collaborative research
• Consultancy
• Services
• Conferencing
• Publishing
• Networking
• Student placement
• Secondments
• Hiring
• Teaching
• Training
• Facility sharing
• Spin offs
• Start-ups

The recipients are typically enterprise, public institutions, non-profits that use those for create the economic gains, social and cultural benefits.

Intellectual property rights in academic setting

Two main systems of IP rights (Goldfarb & Henrekson, 2003; Crespi, Geuna,, Nomaler, & Verspagen, 2010):

• IPR belongs to the university (e.g. US system): in 1980 the Bayh–Dole Act in the US gave the institutions rights to patent research funded by government funds and this resulted in a surge of patenting and technology transfer. It provides strong incentives to universities to develop technology transfer offices. Inventors are rewarded with shares in proceeds from the projects. Most EU countries are shifting to this model.
• IPR belongs to the inventor, i.e. “professor’s privilege”: full faculty ownership of the IPR. Universities themselves have had little incentive to become involved in technology transfer and tend to have limited infrastructure. Academic staff have a better ability to negotiate with enterprises.

In Estonia the economic proprietary rights belong to the university, authors retain the moral rights for the recognition of authorship.

Typical steps for commercialization of an invention in a university (Hindle & Yencken, 2004):

• Disclosure of an invention by researchers to the university
• Assessment of its value and selection of IPR strategy
  • Publication for public good
  • Intellectual property protection (application for patents, copyright)
    • Licensing, assigning or selling the IP
      • To existing businesses for royalties, cost recovery
      • New spin-offs or start-ups for equity or IP cost recovery

Types of IP protections:

• Patents- exclusive right to make, use and sell a particular application. The holder has to disclose the new knowledge upon registration (United Nations, 2012). Patent for the invention has to demonstrate that it is new, involving an inventive step and has to be susceptible to industrial application (Estonian Patent Office, 2021).
• Utility model- property rights for invention with lower threshold for inventiveness.
• Copyright- exclusive provide to make copies or reproduce a particular tangible expression of knowledge (United Nations, 2012).
• Trade secret – confidential, commercially valuable information for the enterprise that not generally known or readily accessible beyond those lawfully owning them and is kept confidential by those lawfully controlling it, and disclosure of which will led to unfair competition (Restriction of Unfair Competition and Protection of Business Secrets Act, 2018).

Hurdles to the research commercialization (Siegel, Veugelers, & Wright, 2007; Prodan, Drnovsek, & Ulijn, 2009; De Prato & Nepelski, 2014):

• Cultural factors
  • Stakeholders cultural and spatial distance (academics, university, enterprises)
  • Challenges in the exchange and transfer of tacit knowledge and ability to receive it
  • Different motives and objectives of stakeholders, incl. enterprises and entrepreneurs seeking profit and competitive advantage, different timeframes with enterprises focusing on quick market penetrations vs. long academic research times.
• University administration – guarding university’s IP, but lack of incentives for commercialization, incl.
  • Resources for support systems
  • Lack of enforcement on invention disclosure for academics
  • IP protection costs
  • Academic background
  • Lack of technical background
  • Lack of specialized technology transfer office (TTO)
• Academics – interest in rapid dissemination and recognition, particularly through publications.
  • Lack of general incentives of commercialization
  • Lack of disclosure of inventions- „going out the back door“
  • Lack of industry experience
  • Lack of business background

 Questions for discussion:

1. How do academic entrepreneurship activities differ between different sciences?
2. What kind of structures have been established in your university to support academic entrepreneurship? What kind of support those offer for academic entrepreneurship?
3. What kind of measurement indicators and for which stage of academic entrepreneurship have been prevalent in your university?
4. What are the incentives and what are the barriers of research commercialization in your university? In your research field?