1. Multiple Missions and Academic Entrepreneurship Nicola Lacetera Case Western Reserve University Department of Economics

2. Nicola Lacetera -- Multiple Missions and Academic Entrepreneurship Questions  What are the peculiarities of academic entrepreneurship, i.e. of the direct involvement of academic researchers into the commercialization of research ?  How is the behavior and performance of academic entrepreneurs different from that of other entrepreneurs?  Broader agenda: Which role of academics and academic organizations for the commercialization of research?

3. Nicola Lacetera -- Multiple Missions and Academic Entrepreneurship Motivation Vast and lively debate, policy interventions, managerial interest  Facilitate knowledge transfer, ‘balance’ research and $$ (Gibbons et al. 1994, Zucker-Darby 1995, Stokes 1997, Ezkowitz 2004) d(firm performance)/d(academics involved)>0 (Zucker-Darby 1995, Cockburn- Henderson 1998, Nerkar-Shane 2003, Rothaermel-Thursby 2005) d(firm performance)/d(academic incentives)>0 (Henderson-Cockburn 1994 )  Conflicting missions (Dasgupta-David 1994, Stern 1995, Nelson 2004): don’t mix up $$ and academic rules Case studies (Kenney 1986, Lerner 2004), ‘parallel’ research (transistor, insulin), large sample evidence (Doutriaux 1987, Audretsch 2000, Hall et al. 2000, Franklin et al. 2001, Kogut-Gittelman 2003, Rothaermel-Thursby 2005)

4. Nicola Lacetera -- Multiple Missions and Academic Entrepreneurship Contribution  Model the choice and timing of entry into commercial activities by an academic research team, and returns and costs of these activities. Comparison with non-academic (industrial) team Better commercial performance? Can compare? Selection? Less focused on $$? More able to do both research and $$? Greedier if $$?  $$ + academic rules = ?  Present evidence from cases, interviews  Address empirical issues, managerial and policy implications  Mixed empirical findings, performance measures, self-selection.  Role of academia and academic rules for competitiveness

5. Nicola Lacetera -- Multiple Missions and Academic Entrepreneurship Ingredients: Role of Research, Rules of Research Cumulative nature of knowledge – investment value of research  Rosenberg 1990; Klepper 1996, Jensen et al. 2003 Different types of pre-commercial research – degrees of applicability  Multidisciplinarity, tacitness: Rosenberg (1994), Brewer (1999) Llerena - Meyer- Kramer (2003), Rinia et al. (2001), Carayol-Thi (2003). My interviews.  Basic vs. pre-commercial, ‘Bohr vs. Pasteur’ (Stokes 1997)  E.g.: electronic device, drug research Institutional differences b/w industry and academia  Peer recognition, publication, consumption value. Different missions and rules  Different recognition for different types of research  Merton (1973), Dasgupta-David (1994), Stern (1995)

6. Nicola Lacetera -- Multiple Missions and Academic Entrepreneurship Model -- Set Up  Research project, commercializable at current date. 2 periods  t=0: Academic team chooses: perform additional fundamental research (a 0 u =s); do commercially related activities (a 0 u =c); stay idle (a 0 u = ∅ ) a 0 u =s : team also chooses applicability level a 0 u =c : prob. p that project successfully completed in t=0  t=1: same choices (a 1 u ∈ {s, c, ∅ };  ), unless project completed in t=0

7. Nicola Lacetera -- Multiple Missions and Academic Entrepreneurship Model -- Payoffs Commercialization (c)  Return: R, at completion  Cost: paid only once, at first commercialization attempt:  : level of applicability. Different types of basic research  Multidisciplinarity. Tacitness. Basic vs. pre-commercial, ‘Bohr vs. Pasteur’  Cumulativeness, investment value of research: cost down if s performed in t=0 Basic, Pre-commercial research (s)  ‘Private’ benefit B u at each s: Publication, peer recognition, ‘consumption’.  Cost: paid each time s is performed: Organizing diverse teams, communication (Porac et al. 2004, Pereira 2006)

8. Nicola Lacetera -- Multiple Missions and Academic Entrepreneurship Model -- Institutional Differences Modeling approach: Same problem in industry and academia; characterize academic entrepreneurship Comparison, no interaction. Organizational dimension. Academia  Cares about $$  ‘Consumption value’ of research: publications, peer recognition  ≠ recognition for ≠ types of research. E.g. multidisciplinarity (Shapin, Brewer)  ‘Multiple missions’: science and $$ Industry  Cares about $$  No (or lower) response to ‘scientific community’, e.g. lower direct benefit from research: only investment value

9. Nicola Lacetera -- Multiple Missions and Academic Entrepreneurship Results -- Entry: Academic Reluctance/Selection Proposition 1: academic team undertakes fewer commercial ventures than industrial team Intuition: ‘Wedge’ from consumption value of research and recognition costs. Greater opportunity cost of commercialization for academics Evidence and Discussion  Viability of academic entrepreneurship, missed opportunities (Dasgupta- David 1994, Stern 1995, Audretsch 2000)  Different ‘logics’ (Franklin et al. 2001, Gittelman-Kogut 2003)  Cases of parallel research: academic reluctance, industrial focus: E.g. Transistor, Human insulin: Bell Labs ≠ Purdue, Genentech ≠ Harvard.  Academic ventures from a different, and typically more profitable, set of projects: Caution toward such causal inferences as d(firmperformance)/d(academics involved)>0: selection bias.

10. Nicola Lacetera -- Multiple Missions and Academic Entrepreneurship Results -- Timing: Academic Slowness Proposition 2a: under certain parameter values, academic team delays commercialization, but bears lower costs Intuition: Private benefit  Greater investment in (applicable!) research Evidence and Discussion  Documented ‘downside’ (Doutriaux 1987, Hall et al. 2000, Rothaermel- Thursby 2005).  Cost–timing tradeoff. ‘Right’ incentives to ‘balance and bridge’ s&c.

11. Nicola Lacetera -- Multiple Missions and Academic Entrepreneurship Results -- Timing: Academic Rush Proposition 2b: Under certain parameters, academic team commercializes earlier than an industrial team, and perform less basic research Intuition: Low scientific value, high recognition costs  additional research has less value for academics than for firm – consumption vs investment motives Evidence and Discussion  Balance research-commerce in industry? Unexpected effect of multiple missions (Gittelman-Kogut 2003).  Policy: Economic incentives on top of academic rules? Multiple changes? (David 2005)  Management: ‘pure’ academic incentives on top of commercial incentives?  Early commercialization (Jensen-Thursby 2001, Lowe 2002); different ‘logics’ (Gittelman-Kogut 2003); research by firms

12. Nicola Lacetera -- Multiple Missions and Academic Entrepreneurship Example -- Academic Slowness

13. Nicola Lacetera -- Multiple Missions and Academic Entrepreneurship Example -- Academic Rush

14. Nicola Lacetera -- Multiple Missions and Academic Entrepreneurship Summary Environmental conditions and project types s.t. academic entrepreneurs ‘balance’ basic research and commercialization; cases where academicians are reluctant, slow or fast in commercializing Characterize academic entrepreneurship Institutional features, multiple missions. Compare to non-academic environment  ‘Focus’, project selection  Timing: delay/balance, ‘rush’ Interpret evidence and debate Reconcile evidence Multidimensional Measures Issues in existing econometric analyses, e.g. self-selection Managerial and policy implications

15. Nicola Lacetera -- Multiple Missions and Academic Entrepreneurship Extensions, Future Work Theory  Interactions – Spillovers, Competition (Jaffe 1989, Rosenberg 1994; Hall 1987, Werth 1995, Davies 2001, Evans 2004) Asymmetric reactions? Testing  Case studies – ‘natural experiments’  Selection – find instruments (university guidelines?)  Timing, costs - spin-offs, incubators, research parks, alliances and division of scientific labor  Scientists’ life cycle