Bayh-Dole and Entrepreneurship Reconsidered: University versus

Inventor Ownership*

Martin KenneyMartin KenneyDept. of Human and Community Development

UC Davis&

Berkeley Roundtable on the International Economy

&Donald PattonDonald Patton

Dept. of Human and Community DevelopmentUC Davis

Presented in North Central Regional Center for Rural Development Webinar October 18, 2011

Motivation for Paper

• Appreciative modeling exercise suggested inventor ownership should be effective (Kenney and Patton 2009)

• Entrepreneurship and technology transfer long time US policy goals

Motivation• In response to increasing questioning in the

academic literature, a 2010 National Research Council Report stated:

“Arguments for the superiority of an inventor driven system of technology transfer are largely conjectural. There is certainly anecdotal evidence of faculty dissatisfaction with the technology licensing office-dominated model as well as evidence of faculty entrepreneurial success independent of such offices, but there is no systematically collected evidence that inventors have knowledge and skills superior to those of technology transfer personnel and their service providers in the various components of IP acquisition, management, and licensing.”

Methodology• Find inventor-ownership university

– Cambridge, Stanford, Wisconsin – all changed– Only Anglo-Saxon pure inventor ownership

univ. -- Waterloo, Canada

• Collect all technology-based startups– Internet search, documents, interviews, TLO

offices

• Extremely strict definition about firms to be included– Decisions made by both authors

HypothesisWith various controls, we expect greater With various controls, we expect greater entrepreneurship at inventor-ownership entrepreneurship at inventor-ownership university, i.e., Waterloo university, i.e., Waterloo

But conditioned by:1. University academic ranking

2. Academic field

3. University R&D expenditures

4. Number of professors

Population and Data

• Waterloo versus University of Wisconsin, Madison; University of Michigan, Ann Arbor; University of Illinois, Urbana-Champaign; UC Davis; UC Santa Barbara

• Spin-offs, University/Field ranking, R&D Expenditures, Number of Faculty

Spin-offsSpin-offs Academic Academic RankingRanking

R&D R&D Expenditures*Expenditures* Faculty SizeFaculty Size

Attribute Attribute DescriptionDescription

Number of Spin-Number of Spin-offs, 1957-2010 offs, 1957-2010

2010 SJTU 2010 SJTU RankingRanking

$ millions,$ millions, 2005-2008 2005-2008

avg.avg.

Total BMS, Total BMS, CS&EE, EPS CS&EE, EPS

facultyfaculty

UWMUWM 140140 1717 792792 2,1952,195

UMAAUMAA 8888 2222 724724 3,1933,193

UIUCUIUC 7272 2525 462462 2,1202,120

UCDUCD 4040 4646 563563 2,0382,038

UCSBUCSB 3737 3232 163163 559559

WaterlooWaterloo 138138 151-200151-200 9595 963963

Sources: various

* Total for BMS, CS&EE, and EPS; all others excluded

Overview of the DataOverview of the Data

0

20

40

60

80

100

120

140

19751976197719781979198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009

UWM

Waterloo

UMAA

UIUC

UCD

UCSB

Cumulative Number of Spin-offs by Cumulative Number of Spin-offs by University, 1957-2009University, 1957-2009

OverallOverallWorldWorld

RankingRanking

NaturalNaturalSciences andSciences andMathematicsMathematics

Eng., Tech. and Eng., Tech. and Computer Computer

ScienceScience

Life and Agric. Life and Agric. SciencesSciences

Medicine and Medicine and PharmacyPharmacy

Computer Computer SciencScienc

ee

UWMUWM 1717 1717 2323 1111 2020 52-7552-75

UMAAUMAA 2222 2121 77 2424 88 1818

UIUCUIUC 2525 2323 44 1818 n.a.n.a. 1313

UCSBUCSB 3232 1919 1515 51-7551-75 n.a.n.a. 4444

UCDUCD 4646 4646 4646 2121 n.a.n.a. 5050

WaterlooWaterloo 151-200151-200 n.a.n.a. 52-7552-75 n.a.n.a. n.a.n.a. 76-10076-100

2010 Shanghai Jiao Tong University Global Academic 2010 Shanghai Jiao Tong University Global Academic Rankings, Overall and Selected Technology CategoriesRankings, Overall and Selected Technology Categories

BiomedicalBiomedical CS&EECS&EE EPSEPS TotalTotal

UWMUWM2,1992,199 104104 866866 3,1693,169

(274.9)(274.9) (20.8)(20.8) (216.5)(216.5) (186.4)(186.4)

UMAAUMAA2,0562,056 193193 647647 2,8962,896

(228.4)(228.4) (32.2)(32.2) (323.5)(323.5) (170.4)(170.4)

UCDUCD1,8101,810 5757 386386 2,2532,253

(452.5)(452.5) (14.3)(14.3) (77.2)(77.2) (173.3)(173.3)

UIUCUIUC642642 440440 766766 1,8471,847

(642.0)(642.0) (88.0)(88.0) (127.7)(127.7) (153.9)(153.9)

UCSBUCSB 9191 173173 388388 652652

(15.2)(15.2) (43.3)(43.3) (194.0)(194.0) (54.3)(54.3)

WaterlooWaterloo7171 9797 212212 381381

(71.0)(71.0) (6.1)(6.1) (26.5)(26.5) (15.2)(15.2)

Total R&DTotal R&D 6,8696,869 1,0641,064 3,2653,265 11,19811,198

2005-20082005-2008Spin-offsSpin-offs 2929 4040 2727 9696

R&D$M per R&D$M per Spin-offSpin-off (120.9)(120.9) (116.6)(116.6)

R&D Expenditures, Total and Per Spin-off R&D Expenditures, Total and Per Spin-off by University and Technology, 2005-2008by University and Technology, 2005-2008

Da

ta fro

m 2

00

5-2

00

8

236.9236.9 26.626.6

MBSMBS CS&EECS&EE EPSEPS TotalTotal

UWMUWM1,385 1,385 155 155 655 655 2,195 2,195

(173.1)(173.1) (31.0)(31.0) (163.8)(163.8) (129.1)(129.1)

UMAAUMAA1,7901,790 172172 1,2311,231 3,1933,193

(198.9)(198.9) (28.7)(28.7) (615.5)(615.5) (187.8)(187.8)

UCDUCD1,3961,396 9999 543543 2,0382,038

(349.0)(349.0) (24.8)(24.8) (108.6)(108.6) (156.8)(156.8)

UIUCUIUC1,0231,023 276276 821821 2,1202,120

(1023.0)(1023.0) (55.2)(55.2) (136.8)(136.8) (176.7)(176.7)

UCSBUCSB148148 8989 322322 559559

(24.7)(24.7) (22.3)(22.3) (161.0)(161.0) (46.6)(46.6)

WaterlooWaterloo232232 165165 566566 963963

(232.0)(232.0) (10.3)(10.3) (70.8)(70.8) (38.5)(38.5)

Total FacultyTotal Faculty 59745974 956956 41384138 1106811068

2005-2008 Spin-2005-2008 Spin-offsoffs 2929 4040 2727 9696

Faculty per Spin-Faculty per Spin-offoff (153.3)(153.3) (115.3)(115.3)

University and Technology Field, Number of Faculty and Spin-offs per Faculty

Spin-offs 2005-2008; number of faculty 2006 except Waterloo which is 2011

206206 23.923.9

All Spinoffs2005 through 2008

0.000

0.005

0.010

0.015

0.020

0.025

0.030

0.000 0.010 0.020 0.030 0.040 0.050 0.060 0.070

Spinoffs / R&D in millions of dollars

Spinoffs / Faculty

UWM (17)

UMAA (17)

UIUC (12)

UCSB (12)

UCD (13)

Waterloo (25)

5 US universities above

Decreasin

g as one m

oves t

oward orig

in

Spin-offs per Faculty and R&D Expenditures ($ million)

Waterloo

UCSB

BMSBMS CS&EECS&EE EPSEPS TotalTotal

Total Total %% TotalTotal %% TotalTotal %% TotalTotal %%

UWMUWM 7878 47.3%47.3% 4343 14.0%14.0% 1919 36.8%36.8% 140140 35.7%35.7%

UMAAUMAA 3737 67.6%67.6% 3838 39.5%39.5% 1313 38.5%38.5% 8888 51.1%51.1%

UIUCUIUC 88 87.5%87.5% 4040 35.0%35.0% 2424 58.3%58.3% 7272 48.6%48.6%

UCDUCD 2626 30.8%30.8% 66 33.3%33.3% 88 37.5%37.5% 4040 32.5%32.5%

UCSBUCSB 1212 8.3%8.3% 1717 29.4%29.4% 88 25.0%25.0% 3737 21.6%21.6%

WaterlooWaterloo 88 12.5%12.5% 9494 1.1%1.1% 3636 8.3%8.3% 138138 3.6%3.6%

TotalTotal 169169 46.7%46.7% 238238 18.1%18.1% 108108 31.5%31.5% 515515 30.3%30.3%

University Spin-offs, Number and Percentage Licensed by University and Technology Category, 1957-2010

Discussion• Inventor ownership proved to be conducive to

entrepreneurship– University of Wisconsin had inventor ownership in the

past

• Surprising differences in levels of entrepreneurship between study fields

• EE&CS appear far more efficient at generating startups

• EE&CS have no need for TLOs and are hard to police

• Some US universities are experimenting, e.g. North Carolina Express Agreement, for inventors wishing to establish their own firm.

Discussion (continued)

• TLOs would survive and even thrive as SERVICE organizations not bureaucratic control operations

• US needs to experiment with alternative models

Limitations and Further Research with Database

• Only one inventor-ownership university

• Role of student entrepreneurship can be explored in our database

• Extend to private universities and foreign universities

Thank you

mfkenney@ucdavis.edu