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Technology Incubators: Facilitating Technology Transfer or Creating Regional Wealth

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Title: Technology Incubators: Facilitating Technology Transfer or Creating Regional Wealth


1
Technology Incubators Facilitating Technology
Transfer or Creating Regional Wealth?
Andrew Maxwell, Canadian Innovation Centre,
Waterloo, Ontario Moren Lévesque, Management
Science, University of Waterloo, Ontario, Canada
Conflicting agendas?
Venture creation
Licensings ROI
University ROI
Traditional licensing does not justify
governments investment in research. In fact only
1 of disclosures generate revenues that exceed
the cost of patenting and establishing the
license (Blake,1993). .
In Canada, governments CDN 2.1 billion
research investment generated 51 million of
gross University license revenue in 2003 (reduced
to 14.6 million net). On average, licensing
revenue represents less than 0.5 of universities
total income (AUCC, 2005).
.
Universities view their role in regional wealth
creation as important, yet tend to view
technology commercialization as a source of
revenue from license agreements. These licenses
create wealth in the region in which the licensee
operates, not the region of the originating
university. Further a focus on license revenues
understates the potential overall regional
economic benefits which can be derived from
university research - especially the impact on
local industrial partners and newly created
ventures. We suggest that enhancing the
definition of mechanisms for wealth extraction
from university research will lead to potential
for greater impact and an expanded role for
technology incubation.
  • New technology ventures create
  • local high-paying jobs .
  • more long-term license revenue
  • long term gains if commercialized technology is
    not based on original IP
  • local economy stimulation .
  • local early technology adopters (Holbrook
    Clayman, 2003) .
  • investment opportunities and wealth for
    shareholders (Feldman et al., 2002).
  • university graduate employment (Mian, 1996)
    .
  • contract research and internships

Universities gain financially by providing
contract research to new ventures and leveraging
government funding. Clotfelter (2003) also
identified that supporting new ventures increases
the likelihood of alumnae donations. Evidence of
this effect is seen in data provided by the
University of Waterloo (2007) and others .
Proposed commercialization model
Incubators role
Extracting value from university research
Incubators can increase the chance of venture
success and facilitate the flows of knowledge and
money within the commercialization process. They
can facilitate knowledge flows from the
university to new ventures and back to the
university laboratories and faculty/students.
Incubators can become a focal tool in
transferring knowledge and money and enhancing
all aspects of commercialization, creating a
range of long term benefits for both region and
university. .
  • Universities foster regional economic development
    through knowledge transfer
  • student extraction when embedded knowledge
    leaves the university when students graduate.
    .
  • commerce extraction when tacit knowledge is
    transferred through contract research undertaken
    for external partners
  • opportunity extraction when research leads to
    codified IP which can be licensed to existing
    players or new ventures.
  • Knowledge is also transferred through informal
    interactions.

Commercialization knowledge and money flows
References AUCC. (2005) Momentum Report of the
Association of Universities and Colleges of
Canada Blake, D. A. (1993) The universitys role
in marketing research discoveries. Chronicle of
Higher Education May 12. Clotfelter, C. T.
(2003) Alumni giving to private colleges and
universities. Economics of Education Review
22(2), 109120. Feldman, M. P., Feller, I.,
Bercovitz, J. Burton, R. (2002) Equity and the
technology transfer strategies of American
research universities. Management Science 48(1),
105-121. Holbrook, J. A. Clayman, B. P. (2003)
The survival of university spin-offs and their
relevance to regional development. Canadian
Foundation for Innovation Mian, S. A. (1996)
Assessing value-added contributions of university
technology business incubators to tenant firms.
Research Policy 25(3), 325-335. University of
Waterloo, Office of Advancement Data provided
2007.
We develop a venture creation commercialization
model which includes both spin offs (based on
University IP) and new ventures which are
facilitated by the university. Total new ventures
comprise approximately ten times the number of
spin-off companies with both creating significant
long term benefits to universities. Viewing
commercialization in terms of these three
extraction mechanisms identifies opportunities
for institutions to maximize their impact on both
regional wealth creation and university income.

Expanding the technology commercialization model
Poster for ACCT Conference Toronto, November
2007
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