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Management Series: leadership-entrepreneurship

Can perceived institutional support for entrepreneurship keep faculty at universities despite the lure of lucrative spin-outs?

Why do some academic inventors leave their university for a commercial spin-out when others decide to stay?

Author(s): Professor Vangelis Souitaris - Cass Business School; Nicos Nicolaou - Warwick Business School

University spin-outs result from the direct commercialisation of intellectual property developed within the institution. Perhaps the most notable (and successful) recent example of this phenomenon is the internet behemoth Google, which was developed by PhD students Larry Page and Sergey Brin at Stanford University.

While there is increasing pressure for universities to commercialise their inventions, there is also genuine concern that the academic talent involved in their development could be lost to the commercial world. For when a spin-out has proved a success, those academics involved in its creation usually face a choice – leave the university to assume a full-time role with the commercial venture, or maintain their university affiliation while reducing their involvement in the venture to a minimum or to none at all.

The paper defines the former phenomenon as academic exodus and the latter as academic stasis.

What factors influence which path academic inventors choose? Drawing from the literature on innovation-supportive climates and also from organisational support theory, this research argues that perceptions of institutional support for entrepreneurship (i.e. – support by the university to create a spin-out) and departmental norms regarding entrepreneurship (i.e. – departmental norms about the desirability of spin-outs) are important factors for academics pondering whether to stay at or leave an institution.

The researchers surveyed 111 inventors from a leading European university and all involved in a spin-out about how they perceived their institution’s support for entrepreneurship. At the time they responded to the questionnaire they had already made their decision whether to stay or leave. The final usable sample was of 89 individuals.

The research found that inventors who perceive that there is greater institutional support for entrepreneurship are less likely to leave. Moreover, we found that the positive relationship between perceived institutional support and the decision to stay becomes stronger in the presence of favourable departmental norms towards entrepreneurship.

For universities, the retention of academics that have contributed to spin-outs has a number of advantages:

  • Studies have shown that academics involved in spin-outs tend to be highly published. Retaining star performers is important to every university.
  • Those academics with experience of developing or contributing spin-outs may in turn inspire others within the institution to do the same. They may even become habitual entrepreneurs themselves.
  • Academic stasis may lead to a change in university reward structure, which is currently weighted towards publications.

The paper also points to several drawbacks to academic stasis:

  • Inventors that stay at the university are subject to commitments that can curtail their contributions to the spin-out.
  • Stasis may give rise to tension between those departments which are and which aren’t commercially successful in transferring their knowledge. It may also create tension between individuals within departments along the same lines.
  • Academics that leave but which maintain a good relationship with their former university may be in a position to provide valuable commercial contracts for it.

In conclusion, the research proposes that the distinction between academic exodus and stasis is important for the better understanding of academic entrepreneurship. Its core finding is that perceived support for an activity (entrepreneurship) that is intuitively linked with leaving one’s job, actually makes faculty more likely to stay in the university. By supporting its scholars to pursue commercial activity, which on the face of it would ‘derail’ their research and lead to exit, a university may actually find they have encouraged faculty to remain and continue their research.

This study has clear implications for universities, policy makers and funders, who aim to stimulate academic entrepreneurship but who are concerned about losing entrepreneurial faculty. More broadly, the topic is also relevant to the innovation literature, which has recently signaled management of “talent” as a research priority.

The accepted version of the paper is available for download at the link below. The final paper was published in the Journal of Product Innovation Management.

Attachment(s)
{Can Perceived Support for Entrepreneurship Keep Great Faculty in the Face of Spinouts?}{https://www.cass.city.ac.uk/__data/assets/pdf_file/0006/376269/perception-entrepreneurial-support-nicolaou-souitaris.pdf}
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