Your source for expert commentary on IP management issues.
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Editor-in-Chief, Anatole Krattiger
Why This Topic Is Important
One of the goals of many technology transfer policies is to drive entrepreneurship. Indeed, the creation of
new firms, and even new industries, is, in the long run, one of the most powerful impacts that public
sector research and technology transfer can have. In some cases it is the only hope for a new technology
to be developed. This section describes competing approaches to managing the process of venture
creation, examines the roles of the different players involved, and outlines policies that can enhance
Key Implications and Best Practices: Section 13
Given that IP management is heavily context specific, these Key Implications and Best Practices are intended as starting points to be adapted to specific needs and circumstances.
- Much of the success of a spinout or start-up will depend on the entrepreneurial spirit at the institution. The more entrepreneurial, the more likely it will be that someone wants to set up a new company.
- Governments should encourage public research organizations to use their inventories of IP rights to create spinouts because they create new jobs, contribute to economic development, and potentially grow into multinational companies. But governments should recognize that setting up a new business is a high-risk activity and should allow new companies to fail gracefully.
- Rather than venture capital driving the creation of new companies, it is usually the creation of new companies that attracts venture capital.
- The formation of new companies creates an environment that increases the probability of success for other companies. Thus, the public sector should (1) plant the seed, encouraging skilled people with new ideas to develop those ideas and (2) create an environment that favors entrepreneurship and success. Universities and research institutes can plant the seeds, while government policies can shape the environment.
- While a government cannot legislate entrepreneurship, it can encourage entrepreneur-ship by providing a favorable environment for creating and growing new companies. This would be an environment with (1) an encouraging business culture that rewards success and treats failure as a learning opportunity, (2) access to intellectual capital (such as that flowing from universities), (3) access to sufficient financial capital, and (4) reliable physical capital (facilities, laboratories, communications).
- Public sector institutions may be the largest economic entities present in a developing country. Hence, they can contribute much by taking the lead in developing and fostering the establishment of spinout companies that are seeded with technologies generated in the public sector and protected and managed as IP assets.
- To successfully commercialize intellectual property, a country ought to have a stable economic and institutional environment, available investment capital, commercial-izable intellectual property, a commercial environment that can develop intellectual property, and competent technology transfer intermediaries.
- Technology transfer of any sort is likely to succeed only if there is sustained commitment at the most senior levels of both government and research institutions.
- Governments can encourage regional economic development by fostering and financing business incubators. Ideally, they ought to be located in strategically selected regions and build on potential synergies of existing institutions. Small business incubators in particular have proven to be effective economic development tools.
Dealing with Spinout Companies
by Jon C. Sandelin
Formation of a Business Incubator
by Edward M. Zablocki