STIINPL › Public sector research - activities and outcomes - Spin-off firms from PSR
What are spin-off firms?
Research-based spin-offs are generally understood to be small, new technology-based firms whose intellectual capital originated in universities or other public research institutes. The dimensions that differentiate spin-off firms from others are the type of resources they draw upon, their prevailing business model and their links to research organisations. Such spin-offs are created in order to commercially deploy new knowledge generated by public research organisations.
Data on the number of such firms are not collected systematically across countries so that international comparisons are particularly difficult. Indicators on the performance of small firms and their survival is not ideal since spin-offs represent only a small share of the total number of firms. It is also worth noting that high death rates of spin-offs are not necessarily economically undesirable as many of new risky ideas might not be suitable for markets and, therefore, will not survive market competition. It is relevant to uncover whether such healthy cleansing arises or whether successful products fail due to market failures that policy could have addressed.
Collecting specific micro firm-level data and conducting case studies are, therefore, often the best ways to assess spin-offs and their performance.
How do spin-off firms from public sector research relate to innovation performance?
Spin-offs are a potentially powerful means for commercially deploying new technologies and scientific knowledge, introducing not only incremental but potentially also radical innovations. Specifically their linkages with public research, together with their commercial orientation, means these firms can be powerful innovators. They are often more flexible, high-tech and dynamic than other firms and can, therefore, be instrumental in the development of new markets and in the generation of high-technology clusters. If successful high-tech spin-offs can, therefore, not only generate innovation but also be an important engine for economic growth and employment. Spin-offs are expected to generate substantial positive knowledge spillovers, i.e. returns beyond those accruing to spin-offs themselves. There is, therefore, widespread consensus that the numbers of spin-offs are sub-optimal due to several market failures, such as the insufficient development of financial markets to cope with the risky business projects commonly proposed.
What actors are the important for spin-off firms to contribute to innovation performance?
The creation of spin-off firms depends on many actors of the innovation system, including notably the following:
Which factors are important for spin-off firms?
Many shaping factors will influence spin-offs and their creation including the following:
What policies are important for spin-off firms?
Several types of policies can stimulate the creation of such spin-offs. Providing research universities and PRIs with incentives for spin-offs is a central area for policies. This is related to the funding such organisations receive but will also depend on their capacities to provide services needed for the creation of spin-offs. This includes, for instance, dealing with IPR questions as well as providing services on legal and technical issues involved around the creation of spin-offs. The fact that researchers might not face any incentives and lack “business” capacities is, moreover, a central obstacle for the creation of spin-offs. Therefore, entrepreneurship training schemes aimed at providing researchers with an interest in such ventures are likely to be useful. Moreover, policies aimed at affecting several framework conditions can stimulate the creation of spin-ofs, including the provision of financing opportunities for spin-off activities and supporting the creation of high-tech clusters.
Mustar et al. (2006), Conceptualising the heterogeneity of research-based spin-offs: A multi-dimensional taxonomy, Research Policy 35 (2006):, pp. 289-308.
List of useful links