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Chapter 1
The importance of public research spinoffs
1.1 Introduction and definition of public research spinoff
The importance of academic spinoffs in fostering economic growth and technological
development for our society has already been much studied and widely acknowledged by scholars
all over the world. Nevertheless, it has to be remarked that this subject has not been tackled at all
until recent years when it has started to attract ever increasing numbers of researchers who have
been focusing on it and studying its dimensions.
First of all is important to define what an academic spin-off is. Here the first complications
in our subject are encountered, because, as has been highlighted by the European Commission,
“there is no commonly accepted definition of what an academic spinoff is.”
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.
Shane defines an academic spinoff as “a new company founded to exploit a piece of
intellectual property created in an academic institution”. He does not include in his definition those
companies established by current or former members of universities, which do not commercialize
intellectual property created in academic institutions. Thus, his idea of academic spinoff is a subset
of all start-up companies created by students and employees of academic institutions (Shane, 2004).
Pirnay (2003) has a similar interpretation, proposing that an academic spin-off is to be defined as a
“new firm created to exploit commercially some knowledge, technology or research results
developed within a university”. On the contrary Roberts (1991), one of the first scholars to
approach this field of research, gave a broader sense to this definition, stating that “university spin-
offs are companies founded by anyone who has studied or worked at a university”. This change
shows how much the definition of this concept has been refined in the last ten years.
In Italy the network of Italian University Technology Transfer Offices has reached consesus
on a more narrow sense/definition: a university spin-off is a business founded by a researcher to
valorize the results of his/her own research activity and his/her scientific knowledge.
This paper will not limit its invesigations to academic spin-offs, but will also analyze public
research center spinoffs. These two categories will constitute a broader set labeled “public research
spin-offs”. Figure 1 will help the reader to better understand the different categories.
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European Commission: ‘The changing role of public support to academic spin-offs’- Trendchart Workshop summary
paper - 17/05/2002 - http://trendchart.cordis.lu/tc_newsitem.cfm?ID=126
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Figure 1 – Different kinds of spinoffs
source: Author’s compilation
Most scholars, especially those in the United States, focus their studies of the subject on
university spinoffs only, while in Italy the trend is to analyze the wider category of public research
spinoffs. This is because, firstly, they have very similar features and, secondly, given the smaller
number of Italian university spinoffs compared to American ones, it is possible in this way to have a
larger sample to produce better results in statistical analysis.
Nevetheless, some international economic organizations prefer to also address the public
research topic, recognizing these similarities. For instance, the Organization for Economic Co-
operation and Development (OECD) has offered a definition of public research spin-offs which
considers three cases: any new entrant (1) which licenses a new technology from a university or
public research organization; (2) which includes a public sector or a university employee as a
founder; and/or (3) a university or national laboratory has made an equity investment (Callan,
2001).
In this paper public research spin-offs are defined as “companies created to exploit
technological knowledge which originated within universities”. Such a definition, which is similar
to the OECD one, includes the following cases :
- the university/public research institute elects to provide the rights to the technology
to an external, independent entrepreneur, non-university dependent, who initiates a
new company;
- the university/public research center starts a company on the basis of either a
university/public research assigned technology (licence) or a more generic
technological knowledge (non-university assigned);
- the unversity/public research shares equity (Fini, 2006; slightly modified from
Grimaldi & Sobrero, 2005);
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Apart from this definition which will be used in the rest of this thesis, an analysis of the
Italian regulations as stated by d.lgs 297/99 by D.Murst 593/00 allows us to understand that there
are two different definitions or typologies of university spin-offs:
- those companies listed in the stock market (spa) or not listed and having limited
liability (srl) in which the university shares equity are considered to be “proper”
university spin-offs;
- those companies listed in the stock market (spa) or not listed with limited liability
(srl), in which the university does not shares equity are called academic spin-offs.
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Now that we have clearly described exactly what is considered a public research spin off, the
main topic of this paper can be presented:
This thesis will start by exploring the general topic of the public research spin off and its
main features.
Secondly, it will carry out a review of the literature review that has addressed the figure of
the public research entrepreneur and in particular his personal motivations, skills, prior knowledge
and perception of the external environment. Hence, a questionnaire has been drawn up in order to
gather data on the personal features of university entrepreneur. This questionnaire was posed in
face-to-face interviews with 80 founder entrepreneurs of public research spin offs of the University
Bologna and of the other public research centers (the CNR and the ENEA) situated in Bologna.
Thus, a descriptive empirical analysis of the results of this survey will be presented. In the last part
of this paper these results will be interpretated and discussed.
1.2 Successful examples of public research spin offs:
The number of university spin offs in the U.S. is outstanding. According to the Association
of Technology Members in the U.S. 628 new spinoffs were created in 2005, with a total of 5171
since 1980. These spin offs led to 527 new products being introduced into the market in 2005.
When the period from financial year 1998 through financial year 2005 is taken into account we see
that, 3641 new products were introduced into the U.S domestic market (AUTM, FY 2005).
The most widely known name of an academic spin off is certainly Google, which was
founded by doctoral students Larry Paige and Sergey Brin at the University of Stanford graduate
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school.and was incorporated as a privately held company on September 7th 1998. It is relevant to
compare this case with another famous Internet service company, that of Yahoo!. The latter was
also founded by Stanford graduate students Jerry Lang and David Filo in January of 1994, but as
they developed this project in their spare time, outside the University, Stanford did not get any
intellectual property rights to it. Thus, Yahoo! is not considered to be an academic spin-off and
the University of Stanford did not get any benefit from its success.
In the semiconductor market the most remarkable spinoff company is Cirrus Logic
founded in Austin, Texas, in 1984; while in the biotechnology sector Genetech is a very well
known company, that emerged from the University of California at Berkeley to exploit the Cohen-
Boyer genetic engineering patent. Indeed, the first biotechnology firm, Cetus, was a spinoff from
the University of California at Berkeley (Parker and Zilberman, 1993).
In Europe there are fewer examples of public research spin-offs that have been successful,
and in any case they are certainly less famous than the American ones: Kronodoc, a finnish firm
founded in 1997 as a spin-off from an engineering project of the European Organisation for Nuclear
Research (CERN); Lenntech, a spin-off of the Technical University Delft (the Netherlands); a
couple of spin-offs set up by members of the University of Cambridge like Akubio or Astex
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; or
again in the United Kingdom TurboGenset, a university spin-off from the Imperial College in
London, that produces high-speed magnetic systems for power production, was worth over $ 1
billion in 2000 (Charles and Conway 2001).
Restricting the analysis to Italy, the case of PharmEste, a pharmaceutical spin off of the
University of Ferrara, which recently, in January 2007, received € 3,2 mil financing from
international investors is a highlight. PharmEste will offer new forms of care and assistance to over
7 million neuropathic-ache patients around the world, who previously suffred from a disease which
was incurable.
1.3 The importance of public research spin offs
Scholars and research institutes have remarked that university based spin-offs are very
robust companies, having significantly higher survival rates than other start-ups (Mustar 1997;
AUTM 2001). Also thanks to these reports, in the last ten years the idea of the university spin-off
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source IPR-Helpdesk: http://www.ipr-
helpdesk.org/controlador/resources/showDocument?len=en&idFicha=0000006385&formato=xml_html&nomFichero=
ES_SpinOffs&idFichero=00&cod_padre=t_02.01.02.01&localizador=doc
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