Academic entrepreneurship at Belgian Universities

Academic entrepreneurship at Belgian Universities

R. Van Dierdonck and K. Debackere

Vlerick School Voor Management University of Ghent, St. Pietersnieuwstraat 49, 9000 GHEN T, Belgium.

Abstract

In this paper a framework of university-industry interactions is discussed. The presence or absence of academic entrepreneurial behaviour is considered as a basic variable in disting- uishing a host of transfer mechanisms. As a hypothesis it is stated that university-industry interactions are hampered by three types of barriers: cultural, institutional and operational.

This framework is then applied to the Belgian university system. The relative importance of different groups of transfer mechanisms is described. Particular attention is given to the barriers occurring during licensing arrange ments and entrepreneurial ventures. A mix of cultural, institutional and operational barriers helps to explain why licensing arrangements and entrepreneurial ventures occur at present less frequently then the assistance mechanisms. suggested keywords: spin-offs/entrepreneurship/university/ barriers.

1. INTRODUCTION

The awareness that the R&D resources of their universities are underutilized has led Western nations to a careful scrutiny of the potential role of academia in promoting technical change (National Science Foun- dation, 1982; Stankiewin, 1982). Literature provides examples of technology transfers between industry and academia (Teubal & Steinmueller, 1982; Goldhor & Lund, 1983). Although barriers to cooperation do still exist, academic researchers are increasingly aware of the potential benefits resulting from joint cooperations with industry (Azaroff, 1982; Langfitt et al., 1983). A lot of research was based on case studies or interviews with

experts in university-industry technology transfer. Our study aims at analyzing the major trends affecting the links between academia and industry in a national university system. Therefore, we designed a study using a questionnaire which was sent to a stratified sample of 300 Belgian university laboratories. Several studies point to the growing importance of academic entrepreneurship as a means to exploit university generated technology (Rodenberger & McCray, 1981; Doutriaux & Peterman, 1982; Stankiewicz, 1982; Vesper & Cross- white, 1983; Olofsson & Wahlbin, 1984; Doutriaux, 1985; Segal et al., 1985; Moe, 1986; McMullan & Vesper, 1987). It is the purpose of this paper to describe the importance of academic entrepreneurship in Belgium and to provide additional insight into the problems and opportunities facing those ‘entrepreneurial‘ transfer mechanisms. This study, of course, is relevant within the Belgian context. A major characteristic of Belgian universities is a limited autonomy to formulate their pedagogical and research policies. Even the so-called ‘free’ universities are still strongly dependent upon govern- mental authorities. Those constraints have to be considered when one tries to generalize from our findings.

2. THEORETICAL BACKGROUND AND RESEARCH TOPICS

2.1 Organizing a huge number of transfer mechanisms

The belief in the innovative role of universities has led to a quasi uncontrolled growth of transfer mechanisms. A recent study (NSF-report, 1982) counted not less than 464 different technology transfer mechanisms. When reviewing the host of transfer mechanisms described in the

R&D Management 18,4, 1988 341

342

institutional

formal

informal

R. VAN DlERDONCK AND K. DEBACKERE

projects in cooperation with an industrial partner can be considered as high intensity transfer activities. Thus, the intensity of a particular cooperation varies along a continuum according to the involvement and commitment of both partners. This ordering of R&D assistance mechanisms along two dimensions is visualized in Figure 1.

A second group of transfer mechanisms is characterized by the entrepreneurial role assumed by the university or by its members. Contrary to the first group (R&D assistance), academic researchers decide on exploiting their research results and by doing so, they become technical entrepreneurs (Stan- kiewicz, 1982).

The marketing of university generated technology is often considered as the most elementary form of academic entrepreneurship. It consists in offering research results for sale in open markets. A second form of academic entrepreneurship occurs when the university assumes the exploitation of its research results by establishing a development company run by the university itself. The French ‘Institut Pasteur’, which estab lished its own company to manufacture and to sell products based on research conducted at the institute, is a well known example. Other examples of university-run development companies can be found in a recent report of the Association of American Universities (1986). The most intense form of academic entrepreneurship consists of academic spin-offs (Rodenberger & McCray, 1981; Bollinger et al., 1983; Garvin, 1983;

intensity

. b

literature, it becomes apparent that they require different degrees of entrepreneurial behaviour on behalf of the academic researchers using them. This leads to the following typology, based on the presence or absence of academic entrepreneurial behaviour.

A first group contains those transfer mechanisms where universities act as a source of R&D assistance to entrepreneurs (Stankiewicz, 1982). The academic researchers do not assume any entrepreneurial role. In our view, the various mechanisms within this group can be ordered along two dimensions. The first dimension refers to the administrative organization of the cooperation implied in the transfer: the mechanisms used to provide academic R&D assistance to industry can vary from informal to formal and even to institutional. The difference between formal and informal is that the former is clearly defined in terms of time, place and joint objectives. Institutional cooperation implies an organization which has been especially created for this purpose. The second dimension measures the intensity of the cooperation. Intensity increases if one or more persons devote a substantial part of their time exclusively to a particular instance of cooperation. Infor- mation transfer typically is a low intensity activity. Service activities can be considered as an example of medium intensity transfer activities. They concern routine tests and analyses carried out by the university on demand of an industrial partner. Research

administrative organization

t

Figure 1 Academic R&D assistance to entrepreneurs

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Academic entrepreneurship at Belgian universities 343

Olofsson & Wahlbin, 1984; Bullock, 1985; McMullan & Vesper, 1987). Two extremes among a variety of university spin-offs are extrapreneurship and intrapreneurship. The former occurs when the researcher estab- lishes his or her own company to exploit his or her research results. By doing so, s/he assumes the full entrepreneurial responsi- bility for the success or failure of his or her activities. Intrapreneurship occurs when the researcher exploits his or her results within an existing company, for example by becoming a project leader. In this case, s/he can always rely on the management skills available at the company. Several studies on extrapreneurial spin-offs point to the potential benefits of this entrepreneurial transfer mechanism (Olofsson & Wahlbin, 1984; Doutriaux, 1985).

The frequency of the occurrence of spin- offs at academic institutions has been the subject of various studies (Rodenberger & McCray, 1981; McQueen & Wallmark, 1984; Cooper, 1985; Segal et al., 1985; McMullan & Vesper, 1987). Those studies show remarkable differences in spin-off creations among universities. However, inventorying spin-offs is not an easy job. An iceberg phenomenon may be at work, which hides a large number of them from view (McMullan & Vesper, 1987). Experience seems to suggest that spin-off rates are likely to be enhanced by entrepreneurship courses early in the history of spin-off activity (Vesper & Crosswhite, 1983; McMullan & Vesper, 1987). It is moreover likely that the presence of role models stimulates spin-off creation (Segal et al., 1985; Miller & Cat&, 1987). The family tree of the Cambridge Phenomenon also illustrates that spin-offs appear to multiply themselves through later generation of spin-offs (Segal et al., 1985). Studies show that, after a certain time, universities could possibly start generating spin-offs at a steady (or even increasing) rate (Rodenberger & McCray, 1981; Olofsson & Wahlbin, 1984; Moe, 1986). Doutriaux, concluding a longitudinal study on academic spin-offs, finds that the dynamics and growth behaviour of consulting firms is very different from the behaviour of manufac- turing firms, while there do not appear to be particular advantages for the companies having an owner who keeps his academic

R&D Management 18,4, 1988

position (Doutriaux & Peterman, 1982; Doutriaux, 1985).

Those two groups of transfer mechanisms are not totally independent. We may even hypothesize a third group of mechanisms in between the two previous ones. This group would then contain the licensing arrangements between university and industry (Stankiewicz, 1982). Licensing arrangements can occur as a second step in R&D assistance activities (for example, a research contract which has led to a result open to patent protection). On the other hand, academic researchers may write a patent application as a first step in the process to market their research results. By doing so they try to increase the commercial value of their research results before offering them for sale. In those instances, licensing can be considered as a first step in the entrepreneurial process. Roberts and Peters (1981) Consider the writing of a patent application by academic researchers as an indication of strong exploitation behaviour. Thus, licensing arrangements can be the expression as well of academic R&D assistance to industry as of academic entrepreneurial behaviour. Therefore, one may prefer to treat them as a separate group of transfer mechanisms involving specific skills and knowledge (Blumenthal et al., 1986).

2.2. Stimuli and barriers for university- industry technology transfer

Research projects have analyzed stimuli for cooperation between industry and university (NSF-report, 1982; Stankiewicz, 1982; Langfitt et al., 1983). Four major groups of academic stimuli can be discerned. First, there is a growing social pressure on universities to carry out 'useful' research. Second, as universities see their R&D budgets shrink, they have to turn to industry for additional funding. A third group, which we would call scintific stimuli, results from the increasing interrelatedness of science and technology in several disciplines. A fourth group consists of pedagogical stimuli such as providing real life projects for students. On top of these four driving forces, we need to mention that in the case of

344

academic entrepreneurship, the personal characteristics are believed to play a crucial role as to whether the researcher will display exploitative behaviour or not (Roberts & Peters, 1981).

Despite those stimuli, a multitude of barriers to cooperation have been identified (Dean, 1981; Fowler, 1984). We propose a classification into three categories: cultural, institutional and operational barriers.

Cultural barriers arise because university and industry are traditionally perceived to have separate social, cultural and economic roles. This leads to differences in mentality and values (Azaroff, 1982; Stankiewicz, 1982). Those differences result in problems and conflicts such as mutual lack of comprehension and academic aversion to entrepreneurial behaviour.

Institutional barriers are a result of the cultural differences between industry and academia. Both organizations are not structured to cooperate. As far as academic entrepreneurs are concerned, institutional norms and values may hamper their exploitation behaviour by denying them the necessary support for patenting, new venture creations etc. (Monck & Segal, 1983). Shapero considers this institutional support as a key element in stimulating entrepre neurial behaviour.

Operational problems occur during the technology transfer. A few examples: conflicts with regard to income distribution (e.g. royalties), the problem to find resources (e.g. seed money to form a spin-off company), a lack of expertise to write business plans or to make market forecasts, difficulties to meet time constraints etc. (Monck & Segal, 1983; Fowler, 1984).

A certain hierarchy exists in this barrier typology, along with feedback links from a lower barrier level to a higher one. The three barrier types thus are highly inter- dependent. This sometimes leads to a vicious circle which is difficult to interrupt. Liaison offices have been created to overcome those barriers (Stankiewia, 1982). Most frequently occurring are the university based liaison offices and the technology brokers. They assist researchers in their negotiations with industry, and at the same time they try to stimulate academic entrepreneurship. But they have no formal power to force the

R. VAN DIERDONCK AND K. DEBACKERE

academic community to use their services.

2.3 Research topics

The research reported in this paper is mainly descriptive. Based on the theoretical background, we want to gain an insight into the occurrence of academic entrepreneurship at Belgian universities. Therefore, we will compare the relative importance of the different groups of transfer mechanisms (as described in the literature review) at Belgian academic institutions.

From the literature review, it follows that the three types of barriers, which may reinforce one another, will exist at the same time with respect to academic entrepreneurs. Understanding those barriers is of major importance in designing the appropriate mechanisms to reduce them. A careful examination of the three barriers with respect to academic entrepreneurship will then be an important research topic.

Roberts and Peters (1981) argue: ‘A large percentage of technical university faculty can be expected to generate ideas of potential commercial value. However, only a smaller fraction of technical university faculty can be expected to do anything towards exploiting these ideas, and even fewer to undertake strong commercially oriented actions.’ The less frequent occurrence of exploitative behaviour among academic researchers, coupled with the expected barriers, may further hamper the use of entrepreneurial transfer mechanisms. As a consequence, we may expect rather sharp differences in the relative occurrence of the described groups of transfer mechanisms.

Besides analyzing the barriers to academic entrepreneurship and comparing the relative importance of the different mechanisms, we also try to assess the impact of the liaison offices on university-industry technology transfers. Their impact on university-industry technology transfer still is a rather contro- versial subject (Stankiewicz, 1985).

3. METHODOLOGY

In order to verify the described research

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topics and to obtain additional information on Belgian university-industry relationships, a questionnaire was designed and sent out to 300 Belgian university laboratories. Those laboratories form a stratified sample over the 13 Belgian universities having depart- ments in the four scientific disciplines considered in our research: Engineering, Agriculture, Sciences and Medicine (inclu- ding Pharmaceutical Sciences). We limited the research to these four disciplines because we believed university-industry technology transfer to occur mainly in these disciplines. The 300 units represent about 30% of the total Belgian university laboratory popu- lation in the described disciplines. We believe that this approach accounts for a rather complete insight into our national university-industry relationships. Of course, the specific character of the Belgian situation should be remembered when one tries to generalize from our findings: Belgian universities are strongly dependent upon public authority. This limits their flexibility and their autonomy.

A response rate of 77%, i.e. 231 respondents, was obtained. In order to determine whether the non-respondents differed from the 231 respondents, they were contacted by telephone. This enabled us to reach another 61 respondents. Table 1 shows the results. The percentage of non- cooperating units is much higher for those contacted by telephone. This could be

expected. It is indeed not astonishing that the absence of industrial cooperations acts as a deterrent to cooperate on a research project about university-industry technology transfer.

4. RESEARCH RESULTS

In order to compare the groups of transfer mechanisms which have been described in the literature review, we will focus on the 150 questionnaire respondents involved in technology transfer projects.

4.1 Academic R&D assistance to entrepreneurs: Characteristics of university- industy cooperation projects

Table 2 shows the distribution of the nature of the cooperative projects for the 117 respondents who answered this question correctly. Three classes are distinguished. First, we have trouble-shooting projects. These are the projects involving very practical questions. Second are the moderately innovative projects concerning the amelioration of existing products and/or processes. Third are the highly innovative projects concerning the development of new products, processes or technologies.

From this table we gather that 59% of the projects involve innovative activity, with

Table 1 Cooperation at Belgian universities (1985- 1986)

Questionnaire Telephone Total

CO NCo C NC C NC

(n=231) (n=61) (n = 292) Ynits Discipline \ Engineering 47 4 5 3 52 7 Agriculture 15 10 1 2 16 12 Sciences 36 41 8 16 44 57 Medicine 52 26 1 1 15 63 41

Total 150 81 25 36 175 117 Xz = 28.4 Xz = 2.8 Xz = 32.5 p<.001 N.S. p < ,001

O : C = Cooperating research units NC = Non-Cooperating research units

Questionnaire Telephone

Cooperating Non-Cooperating

150 81

25 X2 = 10.6 36 p < ,005

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346 R. VAN DIERDONCK AND K. DEBACKERE

Table 2 Nature of the cooDerative Droiects (1985- 19861

Subject Number of projects (n= 117)

Troubleshooting 832 (41%) Moderately innovative 558 (27%) Highly innovative 641 (32%)

more than half of them being highly innovative. The innovative stance of Belgian universities is further illustrated by the existence of centres of excellence in biotechnology, micro-electronics, artificial intelligence and mechanical engineering.

Table 3 shows the project duration. A vast majority of the projects lasts less than one year. This may be an illustration of industry’s short-term orientation. This also coincides with the reproach of the universities that Belgian industry only seeks academic assistance to solve an urgent problem. Although Table 2 contradicts the academic observation as if industry were mainly interested in trouble-shooting. Probably, the short duration of some of the projects could also be ascribed to the fact that projects were terminated because success came earlier than expected or because they failed to realize industry’s objectives.

Interdisciplinarity is a feature of modern science and technology. In order to obtain an indication of the interdisciplinary nature of Belgian university-industry cooperations, we considered three categories: 1. Projects carried out within the R&D unit

without assistance from other academic research units (category 1);

2. Projects carried out at the same university but in cooperation with other laboratories (in Belgium, each university laboratory has a well-defined scientific orientation, different from other units at the same institution) (category 2);

3. Projects carried out in cooperation with laboratories at other universities (category 3) .

Table 4 summarizes the results for this third project characteristic.

Those results may be an illustration of the individualistic attitudes of academic researchers. Even within the same institution, it is sometimes extremely difficult to motivate researchers to cooperate across suborgani- zational (i.e. laboratory) boundaries. Inter- university projects mainly occur through the intervention of European or government agencies. These agencies stimulate cooperation between several laboratories at different institutions and belonging to various disciplines. One might speculate why interuniversity projects appear to be difficult in Belgium. One hypothesis states that cooperation barriers not only exist between university and industry, but also among universities themselves.

Table 3

Duration

Project distribution by duration (1985- 1986)

Number of projects (n= 141)

< 1 year 1-2 year > 2 year

1838 (76%) 327 (13%) 271 (11%)

Table 4

Category

Project distribution by category (1985- 1986)

Number of projects ( n = 150)

1 2 3

2146 (87%) 210 (9%) 99 (4%)

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Personnel exchanges between university and industry

Several authors have pointed to the importance of personnel exchange as one of the most effective means to transfer technology since technology transfer mainly involves information transfer (Allen, 1977). Despite this importance, only 43 out of 150 respondents (28.7%) mention such exchanges. This percentage is even lower when referring to the number of projects involved: 36 respondents (7 did not answer correctly) mentioned 95 projects which used this mechanism. Or, 3.9% on a total of 2455 projects identified (n=150). This rather disappointing result can be partly attributed to the rigidities of the Belgian scientific system. This system lacks measures such as sabbatical leaves and programs for the exchange of industrial and academic researchers.

Project mediation

Despite the belief that a third partner can reduce barriers between the academic research unit and the industrialists, Table 5 indicates that mediators played a role in only 21.4% of the projects with industry during the last two years. Only 310 projects (12.7%) made use of the university liaison office’s help during their initiation. The fact that only 9 of the 13 universities have a liaison office does not alter this picture. After substracting the number of projects at the 4 institutions (1 15), we arrive at 310 projects

on a total of 2322 (13.4%). Only 16 projects (0.7%) used the intervention of private technology brokers.

4.2 Licensing arrangements

As described in 2.1 we can distinguish between different types of patents, according to their origins. We consider two groups. First, patents can arise out of contract research (CR-patents). Second, patents may grow out of independent academic! research (IR-patents). Independent research activities are carried out without the intervention of external partners. It is clear that IR-patents demand a degree of entrepreneurial commitment on behalf of the academic researcher which cannot be found in the case of CR- patents.

Only moderate use has been made of this mechanism during the last five years (in comparison to the 2455 cooperation projects reported for the last two years). CR-patents, which are somehow a ‘natural’ extension of the R&D assistance mechanisms, are more frequent. However, income from both types of patents is low. There are a number of explanations for this. Contacts with respondents reporting CR-patents learn that they receive compensations which cannot be called strictly monetary. In those instances, the industrial partner owns the patent and he rewards the academic partner through continued contract research and/or the gift of equipment. Thus, although the patents do not generate income for the academic partner, there is some compensation. This,

Table 5

Mediation type

No external mediation, i.e. the researcher and industrialist alone 1914 (78.6%)

External mediation, i.e.:

- universiw based liaison office 310 (12.7%) - private technology brokers 16 ( 0.7%)

- others (public agencies. research 197 ( 8.0%)

Project mediation ( 1985- 1986)

Number of projects (n= 141)

foundations,. . .)

Numberof projects(n= 141)

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348 R. VAN DIERDONCK AND K. DEBACKERE

Table 6 Patenting activities during the last five years (n= 150)

CR-patents IR-patents

Number of respondents 24O 15 having such patents Number of patents 61° 26 Number of respondents whose 3 2 patents already generated income

O : 3 respondents did not specify their

however, is only one explanation for the low income generated by CR-patents. Belgian universities have only recently become aware of the opportunities of licensing. As a consequence, most of them still lack appropriate patent policies and researchers are not always aware of the possibilities offered by patenting research results. This makes the university a ‘weak’ party when it comes to patent negotiations during a research project: examples exist where the industrial partner (who owns the research results) took a patent without any form of compensation for the academic partner. In the case of IR-patents, several respondents affirmed they took a preliminary patent in Belgium or Luxemburg (which is rather cheap) which was unable to rouse industrial interest. Once again, this points to the difficulties for researchers (the majority of whom have little or no experience with licensing) to engage in such activities.

The negligible return from patents may be one of the reasons why academia is discouraged to engage actively in licensing pr. ctices. However, the previous discussion ah ) points to the presence of barriers which mi r inhibit efficient licensing activity. This is clearly illustrated by our research:

1. Cultural barriers exist because researchers do not perceive patenting as an academic activity, thus ignoring possible benefits.

2. Institutional barriers are diverse. It seems difficult for Belgian universities to formulate licensing policies. They lack the necessary expertise and shortage of financial resources prevents them from taking (even preliminary) patents. Those difficulties are illustrated by the fact that only 3 CR-respondents and 2 IR-respon-

number of CR-Datents

3.

dents refer to some form of financial engagement on behalf of the university. In the case of CR-respondents, this problem is overcome by relying on the expertise and resources of the industrial partner (17 respondents). For IR-patents, a variety of practices appear such as the researchers taking the patent themselves or seeking external assistance. Contrary to CR-patents, industry intervention is scarce. Only 3 IR-respondents mention this form of intervention. This supports the argument that IR-patents have difficulties to rouse industrial interest. It is also noteworthy that most universities which institutionalized a liaison office confined their licensing activities to that service. However, contacts with liaison officers reveal that most of them do not regard patenting as their main activity. Moreover, several researchers acquainted with licensing affirm that they always shortcircuit the liaison office. They do not want its assistance since the ‘value added’ by the liaison office is perceived to be low or non-existing. Besides, a majority of academic researchers consider the central university administration as rather inefficient and try to defend their academic autonomy against it. Since most liaison offices are incorporated within this central administrative structure, this does not enhance their accessibility and visibility. The accomplishments of private technology brokers in this field are few. Operational problems exist because it is not always easy to motivate the industrial partner to surrender a fair share of his future income to the university and/or laboratory. Even when industry is pre- pared to share income, the distribution of this income within the academic institution causes problems. Also, when

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government funds are involved, it is not always clear who owns what part of the results.

This discussion clearly illustrates the interdependence of the three barrier types. The lack of appropriate patent policies causes operational problems when negot- iating a patent. This absence can be ascribed to cultural perceptions which, for decades, have considered patenting as contradictory to university values and academic ethos. Moreover, operational and institutional problems may reinforce such differences in perception.

On top of the described difficulties, we have to mention that 54% of the respondents (n=135) declare that their independent research results are not amenable to patent protection. This is not surprising since, in most cases, university research has no definite goals in terms of products or processes. And if it has such objectives, the presence of an industrial partner often limits the freedom with respect to the results.

Finally, we have to add that Belgian universities have not yet been confronted with lawsuits evolving from patenting. If the use of patenting as a transfer mechanism were to increase, universities may be sure to become involved in suits for infringement of patents or restraint of trade (Blumenthal et al., 1986).

4.3 Academic entrepreneurship

Marketing of university generated technology

This consists in offering research results for sale in open markets. We discussed the possibility to patent research results in order to enhance their commercial attractiveness. The preceding paragraph showed the limited occurrence of such practices.

In the literature review we mentioned that academic entrepreneurship and R&D assistance to entrepreneurs are not totally independent. The discussion on licensing arrangements illustrated this point. When looking at the 2455 projects described under 4.1., we find that 1525 (62%) are initiated by the industrial sponsor, 886 (36%) by the academic researcher and 44 (2%) by other

institutions such as public agencies and research foundations. The fact that 886 projects are initiated by academic researchers suggests the following process with respect to the marketing of university generated technology. Academic research results are not always transferable to industrial applications (Winand, 1986). They require further adjustment and development. Thus, it is not astonishing that academic researchers who want to market their research results, contact first some industrialists known to them and who might be interested in their research. This search results in applied research and development contracts which benefit both partners, not least the academic researcher himself. Indeed, he receives funds to operationalize his findings; he remains within the ‘safe’ university system; he gets close to industrial practice without having to face all the uncertainties which characterize the other forms of academic entrepreneurship; and, he avoids conflicts with conservative university norms and policies. Of course, those practices only demand a minimal degree of entrepreneurial commitment on the part of the researcher.

University-tun development companies

This second group of entrepreneurial transfer mechanisms does not yet occur in Belgium. Our contacts with university authorities show that Belgian universities will have to overcome ethical, legal and institutional barriers before they will be able to integrate this mechanism within the academic system. Moreover, the question remains whether such companies are desirable. Universities such as Harvard, though they have long-standing relationships with industry, simply refuse to establish such companies. A few Belgian universities already received equity participation in academic spin-offs, in return for the know- how transferred to the company. However, these are certainly not university-run companies. Two universities recently provided a minor part of the capital of spin-off companies. These financial participations, which could be interpreted as a first move

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350 towards university-run companies, are experiments which will be carefully examined by university authorities in the years to come. The possible corruption of university integrity by becoming a ‘holding company’ is a core issue in this debate.


the case of extrapreneurship (Table 8). Forty-nine respondents recognize that academic researchers prefer their scientific work over more commercial activities. This is reminiscent of the cultural differences between the academic and the industrial community. A few years ago, Belgian universities started to realize that academic and entrepreneurial behaviour are not necessarily incompatible. However, even though cultural barriers are diminishing, it will take several years to establish such mentality changes within the Belgian academic community. behaviour on the part of university scientists is reflected in the institutional and operational problems facing the academic entrepreneur. It is often rather difficult for researchers to obtain management advice from their academic institution when starting their own businesses. Indications exist that entrepreneurship courses may have a positive influence on spin-off activities (Vesper & Crosswhite, 1983; McMullan & Vesper, 1987). Notwithstanding the fact that MBA programs are flourishing at Belgian universities, only a few institutions started with management courses for academic entrepreneurs.

Academic entrepreneurs are often facing a dilemma: they are forced to make an immediate choice between their entrepreneurial and their academic careers. Although part-time professorships are perfectly possible, most universities and researchers seem to be unfamiliar with this possibility. Moreover, only a minority of respondents (Table 8) recognize that academic researchers lack the necessary entrepreneurial skills (6%) and commercial awareness (12%) to engage in spin-off activities. On the other hand, liaison offices often cite those problems as being a characteristic of the majority of academic researchers. The low

Spin-off activities

Our study only considers intra- and extrapreneurship, which are in fact two extremes along a continuum. Table 7 summarizes the results.

Spin-off activities offer some return to the research unit: 29 respondents confronted with intrapreneurial spin-offs and 8 respondents confronted with extrapreneurial spin-offs mention some kind of compensation. Most common is the presence of continued contract research (7 respondents with intrapreneurial spin-offs and 4 respondents with extrapreneurial spin-offs). Thus academic entrepreneurship leads to the research unit offering further R&D assistance to the industrial partner. However, the moderate number of spin-offs (especially extrapreneurial ones) requires some comments.

First, we have to mention the iceberg phenomenon discussed in 2.1 (McMullan & Vesper, 1987). Since we asked the research units to report the number of spin-offs during the last five years, we hope that the recent character of this time horizon minimizes the bias.

‘ econd, we asked the respondents to ex lain the absence of entrepreneurship at tht r research units (more than one answer was possible). Table 8 summarizes the results.

Review of the questionnaire results and contacts with university authorities illustrate the presence of cultural, institutional and operational barriers. These are evident in

Table 7 lntre and entrapreneurship for the last five years (n= 150)

lntrapreneurship Extrapreneurship

Number of respondents reporting such experiences 370 14 Number of cases 6 9 O 14

O : 6 respondents do not specify the number of intrapreneurial spin-offs

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Academic entrepreneurship at Belgian universities

Table 8 Reasons for the absence of extrapreneurship (n= 136)

Reason Number of respondents

351

Academic researchers prefer scientific activities over more commercial work The research results do not lend themselves to extrapreneurial spin-offs Lack of commercial awareness on the part of academic researchers Shortage of start-up capital Too much red tape Lack of entrepreneurial skills on behalf of academic researchers

numbers of spin-off activities somehow support the liaison officers’ view. So the answer of the questionnaire respondents may point to the fact that a vast majority of Belgian scientists, even though they are involved in cooperations with industry, underestimate the importance of entrepreneurial and commercial knowledge and skills to successful spin-off creations. Contacts with academic entrepreneurs show that only after a few years they start realizing the importance of those skills and their lack of management knowledge. This may explain the results of Table 8. Doutriaux and Peterman (1982) similarly found that academic entrepreneurs tend to disregard the need to bring some business experience into the company.

Other problems concern the amount of red tape involved (16%) and the shortage of starting capital (20%). Since most extrapreneurial spin-offs have substantial R&D activities, they need vast amounts of money to arrive at viable products. As discussed previously, Belgian universities only started experimenting with capital investments in spin-offs. Moreover, the present budgetary problems will certainly limit the resources available for such activities, Venture capita- lists are considered rather conservative.

It is evident that most of those problems only occur in the case of extrapreneurial spin-off creations. The intrapreneurial spin- off can rely on the management infra- structure available at the company. The absence of consistent compensation policies


49 (36%)

72 (53%)

16 (12%) 27 (20%) 22 (16%)

8 ( 6%)

for spin-off activities gives rise to another problem. This lack is illustrated by a variety of compensation schemes (royalties, research contracts, equipment, . ,) and by a number of respondents having received nothing at all.

It is apparent from the previous discussion that barriers alone are not enough to explain the absence of spin-offs. Entrepreneurial skills and knowledge are also important in the spin-off process (Roberts & Peters, 1981; McMullan & Vesper, 1987).

Third, as discussed in the literature review, role models and the growing recognition of spin-offs as a means to transfer university technology may act as catalysts (Segal et al., 1985; Miller & CBtC, 1987). This may eventually lead to a certain (steady) rate of spin-off creations, followed by later generation spin-offs.

Fourth, a majority of the respondents recognize that their research results do not lend themselves to intrapreneurial spin-offs (52%, n=113) nor to extrapreneurial spin- offs (53%, n=136). This shows that academic entrepreneurship is a means to transfer university research results, but certainly not an end. The results reported here also support the remark that two major problems to academic venture formation may well be the lack of entrepreneurs and the lack of products (McMullan & Melnyk, 1988).

The influence of the liaison offices on extrapreneurship seems to be greater than in the case of licensing activities. On the other hand, most intrapreneurial spin-offs

352

are completely unknown to the liaison officers. About one third of the 14 spin-off companies in our sample received tangible support from the liaison office. Liaison officers provided advice to the academic entrepreneur, they helped to find the necessary capital, or they negotiated with university authorities to obtain provisional housing within the university buildings. Contacts with liaison officers further revealed the existence of 28 other extrapre neurial spin-offs at Belgian universities (December 1986). However, our findings do not permit an assessment of the impact of the liaison support in those cases.

5. CONCLUSIONS


Therefore, universities should not neglect this group of transfer mechanisms. Our results point to the key role of the individual researcher in this process (Table 5). Academia should also strive for a real bidirectional knowled e flow during those cooperative projects. %he lack of mobility found during our research indicates that this is perhaps a major flaw of the present system.

The impact of liaison offices proves as yet to be marginal. Nevertheless, the majority of our respondents believe those offices could have a healthy influence on university- industry relationships. Those arguments hint at a focus of liaison offices on being a university marketing instrument offering logistic support to researchers engaged in technology transfer activities. They could, for instance, design and promote entrepreneurship courses for university scientists, given the presumed impact of such courses (Vesper & Crosswhite, 1983; McMullan & Vesper, 1987).

Our research results show that academic entrepreneurship is a recent phenomenon at Belgian universities. Academic researchers are familiar with the R&D assistance mechanisms, but a majority of them still have to learn the opportunities offered by the more entrepreneurial transfer mechanisms. A mix of cultural, institutional and operational barriers explains why licensing arrangements and entrepreneurial ventures occur at present less frequently than the R&D assistance mechanisms. However, a few comments are necessary. First, there is the iceberg phenomenon which may hide a substantial part of academic spin-off activity. Second, barriers alone are not enough to explain the absence of academic entrepreneurs. Exploitative behaviour and entrepreneurial skills are also required. Those are not necessarily a common characteristic of university scientists. Third, it may take several years before universities start generating spin-offs at a certain (steady) rate. Fourth, entrepreneurial ventures should be considered as a means to exploit university technology, and not as an end. Indeed, a lot of academic research does not necessarily lead to a ready-touse product or process.

It is clear that the R&D assistance mechanisms have at present the lowest entry barrier for academia to engage in industrial cooperations. The frequent use of R&D assistance mechanisms at academic research units is sometimes considered as a necessary condition to stimulate academic entrepreneurship (Vesper & Crosswhite, 1983).

ACKNOWLEDGMENTS

This research was sponsored by the Belgian Science Policy Department (Diensten voor de Programmatie van het Wetenschaps- beleid). The authors want to thank two anonymous referees for their helpful comments.

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