UNIVERSITY ENTREPRENEURSHIP AND TECHNOLOGY TRANSFER: PROCESS, DESIGN, AND INTELLECTUAL PROPERTY i ADVANCES IN THE STUDY OF ENTREPRENEURSHIP, INNOVATION AND ECONOMIC GROWTH Series Editor: Gary D. Libecap Recent Volumes: Volume10: Legal,RegulatoryandPolicyChangesthatAffect Entrepreneurial Midsize Firms, 1998 Volume 11: The Sources of Entrepreneurial Activity, 1999 Volume 12: Entrepreneurship and Economic Growth in the American Economy, 2000 Volume 13: Entrepreneurial Inputs and Outcomes: New Studies of Entrepreneurship in the United States, 2001 Volume 14: Issues In Entrepreneurship: Contracts, Corporate Characteristics and Country Differences, 2002 Volume 15: Intellectual Property and Entrepreneurship, 2004 ii ADVANCES IN THE STUDY OF ENTREPRENEURSHIP, INNOVATION AND ECONOMIC GROWTH VOLUME 16 UNIVERSITY ENTREPRENEURSHIP AND TECHNOLOGY TRANSFER: PROCESS, DESIGN, AND INTELLECTUAL PROPERTY EDITED BY GARY D. 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ISBN: 0-7623-1230-0 ISSN: 1048-4736(Series) ∞ ThepaperusedinthispublicationmeetstherequirementsofANSI/NISOZ39.48-1992(PermanenceofPaper). PrintedinTheNetherlands. Working together to grow libraries in developing countries www.elsevier.com | www.bookaid.org | www.sabre.org iv CONTENTS LIST OF CONTRIBUTORS vii INTRODUCTION Gary D. Libecap ix ANALYZING THE EFFECTIVENESS OF UNIVERSITY TECHNOLOGY TRANSFER: IMPLICATIONS FOR ENTREPRENEURSHIP EDUCATION Donald S. Siegel and Phillip H. Phan 1 THE BAYH-DOLE ACT AND HIGH-TECHNOLOGY ENTREPRENEURSHIP IN U.S. UNIVERSITIES: CHICKEN, EGG, OR SOMETHING ELSE? David C. Mowery 39 THE KNOWLEDGE SPILLOVER THEORY OF ENTREPRENEURSHIP AND TECHNOLOGICAL DIFFUSION David B. Audretsch, Max Keilbach and Erik Lehmann 69 CURIOSITY-DRIVEN RESEARCH AND UNIVERSITY TECHNOLOGY TRANSFER Katherine J. Strandburg 93 THE IRRATIONALITY OF SPECULATIVE GENE PATENTS David E. Adelman 123 v vi CONTENTS COMMERCIALIZING UNIVERSITY RESEARCH SYSTEMS IN ECONOMIC PERSPECTIVE: A VIEW FROM THE DEMAND SIDE Brett M. Frischmann 155 PROS AND CONS OF FACULTY PARTICIPATION IN LICENSING Jerry G. Thursby and Marie C. Thursby 187 INTRODUCING TECHNOLOGY ENTREPRENEURSHIP TO GRADUATE EDUCATION: AN INTEGRATIVE APPROACH Marie C. Thursby 211 AN INTEGRATED MODEL OF UNIVERSITY TECHNOLOGY COMMERCIALIZATION AND ENTREPRENEURSHIP EDUCATION Arthur A. Boni and S. Thomas Emerson 241 ORGANIZATIONAL MODULARITY AND INTRA-UNIVERSITY RELATIONSHIPS BETWEEN ENTREPRENEURSHIP EDUCATION AND TECHNOLOGY TRANSFER Andrew Nelson and Thomas Byers 275 LIST OF CONTRIBUTORS David E. Adelman The University of Arizona, Tucson, AZ, USA David B. Audretsch Ameritech Chair of Economic Development, Indiana University, Institute for Development Strategies, Bloomington, IN, USA Arthur A. Boni Tepper School of Business, Carnegie Mellon University, Pittsburgh, PA, USA Thomas Byers Stanford University, Stanford, CA, USA S. Thomas Emerson Tepper School of Business, Carnegie Mellon University, Pittsburgh, PA, USA BrettM.Frischmann Loyola University Chicago School of Law, Chicago, IL, USA Max Keilbach Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Research Group, Jena, Germany Erik Lehmann Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Research Group, Jena, Germany Gary D. Libecap The University of Arizona, Tucson, AZ, USA David C. Mowery University of California, Berkeley, Berkeley, CA, USA Andrew Nelson Stanford University, Stanford, CA, USA Phillip H. Phan RensselaerPolytechnicInstitute,Troy,NY, USA Donald S. Siegel RensselaerPolytechnicInstitute,Troy,NY, USA vii viii LIST OFCONTRIBUTORS Katherine J. DePaul University, College of Law, Strandburg Chicago, IL, USA Jerry G. Thursby Department of Economics, Emory College, Emory University, Atlanta, GA, USA Marie C. Thursby College of Management, Georgia Institute of Technology, Atlanta, GA, USA INTRODUCTION American universities, indeed, universities throughout the world, arefacing increaseddemandtosharetheknowledgedeveloped withintheircampuses. Historically, students pass knowledge to the greater society. But since at least the 1960s, the university’s research role has dramatically increased, with more and more resources devoted to basic and applied research in the physical and biological sciences, engineering, humanities, social sciences, and managementfields. Not all of this research can be transmitted through the graduation of students. Research on basic scientific and life processes and engineering also eventually results in applications in new products and processes. Given the large investment in university research, society natu- rally seeks greater returns through patents, licensing, and new business starts. Local and state governments, especially, look to universities for job creation and economic growth through greater knowledge transfer. In addition to these external demands, administrators and faculty within universities grow more interested in the potential from knowledge transfer. They believe students have better chances for employment with experience in commercialization; they believe that revenues from royalties and other licensing revenue can augment declining government support of their ac- ademic programs; they believe that the academic reputation of their insti- tutions can be enhanced with greater success in knowledge transfer; and finally,theybelievethatall levels ofgovernmentwill bemore supportiveof theinstitutionifitrevealsaclearinterestandsuccessinknowledgetransfer. Butinternaldemanddoesnotcomeonlyfromadministratorsandfaculty. Students want greater emphasis on the practical application of their uni- versity-based knowledge. They want greater training in commercialization, knowledge that is applicable to real-world problems and hence will be de- manded by employers. Finally, they have intellectual demands to see how university ideas might be modified to meet economic and social needs. In the face of growing external and internal demands for knowledge transfer, universities have responded by investing in augmented technology transfer or licensing offices, adding courses and programs in commercial- ization, and perhaps most importantly, broadening administrative and ac- ademicsupportforknowledgetransfer.Theemphasisisnolongersolelyon ix