Recent Research II: How Does the Experience of Academic Entrepreneurs Impact Firms' Performance?

A popular strategy in the TBED community is the attempt to both recruit and develop academic entrepreneurs that may have a substantial effect on the growth of a region's economy. Successful efforts to attract researchers, such as the Georgia Research Alliance and Kentucky's Bucks for Brains programs, are being replicated across the country. However, if one of the hoped-for payoffs is the successful creation of innovative companies, what types of researchers are best suited for this role? A recent discussion paper by Dirk Czarnitzki and Andrew Toole released via the Centre for European Economic Research contributes to the growing collection of studies that measure the impact of the background of entrepreneurial researchers on their firms' performance.



In preparing their paper, the authors explored the effect of the human capital of academic entrepreneurs who started companies through the government's Small Business Innovation Research (SBIR) Program for the National Institutes of Health (NIH). They measured this human capital by the extent academic entrepreneurs were oriented toward scientific endeavors (based on past NIH grants) or commercial activities (based on past patents). Similarly, a firm's performance also was gauged by scientific or commercial orientation. Czarnitzki and Toole defined scientific success as receiving SBIR Phase II funding, thus proving a scientific "feasibility of concept." Commercial impact was measured by the patent production of the new enterprise.



The authors chose individuals who were principal investigators on an NIH research grant and on an SBIR project from 1983 to 1996. Past experiences of academic entrepreneurs definitely correlate with the differences in their firms' performance, Czarnitzki and Toole concluded. Specifically, the authors found that:

• Biomedical academic entrepreneurs with a stronger tendency for attaining NIH research grants contribute more to their firm's performance of research oriented tasks.
• Individuals with past patentable research "do not make any marginal contribution" to the completion of research oriented tasks at the firm.
• Biomedical academic entrepreneurs who have attained commercial patents improve their firm's performance of commercial oriented tasks, increasing the likelihood of a firm patenting and the number of patents.
• Keeping the commercial orientation constant, increasing the scientific experience of these entrepreneurial academics actually hinders the firm's patenting performance.

The authors acknowledged setbacks of their chosen sample. They did not observe the role of academic scientists who have a non-principal investigator role in the SBIR firm, for example. Additionally, they did not explore other sources of capital, such as venture funds, personal assets or seed money that can be provided outside of the SBIR program for NIH grant recipients attempting commercialization.



So will the background of academic entrepreneurs impact the future growth strategies of firms? The authors speculate that the composition of individuals within certain science-based sectors could influence the distribution of firm types in that sector. Additionally, those with skills geared more towards identifying and exploring commercial opportunities might not be best suited for producing knowledge in an academic research environment.



This branch of research may impact the recruitment methods of the administrators of TBED and technology transfer programs looking to increase their entrepreneurial output. Additional studies are needed to build upon this research, exploring the importance and impact of specified human capital throughout other technical fields.



Czarnitzki and Toole's working paper, Exploring the Relationship Between Scientist Human Capital and Firm Performance: The Case of Biomedical Academic Entrepreneurs in the SBIR Program, can be downloaded for free from website of the Social Science Research Network: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=966125