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Does Exposure to University Research Make a Difference? Evidence from Europe YannisCaloghirou National Technical University of Athens AimiliaProtogerou.

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Presentation on theme: "Does Exposure to University Research Make a Difference? Evidence from Europe YannisCaloghirou National Technical University of Athens AimiliaProtogerou."— Presentation transcript:

1 Does Exposure to University Research Make a Difference? Evidence from Europe YannisCaloghirou National Technical University of Athens AimiliaProtogerou National Technical University of Athens Nicholas S. Vonortas George Washington University Atlanta Conference on Science and Innovation Policy 2013, Georgia Institute of Technology, September 26-28 TTThvdkjhfdSanTSebastian,Spain, September 8-9, 2011

2 Definitions Types of academic entrepreneurship: narrow definition, broader definition We adopt a broader definition based on company founders with prior exposure to academic research (Ph.D. holders) Examine new ventures created by Ph.D. holders as a form of Knowledge-Intensive Entrepreneurship.

3 Research question Do new ventures founded by persons who have been previously exposed to academic research differ in behavior and structure from other KIE ventures? Our conjecture is that exposure of company founders to university research affects entrepreneurial incentives and behavior in ways that reflect higher levels of creation and use of scientific and technological knowledge and market niche specialization.

4 The increase in Ph.D. holders between 2000 and 2009 per country Countries20002009 Switzerland 2,40%3,40% Sweden 2,50%3,00% Portugal 1,00%2,70% Finland 1,90%2,50% Germany 2,00%2,50% Slovakia 0,60%2,20% UnitedKingdom 1,40%2,10% Austria 1,40%2,00% Australia 1,30%1,90% Netherlands 1,50%1,60% Denmark 1,10%1,60% Norway 1,00%1,60% UnitedStates 1,30%1,60% Slovenia -1,50% OECD 1,00%1,50% France 1,20%1,50% NewZealand 0,80%1,40% Greece 0,20%1,40% CzechRepublic 0,60%1,40% Countries20002009 Ireland 0,90%1,40% RussianFederation -1,40% Israel 0,90%1,30% Belgium 0,90%1,30% Italy 0,40%1,30% Canada 0,80%1,20% Korea, 0,70%1,20% Japan 0,60%1,10% Spain 0,90%1,00% Hungary 0,50%0,90% Estonia -0,80% Poland 0,80% Iceland 0,40%0,70% Brazil 0,40% Turkey 0,20%0,40% Mexico -0,20% Chile -0,20% Indonesia -0,10%

5 Data AEGIS survey data on : 4004 newly established firms (2001-2007) Ten European countries - France, Germany, Italy, United Kingdom - Denmark, Sweden - Czech Republic, Greece, Portugal - Croatia 18 sectors in three broad sector groups - High and medium-high tech manufacturing - Medium-low and low-tech manufacturing - Knowledge-intensive business services

6 Sample Characteristics Ph.D Founder (N=323)Non-Ph.D Founder (N=3681) #%#% High-tech 5015.5%37310.1% Low-tech 4513.9%143439.0% KIBS 22870.6%187450.9% Total323100%3681100%

7 Education qualification of employees Ph.D FoundersNon-Ph.D Founders Employees educational qualification #% Mean number of employees per firm #% bachelor degree 294918.17 230563 5.22 graduate degree 205635.81 144639 3.71 PH.D degree 226702.17 2126 1.84

8 Firms employing Ph.D holders Firm type Firms employing Ph.D holders (#) Firms employing Ph.Dholders (%) Mean number of Ph.D holders per firm Ph.D Founders 22670% 2.17 non-Ph.D Founders 2126% 1.84

9 Firms employing Ph.D holders per sector group Ph.D. FoundersNon-Ph.D. Founders Sector group #% Mean number of Ph.D holders per firm #% High-tech 3570.0%1.97256.7%2.24 Low-tech 3066.7%1.73574.0%1.77 KIBS 16170.6%2.191306.9%1.72

10 Factors affecting firm formation Ph.D Foundersnon-PhD Founders t-test (observed differences) Factors Average rating Work experience in the current activity field 4.34 4.31 n.s. Technical/engineering knowledge 4.07 3.81 *** Design knowledge 3.03 3.04 n.s Market knowledge 3.98 4.06 n.s Networks built during previous career 3.85 3.73 n.s Availabilityof finance 3.37 3.33 n.s Opportunities in a public procurement initiative 1.97 2.10 *** Existence of a large enough customer 3.04 3.27 *** Opportunity deriving from technological change 3.23 2.95 *** Opportunity deriving from a new market need 3.42 3.26 ***

11 Funding sources Ph.D FoundersNon-Ph.D Founders Funding sources Count of firms using a specific source % of firms Count of firms using a specific source % of firms Own financial resources287 91%330392% Family member29 9%3379% Previous employer14 4%782% Venture capital35 11%1424% Bank60 19%101828% National government or local authorities31 10%2507% EU funds9 3%1033% Other sources27 9%1504%

12 Average percentage of funding Ph.D. foundersNon-Ph.D. Founders Funding sourcesAverage % fundingAverage % of funding Own financial resources76.9979.49 Family member34.1043.27 Previous employer45.3643.94 Venture capital61.1140.73 Bank45.1351.98 National government or local authorities 32.4834.36 EU funds27.7834.51 Other sources62.1157.08

13 Factors for creating and sustaining competitive advantage Ph.D Founders non-Ph.D Founders T-test (observed differences) Factors Average rating Capability to offer novel products/services 3.763.68 n.s. Capacity to adapt the products/services to the specific needs 4.234.22 n.s. Capability to offer expected products/ services at low cost 3.003.29 ** R&D activities 3.592.88 ** Establishment of alliances/partnerships with other firms 3.262.92 ** Capability to offer high quality product/services at a premium price 3.893.72 n.s Networking with scientific research organizations 3.002.18 *** Marketing and promotion activities 3.223.23 n.s

14 Main strategy Ph.D Founders (N=323)Non-Ph.D Founders (N=3681) Number of firms % of firms Number of firms % of firms Offer standardized products and services at low cost 319.6%60816.5% Offer unique products and services 19961.6%214858.4% Exploit opportunities in new market niches 9328.8%92525.1%

15 Sources of knowledge SourcesPh.D Founders Non-Ph.D Founders T-test (observed differences) Average rating Clients or customers 4.404.41n.s. Suppliers 2.823.41** Competitors 3.223.28n.s. Public research innstitutes 2.452.07*** Universities 2.672.07*** External commercial labs/R&D firms/technical institutes 2.222.02*** In-house R&D 3.843.22*** Trade fairs, conferences and exhibitions 3.082.94n.s. Scientific journals and other trade or technical publications 3.212.84n.s. Participation in nationally funded research programmes 2.271.86*** Participation in EU funded research programmes 2.111.85***

16 Introduction of innovations Firm type Ph.D foundersnon-Ph.D. founders # of firms% of firms# of firms% of firms Radicallnes s of Innovation No Innovation 8225%137437% New-to-firm4915%82522% New-to- market 10232%100227% New-to- world 9028%48013% Total323100%3681100%

17 Intellectual property protection Firm type Ph.D foundersnon-Ph.D. founders Methods% of firms Patents31.5%15.0% Trademarks49.8%40.2% Copyrights34.9%26.7% Confidentiality agreements 79.7%52.2% Secrecy58.5%38.5% Lead-time advantages on competitiors 59.8%53.1% Complexity of design57.7%44.5%

18 Firm performance Firm typeNMean t-test (observed differences) % Sales in International market Ph.D. founders 32326.04 *** non-Ph.D founders 368113.43 Avrg. Growth Sales (quartile) Ph.D. founders 3015.77 ** non-Ph.D founders 33615.25 Avrg. Growth Employment (quartile) Ph.D. founders 3062.29 ** non-Ph.D founders 33912.08

19 Preliminary Conclusions At first look, young European companies whose founders have been exposed to academic research indicate, in the aggregate, a fair degree of similarity in behaviour to those whose founders have not had the same exposure. Important similarities between the two groups of companies include: - Market focus and offering novel products or services are the critical factors for creating and sustaining competitive advantage; - Main company strategy is to offer unique products and services followed at some distance by exploiting new market niches; - Clients are the most important source of knowledge.

20 Preliminary Conclusions More careful cross-examination reveals for the former group of firms (Ph.D. founders) a picture of: – Extensive dependence on university graduates and post graduates as employees – More reliance on venture capital funding (risk-taking) – Higher dependence on internal R&D and external scientific and research networks as sources of knowledge – Higher innovative performance especially in terms of new-to- the world products – Increased awareness of intellectual property protection – Better firm performance in terms of growth and international sales

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