Essays on the entrepreneurial university

National innovative performance is a key driver for sustainable growth (Pavitt, 1980). National innovative capacity may be improved by fostering industrial Research and Development (R&D), by funding academic research and by effectively supporting university-industry interactions in order to strengthen the linkage between R&D and product development. In a context of growing relevance of external sources of innovation, where the industry, rather than relying on internal R&D, increasingly engages in ‘open innovation’ (Chesbrough, 2006), the role played by universities is crucial. The essays presented in this thesis focus mainly on academic R&D and knowledge transfer mechanisms from the university viewpoint, as opposed to government or industry perspectives. These essays contribute to our understanding of how universities organise themselves to adapt to this changing context. In other words, the thesis looks at the ‘reflexivity’ norm of the system associated with the entrepreneurial university, as established by Etzkowitz (2004); or “a continuing renovation of the internal structure of the university as its relation to industry and government changes, and of industry and government as their relationship to the university is revised”. Universities play a major role in the national innovative capacity of a country as producers and transmitters of new knowledge (see for instance, Adams, 1990; Mansfield, 1991; Klevorick et al. 1995; Zucker et al. 1998; Cohen et al. 2002; Arundel and Geuna, 2004; Guellec and van Pottelsberghe, 2004). While European countries play a leading global role in terms of scientific output, they lag behind in the ability to convert this strength into wealth-generating innovations (this is known as the ‘European paradox’, see for instance Tijssen and van Wijk, 1999; and Dosi et al. 2005). This level of innovation may be improved by different factors; for instance, by fostering an entrepreneurial culture, or by increasing industry’s willingness to develop new products, new processes. One of these factors relies on the notion of an ‘entrepreneurial university’. Universities, in addition to the two traditional missions of research and teaching, foster their third mission of contribution to society, by improving the transfer of knowledge to the industry. New tools and regulations have been established to support universities in this process. Since the early 80’s, academic technology transfer offices (TTOs) have been created, dedicated employees have been trained and hired, incubators for the launch of new academic ventures have been set up, academic or independent pre-seed investment funds have been founded and laws related to the ownerships by university of their invented-patents have been promulgated. But what exactly stands behind the notion of ‘entrepreneurial university’? There exist more different descriptions of a similar concept or of a similar evolution than a general agreed definition. Indeed, "(…) There is high heterogeneity, there is no such thing as a typical university, and there is no typical way to be or become an entrepreneurial university" (Martinelli et al. 2008, p.260). However some similar patterns of what is or should be an entrepreneurial university may be identified. First, there is this notion of a revolution experienced by universities that now have to integrate a third mission of contributing to economic development aside of their traditional academic missions. “(…) But in the most advanced segments of the worldwide university system, a ‘second revolution’ takes off. The entrepreneurial university integrates economic development into the university as an academic function along with teaching and research. It is this ‘capitalisation of knowledge’ that is the heart of a new mission for the university, linking universities to users of knowledge more tightly and establishing the university as an economic actor in its own right” (Etzkowitz, 1998, p.833). This revolution finds its origin in a necessary adaptation of universities to an external changing environment where modern societies put a strong emphasis on knowledge. “The concept of the entrepreneurial university envisions an academic structure and function that is revised through the alignment of economic development with research and teaching as academic missions. The transformation of academia from a ‘secondary’ to a ‘primary’ institution is a heretofore unexpected outcome of the institutional development of modern society (Mills, 1958). In consequence, the knowledge industry in modern societies is no longer a minor affair run by an intellectual elite, an activity that might be considered by pragmatic leaders as expendable; it is a mammoth enterprise on a par with heavy industry, and just as necessary to the country in which it is situated (Graham, 1998, p.129)”, quoted by Etzkowitz et al. (2000, p.329). The notion of an ‘entrepreneurial university’ also exceeds the simple idea of the protection of academic intellectual property by patents owned by universities and their out-licensing as well as the launch of new ventures. It encompasses an overall change of how the university is organised. “In the gruesome and heady world of changing external environments, organizations – including universities – will need to seek opportunities beyond their existing competences (Hamel and Prahalad, 1989, 1994), which suggests the need for an entrepreneurial orientation (Lumpkin and Dess, 1996)”, quoted by Glassman et al. (2003, p.356). This entrepreneurial orientation will only be possible if the overall organisation of the university changes. “An entrepreneurial university, on its own, actively seeks to innovate how it goes about its business. It seeks to work out a substantial shift in organizational character so as to arrive at a more promising posture for the future. Entrepreneurial universities seek to become 'stand-up' universities that are significant actors on their own terms” (Clark, 1998, p.4). The notion of entrepreneurial university also encompasses the concept of academic entrepreneurship in its broad sense. For a university to become entrepreneurial, individual academics also have to adapt and to behave in an entrepreneurial way. This concept is not solely conceived here as the launching of new ventures by academics (a view embraced by Shane, 2004, for instance). It relates more to the view of Stevenson, Roberts and Grousbeck (1989), referenced by Glassman et al. (2003, p.354) or “the process of creating and seizing an opportunity and pursuing it to create something of value regardless of current available resources.” The difficulty facing universities is then to adapt to their external environment while preserving the integrity of their two traditional academic missions. However, some conceive this challenge as precisely an ability that characterise the very intrinsic university’s nature. "The uniqueness of the university,(…) lies in its protean capacity to change its shape and function to suit its temporal and sociopolitical environment while retaining enough continuity to deserve its unchanging name” (Perkin, 1984, p.18). Furthermore, others perceive this challenge as a tension that has always been at the root of the university’s character. “The cherished view of some academics that higher education started out on the Acropolis of scholarship and was desecrated by descent into the Agora of materialistic pursuit led by ungodly commercial interests and scheming public officials and venal academic leaders is just not true for the university systems that have developed at least since 1200 A.D. If anything, higher education started in the Agora, the market place, at the bottom of the hill and ascended to the Acropolis on the top of the hill… Mostly it has lived in tension, at one and the same time at the bottom of the hill, at the top of the hill, and on many paths in between” (Kerr, 1988, p.4; quoted by Glassman, 2003, p.353). Nevertheless, it appears that some institutions, the ones integrating the best their different missions and being the most ‘complete’ in terms of the activities they perform, will be better positioned to overcome this second revolution than other institutions. “Since science-based innovations increasingly have a multidisciplinary character and build on "difficult-to-codify" people-centred interactions, university-based systems of industry science links, which combine basic and applied research with a broader education mission, are seen as enjoying a comparative advantage relative to research institutes” (OECD, 2001 quoted by Debackere and Veugeleers, 2005, p.324). Or as stated by Geuna (1998, p.266), in his analysis of the way the different historical trajectories of European universities are influencing their ability to adapt to the current changing environment, “ (…) the renowned institutions of Cluster IV (pre-war institutions, large in size, with high research output and productivity) are in a strong position both scientifically and politically, and can exercise bargaining power in their relations with government and industry. (…) On the other side, universities in the other two clusters (new postwar universities, characterised by small size, low research output and low research orientation and productivity, whether involved in technological research or in teaching), with very low research grants from government, are pushed to rely more heavily on industrial funding. Being in a weak financial position, they may find themselves in an asymmetric bargaining relationship with industry that they may be unable to manage effectively.” To summarize, one could attempt to define the broad notion of an ‘entrepreneurial university’ as follows. An entrepreneurial university is a university that adapts to the current changing environment that puts a stronger emphasis on knowledge, by properly integrating the third mission or the capitalisation of knowledge aside of its two traditional missions. This adaptation requires a radical change in the way the university is organised. It will require important strategic reorientation from the top but also, and mainly, it will require from the individual academics to better seize new opportunities to generate value (not only financial but also scientific or academic) given scarcer resources. Renowned and complete universities (with teaching, basic and applied research) have an edge over other institutions to overcome this second revolution. This notion of ‘entrepreneurial university’ has drawn criticisms. For example, academics’ interactions with industry could impact negatively on research activities by reorienting fundamental research towards more applied research projects (Cohen and Randazzese, 1996; David, 2000), by restricting academic freedom (Cohen et al. 1994; Blumenthal et al. 1996; Blumenthal et al. 1997), or by potentially reducing scientific productivity (see for instance van Zeebroeck et al. 2008 for a review on this issue). The present work does not address the issue of the impact of increased interactions with the business sector on traditional academic missions nor the question of whether universities should become entrepreneurial or not. Instead, the essays start from the idea that the ‘entrepreneurial university’ notion is part of the intrinsic nature of modern universities, or at least, is a part of its evolution. Industry-university relationships are not a new phenomenon; it can be traced at least to the mid- to late-1800s in Europe and to at least the industrial revolution in the USA (Hall et al. 2001). What is evolving is the nature of such relationships that become more formal. The present analysis starts then from the general observation that some universities (and researchers) are more entrepreneurially-oriented and better accept this mission than others. From that stems the primary research question addressed in this thesis: are there characteristics or conditions leading to a smooth coexistence of traditional and new academic missions inside an entrepreneurial university? And if so, what are they? Existing work on the entrepreneurial university is a nascent but already well developed field of research. The aimed contribution of this thesis is to analyse the topic under three specific but complementary angles. These three perspectives are explored into the four main chapters of this work, structured as follows. Chapter 1 is titled “Turning science into business: A case study of a traditional European research university”. It introduces the topic by investigating the dynamics at play that may explain the propensity of a traditional, research-oriented university to start generate entrepreneurial outputs, while being not full-fledge entrepreneurially organised. Exploring the importance of “new” entrepreneurial outputs, as defined as patents and spin-off companies, compared to other ways of transferring new knowledge to the industry, Chapter 2 reviews the literature on the variety of knowledge transfer mechanisms (KTMs) used in university-industry interactions. It is titled “University-Industry interactions and knowledge transfer mechanisms: a critical survey”. Given scarcer structural funds for academic research and increasing pressure on academics to diversify their activities in terms of being involved in patenting or spin-off launching, Chapter 3 and Chapter 4 investigate the role played by individual characteristics of researchers in attracting competitive, external funding. Chapter 3 presents stylised facts related to external fundraising at ULB and characteristics of researchers who attracted these funds over the period 1998-2008. The empirical analysis on associations between individual characteristics of researchers (intrinsic, scientific and entrepreneurial) and the extent of funds attracted from different sources (national, regional and business) is presented in Chapter 4, titled “The determinants of academic fundraising.” Chapter 5 concludes and suggests ideas for future investigation on this topic. Chapter 6, in appendix of the present work, titled “A note on the drivers of R&D intensity”, is not directly linked to the issue of the entrepreneurial university. It has been included to complement the studied topic and to put in perspective the present work. Academic research and university-industry interactions constitute important drivers of a national R&D and innovation system. Other factors are at play as well. Looking at this issue at the macroeconomic level, Chapter 6 investigates to what extent the industrial structure of a country influences the observed R&D intensity, and hence would bias the well-known country rankings based on aggregate R&D intensity.