EXECUTIVE SUMMARY

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David Pérez-Castrillo (UAB and MOVE) 

Scarcity of Ideas and R&D Options: Use it, Lose it, or Bank it

Presenter: Suzanne Scotchmer, (UC Berkeley)
Co-author: Nisvan Erkal (University of Melbourne) 

Unlike the classical wisdom in the R&D literature that stresses the efforts implemented in research and innovation, the author focuses on the fact that research ideas are scarce. Researchers may have ideas and may use them immediately, forget them or save them for a future use. Building an R&D model where each researcher can obtain one idea at a certain point in time, the author compares the result obtained when the individual researcher decides and the result of a central government deciding in the place of the private researcher. The conclusion of the study is that there should be a higher private reward associated with pursuing these ideas when ideas are scarcer so that both results can coincide.  

Managing Licensing in a Market for Technology

Presenter: Andrea Fosfuri (Universidad Carlos III de Madrid)
Co-Authors: Ashish Arora (Fuqua School of Business, Duke University)
Thomas Rønde (Copenhagen Business School)

The article answers the following research question: How should large companies manage their licensing business? Licensing decisions can be decentralized at the Business Unit level or can be centralized at the corporate level by setting up a Licensing Unit. Decentralization exploits information that resides within the Business Unit, while centralization solves incentive problems that might affect decisions taken at the Business Unit level. The article shows that the creation of a Licensing Unit is more likely when the market for technology functions more efficiently and when the underlying technology has a broader array of applications.  

Do Venture Capitalists Have a Bias Against Investment in Academic Spin-offs? Evidence from the Micro- and Nanotechnology Sector in the UK 

Presenter: Federico Munari (University of Bologna)
Co-Author: Laura Toschi (University of Bologna)

Previous theoretical studies suggested that the venture capitalist may investment little in academic spin-offs. In this paper, the authors seek statistical evidence on this problem. Using the data for the nanotechnology sector in UK, it turns out that the there is no such evidence of this. However, the university’s scientific reputation plays an important role in the academic spin-off’s ability to access venture capital financing. Moreover, comparing public and private venture capital behaviours, the private one benefits more when there are collaborations between university and the industry. 

Incentives in University Technology Transfers

Presenter: David Pérez-Castrillo (Universitat Autònoma de Barcelona and MOVE)
Co-Author: Inés Macho-Stadler (Universitat Autònoma de Barcelona and MOVE)

This paper provides a detailed review and analysis on the incentives in university technology transfer. The authors distinguish two main ways in this transfer process, one is licensing agreements, and the other is the creation of spin-offs. In this paper, the main stages (development, commercialization and exit) of the transfer of university innovations are analyzed. Also, the authors compare the incentives that, in each stage of each method, venture capitalist, researchers, and technology transfer office have. Finally, in the light of these incentives, some contractual solutions are proposed.  

Venture Capitalist, Technology Transfer and Spin-offs

This work answers the following question: What are the characteristics of Venture Capital firms that make them want to invest in university ideas? There are many theories that explain the behaviour of Venture Capital firms when investing. The author conducts an analysis on data of Venture Capital investments in order to contrast the results with what theory tells so far. No evidence of direct implication between the experience of venture capital and attitudes to spin-offs is found. The behaviour of investors seems to be in line with what theory predicts, and public subsidies are indeed used to compensate for the lack of private investments. 

Round Table - Financing of Start-ups and Young Radical Innovators

• Reinhilde Veugelers (Katholieke Universiteit Leuven)
• Juan Tomás Hernani (Ministerio de Ciencia e Innovación)
• Paul van Dun (Katholieke Universiteit Leuven)
• Fermín Goitisolo (Metasbio)
• Stuart Medina (ProRetina Therapeutics SL)
• Oriol Sans (Acc1Ó)

In the round table session several presenters from different sectors, public and private, discussed extensively on the issues behind young investors starting a company in he R&D context. The expressed ideas come from different perspectives: national and regional government, researcher, technology transfer office, venture capitalist and start-up company, giving us access to the reality behind the theory. The discussions mainly concentrated on: How will the economic crisis affect young high-tech companies? What are the constraints these companies face? Which instrument or financial sources are needed? How should the government intervene?

The government, from both Spanish and Catalan level, discussed their package of aids to these companies, such as risk capital, public subsidies, bank finance, investment in venture capital, and also an increase on co-investment from international venture capitalist. The university technology transfer (TTO) manager stressed that spin-off activities are more integrated with other technology transfer activities such as licensing and contracting. On spin-off support, he pointed to the importance of the presence of a high-tech corridor in the near neighbourhood. The venture capitalist and the start-up company shared their real story of difficulties when looking for financing in Spain. They stressed the lack of funding in some sectors, the economic crisis had largely and negatively influenced start-ups, and suggested that these start-up companies should be more realistic, for example, a solid intellectual patent, a short cycle, a good team, and robust business plan are necessary.

Product Innovation and Increasing Returns in Open Software 

Presenter: Marco Giarratana (Universidad Carlos III de Madrid)
Co-Author: Alessandra Luzzi (Universidad Carlos III de Madrid)

This paper investigates whether the Open Source Software (OSS) generates indirect network externalities among product complementors. It tests this conjecture along three lines. The first is between OSS applications and OSS operating systems; second, between OSS and hardware products; and the third is between OSS releases by for-profit firms and releases by communities. The author finds externalities in the latter two sources, which sheds new light on the profitability of the OSS business models in the long run.  

Mixed Source

This paper analyzes different business model strategies for profit-maximizing firms in the software industry. Firms sell the core software and complementary goods (e.g. extensions of the software) and services (e.g. training). Three different business model strategies are analyzed: the proprietary model (where all software modules offered by the firm are proprietary), the open source model (where all modules are open source), and the mixed source model (where a few modules are open). When a firm opens one of its modules, users can access and improve the source code. At the same time, however, opening a module sets up an open source (free) competitor. This hampers the firm's ability to capture value. The paper shows that: (i) firms may choose a "more closed" strategy in response to competition from an outside open source project; (ii) firms are more likely to open substitute, rather than complementary, modules to existing open source projects; (iii) when the products of two competing firms are similar in quality, firms differentiate through choosing different business models; and (iv) low-quality firms are generally more prone to opening some of their technologies than firms with high-quality products. 

Are There Local Knowledge Spillovers? An Empirical Test Using Inventor's Assessment Data

Presenter: Alfonso Gambardella (Bocconi University)
Co-Authors: Maryann Feldman  (University of Toronto), Dietmar Harhoff (Ludwig-Maximillians-U. München), Myriam Mariani (Bocconi University)

This paper is an important contribution that answers an important question: Does geographical proximity of firms and research organization favour transmission of knowledge? To address this issue, the authors use a survey based on a questionnaire filled by inventors. Geographic proximity with the firms they interacted and its importance to their research are the relevant questions for the study. The authors reach two main conclusions: First, there is evidence of higher transmission of knowledge when firms and investors are close by. Second, higher “close by” transmissions seems to be related to higher “far” transmissions of knowledge. 

Tracing the Effect of Links Between Science and Industry: the Role of Researcher Interaction and Mobility Between Firms and Research

Does science matter for firms in the semiconductor industry? The paper demonstrates how firms in semiconductors benefit from links to science through pre-competitive research, and how researcher interaction and mobility play a crucial role in developing these links. Inventors who link to science are important in building more valuable commercial echnologies faster and allow the firm to capture more of the returns to these new technologies. 

Scientific and Commercial Incentives in R&D: Research versus Development

Presenter: Inés Macho-Stadler (Universitat Autònoma de Barcelona and MOVE)
Co-Author: Albert Banal-Estanol (Universitat Pompeu Fabra)

This paper analyses the effects of scientific and commercial incentives on the pattern of research when the researcher confront two alternative uses of the time: undertaking new research or developing an already existing idea. As expected, higher commercial rewards induce the researcher to develop more and therefore to spend less time on research. Also, the introduction of commercial incentives affects the choice of research projects, and will prompt researchers to invest in riskier and more profitable research programs. Finally, the authors also study the payment scheme for research workers, and show how universities and research-intensive firms should use commercial and scientific incentives to motivate their researchers. 

The Impact of Industry Collaboration on Academic Research Output: A Dynamic Panel Data Analysis

This paper aims to see if collaboration between the universities and the industry increases the rate at which researchers publish their research work, if this collaboration affects also the direction of research (basic versus applied), and finally if there is evidence that due to this partnership researchers delay their publication to protect information before a patent is issued. To study this, the authors base their study on a 21 year dataset on researchers of forty engineering departments in the UK. The main result is that a moderate level of collaboration with industry is beneficial for researchers. However, as the involvement with the industry increases, the benefits have a tendency to decrease, so high level of collaboration is not recommended if the aim is to do research. 

The Location Decision of New PhDs Working in Industry

Presenter: Paula E. Stephan (Georgia State University)

The geographical mobility of PhDs plays an important role on the transmission of knowledge. This paper is a study conducted on the placement of PhD graduates from U.S. universities who have definite plans to work at a firm, using the Survey of Doctoral Recipients data for the period 1997-2002 for twelve fields of science. The authors find that PhD students very frequently do not end up working in the same state or city where they did their PhD training; rather there is a strong trend in concentrating in certain cities and states. Migration is particularly strong from Midwest public universities, which, despite their academic strength lose most of their graduates to other areas. The authors also examine characteristics of a PhD that explain the decision to remain in the area of training, for the sample who received their PhD between 1997-1999. They find that the “best” are more likely to move, as are those on temporary visas, those who received their tertiary education outside the state, and those who have acquired debt while in graduate school. Men are also more likely to move than are women.