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Research-based Spin-offsResearch-based Spin-offs

Issues in benchmarking OECD member country performance

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Workshop ObjectivesWorkshop Objectives

• Review of definitions and data available

• Elaboration of spin-off models/typology

• Review of strategies and policies for the promotion of spin-offs

• Evaluation of spin-offs as indicator of health of public-private interface in NIS

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TIP Benchmarking ProjectTIP Benchmarking Project

• Spin-offs are one measurable mx of tech transfer b/t public and private sectors

• We want to compare performance, but there are methodology challenges:– definitions– data comparability– weighting spin-offs in benchmarking exercise

• Country input important to future work

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What counts as a public research-based spin-off?

What counts as a public research-based spin-off?

• No standard definition

• Narrow: any new firm which includes a public sector or univ employee as a founder

• Broader: employee founders + licensees + firms in which the institution holds equity

• Broadest: employees + licensees + equity + students/alumni + incubator firms + other?

Technology and Innovation Policy Committee (8 December 1999) D S T ID S T I

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Questionnaire AnswersQuestionnaire Answers

Research-based Spin-off Definitions

Defining characteristic for public sector spin-offs: Times feature is mentioned:

A Founder(s) include public sector employees 12

B Key technology is licensed from public sector institution 6

C Founder(s) include public sector students or alumni 4

D Physically located in public-sector incubator or science park 4

E Equity investments were made by public sector 7Source: OECD

Technology and Innovation Policy Committee (8 December 1999) D S T ID S T I

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Where to draw the line?Where to draw the line?

• Too narrow: undercounts frequency with which countries/institutions generate new firms.

• Too broad: distinction b/t public sector spin-offs and high tech start-ups becomes fuzzy.

• Definitional consistency needed for OECD Benchmarking study

Technology and Innovation Policy Committee (8 December 1999) D S T ID S T I

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Spin-off formation ratesSpin-off formation rates

• Not regularly monitored by most countries• A handful of countries have national data

– Belgium, France, Germany, Norway– obtainable for Canada, UK, US

• Institutional or regional v. national data• Yearly formation rates v. cumulative totals• Normalization of rates by researcher,

institution, R&D funding

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Type of DataType of Data

Countries Total

No data available fromgovernment

Hungary, Japan, Mexico, Poland, Turkey 5

Institution level dataexists

Australia, Austria, Canada, Finland,Iceland, Italy, Korea, Netherlands, UnitedKingdom, the United States

10

National or aggregatedata exists

Belgium, France, Germany,Norway 4

Source: OECD

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Future work (1)Future work (1)

• Correspondence with governments to clarify definition and data sent to OECD

• Focus on countries w/ national level data • More limited comparisons of countries with

institutional or regional data, e.g. growth rates• Cooperation with other projects

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Spin-off typologiesSpin-off typologies

• What exactly is exchanged between the public sector and a private spin-off?

• Personnel, capital, licenses, physical space, equipment, contacts, know-how and services.

• Investments made and returns expected• Options available to public sector institutions:

spin-offs by design!• Advantages and disadvantages...

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Policies and StrategiesPolicies and Strategies

• Funding• Incentives

– IP rights allocation, licensing fees and royalties– rewards for entrepreneurship– personal, professional, financial risk reduction

• Culture of entrepreneurship • Longer term support structures

– finding partners, management & marketing services

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Data on LifecyclesData on Lifecycles

• Sparse information on how spin-offs grow and their long term prospects– Financial needs– Size and structure– Growth and survival rates– Exit strategies

• Impressionistic -- spin-offs are small, grow relatively slowly, but survive longer than general population of SMEs

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Future Work (2)Future Work (2)

• Role of the public sector in financing early stage public sector spin-offs

• Data on the initial capital needs and burn rates of spin-offs

• What are the funding sources?• What further info on spin-off life-cycles is of

interest to member countries?

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Spin-offs and BenchmarkingSpin-offs and Benchmarking

• What is so special about spin-offs?– High skilled jobs, new firms, new industries, effect on public

research priorities, role as intermediary.

• Are spin-offs a necessity for a healthy NIS?• What should countries strive for:

– existence of some spin-offs, steady growth rates, balance with other tech transfer mechanisms