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Technovation 22 (2002) 281–289

A stage model of academic spin-off creation

Frédéric Nlemvo Ndonzuau *, Fabrice Pirnay , Bernard Surlemont
SME and Entrepreneurship Research Centre, University of Liège, Boulevard du Rectorat 7 (B33), 4000 Liège, Belgium

Received 17 June 2000; received in revised form 10 January 2001; accepted 7 February 2001


The commercialisation of scientific and technological knowledge produced within publicly funded research institutions such as
universities, laboratories, research centres, and so forth, is increasingly considered by policymakers as raw material for developing
and sustaining regional economic growth. This paper focuses on one of the most promising ways to transfer research results to the
market place, namely, the creation of academic spin-offs. Its main aim is to identify, understand, and distinguish the major issues
raised by the creation of such companies from the point of view of both public and academic authorities. To achieve this, some
well-known international spin-off support programmes have been benchmarked. We used these observations to build up a general
model that puts forward the major issues involved in the transformation of research results into the creation of economic value
within the perimeter of universities. Based on inductive research, the model is composed of four successive stages interacting in a
sequential manner.  2002 Elsevier Science Ltd. All rights reserved.

Keywords: University spin-off; Technology transfer; University–industry relationships

1. Introduction used could not have been developed without academic

research (Mansfield 1995, 1998), most universities and
In the USA, the birthplace of academic research centres are aware that they can exploit their own
entrepreneurship, the spin-off phenomenon achieved its research results by promoting and sustaining the creation
first success many years ago. Popularised by the devel- of new ventures.
opment of the legendary ‘Silicon Valley’ and ‘Route In a recent report titled ‘Fostering Entrepreneurship’,
128’ around prestigious universities such as Stanford and the Organization for European Cooperation and Devel-
MIT, academic spin-offs (ASOs) have been part of the opment stresses that universities need to develop struc-
American academic landscape for decades (Alistair et tural and formal policies to facilitate the transition from
al., 1991; Roberts, 1991). In Europe, the phenomenon is research to the creation of new ventures (OECD, 1998).
still in its infancy. Although the first university spin-offs
appeared in the mid-1970s, they were considered as epi-
phenomena; universities were often totally indifferent to 2. Objectives and methodology
them and sometimes even opposed to their development
(Stankiewicz, 1994). Since the drive for entrepreneurship within university
More recently, universities and politicians have real- laboratories is recent, research on how universities are
ized the strategic role that laboratories and research trying to promote the creation of spin-offs is still in its
centres can play, through their ability to create and dif- infancy (Radosevich, 1995; Roberts and Malone, 1996;
fuse knowledge, in fostering a region’s capacity to inno- Carrayannis et al., 1998; Steffensen et al., 2000). In
vate (Doutriaux, 1991). Since a significant proportion of particular, the different issues raised by the creation of
the products and processes that are currently sold and value from university research amount largely to a black
box (Fig. 1).
The objective of this paper is to open that black box
* Corresponding author. Tel.: +32-43-66-29-45; fax: +32-43-66- in order to identify, understand and distinguish the major
45-74. issues raised by the creation of such companies from the
E-mail address: (F.N. Ndonzuau). standpoints of both public and academic authorities.

0166-4972/02/$ - see front matter  2002 Elsevier Science Ltd. All rights reserved.
PII: S 0 1 6 6 - 4 9 7 2 ( 0 1 ) 0 0 0 1 9 - 0
282 F.N. Ndonzuau et al. / Technovation 22 (2002) 281–289

Fig. 1. The black box of economic value creation from university research.

Our research method relies on a two-step approach. empirical facts that underline our model. In so doing,
First, we identified and analysed some well-known inter- we emphasize or illustrate some specific topics.
national spin-off support programmes, and then used our
observations to build up a general model that set out the
major issues involved in the transformation of research 3. The four stages of the global spin-off process
results into the creation of economic value within the
universities. From the in-depth analyses of our data, four stages
The research relies on field studies conducted within emerged as relevant in explaining the transformation of
universities. Three main criteria guided our choice of academic research results into economic value. The
sites: the site must: (i) have successfully implemented a black box of Fig. 1 can be specified as an input–output
spin-off programme (condition of renown); (ii) be com- model with the four following stages (Fig. 2):
parable with most European universities (condition of
scale); and (iii) have taken original and interesting Stage 1: to generate business ideas from research;
initiatives (condition of originality). Stage 2: to finalize new venture projects out of ideas;
The following 15 universities were visited between Stage 3: to launch spin-off firms from projects;
February and July 1999: Stage 4: to strengthen the creation of economic value
by spin-off firms.
University of Turku, Finland
Helsinki Technology University, Finland Each of these four stages has a specific function in the
Linköping University, Sweden global spin-off process. The first stage generates and
University of Twente (Enschede), The Netherlands assesses ideas with regard to possible commercialisation;
Strathclyde University of Glasgow, UK the second stage considers these ideas and translates the
Katholieke Universiteit Leuven, Belgium most promising of them into genuine entrepreneurial
University of Liège, Belgium projects; the third stage realizes the best projects by cre-
Université Technologique de Compiègne, France ating new spin-off firms; and the fourth stage consoli-
Weizmann Institute of Technology, Rehovot, Israel dates and strengthens the economic value created by
Ben Gurion University, Israel these new firms. A selection process occurs at each
University of Maryland, USA stage, which suggests that the model is an ecological one
University of Pennsylvania, USA (Hannan and Freeman, 1987). Indeed, not all research
North Carolina State University, USA results generate business ideas; not all ideas amount to
Duke University Medical Centre, USA opportunities for new venture projects (Timmons, 1994);
Laval University, Quebec, Canada attractive opportunities do not necessarily lead to the cre-
ation of spin-off firms; and such firms, ultimately, do not
At each site, we interviewed officials from local devel- all generate economic value. A note of caution must be
opment agencies, managers of universities liaison offices made with respect to the model’s suggested assumption
and incubators, and founders of spin-off firms. In-depth of linearity. The four stages are not wholly independent
semi-structured interviews were conducted, addressing of each other. Economic value depends on the quality of
issues that deal with the problematic of research valoris- firms, which depends on the quality of finalized projects,
ation. In every site, we progressively built up a picture of which themselves depend on the quality of the initial
the situation that was cross-validated by different actors ideas. In fact, ‘the efficiency of this multi-stage process
looking at problems from very different angles depends on its weakest link’.
(Eisenhardt, 1989). This four-stage model identifies the various changes
It is worth noting that the following analyses consist of status that research results have to undergo to generate
of common tendencies observed in different sites we vis- economic value; thus, ‘research results→business ideas-
ited. For the sake of conciseness we do not give these →new venture projects→spin-off companies→econ-
experiences in more detail. However, while describing omic value’.
our model, sometimes we briefly supply some pertaining The process is neither straightforward nor spon-
F.N. Ndonzuau et al. / Technovation 22 (2002) 281–289 283

Fig. 2. The global process of valorisation by spin-off.

taneous. Instead, it is strewn with numerous obstacles, books, articles or conferences) that contribute to the col-
difficulties, impediments, hindrances, and other sources lective and cumulative process of knowledge production;
of resistance (hereafter called ‘issues’). In fact, a key and (ii) education that provides students with opport-
value of the model is that it associates with each stage unities to learn the latest scientific findings and discover-
specific delineated issues that are presented in a struc- ies. According to this conception, academic research is
tured and coherent framework. clearly a public good (Bok 1982, 1990; Geisler, 1993;
Callon, 1994; Etzkowitz, 1998).
This paradigm has progressively contributed to a sys-
4. Stage 1: generating business ideas tem of values that is deeply rooted in the academic cul-
ture and that opposes the valorisation of research through
The purpose of the first stage is to produce business spin-offs. Within this system of values, three features
ideas, suggestions, and proposals within the scientific seem particularly difficult to change: the ‘publish or per-
community for commercial exploitation. For most uni- ish’ drive, the ambiguous relationship of researchers to
versities, doing business with their research requires rad- money, and the ‘disinterested’ nature of academic
ical changes in the way they have traditionally exploited research.
their results (Etzkowitz et al., 19981). Indeed, such com-
mercial exploitation necessarily implies that two 4.1.1. The ‘publish or perish’ drive
opposite concepts of science become closer, namely, the As is well recognized in the literature, organizations
‘scientific’ conception, which considers science as an need to fit their human resources management to their
end in itself, and the ‘economic’ conception, which con- objectives (Mintzberg, 1989). In universities, this fit is
siders it more as a means to achieve other goals (in parti- achieved notably through a policy of appointments and
cular making money) (McMillan et al., 2000). One of internal promotions based on an assessment of
the main problems, therefore, is how to reconcile these researchers’ contributions to the progress of science.
two opposite conceptions (Doutriaux, 1991; Dasgupta Publishing articles in prestigious journals and inter-
and David, 1994). national reviews is particularly recommended to increase
In this respect, the two major difficulties to overcome the likelihood of advancement. This strategy has been
by universities we visited are: (a) the academic culture; popularised within the academic community in the
and (b) the internal identification. evocative slogan ‘publish or perish’. In the universities
we visited, researchers are really publishing-oriented
4.1. The academic culture since their hope of getting a higher position at their insti-
tution or elsewhere is tied to their proficiency in pub-
The majority of universities we visited consider that lishing. So, the publication drive appears as a barrier to
the rules used for promotion in the professorship scale creating new spin-offs.
are contrary to the entrepreneurial culture. This cultural Though understandable in a ‘scientific’ sense, these
problematic reflects the sensitive issue of the ultimate incentives to publish research results extensively have
ends of university research. This issue has long been perverse effects from the standpoint of the economically-
avoided because of the strong influence of the ‘scientific’ oriented exploitation of those results. Indeed, as soon
paradigm on the academic culture (Brown, 1985; Etz- as they are published, results lose a major part of their
kowitz, 1989; McMillan et al., 2000). According to that economic attractiveness. A single publication may be
paradigm, the sole purpose of academic research is to enough to remove all their originality value, since once
increase and enhance human knowledge, regardless of they are in the public domain, they cannot benefit from
any practical application. This paradigm recognizes only legal protections such as patents, which are often decis-
two ways of exploiting knowledge: (i) publications (i.e. ive in a valorisation policy.
4.1.2. The ambiguous relationships of researchers to
See particularly chapter 1 entitled “Entrepreneurial science: the money
second academic revolution”, by Etzkowitz, H. and Webster, A., pp. Most academic researchers consider money as a
21–46. means of scientific progress, in contrast to businessmen,
284 F.N. Ndonzuau et al. / Technovation 22 (2002) 281–289

who consider money as an end in itself and science only 4.2.2. The assessment of ideas
as a means to that end (Samson and Gurdon, 1993). Each idea identified is unique as far as the assessment
These relationships to money are symptomatic of the of its economic potential is concerned. One idea may
cultural differences between the two worlds. When a be at once brilliant from a technical point of view and
researcher intends to launch a research project, he/she impracticable from a commercial one; another may be of
submits an application for money to carry out his/her limited scientific interest but be commercially promising.
research free from any other liabilities. In the business Whatever the ideas, their assessment requires an analysis
sphere, the idea of subsidy is replaced with that of con- of their technological, commercial and personal aspects,
tract, which implies compliance with liabilities per- so as to shed light not only on their economic potential,
taining to the contract (concerning results, delays, and but also on the most suitable way to exploit them com-
so forth). mercially.
Technological evaluation requires the ability to assess
the extent to which research results are stable and/or suf-
4.1.3. The ‘disinterested’ nature of academic research
ficiently developed to lead to industrial exploitation by
For a long time, fundamental research has been con-
identifying their possible applications, assessing their
sidered a worthy activity of universities. The distance
technical feasibility, and, in some circumstances, sug-
that most researchers keep from practice induces distrust,
gesting further research and development.
or even in some cases contempt, towards applied
This task is complicated by the broad range of
research and those researchers who ‘prostitute science’
research often conducted within the university, from
by pursuing goals other than the progress of knowledge.
information technology to pharmaceuticals and biotech-
The refusal to integrate concrete and goal-oriented appli-
nology, for which the range of possible applications is
cations with the process of research explains why many
usually extremely wide. This requires the development
academic research results are not directly suitable for
of expertise with internal partners (i.e. professors) or
economic exploitation (Udell, 1990).
external partners (i.e. consulting firms).
It is essential, therefore, to demystify the ivory tower
However, this technological evaluation is necessary
in which many researchers are entrenched. In most uni-
but not sufficient to validate the potential of an idea.
versities which constitute our sample, researchers’ role
Indeed, from the perspective of business exploitation, the
incorporates an increasing mission of ‘service to
commercial potential must also be assessed to verify the
society’, which, notably, allows the economic exploi-
extent to which there might be a viable market. At this
tation of their research results (Reitan, 1997).
stage, multiple questions must be addressed: What are
the different applications of a given technology? Which
4.2. The internal identification are the most promising? Who are the key players in
those markets? How high are the barriers to entry? Is
the potential good enough to build up a viable company?
Until recently, universities have never bothered to
At this stage, the evaluation is still very approximate
detect promising ideas within their research centres and
because further developments might be necessary or
laboratories. The establishment of a valorisation policy
because the applications are so innovative that there is
requires the capacity both to identify ideas and to assess
as yet no definite market (McMullan and Melnyk, 1988;
their potential (Roberts and Malone, 1996: 20–21). The
Steinmueller, 1994).
majority of universities we visited organized themselves
While the first step of the process is to feed the flow
so as to develop, inside the institution, the abilities and
of business proposals, the second stage consists of
skills required to identify and evaluate the most promis-
investigating in more depth the most promising ideas in
ing ideas, in miscellaneous and specialized fields of
order to develop new venture projects.

4.2.1. The identification of ideas 5. Stage 2: finalizing new venture projects

Probably one of the most important tasks is to per-
suade directors of research centres to keep their doors The ideas generated by the first stage of the process
open in order to allow promising ideas to be detected. are generally ill-structured, with many grey areas that
Indeed, researchers generally mistrust external agents need to be clarified. Such ideas usually consist of techni-
investigating their projects, in particular in professional cal and scientific elements, while their potential to make
organizations such as universities, with extreme drives money is not yet precisely known. At this stage, there
for decentralization and individualization (Mintzberg, is merely a feeling or a rough presumption that research
1989). Thus, identification policy requires sensitive con- results display promising economic potential. That pre-
tacts, the development of mutual trust, and the organiza- sumption must be validated in a business project.
tion of an efficient internal diffusion of information. The purpose of the second phase is therefore to trans-
F.N. Ndonzuau et al. / Technovation 22 (2002) 281–289 285

form an ill-structured idea into a coherent and structured such legal protection. In that respect, a strategy must be
venture creation project addressing two specific issues: defined in terms of the duration and geographic coverage
the protection and the development of the idea. This step of the patent.
may require major investments, and clearly signifies the
first major step from the research to the business sphere. 5.2. The development of business ideas

5.1. Protection of ideas As soon as the economic potential of an idea is recog-

nized and, possibly, legally protected, a decision must
We noted that the potential to valorise an idea depends be taken on how best to exploit it (selling, licensing or
most of time on its level of protection. So, not amazing spinning-off) (Lee and Gaertner, 1994). If the spin-off
is the fact that in quite almost the universities we visited option is chosen, the next step is to transform the idea
this aspect is integrated to the problematic of ideas pro- into a genuine entrepreneurial project. This transform-
tection. This problematic is particularly complicated by ation involves: (i) technological development, that is, the
the fact that sometimes the ownership of ideas belongs production of a prototype; and (ii) commercial develop-
to researchers (as in most Scandinavian universities) and ment, that is, the construction of a business plan. This
sometimes to universities (as in Belgium or USA). ‘idea to project’ transformation consumes time, energy
Protection underscores two main problems: (i) how to and money.
identify clearly the owners of results; and (ii) how to In most cases the liaison offices are required to guide
protect efficiently these results from counterfeiting, the development of an idea to a feasible project. As a
copying, and imitations. consequence, they also manage the development of both
Who is the owner of results on which an idea is a prototype and a business plan. This aspect appears to
based? Answering this question is far from straightfor- be more and more important in the universities of our
ward. Several elements are ambiguous, such as the mul- sample.
tiplicity of funding sources, the diversity of conventions
established between funding organizations and teams of 5.2.1. Technological development
researchers, the collaboration between different research The purpose of technological development is to verify
centres (public or private), the various status of people the possibilities of industrial exploitation. The expected
carrying out research activities (professors, contractual output is a first release of products, services, or processes
researchers, doctoral students, and so forth), and, finally, (called hereafter a prototype). This prototype can make
the intangible character of most results. All these it possible not only to check whether production can be
elements contribute to complicating the task of protect- extended to a larger industrial scale but also to demon-
ing intellectual rights. Each case is specific and generally strate to potential customers and partners what the tech-
requires an in-depth analysis in order to determine who nology can achieve.
is the owner of results, not to mention the criterion of Such technological development raises both material
originality that the ‘publish or perish’ culture can jeop- and non-material issues. Material issues refer to the
ardize. availability of technical facilities (equipment, instru-
As soon as the owner(s) of results are clearly ident- ments, machinery, and so forth) that may be necessary
ified, the next problem is the efficient protection of those to build up a prototype. Such facilities can be sophisti-
results (Rappert et al., 1999). In this respect, two differ- cated and very expensive to acquire.
ent aspects may be considered: natural protection and Non-material issues refer to the time that technologi-
artificial protection. Natural protection is based on both cal development may require. Research results may need
the technological level of the results (the degree of several months or years of additional work before they
innovation) and barriers to imitation that give the results can be exploited. During this period, one challenge is to
owners a technological lead for a considerable period of prevent researchers from developing a technically-pure
time. However, as most academic research results do not prototype while ignoring the constraints of time and
enjoy high barriers to imitation coupled with a strong money. A clear schedule with precise milestones and
technological lead, artificial protection, such as patents deadlines must be defined (Sljivic, 1993)
or copyrights, is generally more appropriate (Lowe,
1993). 5.2.2. Commercial development
The management of intellectual rights can be both Whereas commercial assessment makes it possible to
technical and costly. It requires specialists who under- determine whether an idea is a business opportunity, the
stand how to formulate a patent project in order to min- purpose of commercial development is to specify in a
imize the possibilities of evading the protection. Indeed, business plan the ways in which this opportunity will be
previous research shows the limited time advantage that actually exploited.
protection confers (Mansfield, 1998). Therefore, a cost– A good business plan plays essentially two important
benefit analysis must be conducted on the usefulness of roles. First, it helps to design a coherent strategy and to
286 F.N. Ndonzuau et al. / Technovation 22 (2002) 281–289

estimate more accurately key elements such as invest- capital funds while other consider these problems as
ments, turnover, operating costs, or treasury forecasts. being beyond their mission and sphere of competence.
Second, it gives concrete form to a selling document for
bankers and investors by giving them a structured and 6.1. Access to resources
coherent image of the ways in which the results are
intended to be exploited.
All entrepreneurial projects need resources to become
concrete economic realities. This is particularly relevant
5.3. Financing for ASOs, since most operate in high-tech sectors. Two
kinds of resources will be considered here: intangible
From our investigation, financing this development (human); and tangible (money and material).
stage seems to be particularly problematic. Indeed, while
most universities usually support the different costs
6.1.1. Intangible resources
related to legal protections as part of their intellectual
The management of high-technology firms differs gre-
property policy, very few of them can cope with the
atly from that of university laboratories. That is why it
financing of both technological and commercial develop-
must be possible to separate ASOs from the rules usually
ment (prototypes and business plans). As well, while on
applied in universities. In view of the competitive press-
the one hand public funding is essentially dedicated to
ure to which they are generally exposed, ASOs have to
fundamental research, on the other hand very few private
be surrounded by competent people to avoid making
financial backers (i.e. venture capitalists) invest so early
mistakes. Numerous studies have shown that one of the
in the process because of the unpredictability and insta-
main reasons for failure of firms in general, and of ASOs
bility of the high-technology market and the supposedly
in particular, is not so much the poor quality of the busi-
low entrepreneurial capabilities of researchers. This
ness opportunity as the poor quality of management
‘financing gap’ is undoubtedly the key problem to over-
(Timmons, 1994).
come in order to finalize genuine entrepreneurial projects
Moreover, the development of a new business cannot
(Oakey, 1995; Reitan, 1997).
succeed without management expertise (know-how) and
good social networks (know-who) (Mustar, 1997). One
Inventions from university research usually stem from issue at this stage is access to outside ‘coaches’ for men-
research projects supported by governments grants toring the ASO management team (Radosevich, 1995:
which may not have anticipated the invention. Usu- 890–891). Access to such outside expertise raises two
ally some further work is needed…to bring about a fundamental questions: how to identify key people (the
prototype, requiring a year, or part of a year, of identification problem); and how to involve these people
additional work…In the meantime the inventor is left in the ASO (the incentive problem).
without support (McQueen and Wallmark, 1985)
6.1.2. Tangible resources
Besides these intangible resources, all start-up firms
also need both material and financial resources (Mian,
6. Stage 3: launching spin-off firms 1997). Universities we visited increasingly provide
access to facilities such as test devices, precise measure-
At the end of the second stage of the process, a new ment instruments, laboratory equipment, and so forth,
venture project should be ready. The third stage deals which are very expensive to acquire. At this stage, it is
with the creation of a new firm to exploit an opportunity worth noting that the problem is access to such resources
managed by a professional team and supported by avail- rather than acquisition of them.
able resources. These are the three key pillars of any Regarding the financial resources, the challenge is not
entrepreneurial success (Timmons, 1994). The issues so much to find money that to reduce the need for it.
that have to be dealt with will progressively move away Early on, financial resources have much more value than
from specific academic contingencies towards business later in the development. Indeed, since financial backers
considerations. It is important to point out two problems view start-ups like ASOs as very risky, they tend not
at this stage: the availability of resources; and the only to be very conservative in their valuation of a new
relationships that should be established between the venture, but also to ask for high expected returns as a
spin-off firm and its mother university. compensation of risk. The danger is of course for the
ASOs involved in high-tech subjects generally move inventor (or the founder of the venture) to lose control
in an uncertain environment. This turmoil may deal with of his/her company as his/her share of the equity is too
access to resources. In order to help them overcoming diluted. This danger of dilution is likely to increase as
these problems some universities are actively concerned the business grows and injections of new capital are
in finding solutions like, for instance, raising venture needed to finance growth.
F.N. Ndonzuau et al. / Technovation 22 (2002) 281–289 287

6.2. Relationships with the university of origin 7. Stage 4: strengthening the creation of economic
Conflicting interests may arise in the relationship
between a university and its spin-offs. In that respect,
some universities have set a code of best practice in Although the creation of new technology-based firms
order to prevent or avoid potential conflicts. such as ASOs constitutes a fundamental step in the pro-
While all ASOs progressively cut their umbilical cord cess of valorisation by spin-off, this stage is not the final
with the academic environment, most usually retain one. The perspective must be enlarged and extended to
some relationships with their original university. Such the ultimate purpose of the process, namely, the creation
relationships can be established either at an institutional of economic value by ASOs, generating for the local
level (between the university and a spin-off), or at a per- economy both tangible advantages (jobs, investment,
sonal level (between the university and the researcher). taxes, and so forth) and intangible advantages (economic
renewal, entrepreneurial dynamism, constitution of
6.2.1. Institutional relationships between universities centres of excellence, and so forth).
and their spin-offs In writing this paper, our intention is not to tackle the
In terms of purposes, means, and methods, universities very complex problem of how to boost the economic
differ so greatly from ASOs that they could consider the development of a region. We limit our considerations to
creation of ASOs as the final outcome of a process in new technology-based firms with a high growth poten-
which they are no longer concerned. tial, for which two specific problems emerge from our
However, in spite of their differences, the organiza- field research and warrant particular attention: the relo-
tions generally maintain collaborative relationships with cation risk; and the non-exploitation of the full industrial
each other (Doutriaux, 1992; Rappert et al., 1999), for potential of technological projects.
several reasons (Bray and Lee, 1998):
7.1. The relocation risk
앫 universities can hold some ASOs’ equity shares
(financial resources);
앫 ASOs can exploit a patented technology owned by This problem concerns the way the local economy can
universities (intangible resources); take full advantage of the economic value created by
앫 ASOs can have access to some university facilities ASOs. Most ASOs are generally active in markets with
(material resources). high growth potential and international scope, so they
can quickly encounter problems regarding infrastructure,
the recruitment of skilled people, or the funding of their
6.2.2. Personal relationships between universities and development. In these respects, local authorities should
their researchers be particularly careful to prevent technological start-ups
From doctoral students spending all their time con- from leaving the region, as in the case of two Belgian
ducting research activities, to professors dividing their spin-offs that have moved to the Netherlands.
time between research and teaching activities, the range
of researchers likely to launch a spin-off is very wide. 7.2. The change of trajectories
We could observe that the more a researcher is
entrenched and deeply anchored in his/her institution, the
more difficult it will be for him/her to leave the univer- The second problem concerns more specifically tech-
sity to launch an entrepreneurial project (Udell, 1990), nology-based and product-oriented ASOs. Most of these
not only because of the comfortable environment that technological firms develop a two-step growth strategy
he/she would be quitting, but also because of the numer- (Monsted, 1998). Indeed, because they do not generally
ous organizational difficulties involved in quitting. succeed in raising sufficient funds to implement directly
These various relationships, both institutional and per- their industrial strategy, they may decide, in an effort to
sonal, between a university and its spin-offs can generate reduce risks, to temporarily develop service activities
conflicts of interests. Thus, spin-off managers could be such as consulting.
tempted to subcontract a great part of their R&D activi- These activities generate some cash that may be
ties to the laboratories they came from and incidentally necessary to finance technological development so that
benefit from an effective research infrastructure accessed the product is ready to be launched on the market. From
at a lower cost than that available in the market. The the point of view of the local economy, such a growth
natural complicity between some researchers who have strategy presents some risks. We observed that some
created spin-offs and their original affiliation could lead ASOs have decided to remain indefinitely at stage 1,
to situations where universities unintentionally subsidize while giving up their initial project that had much more
some of the activities of their spin-offs. promising prospects for the local economy.
288 F.N. Ndonzuau et al. / Technovation 22 (2002) 281–289

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Stankiewicz, R., 1994. Spin-off companies from universities. Science Bernard Surlemont is currently Professor of International Management
and Entrepreneurship at the University of Liège, Belgium and Professor
and Public Policy 21 (2), 99–107. of Entrepreneurship at the University of Lausanne, Switzerland. He gradu-
Steffensen, M., Rogers, E., Speakman, K., 2000. Spin-offs from ated from the University of Liège and gained his MBA and his PhD at
research centers at a research university. Journal of Business Ven- the INSEAD, Fontainebleau (France). He is the director of the SME and
turing 15 (1), 93–111. Entrepreneurship Research Centre at the University of Liège.