CONCEPTUALIZATION OF ACADEMIC ENTREPRENEURSHIP

ABSTRACT

Entrepreneurship fosters economic development of a country. This appears more crucial and absolute necessity in emerging country context. The efforts have been laid for entrepreneurship development with the collaboration of academic institutions and industries. These collaborations try to transform academic based research into commercialized products to develop a knowledge based society. Government has also initiated numerous projects to support this effort. This chapter presents an overview of the whole scenario along with its challenges, prospects and future development in emerging country context. The theme has been elaborated with a case study on IIT Kharagpur, India.

INTRODUCTION

Entrepreneurship is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial and social risks, and receiving the resulting rewards. The entrepreneurial function implies the discovery, assessment and exploitation of opportunities, in other words, new products, services or production processes; new strategies and organizational forms and new markets for products which did not previously exist (Shane & Venkataraman, 2000). In emerging country context the entrepreneurial opportunity is an unexpected and as yet unvalued economic opportunity. A major transformation and reorganization of world order is taking place. The transformation is led by emerging nations like China and India which is leading to a restructuring in the dynamics of the geopolitical and economic equilibrium. This is led by a strong emphasis on trade and economic development which has seen a rapid surge due to a growth of manufacturing sector in China and service sector in India. The trend is more so similar in other BRICS emerging nations which are also jostling for space in a new world order fastened by the stagnancy of the developed economies in the Europe, US and pacific. The alignment of the needs for swifter and sustainable, deeper and all-inclusive economic growth has led to a change in perspective with more emphasis being put on promoting entrepreneurship. This has gradually led to growing emphasis on innovation and entrepreneurship considered a prerequisite for optimum growth and development of a nation (See Figure 1).

Figure 1. Number of patents

Universities throughout the World are seen as the hub for entrepreneurial growth, knowledge and innovation. Universities play a vital role in the economic growth of the country. From the beginning of the civilization, HEIs have actively participated in in knowledge creation, economic and intellectual growth. Model universities and the monastic schools which existed in medieval ages have been replicated mostly to form the modern universities. These universities have rapidly advanced and transformed themselves to take a projecting role in all aspects of life. 28 new universities were created in the 15th century, with another 18 added between 1500 and 1625. It is believed by experts, that in European universities, a tremendous amount of growth, productivity and innovative research took place during the period from 1400 to 1800 AD also referred as the age of awakening or the Renaissance. Many other researchers feel that cathedral/monastic schools and universities were a continuation of the interest in learning promoted by monasteries. Toward the end of the Middle Ages in Europe, it is estimated that there was a close to a 500% increase in the number of universities during that period. The popularity of these institutions of higher learning in Europe was borne of the fact that they were being looked by rulers and city governments as a means to satisfy a European thirst for knowledge, and the belief that society would benefit from the expertise generated from these institutions.

There is a sharp difference to the basic reason that emerging countries are trying to bring entrepreneurship education in the higher education institutions (HEIs). Emerging country perspective offers a substantive context to perceive uncertainty by the small and big and start-up firms. The entrepreneurial and start-up firms are exposed to these uncertainties more critically than bigger ones due to lack of resources, expertise, and information sources. Emerging economies in general follows a rapid growth utilizing economic liberalization as a primary engine for growth (Li et al., 2013). Emerging countries are also characterized by underdeveloped institutional setup, for example lack of legal protection for IPR, poor enforcement law, non-transparent judicial systems, under developed factor markets and high transaction and market cost (Wu & Chen, 2014). Market failure due to underdeveloped institutional support gets more complex with additional burden of bureaucracy and high corruption rates. Lack of stable political structures makes the environment more volatile leading towards development of informal institutional constraints with the prominence of informal networks and personalized exchanges (Treacy & Phillips, 2011). It has got indirect impact on competitiveness and scaling up activities. The complexity and dynamism become pertinent to uncertainty in merging countries more due to information asymmetry and high imperfections in the market for capital, labor, and products. So, the firms face higher risk spending more resources searching for information. There are numerous reasons for the contemporary interest in entrepreneurship and the creation of entrepreneurs in emerging country context. In Indian perspective there are essentially three main reasons, namely:

1. 1. Job creation and economic development;

2. 2. Strategic adjustment/realignment of industry and academics; and

3. 3. Building the economic wealth on intellectual capability of the nation.

The objective of this article is to review the academic entrepreneurship literature systematically, to synthesize this research and to provide directions for future research. Extant research has sought to identify the determinants and the consequences of university spin-off activity. However, the existing literature on academic entrepreneurship can be divided into six distinct streams include studies that focus on the individual and the personality of the individual as the key determinant of whether spin-off activity organizational configuration studies that seek to explain spin-off activity in terms of the resources of the university; socio-cultural development studies that explain spin-off activity in terms of culture and the rewards within the university; studies that explain spin-offs in terms of external environmental influences; studies that measure the performance of spin-off; and studies that seek to measure the economic impact of spin-off activity occurs.

BACKGROUND

Two related contexts focus on the aspects of Academic entrepreneurs. Firstly, they (academic entrepreneurs) are viewed as important performers in forming channels for technology transfer through their interpersonal contact and movement of university employees. Secondly, they act as torch bearer in emphasizing the role of universities involved in research in development of regional economic. In this context, Stanford and MIT universities played a significant role in developing high-tech regional economies, partly through spinning off technology companies. However, the link between regional development and academic entrepreneurship has been discussed in literature. Academic entrepreneurship in addition to formation of new firm also involves academic patenting and consulting activities (Klofsten & Jones-Evans, 2000). On contrary to this, Stuart and Ding (2004) proposed that academic entrepreneur are important aspects of a start-ups scientific advisory board.

The academic entrepreneurship activity and its impacts should not be solely via economic returns to the university but should be considered by wider social and economic benefits such as the diffusion of knowledge or the contribution to employment. From the point of view of universities, a performance measurement system of academic entrepreneurship support in the development of task such as analysis of captured data for the development of university policies, strategies and initiatives related to academic entrepreneurship; short, medium and long-term planning includes target setting, monitoring of trends and analysis of results and dialogue, development of joint initiatives, and benchmarking with external stakeholders such as policy makers, funding institutions, universities, chambers of commerce, local development agencies, etc. Moreover, academic entrepreneurship opens the possibility for many higher education institutions to get a broader source of funding from non-governmental or public organizations. According to Fairweather (1990), the contribution of academic institutions to respond to social needs and economic development enhance their public image, which in turn can lead to regional and national economic development (Martin & Etzkowitz, 2001).Hence, universities have been considered as important key elements of the innovation system contributing to economic development both by interaction with existing industry and by other types of commercialization of knowledge, like the establishment of new firms (Rasmussen, in press). In this context, the entrepreneurial universities have the ability to generate a strategic direction in order to formulate academic goals and in translating knowledge produced within the university into economic and social utility (Clark, 1998).

A varied interest with regards to entrepreneurship and innovation within the Triple Helix has been a subject of focus among a wide realm of the researchers. Triple Helix Model applies the systems approach to describe the multifaceted nature of interactions at various levels - national, regional, technological, and sectors – and to describe the processes by which research capabilities build knowledge, and then transfer the knowledge to support business development in the context of the Triple Helix of business, government and academic interaction. The evolutionary interpretation of the Triple Helix model assumes that within specific local contexts universities, government and industry are learning to encourage economic growth through the development of what has been called “generative relationships.” The Triple Helix interactions try to renew this juxtaposition that greater innovation interactions between stakeholders of Triple Helix would lead to greater economic growth.

The study is in consistent with the fact that the role of government, HEI and industry stakeholders and their ensuing interactions assumes greater importance for the innovation ecosystem creation. Higher education institutions have been asked by the government to take a larger role in local economic development through innovation grant programme (Cooke et. al., 2000, Boucher et al., 2003) The role of Higher Education institutions have been commended by researchers for their expertise in knowledge generation, maintenance and transfer which has been proven with the creation of various industrial parks, knowledge parks, R&D parks very much in proximity to the higher education Institutions. The Silicon Valley at US, Silicon Alley at Bangalore, Shanghai, Hsinchu Science and Technology Industrial Park at Taiwan etc. are examples of the impetus provided by academia in industry creation. Researchers like Acs (2004) believe that the public knowledge stock and knowledge spillovers are important economic drivers for regional development and growth (Acs et al., 2004). Government support and R & D programs play an important role in economic development. Sikka (1997b) believes that R&D programmes enable industry to acquire a technology base in the country towards producing quality goods of international standard, to adapt and adopt foreign know-how while absorbing the imported technology, to strengthen its capacities and capabilities and to equip the scientific and technical (S&T) manpower to face the challenges in the future. Literature research on the subject reveals that technological collaboration between organizations or stakeholders for product innovation is a topic of considerable interest and study in recent years (Albertini & Butler, 1997; Millar et al., 1997; Chen, 1997). Literature survey suggests that the role of Universities in supporting these government support program is crucial. Powers and McDougall, (2005) believe that in the context of university technology transfer and commercialization, there has also been little research on possible contingency effects of particular institutional structures or processes. Lack of research was found to be higher in the case of government supported innovation funding programs and research in the Indian context related to innovation & commercialization. A major reason for the lack of research data regarding funding & commercialization support mechanisms in India is because most of them have been initiated within this past decade. Lack of research content, other than the official website of the concerned agencies was a major reason for non-availability of government innovation program related information. Another important reason could be the lack of willingness of individual innovators to part with information which may be subject to intellectual property laws and trade secrets, apprehension of copying and other miss utilization by information seekers.

The university based entrepreneurship as a central component for enhancement and exploitation of the national knowledge in order to develop knowledge based society (OECD, 1998). This help in rapid acceleration in the rhythm of creation and dissemination of knowledge, which means that the life spans of technologies and in progression of new products. In addition of this, the development of technologically sophisticated and knowledge led regions assist in wealth creation and improve quality of life (Kenney, 2000; Roberts, 1991). However, the knowledge creation and knowledge exploitation based on technology-based entrepreneurship help in converts new scientific discoveries into new opportunities (Chiesa & Piccaluga, 2000). On the other hand, Economic development is increasingly linked to a nation's ability to acquire and apply technical and socio-economic knowledge and the process of globalization is accelerating this trend. Thus, the government also recognize the need to support the process of technological change with the aim of spawning more high-growth, knowledge-intensive companies from university research.

CONCEPTUALIZATION OF ACADEMIC ENTREPRENEURSHIP

Dissemination of knowledge and engage in research were the two most important objectives of the traditional universities across academic and student communities. The other key role a university can play is technology transfer through R&D activities, patenting innovations and assisting students to develop personal and professional skills. Universities extend their support by influencing the innovation process through “scientific publications that expand the technological opportunity set of firms; training of scientists; training of PhDs with its essential provision of background knowledge, skills and personal networks; and participation in common informal networks, joint R&D projects, research funding and contract research with an associated sharing of explicit and tacit knowledge” (Rogers, 1986). Tradition universities can also play a great role in economic development (regional and national). The deep rooted factors that drive the universities towards economic development are emergent role of knowledge in employment and economies, advancement in ICT, increasing significance of high-technology clusters. Therefore, universities form the platform for economic development through knowledge and technology transfer. This initiates the concept of academic entrepreneurship. The concept of “entrepreneurial university” was first coined by Etzkowitz (1998) to site universities those have proven themselves critical to regional economic development. In the recent years, growing interest of universities towards start-up formation with a university-developed technology, initiated entrepreneurship education in large number of higher educational institutions. A straight forward definition of Academic Entrepreneurship is company formation by an academician (e.g. university scientist or a professor, a PhD student, a post-doc researcher) for commercializing their research outputs. This definition combines the classic definition of entrepreneurship with an adjective “academic”, focusing on the fact that entrepreneurship originated from commercialization of the researchers innovation. In recent years, initiatives for technology based economic development has increased rapidly, focusing mainly on inspiring technological entrepreneurship in educational institutions through licensing, patenting, start-up formation, and university–industry partnerships. Grimaldi et al., (2011) referred this as “academic entrepreneurship,” since commercialization of academically developed innovations is one of the objective of such efforts. The term ‘Academic Entrepreneurship’ explains the economic development based on technology initiatives by academic institutions. Academic Entrepreneurship concentrates mainly on innovation commercialization related to universities. Initiations of entrepreneurial activities within the academic institutions are mainly due to accent on technology-transfer to the industry from academics and also to establish a prompt linkage between ‘science, technology and utilization’ (Allen, Tushman & Lee, 1979; Allen 1995; 1997). The positive aspect of academic entrepreneurship is that it generates revenue for academic research, and promotes commercialization of innovations. On the other hand, social viability for preparation of commercialization is questionable (Litan et. al.,2007; Kenny & Patton,2009) which often leads to publication delay, material transfer and agreements of material transfer(Blumenthal et. al.,1997;Louis et.al.,2001;Mowery & Ziedonis, 2007; Walsh et.al., 2007). Academic entrepreneurship can be categorized in five distinct types:

1. 1. Large scale science that includes research funding for large scale projects or laboratories,

2. 2. Supplemental income augmentation which includes practices of both type consulting or Private,

3. 3. University sciences,

4. 4. Patenting of the innovation project or product for its commercial applicability,

5. 5. Direct commercial involvement which involves formation of firms using university facilities and students for its commercialization.

Universities are stimulated by the expectation of economic development and resource generation source, which rapidly escalate their involvement in transfer of technology and commercialization of university research products. Technology Transfer (TT), termed as academic entrepreneurship by many has reflected the process of movement of scientific results from an organization to another for its further development and commercialization (AUTM, 2009). The core of entrepreneurship lies in identifying the hidden opportunities for creation and existence of goods and services. This can be influenced by scientific discoveries. Moreover, knowledge spillover and organizational learning leads to the fact that continuous interaction among the technology creators, appropriators and consumers increases the affluence of knowledge. Therefore, this leads the origination of Technology transfer offices (TTO), business incubators and science parks for facilitating the acceleration of technology spillover and innovation processes. Success of these setups (business incubators and science parks) are determined by their rate of excellence in transferring technology from academic labs to start-up firms with the help of University technology transfer offices (UTTOs) acting as ‘‘technology intermediaries’’ (Markman et. al, 2005). In the past, developing nations had instead of formulating their own customized growth model had put greater emphasis on replicating the models already implemented in developed nations. Some of the nations in the process had emerged successful but many nations failed to emulate the success of developed nations owing to several reasons such as demographic, geographic, cultural and social dissimilarities. For nations like India too, a different model to promote entrepreneurship through creation of an innovation ecosystem should be implemented customized with the needs of the Indian requirements. Emerging nations need not apply the models developed and implemented by developed nations and should instead try to conceptualize their own model which can be customized and adopted by them for their economic growth. The same has been identified with broadly covering

1. 1. Entrepreneurship orientation and awareness programs which focus on general information about entrepreneurship and encourage participants to think in terms of entrepreneurship as a career.

2. 2. New enterprise creation programs designed to develop competences that lead to self-employment, economic self-sufficiency or employment generation.

3. 3. Programs that focus on small business survival and growth.