Creating University-Based Entrepreneurial Ecosystems from Evidence Emerging World Leaders

Creating university-based entrepreneurial ecosystems Dr Ruth Graham evidence from emerging world leaders June 2014 Executive Summary Governments across the world are looking to technology innovation as a driver for national economic growth, and to universities as the incubators of this national capacity. Universities operating within established technology-driven innovation hubs, such as Silicon Valley and Kendall Square in the US, offer robust models for success within these environments. However, an increasing number of universities located within more challenging environments are establishing strong entrepreneurship and innovation (E&I) profiles and reputations, some of whom will undoubtedly become future national and international leaders. This emerging leaders group (ELG) of universities offers insights for the international academic community in two important domains: • how to drive and manage a process of institutional transformation towards a more entrepreneurial model; • how university-based ecosystems can be nurtured in cultural, economic and socio-political environments that may not be naturally conducive to E&I. A phased benchmarking study was commissioned by the MIT Skoltech Initiative to draw on the experiences of the ELG and gain insight into the conditions and strategies associated with successful E&I transformations for universities operating in more challenging environments. In particular, it asked: (i) “which are the world’s most highly-regarded university-based entrepreneurial ecosystems operating outside the established technology hubs?”, and (ii) “what can the international academic community learn from the experiences of these institutions?”. Conducted between early 2012 and early 2014, the two phases of the study were informed by interviews with technology transfer scholars, E&I professionals and thought leaders in the field, each with an in- depth knowledge of university-based E&I ecosystems across the world. Drawing on their experiences, Phase 1 of the study sought to identify the world’s most highly-regarded entrepreneurial universities and characterise the approach taken by these top-ranked institutions (61 interviews). Using a case study approach involving 130 interviews, Phase 2 focused specifically on a small group of the ELGs, to understand the context within which these universities have developed their E&I capacity. Each with a strong reputation for playing an active, positive role in growing a vibrant and strengthening ecosystem, the four case studies were selected to represent a range of cultural, economic and institutional contexts (Aalto University, Imperial College London, Tomsk State University of Radioelectronics and Control Systems and the University of Auckland). Which are the world’s most highly-regarded entrepreneurial universities? Over 200 universities, representing every continent of the world, were identified by experts as demonstrating established or emerging leadership in entrepreneurship. Three universities, however, were consistently cited as the world leaders – MIT, Stanford University and the University of Cambridge. The most highly-regarded universities operating in more challenging conditions included Technion, i CREATING Aalto University, University of Michigan, Kaist and the University of Auckland. The challenging environments in which the universities operated were typically characterised as cultures that did not UNIVERSITY support E&I, geographic isolation and/or a lack of venture capital. Why and how has an entrepreneurial agenda developed at the ELG universities? - BASED Taken together, Phases 1 and 2 indicate that most universities within the ELG had achieved national and global recognition by following one of two paths to development. The models are strongly linked to the ENTREPRENEURIAL drivers for the university’s original adoption of an E&I agenda and can be characterised as: • Model A: ‘bottom-up’ and community-led, catalysed by students, alumni and entrepreneurs in the regional economy. Often responding to economic and societal challenges, E&I development is triggered by a desire to stimulate regional economic growth, and thereby create graduate ECOSYSTEMS jobs, research opportunities and broader avenues for university support through the creation of a vibrant localised entrepreneurial ecosystem. Typically driven by the university grassroots, students and alumni, a dynamic and inclusive ecosystem is created through strong partnerships : of trust between the regional entrepreneurial community and the university. The investment is EVIDENCE focused on regional rather than institutional capacity; universities often downplay the importance of IP ownership and startup affiliation, regarding these as secondary to the overarching goal of developing the broader ecosystem. However, with many E&I activities operating outside FROM the university itself, the model can face difficulties when the university seeks to regulate and institutionalise its entrepreneurship profile. EMERGING • Model B: ‘top-down’ and university-led, working through established university structures. This model is typically triggered by the desire to realise income from university research, with the E&I WORLD agenda driven by and focused on a strong and ambitious technology transfer office (TTO) (or equivalent). Often building on established university research strengths, this model offers a robust LEADERS and fully institutionalised approach. However, there is a danger that the university’s E&I policies become “synonymous” with those of the TTO, leading to a culture where “only university-protected IP is seen as worthwhile”. As a result, student, alumni and regional entrepreneurial communities are often marginalised. What distinguishes the E&I approach taken by the ELG universities? Evidence from the expert interviews (Phase 1) and the case study evaluations (Phase 2) pointed to shared success factors amongst the ELG universities, despite differences in their development model (Model A and B above) as well as their geography, culture and institutional profile: 1. University senior management: Strong university leadership, actively promoting a clear and prominent E&I agenda that is heard and understood by staff, students and the regional community. Priority is given to establishing a market for the university’s innovative output, developing an approach that is responsive to regional constraints and opportunities. 2. University departments: An academic culture that acknowledges, supports and rewards E&I within a cross-disciplinary context, helping to nurture influential discipline-based role-models, curricular and co-curricular activities, and champions for institutional change. 3. University-led E&I activity: Distributed responsibility for E&I delivery across multiple university agencies, with a range of support services and participation routes for both students and staff throughout each stage of their personal entrepreneurial growth. ii 4. Student-led E&I activity: An empowered, cohesive, inventive, bold and well-connected student- led entrepreneurial community, benefitting from sustained low-level funding, seasoned entrepreneurial mentors and direct connections to university senior management. 5. External E&I community: Robust relationships built on trust and mutual benefit between the university and the regional/national E&I community, with a platform for these individuals to play a visible and influential role in university life. Evidence from the ELG suggests that synergies between these features provide the foundations for the establishment of institutional entrepreneurial cultures and capabilities. It also highlighted the critical role played by a small number of university champions for change, whose conviction of the importance of E&I for the university and the region, as well as a set of personal connections with industry and the regional entrepreneurial community, often proved critical to the university’s emergence as an entrepreneurial centre. In addition, many universities in the ELG have benefitted significantly from responsive, flexible and sustained financial support from regional, national or governmental agencies, who, in turn, “bent a lot of their own rules to fund what we were doing”. What are the key constraints to E&I growth amongst the ELG? The findings suggest that ELG universities share two common barriers to long-term success, each of which has the potential to constrain the growth and institutionalisation of their E&I capacity. The first challenge relates to the disconnect between the two key mechanisms that appear to be driving entrepreneurial growth: • the grass-roots community-led effort to build E&I engagement and strengthen the regional entrepreneurial skills base, labelled Component 1 in Figure 1; • the university-led effort to drive corporate engagement and commercialise university-owned innovations, labelled Component 2 in Figure 1. Evidence from the study suggests that universities in the ELG tend to establish their E&I focus through one of these routes, leaving it imbalanced during its early development. In addition, where, and if, the Component 3 University E&I agenda reflected in its policies, mission, budget allocations, incentives and curriculum Component 1 Component 2 Inclusive grassroots community of Strength in industry-funded research E&I engagement across university and licensing of university-owned populations and regional community technology Figure 1. Three components that appear to be critical to the establishment of an entrepreneurial university.

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