Copyright © The Authors 2007. Published by Oxford University Press.
The economics of university research parks
* University of North Carolina at Greensboro, e-mail: al_link{at}uncg.edu
** Dartmouth College, e-mail: john.t.scott{at}dartmouth.edu
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Abstract |
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In recent years, there has been a substantial increase in public and private investment in university research parks (URPs). URPs are important as an infrastructural mechanism for the transfer of academic research findings, as a source of knowledge spillovers, and as a catalyst for national and regional economic growth. We present international evidence on the growth of URPs, review the academic literature on URPs, and outline an agenda for additional theoretical and empirical research on this topic.
Key Words: innovation • intellectual property • patents • trade marks • copyright
1 These data come from the Association of University Related Research Parks (AURRP, 1998). This data set represents the most encompassing set of information about URPs that is publicly available, but, as discussed by Link and Scott (2003b, 2006), it is not complete because the information comes from AURRP members and not all worldwide URPs are members. Nevertheless, the AURRP data are a useful starting point to discuss trends in URPs formations.
2 There is a vast literature on the economics and management of business incubators and business incubation, much of which has been expertly reviewed by Hackett and Dilts (2004) and McAdam et al. (2006), and in the references therein. There is a void in research specifically related to incubators on URPs.
3 There is a related literature on universities as research partners (e.g. partners in a cooperative research venture) (Hall et al., 2001, 2003). Hall et al. (2003) contend that universities are invited to participate with firms in research projects that involve what may be called ‘new’ science. Industrial partners perceive that the university could provide research insight that is anticipatory of future research problems and could be an ombudsman anticipating and translating to its research partners the complex nature of the research being undertaken.
4 Phan and Siegel (2006) provide a comprehensive review of the literature related to university start-ups and spin-offs. The only research that has focused specifically on spin-offs to URPs is by Link and Scott (2005). They find that in the United States, university spin-off firms are a larger proportion of firms in parks that are geographically closer to their university and in parks that have a biotechnology focus.
5 If one defined narrowly the output of the use of public-sector resources as the park itself, then, following Link and Scott (1998), the counterfactual evaluation method would be appropriate. When publicly funded, publicly performed research investments are evaluated, and the public is building the park, one should ask: what would the private sector have had to invest to achieve the benefits associated with the park in the absence of the public sector's investments? The answer to this question gives the benefits of the public's investments, namely, the costs avoided by the private sector.
6 The part of the stream of expected profits captured by the innovator is its private return, while the entire stream is the lower bound on the social rate of return (because of the additional benefits of consumer surplus and assuming any cannibalization of existing surplus is relatively small). The spillovers evaluation weighs the private return (in practice—see Link and Scott (2001)—estimated through extensive interviews with the private-sector organizations receiving public support regarding their expectations of future patterns of events and future abilities to appropriate returns from R&D-based knowledge) against private investments. The social rate of return weighs the social returns against the social investments.
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