I recently attended the Association of University Technology Managers (AUTM) Central Region Meeting in Cleveland and was particularly struck by an early panel on guiding faculty entrepreneurs to resources and success.
Robert Schmidt, founder and president of Cleveland Medical Devices Inc. and Orbital Research Inc., spoke in strong support of the intrinsic need for university support of small businesses as logical partners in the technology commercialization and wealth creation process. Schmidt stated that it is hard to get large multinational corporations to take technology directly from universities, a sentiment echoed by many in the university community. He also spoke of the strength of universities and small businesses as a team, saying that 38 percent of scientists are in small businesses and 19 percent are at universities.
Through the SBIR program, small businesses receive about 4.3 percent of federal research funding. With the help of this funding, smaller companies produce 5 times more patents per employee than large corporations and 20 times more than universities. While it is important to note that small companies can employ a higher concentration of researchers, because they often lack sales or support staffs and do not have additional responsibilities, such as education, in their core missions, the ability of small businesses to quickly develop patentable technology makes them an incredible asset to their surrounding communities. This fact becomes especially relevant when one considers the importance of patents to the wealth of communities.
Studying data from 1939 to 2004, Paul Bauer, Mark Schweitzer and Scott Shane cataloged eight measurable determinants of per capita income growth in the 48 contiguous U.S. states, including tax burdens, public infrastructure, business failure rates, climate and knowledge stocks. They found that “knowledge stocks,” in particular the number of patents per capita, overwhelmingly held the strongest correlation with income growth, even outpacing levels of educational attainment. At the time, Ohio fell squarely in the middle of the pack at 25th overall with an above average patent portfolio and existing industry structure.
Support of entrepreneurs, whether they come from inside our universities’ ranks or outside in the greater community, is a crucial way universities can advance their region and state. Schmidt’s advocacy sheds light on this fact, but he is certainly not the only individual putting forth the importance of engagement from university researchers.
Read more about Bauer, Schweitzer and Shane's research on "knowledge stocks."