The Link between R&D and Entrepreneurship
AbstractThe reason for the secular decline in entrepreneurship is not well understood. It is evident in all sectors of the economy and almost all regions. One approach to stimulating innovation and entrepreneurship has been to increase investments in science: the U.S. federal government contributed nearly $38 billion for university-based research in Science, Technology, Engineering, and Mathematics (STEM) in 2014. However, there has historically been little evidence about the links between investments in university research and innovation - largely because surveys cannot capture the complex ways in which scientific ideas are created, transmitted and adopted.<br />
This paper examines the relationship between the funding of research teams - in terms of structure, field and type of funding - and the subsequent propensity of members of those teams to start up businesses. It also examines the subsequent survival and productivity growth of those startups. <br />
The work is now possible because of a new data infrastructure resulting from collaborations between the Census Bureau's Innovation Measurement Initiative, the National Science Foundation and the Institute for Research on Innovation and Science at the University of Michigan. The infrastructure links universe data on all people employed on research grants, their funding, and their economic and scientific activities.<br />
This paper is the first to directly trace the pathways from the bench to the workplace at a large scale, using universe data from 25 universities covering about 25% of federal university based R&D. It is the first to use universe data on workers (the LEHD data) to draw comparison groups of individuals employed both within the university and from other R&D intensive businesses. And it is the first to use universe data on business startups to compare the dynamics of university sourced entrepreneurship with other types of entrepreneurship.