Is There a Trade-Off Between Academic Research and Faculty Entrepreneurship? Evidence from U.S. NIH Supported Biomedical Researchers

This paper contributes to the debate whether academic scientists benefit from industry experience with respect to their academic research productivity as measured by publication outcome. One strand of the literature argues that university faculty members who found or join firms may actually become more productive in terms of the quantity and quality of their publications. Although the underlying mechanisms remain unclear, these entrepreneurial faculty members may be leveraging private sector sources for additional research funding, expanded laboratory facilities, or larger research teams. Another strand of the literature takes the opposite perspective and argues that university faculty members who found or join firms trade-off academic research productivity.This alternative perspective draws on both firm-level and individual-level arguments. At the firm-level, several empirical studies identify a trade-off between a firm’s science-orientation and its innovative performance. These studies cast doubt on the belief that cutting-edge research aimed at extending scientific knowledge can be fruitfully pursued in the for-profit sector, at least in the longer term. At the ndividual-level, a faculty member’s choice to found or join a for-profit firm obligates him or her to perform many new and varied commercialization activities. It is argued that these activities divert significant time and cognitive efforts away from research aimed at extending public scientific knowledge and impose a cost on academic knowledge accumulation in the not-for-profit research sector. Using a long panel of NIH supported U.S. biomedical scientists, we find that academic scientists who eventually choose to commercialize their research results are more productive during their career in academe than a randomly selected control group. At the point in time when the scientists choose to leave academe, however, their publication record drops. We break the scientists into three groups after their initial commercialization decision: academic entrepreneurs that do not return to academe, others that either leave only partly to industry or return after gathering some industry experience, and those where we were not able to surely determine their career status after their initial commercialization choice. This yields interesting insights. Academic entrepreneurs never achieve as high publication records as they did before commercializing. However, the scientists that leave only partly or return to academe, perform equally well as scientists from the control group that did not commercialize. The other groups that leave permanent or where the status remains unknown publish less than the control group while or after commercializing.

Czarnitzki, Dirk and Andrew Toole (2009), Is There a Trade-Off Between Academic Research and Faculty Entrepreneurship? Evidence from U.S. NIH Supported Biomedical Researchers, ZEW Discussion Paper No. 09-022, Mannheim, published in: Economics of Innovation and New Technology.