Informal University Technology Transfer: A Comparison Between the United States and Germany

Knowledge produced in the public sector has frequently been shown to be an important ingredient of economic growth and technological change. Most of the existing research puts emphasis on formal university technology transfer mechanisms (i.e. those that embody or directly lead to a legal instrument like a patent, license or royalty agreement). Few authors have investigated informal university technology transfer mechanisms. Informal technology transfer focuses primarily on interactions of the agents involved (i.e. on university scientists and industry personnel) where property rights are of secondary importance. While formal technology transfer mechanisms frequently aim at transferring a research result like a patent or a license to use a technology, informal mechanisms do not, and there is usually no expectation that they will. In this sense, formal technology transfer is a mechanism to allocate property rights whereas informal technology transfer is much more about communication among individuals. Examples could be contacts between academics and industry personnel at conferences, joint publications, academic consulting, or other informal contacts, talks and meetings. However, existing research shows that many university scientists in the United States do not disclose their inventions to their university although prescribed by law. University administrators will therefore have an interest to better understand the determinants of informal technology transfer given their objective to create revenues for the university. In the United States, the commercialization of technology developed by university scientists had been spurred by the enactment of the Bayh-Dole Act in 1980. In Germany, an equivalent to the Bayh-Dole Act only came into force 20 years later in 2002. Hence, the purpose of this paper is to shed light on the effects that institutional differences might have on the choice of scientists to transfer technology informally. We present comparative findings for Germany based on a recent paper by Link et al. (2007) which has focused on the United States. Moreover, we extend their previous findings by focusing on two neglected factors more explicitly: the scientist’s individual productivity as well as the research environment in which the informal technology transfer takes place. Based on a comprehensive sample of more than 800 German university scientists, our U.S.-German comparison reveals similar behavior of university scientists; faculty quality matters considerably for increasing the propensity to engage in informal technology transfer activities. However, scientists signal their quality to industry predominantly by having a track record of patent applications. Scientific publications seem to be less important. The lesson learned is simple; faculty, like all economic agents, respond to incentives and until universities change their incentives (e.g., patenting as one criterion for promotion and tenure) knowledge will continue to flow out the backdoor.

Grimpe, Christoph and Heide Fier (2009), Informal University Technology Transfer: A Comparison Between the United States and Germany, ZEW Discussion Paper No. 09-033, Mannheim, published in: Journal of Technology Transfer.