Fostering Student Entrepreneurship and University Spinoff Companies

There is a risk however, that policies fostering entrepreneurship at a university may miss out on key scholarly insights and concrete practical experience. The literature on student entrepreneurship has grown in varied directions, making it difficult for universities to formulate effective policies. Lessons learned from practical experiences with student entrepreneurs are not widely available. The research findings and intuitive understanding around student entrepreneurs can be difficult to understand for senior university administrators interested in adopting effective university-wide policy principles promoting student entrepreneurship for commercial and social enterprises.


Introduction
Today's academic institutions are adding economic development to their more traditional mandates of teaching and research (Hoskisson et al., 2011: http://tinyurl .com/3tkdepv;Rothaermel, et al., 2007: http://tinyurl .com/4xaacr8).Accordingly, the need to foster student entrepreneurship has become increasingly important for senior university administrators worldwide.
There is a risk however, that policies fostering entrepreneurship at a university may miss out on key scholarly insights and concrete practical experience.The literature on student entrepreneurship has grown in varied directions, making it difficult for universities to formulate effective policies.Lessons learned from practical experiences with student entrepreneurs are not widely available.The research findings and intuitive understanding around student entrepreneurs can be difficult to understand for senior university administrators interested in adopting effective university-wide policy principles promoting student entrepreneurship for commercial and social enterprises.This article focuses on those students who establish new companies to commercialize opportunities using knowledge they acquired through their studies at university.This article is not concerned about university students working in projects commissioned by large companies, nor is it about students who commercialize A student spinoff company strives to transform knowledge acquired by students into an income-generating business.This article outlines how a university can increase the number of spinoff companies created by its student entrepreneurs.
Student spinoff companies are of interest to all forward-thinking universities, particularly those that support research and teaching programs in the field of entrepreneurship.The spinoff companies provide tangible evidence that students acquire viable entrepreneurial skills while studying at the university.In addition, student spinoff companies contribute to regional economic development, commercialize knowledge that otherwise would go undeveloped, help universities attain and expand their core missions, and increase the return on the investments in university R&D.
University policies developed specifically for student spinoff companies significantly affect the growth potential of such ventures.This article provides a model and a set of principles that universities can use to support and increase the number of student entrepreneurs at their institutions.The model and principles are grounded in research findings and practical experience.In addition, the article suggests that universities adopt a results-based management approach to plan and deploy initiatives to support student entrepreneurs.The approach is widely used by government agencies interested in increasing the outcomes from their investments.
Entrepreneurs do more than anybody thinks possible with less than anybody thinks possible, regardless of the field in which they work.This article proceeds as follows.First, the importance of student spinoff companies is examined.Second, the distinct and salient aspects of student entrepreneurs are identified.Third, a model to increase the level of student entrepreneurship at a university is introduced.Fourth, a set of principles anchored around the model are identified.Fifth, a recommendation is provided to encourage senior university administrators to use a results-based management approach to manage their initiatives to increase the level of student entrepreneurship.Conclusions then follow.

Why Are Student Spinoff Companies Important?
Student spinoff companies are important for at least five reasons: 1. Student spinoff companies offer concrete proof that the university from which they emanate is relevant, upto-date, and competitive.These proof points attract talented students, faculty, partners, and donors; generate private and public sector investment; and strengthen links to important regional and international networks.
2. They contribute to the economic development of the region where the university is located.They generate jobs (including jobs for students and knowledge-intensive jobs), diversify the local economy, satisfy customer needs, and attract talent and investment.There are at least five distinct and salient aspects to student entrepreneurs: 1.They use their university education to develop the three core capabilities that underlie venture creation.

Fostering Student Entrepreneurship and University Spinoff Companies
Tony Bailetti ies are: opportunity refinement, resource acquisition, and venture championing.
2. They rely on the university's reputation and networks to reach the credibility thresholds of their ventures.
Rasmussen and colleagues (2011) define the credibility threshold of a venture as the establishment of an entrepreneurial team and acquisition of resources required by the venture.
3. They learn to be more self-reliant than peers carrying out venture initiatives in large corporations.Unlike corporate venturing, student entrepreneurs learn that they cannot count on the university to provide them with the resources they require to develop their ventures.As a result, they tend to think of resources as tools that provide them with requisite services rather than feeling the need to own those resources.Student entrepreneurs focus on the applications, not the attributes of the resources.
4. The quality of their educational experience is very much influenced by the quality of their entrepreneurial experience while studying at the university.Student entrepreneurs expect more than lectures on entrepreneurship; they expect to interact with faculty who can help them attain their entrepreneurial-related goals.
5. They use the university to develop weak, strong, and bridging network ties.Weak ties provide them with new knowledge and information.Strong ties provide resources, legitimacy, and sensitive information exchange.Bridging ties provide market and customer information as well as capability to expand current capabilities (Hoskisson et al., 2011;http://tinyurl.com/ 3tkdepv).

Factors that Affect the Number of Student Spinoff Companies
Various entrepreneurship theories exist.In this section, we build on the knowledge-based theory of entrepreneurship (Acs et al.

Fostering Student Entrepreneurship and University Spinoff Companies
Tony Bailetti amount of knowledge available to students is expressed as the product of two factors: the total stock of knowledge available at the university and the portion of knowledge that the university allows students to commercialize.If university policy assigns all rights over the university's stock of knowledge to students, then the number of student entrepreneurs launching companies is likely to increase.
C: When comparing the projected profits from entrepreneurship to the expected wages from employment inside or outside the university, the greater the disparity between profits over wages, the higher the level of students launching startups.

D:
Students need to develop three core entrepreneurship capabilities: identify and refine an opportunity, acquire resources, and champion a venture.The stronger are the entrepreneurship capabilities of university students, the greater is the number of students launching startups.

E and F:
The literature has identified barriers to entrepreneurship (Shane, 2003; http://tinyurl.com/6yy3yqy),which can be organized into two categories: university barriers and regional barriers.University barriers to entrepreneurship include lack of social acceptance of student entrepreneurs, tensions between academic and commercial outputs, lack of people with business experience and commercial skills, and inefficient technology transfer offices.Regional barriers to entrepreneurship include regulatory, legal, administrative, employment, financial, and partnership burdens.For example, in some regions, student entrepreneurs need one day to register a company; in other regions, they need 20 weeks.Some regions require skill qualification or the elaboration of a business plan certified by a business expert attesting to the company's viability.In some regions, students lack access to bank and trade credit.
Figure 1 illustrates that the number of student entrepreneurs at a university is positively affected by: i) the stock of knowledge at the university; ii) the fraction of stock of knowledge that students can commercialize, iii) the expected excess of profits from entrepreneurship minus wages from employment, and iv) the students' entrepreneurial capabilities.It also illustrates that the higher the university and regional barriers to entrepreneurship, the lower the number of student entrepreneurs.

Principles to Increase the Number of Student Spinoff Companies
Table 1 provides principles that can be used to develop university policies for increasing the number of spinoff companies created by university students.These principles are organized around the six factors illustrated in Figure 1.The logic model illustrates the logical relationships between inputs, activities, outputs, immediate outcomes, intermediate outcomes, and final outcome of a university initiative to increase its number of student entrepreneurs.The inputs, activities, and outputs address the "how" of the initiative, whereas the immediate, intermediate, and final outcomes provide the actual "changes" that take place as a result of investing in the initiative.

Fostering Student Entrepreneurship and University Spinoff Companies
Tony Bailetti

Figure 1 .
Figure 1.Factors that affect the level of student entrepreneurship at a university

" " Fostering Student Entrepreneurship and University Spinoff Companies
new products, services, technology, tools, and solutions; ii) new quality of goods; iii) new methods of production; iv) opening new markets; v) securing new sources of supply of raw materials; and vi) new organizational forms.

What Are the Distinct and Salient Aspects of Student Entrepreneurs?
5. They increase the return on government investment in university R&D.Policy makers and taxpayers are increasingly concerned about the low returns from government investment in university R&D.Michelacci (2003; http://tinyurl.com/68pvg3e)has shown that, when the stock of knowledge is high and the amount of entrepreneurial skill is low, an increase in R&D reduces economic growth.When entrepreneurial skills at the university are low, returns on large R&D investments are also low.In addition to being knowledge-transfer mechanisms, student spinoff companies increase the level of entrepreneurial activity at a university, which then increases the university's return on its R&D.

Based Management Approach to Creating Student Spinoff Companies
/tinyurl.com/3jy985q).With this type of approach, the use of three tools to manage initiatives in fostering the creation of students' spinoff companies may prove quite helpful.These tools include: i) a logic model; ii) a performance measurement framework; and iii) an investment risk management template.Examples of the three tools used by the Canadian International Development Agency can be accessed here: http://tiny url.com/3lnnde6 A Results-

Table 1 .
Principles to foster student entrepreneurship at a university