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Proof of Concept Centers: Accelerating the Commercialization of University Innovation

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Innovation drives economic growth. Economic growth leads to longer, healthier lives by transforming yesterday’s luxuries into better, cheaper, and more efficient goods and services.

University research is a key component of our nation’s innovative capacity. In an increasingly dynamic and global economy, the institutional infrastructure is inefficient at moving university innovations to the marketplace. 

University researchers often face convoluted procedures with insufficient guidance to commercialize their innovations. As angel investors and venture capitalists increasingly invest in later-stage enterprises, researchers face difficulty finding early-stage funding to develop and test prototypes and conduct market research. 

In order to fill this funding gap and accelerate the commercialization of university innovations, a new type of organization has emerged—the proof of concept center.

What follows is an examination of two such centers: the Deshpande Center at the MIT School of Engineering and the von Liebig Center at the University of California San Diego Jacobs School of Engineering. 

This analysis provides valuable insights into how proof of concept centers can facilitate the transfer of university innovations into commercial applications.

Intellectual Property, the Immigration Backlog, and a Reverse Brain-Drain

More than one million skilled immigrant workers, including scientists, engineers, doctors and researchers and their families, are competing for 120,000 permanent U.S. resident visas each year, creating a sizeable imbalance likely to fuel a “reverse brain-drain” with skilled workers returning to their home country, according to this report. The situation is even bleaker as the number of employment visas issued to immigrants from any single country is less than 10,000 per year with a wait time of several years.

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Conducted by researchers at Duke University, New York University, and Harvard University, the study is the third in a series of studies focusing on immigrants’ contributions to the competitiveness of the U.S. economy. Earlier research revealed a dramatic increase in the contributions of foreign nationals to U.S. intellectual property over an eight-year period.

In this study, “Intellectual Property, the Immigration Backlog, and a Reverse Brain-Drain,” researchers offer a more refined measure of this rise in contributions of foreign nationals to U.S. intellectual property and seek to explain this increase with an analysis of the immigrant-visa backlog for skilled workers. The key finding from this research is that the number of skilled workers waiting for visas is significantly larger than the number that can be admitted to the United States. This imbalance creates the potential for a sizeable reverse brain drain from the United States to the skilled workers’ home countries.

The earlier studies, “America’s New Immigrant Entrepreneurs” and “Entrepreneurship, Education and Immigration: America’s New Immigrant Entrepreneurs, Part II,” documented that one in four engineering and technology companies founded between 1995 and 2005 had an immigrant founder. Researchers found that these companies employed 450,000 workers and generated $52 billion in revenue in 2006. Indian immigrants founded more companies than the next four groups (from the United Kingdom, China, Taiwan, and Japan) combined.

Furthermore, these companies’ founders tended to be highly educated in science, technology, math, and engineering-related disciplines, with 96 percent holding bachelor’s degrees and 75 percent holding master’s or Ph.D. degrees.

Among key findings in the most recent report:

  • Foreign nationals residing in the United States were named as inventors or co-inventors in 25.6 percent of international patent applications filed from the United States in 2006. This represents an increase from 7.6 percent in 1998.
  • Foreign nationals contributed to more than half of the international patents filed by a number of large, multi-national companies, including Qualcomm (72 percent), Merck & Co. (65 percent), General Electric (64 percent), Siemens (63 percent), and Cisco (60 percent). Forty-one percent of the patents filed by the U.S. government had foreign nationals as inventors or co-inventors.
  • In 2006, 16.8 percent of international patent applications from the United States had an inventor or co-inventor with a Chinese-heritage name, representing an increase from 11.2 percent in 1998. The contribution of inventors with Indian-heritage names increased to 13.7 percent from 9.5 percent in the same period.
  • The total number of employment-based principals in the employment-based categories and their family members waiting for legal permanent residence in the United States in 2006 was estimated at 1,055,084. Additionally, there are an estimated 126,421 residents abroad also waiting for employment-based U.S. legal permanent residence, adding up to a worldwide total of 1,181,505.

Using data from the New Immigrant Survey, the authors find that, in 2003, approximately one in five new legal immigrants in the United States and about one in three employment-based new legal immigrants either planned to leave the United States or were uncertain about remaining. The authors had no data on how many foreign nationals have actually returned to their homelands.

About the research team 
For more information about the Global Engineering and Entrepreneurship research at Duke University, visit http://www.globalizationresearch.com; visit http://www.law.harvard.edu/programs/lwp/ to learn about Harvard Law’s Labor and Worklife Program, and visit http://www.nyu.edu/ for more information about New York University.

Education, Entrepreneurship and Immigration

This report tracked the educational backgrounds of immigrant entrepreneurs who were key founders of technology and engineering companies from 1995 to 2005 shows a strong correlation between educational attainment (particularly in science, technology, engineering and math) and entrepreneurship.

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While the contribution of skilled immigrants to America’s technology and engineering startups has been recognized for the past decade as critical to the emergence of many of America’s most entrepreneurial companies and huge, new industries, little has been known about the backgrounds of these immigrant entrepreneurs. What types of education have these technology and engineering entrepreneurs received? Why did they come to the United States?

A report released by the Ewing Marion Kauffman Foundation that tracked the educational backgrounds of immigrant entrepreneurs who were key founders of technology and engineering companies from 1995 to 2005 shows a strong correlation between educational attainment (particularly in science, technology, engineering, and math) and entrepreneurship.

The study shows that 96 percent of immigrant founders of technology and engineering companies held bachelor’s degrees and 74 percent held graduate or postgraduate degrees. Seventy-five percent of the highest degrees among immigrant entrepreneurs were in STEM fields (Science, Technology, Engineering and Mathematics). Moreover, 53 percent of the immigrant founders of U.S.-based technology and engineering companies completed their highest degrees in U.S. universities.

Conducted by researchers at Duke University and the University of California, at Berkeley, the study is a follow-up to a report released in January that showed that in 25.3 percent of technology and engineering companies started in the United States from 1995 to 2005, at least one key founder was foreign-born. Nationwide, these immigrant-founded companies produced $52 billion in sales and employed 450,000 workers in 2005. The majority of these immigrant entrepreneurs came from India, the United Kingdom, China, Taiwan, Japan, and Germany.

The study was based on a series of in-depth interviews with:

  • 144 immigrant company founders on their educational attainment, degree types, reasons for entering the United States, and other factors related to their entrepreneurial activities;
  • 87 Indian, 57 Chinese, and 29 Taiwanese company founders to ask where they received their undergraduate education, and;
  • 1,572 companies in 11 technology centers to determine whether a key founder was foreign-born and the founder’s country of birth.

Among the findings:

  • More than half of the foreign-born founders of U.S. technology and engineering businesses initially came to the United States to study. Very few came with the sole purpose of starting a company. Almost 40 percent of immigrant founders entered the country because of a job opportunity, with only 1.6 percent entering the country with the sole purpose of entrepreneurship. They typically founded companies after working and residing in the United States for an average of 13 years.
  • Immigrant founders were educated in a diverse set of universities in both their home countries and across the United States. No single U.S. institution stands out as a source of immigrant founders. Similarly, those who received their undergraduate degrees in India or China graduated from a diverse assortment of institutions. Even the famed Indian Institutes of Technology educated only 15 percent of Indian technology and engineering company founders.
  • Immigrant entrepreneurs tend to move to cosmopolitan technology centers. The regions with the largest immigrant population also tend to have the greatest number of technology startups. On average, 31 percent of the engineering and technology companies founded from 1995 to 2005 in the 11 technology centers that were surveyed had an immigrant as a key founder. This compares to the national average of 25.3 percent.
  • Technology centers with a greater concentration of immigrant entrepreneurs in their state averages include Silicon Valley (52.4 percent), New York City (43.8 percent), and Chicago (35.8 percent). Three technology centers had a below-average rate of immigrant-founded companies: Portland (17.8 percent), Research Triangle Park (18.7 percent), and Denver (19.4 percent).

In a research and policy guide for transforming the U.S. economy toward an innovative entrepreneurial economy published earlier this year, Kauffman Foundation researchers said the nation could benefit from more enlightened immigration policies, designed to attract and retain highly skilled foreign workers and potential entrepreneurs.

About the research team

For more information, visit the Global Engineering and Entrepreneurship at Duke research group, and the UC Berkeley School of Information.

Kansas School District Efficiency Study

This Kauffman Foundation-sponsored report identifies which Kansas school districts are maximizing their resources and how less efficient districts can make improvements.

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Kansas Governor Kathleen Sebelius and the Foundation commissioned Standard & Poor’s School Evaluation Services to conduct an Educational Efficiency Study of the state’s school districts. The objective of the project is to help Kansas better understand which districts are using their resources most efficiently and how less efficient districts may benchmark themselves against these districts to identify improvement opportunities.

The study does not try to answer the question of how much money the state and individual school systems should spend on education.

To determine a district’s efficiency, Standard & Poor’s analyzed multiple data points including how much the district spends per student; the district’s performance on the Kansas Reading and Math Assessments; and the percentage of students enrolled in the district with economically disadvantaged backgrounds, disabilities, or limited English proficiency.

Each school district was given an efficiency score. Kansas’ scores range from about 60 percent to 100 percent efficient. This means that the least efficient district is approximately 60 percent as efficient as the most cost-effective districts. The average Kansas school system is approximately 85% as efficient as the most cost-effective districts.

Among the state’s 300 school districts, there were 257 school systems that had adequate data for analysis. Of this number, 21 received scores of 100 percent; additionally, six districts achieved relative efficiency scores that exceeded 99 percent.

America’s New Immigrant Entrepreneurs

This study was the first in a series examining the importance of immigrant entrepreneurs to the U.S. economy.

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From the Introduction and Overview

Two of the most important questions now being debated in the U.S. are the effects of globalization and immigration on the nation’s economy. Globalization is accelerating and it is still not clear whether trends like outsourcing will erode U.S. competitiveness or provide long-term benefits. The focus of the immigration debate is on the plight of millions of unskilled immigrants who have entered the U.S. illegally. Overlooked in the debate are the hundreds of thousands of skilled immigrants who annually enter the country legally.

In 1999 AnnaLee Saxenian published a groundbreaking report on the economic contributions of skilled immigrants to California’s economy. This study, entitled “Silicon Valley’s New Immigrant Entrepreneurs”, focused on the development of Silicon Valley’s regional economy and the roles of immigrant capital and labor in this process. Saxenian’s study also went beyond a quantitative analysis to focus on the social, ethnic, and economic networks of new U.S. immigrants. One of her most interesting findings was that Chinese and Indian engineers ran a growing share of Silicon Valley companies started during the 1980s and 1990s and they were at the helm of 24% of the technology businesses started from 1980 to 1998. Saxenian concluded that foreign-born scientists and engineers were generating new jobs and wealth for the California economy. Even those who returned to their home countries to take advantage of opportunities there were building links to the U.S. and spurring technological innovation and economic expansion for California.

A team of student researchers in the Master of Engineering Management program of the Pratt School of Engineering at Duke University has been researching the impact of globalization on the U.S. economy and the engineering profession. The team is led by Executive in Residence Vivek Wadhwa, Research Scholar Ben Rissing, and Sociology Professor Gary Gereffi. Earlier research focused on the education and graduation rates of engineers in the U.S., China, and India, and an analysis of the experiences of U.S. firms engaged in outsourcing their engineering operations.

The Duke researchers were concerned about the growing momentum in outsourcing and its impact on U.S. competitiveness—and sought to understand the sources of the U.S. global advantage as well as what the U.S. can do to keep its edge. To better understand the contributions of skilled immigrants to the competitiveness of the U.S. economy, they decided to expand and update Saxenian’s study.

The goal of this research was to document the economic and intellectual contributions of immigrant technologists and engineers at the national level. To understand the economic impact, the study looked at a large sample of all engineering and technology companies founded in the last ten years, to determine whether a key founder was an immigrant. To understand the intellectual contribution, they analyzed the World Intellectual Property Organization Patent Cooperation Treaty database for international patent applications filed in the United States.

Gender Differences in Patenting in the Academic Life Sciences

Male academic scientists in the life sciences secure patents at more than twice the rate of their female colleagues, according to an analysis sponsored by the Ewing Marion Kauffman Foundation.

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According to Gender Differences in Patenting in the Academic Life Sciences, published in the August 3, 2006 issue of Science magazine, female academic scientists patent at about 40 percent the rate of men.

The study, which examined a random sample of 4,227 life scientists over a 30-year period, as well as personal interviews with faculty scientists, revealed that 5.65% of the women in the sample held patents compared to 13% for men. Moreover, the male patent holders in the data amassed a total of 1,286 patents, compared to only 92 patents secured by women scientists.

An analysis of related data concluded that there is no evidence that women do less significant scientific research based on standards of scientific impact. Rather, the most significant contributors to the large gender gap were the lack of exposure and social networks by senior women scientists to the commercial sector, as compared to their male colleagues and, concern among women scientists that pursuing commercial opportunities might hinder their university careers.

According to the researchers, because scientists receive compensation when their patents are licensed from their university employers, the findings of the gender differences have implications for income levels. These differences may be amplified because patenting is often a precursor to faculty involvement in other compensated work with companies, such as appointments to scientific advisory boards (SAB) and consulting. In fact, in a related study the researchers found that of 771 SAB members in a large sample of young biomedical companies, only 6.5% were women.

On a positive note, however, the report reveals that younger women scientists, similar to those of their male colleagues, view patents as accomplishments and as a legitimate means to disseminate research, which may result in a narrowing of the patenting gender gap over time. 

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