Inside or outside the IP system?: Business creation in academia

Research and public policy on academic entrepreneurship are largely based on the assumption that faculty members start businesses to commercialize inventions that have been disclosed to university administrators and have been patented. In this paper, we analyze a sample of 11,572 professors and find that much academic entrepreneurship occurs outside the university intellectual property system. Specifically, about 2/3 of businesses started by academics are not based on disclosed and patented inventions. Moreover, we show that individual characteristics, departmental and organizational affiliations, and time allocation of academics that have started business outside the IP system are different from those of academics that have started businesses to exploit disclosed and patented inventions. We discuss the implications for research on and the practice of academic entrepreneurship.