Scandinavian Working Papers in Economics

SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

No 362: Incentives for Academic Entrepreneurship and Economic Performance: Sweden and the United States

Magnus Henrekson () and Nathan Rosenberg ()
Additional contact information
Magnus Henrekson: Dept. of Economics, Stockholm School of Economics, Postal: P.O. Box 6501, SE-113 83 Stockholm, Sweden
Nathan Rosenberg: Department of Economics, Postal: Stanford University, Stanford CA 94305-6072, U.S.A.

Abstract: The recent 'scientification' of commercial technology has brought the interface between universities and industry into sharp focus. In particular, academic entrepreneurship, i.e., the variety of ways in which academics take direct part in the commercialization of research, is widely discussed. The purpose of this paper is to compare academic entrepre-neurship in the US and Sweden and attempt to explain why the US academic system appears to have been more successful in spawning academic entrepreneurship compared to its Swedish counterpart despite large levels of R&D spending and comprehensive government support schemes in Sweden. Our analysis points to weaknesses in the Swedish incentive structure in key respects: the rate of return to human capital investment, incentives to become an entrepreneur and to expand existing businesses, and insufficient incentives within the university system to adjust curricula and research budgets to outside demand. Several policy measures during the 1990s have reduced the weaknesses in the Swedish incentive structure. The current emergence of a more vibrant entrepreneurial culture in Sweden in some areas is consistent with these changes, although the rules of the game are still unfavorable relative to the US. Our analysis suggests that further measures favoring entrepreneurial activity would encourage academic entrepreneurship even further.

Keywords: Academic entrepreneurship; Innovation; R&D; Spin-off firms; Technology transfer; University-industry relations; Universities and business formation

JEL-codes: J24; O31; O32; O57

61 pages, March 7, 2000

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