Scandinavian Working Papers in Economics

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

No 0436: Demand vs. Supply Driven Innovations: US and Swedish Experiences in Academic Entrepreneurship

Brent Goldfarb (), Magnus Henrekson () and Nathan Rosenberg ()
Additional contact information
Brent Goldfarb: Department of Economics, Stanford University, Postal: Stanford CA 94305-6702, USA
Magnus Henrekson: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden
Nathan Rosenberg: Department of Economics, Stanford University, Postal: Stanford CA 94305-6702, USA

Abstract: Measured by per-capita publication measures, Sweden is an academic powerhouse. Hence, its inability to commercialize on these accomplishments is a puzzle. This paper attributes this failure to the top-down nature of Swedish policies aimed at commercializing these innovations as well as an academic environment that discourages academics from actively participating in the commercialization of their ideas. This sits in stark contrast to the US institutional setting that is characterized by competition between universities for research funds and research personnel, which in turn has led to significant academic freedoms to interact with industry, particularly by founding new firms. We conclude that the technocratic, supply-driven nature of attempts to exploit academic output in Sweden has been markedly less successful than the demand-driven market institutions in the US.

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

JEL-codes: J24; O31; O32; O57

21 pages, February 27, 2001

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