European universities shouldn't focus on professor-led spin-outs to the exclusion of student start-ups, which in the US have led to such success stories as Facebook and Google, writes CLAIRE O'CONNELL
WHEN IT comes to promoting entrepreneurship in Irish higher education, are we missing a host of opportunities by focusing on the wrong place?
It’s the kind of question that makes you look up from your note-taking at a conference. So when Burton Lee – a lecturer on European entrepreneurship and innovation at Stanford University’s school of engineering and a former member of the Innovation Taskforce – raised it at the Euroscience Open Forum 2012 in Dublin last week, people at the session sat up a little straighter.
Student-led enterprises are the “dark matter” of university-based entrepreneurship in some parts of the world, according to Dr Lee, who describes how at Stanford, MIT and Berkeley in the US, student-founded companies “substantially outnumber” those put together by professors, though the actual figures are difficult to quantify.
He points to examples of prominent student-founded companies from Stanford, including Google and Yahoo.
Yet in Europe there is still a tendency to focus on on professor-led spin-outs and commercialisation, he tells The Irish Times after the talk.
“The European Commission, the Irish Government, the OECD and the broad community of innovation economists in Europe are fixated on professors, and they neglect the power of the students to create world-class companies that have a major job creation impact,” says Dr Lee. “But if you want to encourage students to become entrepreneurs in Ireland, this needs to be a formal policy and a priority for the Irish Government.”
Facilitating student entrepreneurs could boost the levels of innovation from higher education. Dr Lee reckons the number of university spin-outs could at least double in the medium term if student-founded firms are encouraged.
But while quantity could go up, what about quality? Lee recognises there are no hard numbers here, pointing out that the issue has not been studied in depth at US universities. But in general, he says, it’s important not to discard the potential value of student-led enterprises simply because they are not headed by a professor.
“You cannot say that student-founded companies are likely to have lower quality growth potential or job creation impact just because they are founded by students. PhD students and postdocs should be able to create companies out of labs, just like professors, and the growth prospects and success rates should be similar,” he says.
“And for undergraduate and Masters students, the experience in the US, Finland and elsewhere shows that the majority of these types of companies today tend to be in mobile apps and the ICT area. They represent low-hanging ICT fruit in rapid growth markets and many can be expected to have even brighter short-term prospects than professor-led companies based on materials science or nanotechnology, for example.”
Recent years have seen moves in higher education in Ireland to encourage entrepreneurship and awareness about commercialisation among students, but Dr Lee sees plenty of scope for more.
So what are the best ways to nurture potential entrepreneurs? High-performing student entrepreneur clubs have proven their worth in the US, Britain and Finland, where students organise courses, arrange talks from entrepreneurs and send student delegations to visit Silicon Valley to fire up enthusiasm for innovation and business.
It’s important that such societies are run by students themselves: they can be supported by the parent institute, but must maintain their independence financially and politically.
But where would they get the wherewithall to fund the society, host business plan competitions, organise speakers and trips and set up and run companies?
Student groups in the US and Finland have been quite successful in raising support from the likes of major tech companies, venture capital firms, private individuals, banks and government agencies says Lee, who is also managing director of Innovarium Ventures, a financial, technical and strategic advisory services firm.
“As to funding new student-founded start-ups, they are still going to have to go to private angels, friends and family and Enterprise Ireland like everyone else has to,” he says.
Student residences can also be a hive of entrepreneurial development, notes Lee, though he hasn’t seen too much evidence of that in Ireland.
“Student residences at night in Ireland don’t seem to be major hubs of social activities, and on the weekends many of the students go home,” he says. “And what is not appreciated in Europe is that student dorms are low-cost incubators for companies. If the students are there for five out of seven days, the incubation effectiveness and start rate drops accordingly.”
At US campuses, there can be a strong focus by the university on student-driven activities in residences. The dorms are on the go 24/7.
“Facebook, for example, was founded in a Harvard dormitory,” says Dr Lee.
The mix of students is important – you have to think carefully about ages, genders and the numbers of students per room. It’s no accident that dormitories are active centres of student engagement around entrepreneurship, he says.
“Student groups and student entrepreneurs are very important [in] recruiting their peers to [join] start-ups – far more important than professors lecturing to students that they must become an entrepreneur.”
Lee recommends that Irish student groups visit successful student entrepreneurship societies at Aalto University in Finland, at Stanford and at MIT.
He also suggests that higher-education institutions sit down with interested engineering, medical and business students and find out what they need to build an active, strong and sustainable entrepreneurship club.
“Ask them what is missing – do they need office or meeting space, money, a bank account off campus, legal advice, introductions to possible corporate sponsors or entrepreneurs to come in and advise them,” he says.
“But university entrepreneurship can’t be a purely top-down initiative – if you can’t find and support students who are generally passionate about entrepreneurship, you are likely to be stuck as an institution with low start-up formation rates.”
Keeping students at the heart of innovation and entrepreneurship is vital, agrees Brian MacCraith, president of Dublin City University, who also spoke at the ESOF session.
“I’m a strong believer in the potential for students to be entrepreneurs and [in] stimulating their innovative mindsets,” Prof MacCraith told The Irish Times. “And there’s a clear indication that today’s students will be shaping their own future, being job shapers rather than job seekers. So we need to ready them by exposing them to the innovation process and to role-model entrepreneurs and stimulating their creativity.”
Undergraduate students at DCU already learn about innovation, creativity and enterprise and prepare business plans. DCU’s enterprise society is its largest student organisation.
The university also plans to set up an accelerator programme whereby individuals or groups of students can set up their own companies. “The students will get mentoring and tutoring, and will raise funds for starting up the company and run the company for the year within this programme,” explains MacCraith.
More generally, he sees the need for Ireland to establish a coherent policy for entrepreneurship in education in Ireland. “This would draw together all the excellent but fragmented activities that are taking place at the moment,” he says.
“And it would also give it a coherent approach from primary through to third-level that would lead to the fostering of a more innovative and entrepreneurial mindset right across education.”
PEOPLE POWER WHAT DRIVES INNOVATION
How can we boost the spin-outs and licensing agreements coming out of Ireland's higher education sector? That was the focus of a session at the Euroscience Open Forum 2012 in Dublin, and one of the key themes was to focus on innovation culture and remember that people are the ones who drive it.
"For me, innovation is that process of translating knowledge created into societal and economic benefit," says Brian MacCraith, president of Dublin City University, who spoke at the session. "And while this session was asking how can universities create more licences and spin-outs, the answers lie more in the creation of an innovation culture itself."
As well as the more structural components like ease of access to intellectual property, mixing expertise across disciplines and having regular engagement with industry, MacCraith sees incentivising staff and encouraging students as major promoters of innovative thinking.
The central role of people was a theme echoed by speaker Kees Eijkel, director of Kennispark Twente at the University of Twente in the Netherlands.
The university, founded in 1961, started supporting young people in their own high-tech enterprises in 1983 and has seen the birth of around 750 companies, he explains.
"The largest contribution in my eyes is the availability of young, talented and courageous people, who are able to start a company on a shoestring," Dr Eijkel says.
"A university is a vast source of talent and knowledge, which provides a rich source.
"Of course, it takes time to learn how this works and that might lead to some issues to be solved, but they are small issues compared to what it brings. It takes time to build this up and a part of the effort is creating the right culture. That's easier in a young university."
Making sure students get to interact with role models can help boost enthusiasm about innovation and entrepreneurship, and it's also important to provide the freedom to act on that enthusiasm, he adds.
"It will cause some tension here and there, for instance, successful student entrepreneurs tend not to finish their study. But look at that in the larger picture and create space. You could work with them in a programme like you work with your Olympic athletes – give them more freedom to do their courses and exams."
Because for Eijkel it's ultimately all about the people: "The people who start a company, the people that they interact with. People can make this change, people can stand in the way of change," he says.
"Often you see a focus on tools and measures and structures. That's great, but keep understanding that it's the people who make it work."
CLAIRE O'CONNELL
