Universities, Entrepreneurship and Local Economic Development

Abstract

This literature review spans several areas of research with a focus on the impact of universities on local entrepreneurship and economic development. This review will analyze whether social welfare is maximized through private ownership of university research and the impact of the increased private protection of these rights on welfare. We will discuss whether maximizing local entrepreneurship necessarily maximizes total welfare. Finally, we will ask whether much of past research and practice on commercializing research from universities may have missed the target. Our hypothesis is that the majority of local entrepreneurial economic development affected by universities is in the form of start-ups created by former students. If this hypothesis is confirmed then the recent transformation of university goals and practices toward increasing spin-off rates and new firm creation by university faculty and researchers may be called to question.

Keywords: universities, entrepreneurship, local economic development, policy

JEL Classification: R58, I28, M13, O18, O38