Innovation New Jersey
  • Home
  • Our Coalition
    • Contact Us
  • News
  • Resources
    • State Supports
    • Federal Supports
    • Higher Ed Supports
  • Join Us

Innovation News

Everything Innovation. Everything New Jersey.
Follow us and stay connected.

VC-backed startups help support vibrant innovation ecosystems, research finds

12/2/2017

0 Comments

 
Washington D.C. - Venture-backed startups generate nine times the knowledge spillovers (e.g., patenting activity and citations) when compared to that produced by R&D investment of established companies, according to recent research. In Measuring the Spillovers of Venture Capital, researchers from the University of Munich found that, on average, two-thirds of this increase can be traced to more patenting by other companies within the VC-backed company’s spillover pool (e.g., companies with geographic or industry proximity). The companies that most benefited from the knowledge spillover were large, established companies.
​Based upon their findings, the researchers contend that increased government support for venture capital is a more effective strategy for increasing regional commercialization and patenting activity than R&D subsidies for established companies. The researchers conclude with the policy proposal that subsidies for venture capital investment should be at least as large as current R&D subsidies for companies — specifically targeting investments in companies that engage in complex product technology development.

VC-backed startups that created the most knowledge spillovers were led by an experienced inventor team that held a patented technology at the time they received their first round of investment. The researchers also found that 'complex' product technology (e.g., computers) creates more spillover than startups that use a 'discrete' product technology (e.g., drugs). The researchers contend that discrete product technologies need less associated patents and have less incentive to work with other companies. In comparison, startups focused on complex product technologies are more likely to need industry partners to achieve the final product and create incentive to work with business in close proximity.

Methodology: To quantify knowledge spillover, the researchers developed a new method for identifying a set of additional companies — the spillover pool — that could potentially influence that company's innovation process. The new method combines information on a firm’s technology with information on the closeness of different technologies, based on patent citations. After identifying the spillover pools for both startup and established companies, the researchers calculated a matrix of all patent citation flows between technology classes and used it to determine the relevant pool of companies likely to be affected by spillovers. Through the new matrix-based model, the researchers contend that they were able to more accurately identify each company’s spillover than previous models because it not only includes potential spillover pool companies that are active in the same technology area, but are active in related technologies. The study was conducted using patent data from the National Bureau of Economic Research with firm level data of venture capital-financed companies and established companies in the U.S. from 1979 to 1999. 
0 Comments



Leave a Reply.

    Do not miss a single innovative moment and sign up for our newsletter!
    Weekly updates


    Categories

    All
    3D Printing
    Academia
    Acquisitions
    Aerospace
    Agriculture
    AIDS
    Algae
    Alumni
    Animals
    Architecture
    Astrophysics
    Autism
    Awards
    Big Data
    Bioethics
    Biofuel
    Biomedical
    BioNJ
    Bioterrorism
    Bit Coins
    Brain Health
    Business
    Camden
    Cancer
    CCollege
    Cellular
    Centenary
    Chemistry
    ChooseNJ
    Climate Change
    Clinical Trials
    Cloud Tech
    Collaboration
    Computing
    Congress
    Coriell
    Council On Innovation
    Crowdfunding
    Cybersecurity
    DARPA
    Defense
    Degree
    Dementia
    Dental Health
    DOC
    DOD
    DOE
    Drew
    Drones
    Drug Creation
    Einstein's Alley
    Electricity
    Energy
    Engineering
    Entrepreneurship
    Environmental
    FAA
    Fairleigh Dickinson
    FDA
    Federal Budget
    Federal Government
    Federal Labs
    Federal Program
    Finance
    Food Science
    Fort Monmouth
    Fuel Cells
    Funding
    Genome
    Geography
    Geology
    Global Competition
    Google
    Governor Christie
    Grant
    Hackensack
    HackensackUMC
    Health Care
    Healthcare
    HHS
    HINJ
    Hospitals
    Immigration
    Incubator
    Infrastructure
    International
    Internet
    Investor
    IoT
    IP
    IT
    Jobs
    Johnson & Johnson
    K-12
    Kean
    Kessler
    Legislation
    Logistics
    Manufacturing
    Medical Devices
    Med School
    Mental Health
    Mentor
    Microorganisms
    Molecular Biology
    Montclair
    NAS
    Neuroscience
    Newark
    New Jersey
    NIFA
    NIH
    NIST
    NJBDA
    NJBIA
    NJ Chemistry Council
    NJCU
    NJDOLWD
    NJEDA
    NJEDge
    NJHF
    NJII
    NJIT
    NJMEP
    NJPAC
    NJPRO
    NJTC
    Nonprofit
    NSF
    OpEd
    Open Data
    OSHE
    OSTP
    Parasite
    Patents
    Paterson
    Patients
    Perth Amboy
    Pharma
    POTUS
    PPPL
    Princeton
    Prosthetics
    Ranking
    Rare Disease
    R&D Council
    Report
    Resiliency
    Rider
    Robotics
    Rowan
    Rutgers
    SBA
    Seton Hall
    Siemens
    Smart Car
    Smart Cities
    Software
    Solar
    Space
    SSTI
    Startup
    State Government
    STEM
    Stevens
    Stockton
    Subatomic
    Supports
    Sustainability
    Taxes
    TCNJ
    Teachers
    Telecom
    Therapy
    Thermodynamics
    Transportation
    Undergraduate
    USEDA
    Verizon
    Video Game
    Virtual Reality
    Water
    WHO
    William Paterson
    Women In STEM
    Workforce Development

Home   Coalition   News   Resources   Events   Join Us
Picture
Innovation New Jersey Coalition
10 West Lafayette Street
Trenton, NJ 08608
732-729-9619