Baylor’s Peter Klein Eyes the True
Value of University Incubators
February 13, 2017
establishment of university-affiliated incubators is often followed by a
reduction in the quality of university innovations, according to a new
study co-authored by a Baylor University entrepreneurship professor.
The study, published in Strategic Entrepreneurship Journal, analyzed
nearly 56,000 patents granted from 1969-2012 to U.S.-based,
research-intensive universities that have established incubators.
Business incubators offer office and laboratory space, support
facilities, coaching and networking for prospective entrepreneurs. About
half of the incubators in the U.S. are on a university campus, or
otherwise sponsored by a university.
All of the 60-plus universities studied are members of the Association
of American Universities. On average, researchers found “a strong
negative association between the establishment of an incubator and the
quality of patents produced subsequently by that university,” according
to the study.
“Not only do university attempts to encourage innovation and
entrepreneurship by incubating businesses seem to reduce the quality of
subsequent scientific and technical innovations, but they also appear to
reduce the income generated by innovative activities,” researchers
Klein, Ph.D., professor of entrepreneurship and senior fellow in the
Baugh Center for Entrepreneurship and Free Enterprise in the Hankamer
School of Business.
Baylor’s Peter Klein, Ph.D., professor of entrepreneurship and senior
fellow in the Baugh Center for Entrepreneurship and Free Enterprise,
explained that the study focused on the quality – not quantity – of the
patents. Innovation quality was tested by looking at the university
patents and their “forward citations” – the number of times these
patents were cited in the bibliographies of subsequent patent
“For example, if I had a patent in 2005, how many future applications
cited my patent? If the answer is none, then the thing I patented
probably didn’t stimulate new research in that area. It’s not as
‘foundational’ as a patent that was cited in a bunch of future
applications,” Klein said. “My patent would not be considered highly
Forward citations, Klein said, are a standard measure of market value
for a patent.
Klein said universities often create incubators under the pressures of
reduced public funding for academia and increased pressure for public
accountability. But does this move toward economic development and
income generation come at a cost?
testing the hypothesis, and we’re finding some empirical support, that
maybe investments in business incubation come at the cost of less
investment or less activity or less of an emphasis on other things that
universities can do that are related to innovation and
entrepreneurship,” Klein said.
The study shows that incubators are competing against other academic
innovation activities for integral resources – personnel, money, lab
space, etc. The net result of that competition may be a dilution of
Research universities are complex organizations trying to accomplish
many goals at the same time, Klein said. The increased focus on
commercialization – getting research from the lab into industry, helping
faculty and students start new companies – may come at the expense of
other activities, including basic research, which universities and their
stakeholders often consider important.
Does this study show that university incubators don’t have value?
“To be clear, our results do not imply that incubators destroy value, as
university incubators serve many purposes, educational as well as
commercial,” the study says. “This is a point worth emphasizing as
ultimately, the net economic effect of incubators is the variable of
interest. The presence of an incubator may attract particular kinds of
faculty and students, enhance the prestige of the university, generate
economic multiplier effects and benefit the community as a whole.”
Klein said he hopes the study leads to additional studies and helps
guide future policy discussions.