“… The assessment of impacts of spin-off creation and operation, and of specific spin-off policies… depend on the specific structure, culture and history of the national science system” (Konrad and Bernhard Truffer 2006).
“Academic entrepreneurship in the developed industrial countries has strong links with scientific progress, economic success and competitive markets. The origin of academic entrepreneurship in Hungary is rather different. It emerged under the pressure of falling budgets, in response to the problems of an industry with a low technical level, struggling in a shortage economy, and facing weak incentives for innovation” (Balazs 1996).
Abstract
The paper questions some of the premises in studying academic spin-offs in developed countries, claiming that when taken as characteristics of ‘academic spin-offs per se,’ they are of little help in understanding the phenomenon in the Eastern European countries during the transitional and post-transitional periods after 1989. It argues for the necessity of adopting a path-dependent approach, which takes into consideration the institutional and organisational specificities of local economies and research systems and their evolution, which strongly influence the patterns of spin-off activity. The paper provides new findings and original arguments in support of Balazs’ seminal theses (Balazs 1995, 1996) about the emergence of academic spin-offs during the early transition. It reveals key economic and policy mechanisms bearing on academic entrepreneurship in Eastern Europe, such as the tensions between economic and political nomenclatures of former Communist Parties, where the dismantling or preservation of the power of political nomenclature resulted in different patterns of development—rapid reforms in the ‘first wave’ of EU accession countries or the establishment of rent-seeking and assets-stripping economies in countries like Bulgaria and Romania, making the transition period especially difficult. In the latter, a specific economic environment emerged, unknown in Western Europe and in the ‘champions’ of transition—such as suppression of the authentic entrepreneurship in a number of economic sectors, disintegration of corporate structures, etc. Thus, the paper reveals the common ground behind the two conflicting tendencies in post-socialist academic spin-offs, partially outlined in other research (Simeonova 1995; Pavlova 2000): as an authentic form of academic entrepreneurship grasping the opportunities opened up by the economic crisis and compensating failures in science and technology policy on the one hand, and as specific rent-seeking strategy draining valuable public assets on the other (the latter, in turn, boosting the negative attitudes in local scientific communities). The paper provides new findings about the evolution of the academic spin-offs in Bulgaria along the two polar trends and their positive and negative repercussions on parent research institutions. The results were achieved in the PROKNOW Project, EC 6th Framework Program.
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Notes
In the 1980s, attempts were made by state combines to become real economic subjects by allowing them direct access to foreign markets, and by introduction of some elements of competition. The state combines were quite different from the Western corporations, yet they coordinated the activity of separate enterprises with clear division of responsibilities between the top and middle levels of management. They possessed specialized units in R&D, in strategic planning, in foreign trade. In the late 1980s, some of them were also exporting to the Western countries (Rila—clothes, Pirin—shoes, Dynamo—warehouse technology, etc.).
In the beginning of 2005, the National Strategy for Scientific Research indicated that Bulgaria was ranked last among the 25 + 2 EU members with regard to the share of scientists working in enterprises—only 6.7% of researchers compared with 27.8% in Hungary, 38.4% in the Czech Republic, and 62.6% in Austria. According to the strategy to approach the average EU values, the number of researchers in enterprises should increase about 10 times!.
“After the breakdown of the former state combines their patent departments were closed down. There are no units or people in charge of the intellectual property of the enterprises of these structures. During the privatization period no funds were set aside for protecting patents and trademarks. Protection abroad was rarely sought” (I. Ivanov, IP Consulting, interviewed by Gergana Mitova, March 2004).
We list some publications summarizing the results of (that are representative for) the research on academic spin-offs in developed countries and where the assumptions outlined below could be clearly identified: Mustar et al. 2006, 2008; Clarysse et al. 2005; Klepper and Thompson 2005; Corolleur et al. 2004; O'Shea et al. 2004; Molas-Gallart et al. 2002; Egeln et al. 2002; Science Technology Innovation 2001; Williams and Majewsky 2001.
For the term ‘post-transitional,’ see (Tajnikar 2001; Valenzuela 1990, University in the 21st Century Conference (US-European Alliance of Universities for Democracy (AUDEM); Cluj-Napoka, Romania, November 4–7, 2007). It is used to distinguish the period of post-communist transition in Eastern Europe until the beginning of this century from the latest developments, where most of the countries in the region became full members of the European Union but are still experiencing the effects of the transition. (Bongaarts 2001) uses the term also in the field of demography.
The project PROKNOW under the 6th Framework Program of EC was carried out between March 2006 and February 2009 in seven European countries, coordinated by the Social Science Research Center Berlin, Germany. Bulgarian case studies comprised six parent research organizations with about 20 spin-offs: Institute of Parallel Processing of Information, Central Laboratory for Optical Storage and Processing of Information, and Central Laboratory for Applied Physics (all at the Bulgarian Academy of Sciences), Agricultural University in Plovdiv, University of Burgas, and Institute for Plant Genetic Resources near Plovdiv. The National Center for Nanotechnologies was also studied. The methods included in-depth interviews with researchers (incl. founders of spin-offs), participant observations, and analysis of documentation, statistical data and other sources. For more on the project, see http://www.proknow-eu.de/.
In 1989, with 5,641 research scientists and engineers per million of population and 3.3% of the GDP devoted to R&D, Bulgaria was among the first five countries in the world. The R&D sector of the country employed 98,338 people, of which 31,611 were scientists, working in 500 research organizations. (Simeonova 1998) Yet we should keep in mind the lower technical level of research infrastructure in the former Eastern Bloc, where the COCOM restriction also played a role.
As pointed out by Simeonova, during the 1980s ‘…a series of top-level [science & technology policy] decisions have been made in Bulgaria, the most illustrative of which was Main Directions and Task of Restructuring of the Research Front, Sofia: Partisdat 1988 (Simeonova 1995).
Commenting on the early 1990s’ situation in Slovenia, one of the ‘champions’ of the post-socialist transition, Franc Mali notes: “There is no doubt that Slovenian scientists have been oriented towards Western Europe already before changes in the 1990s. It is also true that at the end of the communist era in Slovenia the starting conditions for the transformation of the innovation system was much better off than in countries which were part of the former Soviet block. Notwithstanding, even in this form of communism, the existing system of ownership and strong political control of the communist party never enabled to raise the processes of capitalization and commercialization of scientific knowledge” (Mali 2002).
Based on our study, we claim that during the late–socialist period many Bulgarian universities—especially those specialized in engineering (including chemical engineering), agriculture, and food industries—were very close to what Zhou and Peng in their study of academic entrepreneurship in China named ‘entrepreneurial university’: “the university that strongly influences the regional development of industries as well as economic growth through high-tech entrepreneurship based on strong research, technology transfer and entrepreneurship capability” (Zhou and Peng 2008: 638). That this might be a common [late] socialist pattern is confirmed by their observation that China maintained a tradition of industry–university collaboration since the 1950s, where “…universities mainly worked for industries through their consultancy and paid most attention to improving techniques… [with the objective] to meet needs from industry” (ibid).
In 1989, there were 24 people working in NIS at the University of Foot Technology in Plovdiv, now there are only two full time employees. NIS at Plovdiv Agricultural University and the University of Burgas had a similar destiny. In the latter, the former NIS patent specialist has found refuge as a consultant at the university library.
In 1989, the Bulgarian Academy of Sciences comprised 103 institutes, employing about 12,000 scientists and engineers. Unlike industrial research (see below), the Academy preserved its structure, admitting only controlled reduction of personnel (about 20% by 1994) and research units (reduced by 1/3 in the mid 1990s).
In fact, during the 1990s, the innovative entrepreneurs in Bulgaria, including academic spin-off firms, worked in hostile environment of rent-seeking and assets-scrapping capitalism dominated by political nomenclature of the former Communist Party. Unlike the situation in Hungary, it was the political nomenklatura (members of the Communist Party’s organizational and ideological departments, and secret services as their ‘right hand’) that carried out post-socialist economic transformation. Instead of opening the door to foreign investors, to empower the most talented industrial managers and to promote entrepreneurial spirit among the economically active people, the ‘reformers’ succeeded to converse their political capital into an economic one, hence preserving their dominant positions in society. For more on the distinction between economic and political nomenclature ant its importance for understanding the dynamics of economic reforms during the late socialism and transition period, see www.policy.hu/tchalakov (Tchalakov 2003 Policy paper), and (Tchalakov 2005). See also the volume “The Networks of Transition” (2008), published in Bulgarian by East–West Publishers, Sofia.
It was issued in January 1988 and for the first time allowed setting up private companies in industry, trade and other spheres of the economy under certain conditions.
Simeonova notes that, during socialism, the meritocratic principle had a dubious meaning since the directors of the institutes, corresponding members and academicians were Communist Party nomenclature and had to be approved by relevant Communist Party departments. That is why this meritocratic principle was strongly devalued after 1989.
CLAP was set up in the city of Plovdiv as an independent academic unit in the framework of the Bulgarian Academy of Sciences in April 1979. In January 1984, a pilot production was opened at the laboratory, on the basis of which a “Small Enterprise for Sensors and Sensor Units” was launched in October 1986. Throughout the entire 1990s, the laboratory continued the small-scale manufacturing of high-tech products, without spinning it off. In 2006, a Technology Transfer Office was established as a separate structure within the laboratory, the purpose of which is to assist the commercialization of scientific results, including through the creation of spin-off firms. In the framework of a EU 6th Framework Program project in 2007, an Innovation Centre was created, and the spin-off firms operating on the territory of the CLAP were attached to it.
It seems to us that the Triple-Helix Model of government-university-industry relationships, developed by Etzkowitz and Leydesdorff (2000), reduces somehow the importance of individual entrepreneurial initiative at the expense of various institutional policies at the government and university levels, which is just the opposite to the developments in Eastern Europe after 1989 (see also Etzkowitz 2002). We consider this model less suitable as an explanatory model for the transitional societies in (South) Eastern Europe, where the governments in fact deserted the role the Triple-Helix Model pleads, and academic entrepreneurship was kept alive because of the individual efforts of some members of the academic community. Still, we are conscious that this model might become relevant again in the post-transitional period of EU membership.
“In contrast to the US spin-off model in which proto-firms rapidly move out of the university, UREs have persisted within the administrative framework of the university, until the quite recent institution of policies to encourage separation of operations… In China, a ‘horse race’ to the research university is proceeding with government support” (Zhou and Peng 2008).
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Tchalakov, I., Mitev, T. & Petrov, V. The Academic Spin-Offs as an Engine of Economic Transition in Eastern Europe. A Path-Dependent Approach. Minerva 48, 189–217 (2010). https://doi.org/10.1007/s11024-010-9149-8
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DOI: https://doi.org/10.1007/s11024-010-9149-8