Technovation 22 (2002) 281–289

www.elsevier.com/locate/technovation

A stage model of academic spin-off creation

Frédéric Nlemvo Ndonzuau *, Fabrice Pirnay , Bernard Surlemont
SME and Entrepreneurship Research Centre, University of Liège, Boulevard du Rectorat 7 (B33), 4000 Liège, Belgium

Received 17 June 2000; received in revised form 10 January 2001; accepted 7 February 2001

Abstract

The commercialisation of scientific and technological knowledge produced within publicly funded research institutions such as
universities, laboratories, research centres, and so forth, is increasingly considered by policymakers as raw material for developing
and sustaining regional economic growth. This paper focuses on one of the most promising ways to transfer research results to the
market place, namely, the creation of academic spin-offs. Its main aim is to identify, understand, and distinguish the major issues
raised by the creation of such companies from the point of view of both public and academic authorities. To achieve this, some
well-known international spin-off support programmes have been benchmarked. We used these observations to build up a general
model that puts forward the major issues involved in the transformation of research results into the creation of economic value
within the perimeter of universities. Based on inductive research, the model is composed of four successive stages interacting in a
sequential manner.  2002 Elsevier Science Ltd. All rights reserved.

Keywords: University spin-off; Technology transfer; University–industry relationships

1. Introduction used could not have been developed without academic

In the USA, the birthplace of academic
entrepreneurship, the spin-off phenomenon achieved its
first success many years ago. Popularised by the devel-
opment of the legendary ‘Silicon Valley’ and ‘Route
128’ around prestigious universities such as Stanford and
MIT, academic spin-offs (ASOs) have been part of the
American academic landscape for decades (Alistair et
al., 1991; Roberts, 1991). In Europe, the phenomenon is
still in its infancy. Although the first university spin-offs
appeared in the mid-1970s, they were considered as epi-
phenomena; universities were often totally indifferent to
them and sometimes even opposed to their development
(Stankiewicz, 1994).
More recently, universities and politicians have real-
ized the strategic role that laboratories and research
centres can play, through their ability to create and dif-
fuse knowledge, in fostering a region’s capacity to inno-
vate (Doutriaux, 1991). Since a significant proportion of
the products and processes that are currently sold and
* Corresponding author. Tel.: +32-43-66-29-45; fax: +32-43-66-
45-74.
E-mail address: f.ndonzuau@ulg.ac.be (F.N. Ndonzuau).
research (Mansfield 1995, 1998), most universities and
research centres are aware that they can exploit their own
research results by promoting and sustaining the creation
of new ventures.
In a recent report titled ‘Fostering Entrepreneurship’,
the Organization for European Cooperation and Devel-
opment stresses that universities need to develop struc-
tural and formal policies to facilitate the transition from
research to the creation of new ventures (OECD, 1998).
2. Objectives and methodology
Since the drive for entrepreneurship within university
laboratories is recent, research on how universities are
trying to promote the creation of spin-offs is still in its
infancy (Radosevich, 1995; Roberts and Malone, 1996;
Carrayannis et al., 1998; Steffensen et al., 2000). In
particular, the different issues raised by the creation of
value from university research amount largely to a black
box (Fig. 1).
The objective of this paper is to open that black box
in order to identify, understand and distinguish the major
issues raised by the creation of such companies from the
standpoints of both public and academic authorities.

0166-4972/02/$ - see front matter  2002 Elsevier Science Ltd. All rights reserved.
PII: S 0 1 6 6 - 4 9 7 2 ( 0 1 ) 0 0 0 1 9 - 0
282 F.N. Ndonzuau et al. / Technovation 22 (2002) 281–289
Fig. 1. The black box of economic value creation from university research.
Our research method relies on a two-step approach.
First, we identified and analysed some well-known inter-
national spin-off support programmes, and then used our
observations to build up a general model that set out the
major issues involved in the transformation of research
results into the creation of economic value within the
universities.
The research relies on field studies conducted within
universities. Three main criteria guided our choice of
sites: the site must: (i) have successfully implemented a
spin-off programme (condition of renown); (ii) be com-
parable with most European universities (condition of
scale); and (iii) have taken original and interesting
initiatives (condition of originality).
The following 15 universities were visited between
February and July 1999:
University of Turku, Finland
Helsinki Technology University, Finland
Linköping University, Sweden
University of Twente (Enschede), The Netherlands
Strathclyde University of Glasgow, UK
Katholieke Universiteit Leuven, Belgium
University of Liège, Belgium
Université Technologique de Compiègne, France
Weizmann Institute of Technology, Rehovot, Israel
Ben Gurion University, Israel
University of Maryland, USA
University of Pennsylvania, USA
North Carolina State University, USA
Duke University Medical Centre, USA
Laval University, Quebec, Canada
At each site, we interviewed officials from local devel-
opment agencies, managers of universities liaison offices
and incubators, and founders of spin-off firms. In-depth
semi-structured interviews were conducted, addressing
issues that deal with the problematic of research valoris-
ation. In every site, we progressively built up a picture of
the situation that was cross-validated by different actors
looking at problems from very different angles
(Eisenhardt, 1989).
It is worth noting that the following analyses consist
of common tendencies observed in different sites we vis-
ited. For the sake of conciseness we do not give these
experiences in more detail. However, while describing
our model, sometimes we briefly supply some pertaining
empirical facts that underline our model. In so doing,
we emphasize or illustrate some specific topics.
3. The four stages of the global spin-off process
From the in-depth analyses of our data, four stages
emerged as relevant in explaining the transformation of
academic research results into economic value. The
black box of Fig. 1 can be specified as an input–output
model with the four following stages (Fig. 2):
Stage 1: to generate business ideas from research;
Stage 2: to finalize new venture projects out of ideas;
Stage 3: to launch spin-off firms from projects;
Stage 4: to strengthen the creation of economic value
by spin-off firms.
Each of these four stages has a specific function in the
global spin-off process. The first stage generates and
assesses ideas with regard to possible commercialisation;
the second stage considers these ideas and translates the
most promising of them into genuine entrepreneurial
projects; the third stage realizes the best projects by cre-
ating new spin-off firms; and the fourth stage consoli-
dates and strengthens the economic value created by
these new firms. A selection process occurs at each
stage, which suggests that the model is an ecological one
(Hannan and Freeman, 1987). Indeed, not all research
results generate business ideas; not all ideas amount to
opportunities for new venture projects (Timmons, 1994);
attractive opportunities do not necessarily lead to the cre-
ation of spin-off firms; and such firms, ultimately, do not
all generate economic value. A note of caution must be
made with respect to the model’s suggested assumption
of linearity. The four stages are not wholly independent
of each other. Economic value depends on the quality of
firms, which depends on the quality of finalized projects,
which themselves depend on the quality of the initial
ideas. In fact, ‘the efficiency of this multi-stage process
depends on its weakest link’.
This four-stage model identifies the various changes
of status that research results have to undergo to generate
economic value; thus, ‘research results→business ideas-
→new venture projects→spin-off companies→econ-
omic value’.
The process is neither straightforward nor spon-
 F.N. Ndonzuau et al. / Technovation 22 (2002) 281–289
Fig. 2. The global process of valorisation by spin-off.
taneous. Instead, it is strewn with numerous obstacles,
difficulties, impediments, hindrances, and other sources
of resistance (hereafter called ‘issues’). In fact, a key
value of the model is that it associates with each stage
specific delineated issues that are presented in a struc-
tured and coherent framework.
4. Stage 1: generating business ideas
The purpose of the first stage is to produce business
ideas, suggestions, and proposals within the scientific
community for commercial exploitation. For most uni-
versities, doing business with their research requires rad-
ical changes in the way they have traditionally exploited
their results (Etzkowitz et al., 19981). Indeed, such com-
mercial exploitation necessarily implies that two
opposite concepts of science become closer, namely, the
‘scientific’ conception, which considers science as an
end in itself, and the ‘economic’ conception, which con-
siders it more as a means to achieve other goals (in parti-
cular making money) (McMillan et al., 2000). One of
the main problems, therefore, is how to reconcile these
two opposite conceptions (Doutriaux, 1991; Dasgupta
and David, 1994).
In this respect, the two major difficulties to overcome
by universities we visited are: (a) the academic culture;
and (b) the internal identification.
4.1. The academic culture
The majority of universities we visited consider that
the rules used for promotion in the professorship scale
are contrary to the entrepreneurial culture. This cultural
problematic reflects the sensitive issue of the ultimate
ends of university research. This issue has long been
avoided because of the strong influence of the ‘scientific’
paradigm on the academic culture (Brown, 1985; Etz-
kowitz, 1989; McMillan et al., 2000). According to that
paradigm, the sole purpose of academic research is to
increase and enhance human knowledge, regardless of
any practical application. This paradigm recognizes only
two ways of exploiting knowledge: (i) publications (i.e.
1
See particularly chapter 1 entitled “Entrepreneurial science: the
second academic revolution”, by Etzkowitz, H. and Webster, A., pp.
21–46.
283
books, articles or conferences) that contribute to the col-
lective and cumulative process of knowledge production;
and (ii) education that provides students with opport-
unities to learn the latest scientific findings and discover-
ies. According to this conception, academic research is
clearly a public good (Bok 1982, 1990; Geisler, 1993;
Callon, 1994; Etzkowitz, 1998).
This paradigm has progressively contributed to a sys-
tem of values that is deeply rooted in the academic cul-
ture and that opposes the valorisation of research through
spin-offs. Within this system of values, three features
seem particularly difficult to change: the ‘publish or per-
ish’ drive, the ambiguous relationship of researchers to
money, and the ‘disinterested’ nature of academic
research.
4.1.1. The ‘publish or perish’ drive
As is well recognized in the literature, organizations
need to fit their human resources management to their
objectives (Mintzberg, 1989). In universities, this fit is
achieved notably through a policy of appointments and
internal promotions based on an assessment of
researchers’ contributions to the progress of science.
Publishing articles in prestigious journals and inter-
national reviews is particularly recommended to increase
the likelihood of advancement. This strategy has been
popularised within the academic community in the
evocative slogan ‘publish or perish’. In the universities
we visited, researchers are really publishing-oriented
since their hope of getting a higher position at their insti-
tution or elsewhere is tied to their proficiency in pub-
lishing. So, the publication drive appears as a barrier to
creating new spin-offs.
Though understandable in a ‘scientific’ sense, these
incentives to publish research results extensively have
perverse effects from the standpoint of the economically-
oriented exploitation of those results. Indeed, as soon
as they are published, results lose a major part of their
economic attractiveness. A single publication may be
enough to remove all their originality value, since once
they are in the public domain, they cannot benefit from
legal protections such as patents, which are often decis-
ive in a valorisation policy.
4.1.2. The ambiguous relationships of researchers to
money
Most academic researchers consider money as a
means of scientific progress, in contrast to businessmen,
284 F.N. Ndonzuau et al. / Technovation 22 (2002) 281–289
who consider money as an end in itself and science only
as a means to that end (Samson and Gurdon, 1993).
These relationships to money are symptomatic of the
cultural differences between the two worlds. When a
researcher intends to launch a research project, he/she
submits an application for money to carry out his/her
research free from any other liabilities. In the business
sphere, the idea of subsidy is replaced with that of con-
tract, which implies compliance with liabilities per-
taining to the contract (concerning results, delays, and
so forth).
4.1.3. The ‘disinterested’ nature of academic research
For a long time, fundamental research has been con-
sidered a worthy activity of universities. The distance
that most researchers keep from practice induces distrust,
or even in some cases contempt, towards applied
research and those researchers who ‘prostitute science’
by pursuing goals other than the progress of knowledge.
The refusal to integrate concrete and goal-oriented appli-
cations with the process of research explains why many
academic research results are not directly suitable for
economic exploitation (Udell, 1990).
It is essential, therefore, to demystify the ivory tower
in which many researchers are entrenched. In most uni-
versities which constitute our sample, researchers’ role
incorporates an increasing mission of ‘service to
society’, which, notably, allows the economic exploi-
tation of their research results (Reitan, 1997).
4.2. The internal identification
Until recently, universities have never bothered to
detect promising ideas within their research centres and
laboratories. The establishment of a valorisation policy
requires the capacity both to identify ideas and to assess
their potential (Roberts and Malone, 1996: 20–21). The
majority of universities we visited organized themselves
so as to develop, inside the institution, the abilities and
skills required to identify and evaluate the most promis-
ing ideas, in miscellaneous and specialized fields of
research.
4.2.1. The identification of ideas
Probably one of the most important tasks is to per-
suade directors of research centres to keep their doors
open in order to allow promising ideas to be detected.
Indeed, researchers generally mistrust external agents
investigating their projects, in particular in professional
organizations such as universities, with extreme drives
for decentralization and individualization (Mintzberg,
1989). Thus, identification policy requires sensitive con-
tacts, the development of mutual trust, and the organiza-
tion of an efficient internal diffusion of information.
4.2.2. The assessment of ideas
Each idea identified is unique as far as the assessment
of its economic potential is concerned. One idea may
be at once brilliant from a technical point of view and
impracticable from a commercial one; another may be of
limited scientific interest but be commercially promising.
Whatever the ideas, their assessment requires an analysis
of their technological, commercial and personal aspects,
so as to shed light not only on their economic potential,
but also on the most suitable way to exploit them com-
mercially.
Technological evaluation requires the ability to assess
the extent to which research results are stable and/or suf-
ficiently developed to lead to industrial exploitation by
identifying their possible applications, assessing their
technical feasibility, and, in some circumstances, sug-
gesting further research and development.
This task is complicated by the broad range of
research often conducted within the university, from
information technology to pharmaceuticals and biotech-
nology, for which the range of possible applications is
usually extremely wide. This requires the development
of expertise with internal partners (i.e. professors) or
external partners (i.e. consulting firms).
However, this technological evaluation is necessary
but not sufficient to validate the potential of an idea.
Indeed, from the perspective of business exploitation, the
commercial potential must also be assessed to verify the
extent to which there might be a viable market. At this
stage, multiple questions must be addressed: What are
the different applications of a given technology? Which
are the most promising? Who are the key players in
those markets? How high are the barriers to entry? Is
the potential good enough to build up a viable company?
At this stage, the evaluation is still very approximate
because further developments might be necessary or
because the applications are so innovative that there is
as yet no definite market (McMullan and Melnyk, 1988;
Steinmueller, 1994).
While the first step of the process is to feed the flow
of business proposals, the second stage consists of
investigating in more depth the most promising ideas in
order to develop new venture projects.
5. Stage 2: finalizing new venture projects
The ideas generated by the first stage of the process
are generally ill-structured, with many grey areas that
need to be clarified. Such ideas usually consist of techni-
cal and scientific elements, while their potential to make
money is not yet precisely known. At this stage, there
is merely a feeling or a rough presumption that research
results display promising economic potential. That pre-
sumption must be validated in a business project.
The purpose of the second phase is therefore to trans-
 F.N. Ndonzuau et al. / Technovation 22 (2002) 281–289
form an ill-structured idea into a coherent and structured
venture creation project addressing two specific issues:
the protection and the development of the idea. This step
may require major investments, and clearly signifies the
first major step from the research to the business sphere.
5.1. Protection of ideas
We noted that the potential to valorise an idea depends
most of time on its level of protection. So, not amazing
is the fact that in quite almost the universities we visited
this aspect is integrated to the problematic of ideas pro-
tection. This problematic is particularly complicated by
the fact that sometimes the ownership of ideas belongs
to researchers (as in most Scandinavian universities) and
sometimes to universities (as in Belgium or USA).
Protection underscores two main problems: (i) how to
identify clearly the owners of results; and (ii) how to
protect efficiently these results from counterfeiting,
copying, and imitations.
Who is the owner of results on which an idea is
based? Answering this question is far from straightfor-
ward. Several elements are ambiguous, such as the mul-
tiplicity of funding sources, the diversity of conventions
established between funding organizations and teams of
researchers, the collaboration between different research
centres (public or private), the various status of people
carrying out research activities (professors, contractual
researchers, doctoral students, and so forth), and, finally,
the intangible character of most results. All these
elements contribute to complicating the task of protect-
ing intellectual rights. Each case is specific and generally
requires an in-depth analysis in order to determine who
is the owner of results, not to mention the criterion of
originality that the ‘publish or perish’ culture can jeop-
ardize.
As soon as the owner(s) of results are clearly ident-
ified, the next problem is the efficient protection of those
results (Rappert et al., 1999). In this respect, two differ-
ent aspects may be considered: natural protection and
artificial protection. Natural protection is based on both
the technological level of the results (the degree of
innovation) and barriers to imitation that give the results
owners a technological lead for a considerable period of
time. However, as most academic research results do not
enjoy high barriers to imitation coupled with a strong
technological lead, artificial protection, such as patents
or copyrights, is generally more appropriate (Lowe,
1993).
The management of intellectual rights can be both
technical and costly. It requires specialists who under-
stand how to formulate a patent project in order to min-
imize the possibilities of evading the protection. Indeed,
previous research shows the limited time advantage that
protection confers (Mansfield, 1998). Therefore, a cost–
benefit analysis must be conducted on the usefulness of
285
such legal protection. In that respect, a strategy must be
defined in terms of the duration and geographic coverage
of the patent.
5.2. The development of business ideas
As soon as the economic potential of an idea is recog-
nized and, possibly, legally protected, a decision must
be taken on how best to exploit it (selling, licensing or
spinning-off) (Lee and Gaertner, 1994). If the spin-off
option is chosen, the next step is to transform the idea
into a genuine entrepreneurial project. This transform-
ation involves: (i) technological development, that is, the
production of a prototype; and (ii) commercial develop-
ment, that is, the construction of a business plan. This
‘idea to project’ transformation consumes time, energy
and money.
In most cases the liaison offices are required to guide
the development of an idea to a feasible project. As a
consequence, they also manage the development of both
a prototype and a business plan. This aspect appears to
be more and more important in the universities of our
sample.
5.2.1. Technological development
The purpose of technological development is to verify
the possibilities of industrial exploitation. The expected
output is a first release of products, services, or processes
(called hereafter a prototype). This prototype can make
it possible not only to check whether production can be
extended to a larger industrial scale but also to demon-
strate to potential customers and partners what the tech-
nology can achieve.
Such technological development raises both material
and non-material issues. Material issues refer to the
availability of technical facilities (equipment, instru-
ments, machinery, and so forth) that may be necessary
to build up a prototype. Such facilities can be sophisti-
cated and very expensive to acquire.
Non-material issues refer to the time that technologi-
cal development may require. Research results may need
several months or years of additional work before they
can be exploited. During this period, one challenge is to
prevent researchers from developing a technically-pure
prototype while ignoring the constraints of time and
money. A clear schedule with precise milestones and
deadlines must be defined (Sljivic, 1993)
5.2.2. Commercial development
Whereas commercial assessment makes it possible to
determine whether an idea is a business opportunity, the
purpose of commercial development is to specify in a
business plan the ways in which this opportunity will be
actually exploited.
A good business plan plays essentially two important
roles. First, it helps to design a coherent strategy and to
286 F.N. Ndonzuau et al. / Technovation 22 (2002) 281–289
estimate more accurately key elements such as invest-
ments, turnover, operating costs, or treasury forecasts.
Second, it gives concrete form to a selling document for
bankers and investors by giving them a structured and
coherent image of the ways in which the results are
intended to be exploited.
5.3. Financing
From our investigation, financing this development
stage seems to be particularly problematic. Indeed, while
most universities usually support the different costs
related to legal protections as part of their intellectual
property policy, very few of them can cope with the
financing of both technological and commercial develop-
ment (prototypes and business plans). As well, while on
the one hand public funding is essentially dedicated to
fundamental research, on the other hand very few private
financial backers (i.e. venture capitalists) invest so early
in the process because of the unpredictability and insta-
bility of the high-technology market and the supposedly
low entrepreneurial capabilities of researchers. This
‘financing gap’ is undoubtedly the key problem to over-
come in order to finalize genuine entrepreneurial projects
(Oakey, 1995; Reitan, 1997).
Inventions from university research usually stem from
research projects supported by governments grants
which may not have anticipated the invention. Usu-
ally some further work is needed…to bring about a
prototype, requiring a year, or part of a year, of
additional work…In the meantime the inventor is left
without support (McQueen and Wallmark, 1985)
6. Stage 3: launching spin-off firms
At the end of the second stage of the process, a new
venture project should be ready. The third stage deals
with the creation of a new firm to exploit an opportunity
managed by a professional team and supported by avail-
able resources. These are the three key pillars of any
entrepreneurial success (Timmons, 1994). The issues
that have to be dealt with will progressively move away
from specific academic contingencies towards business
considerations. It is important to point out two problems
at this stage: the availability of resources; and the
relationships that should be established between the
spin-off firm and its mother university.
ASOs involved in high-tech subjects generally move
in an uncertain environment. This turmoil may deal with
access to resources. In order to help them overcoming
these problems some universities are actively concerned
in finding solutions like, for instance, raising venture
capital funds while other consider these problems as
being beyond their mission and sphere of competence.
6.1. Access to resources
All entrepreneurial projects need resources to become
concrete economic realities. This is particularly relevant
for ASOs, since most operate in high-tech sectors. Two
kinds of resources will be considered here: intangible
(human); and tangible (money and material).
6.1.1. Intangible resources
The management of high-technology firms differs gre-
atly from that of university laboratories. That is why it
must be possible to separate ASOs from the rules usually
applied in universities. In view of the competitive press-
ure to which they are generally exposed, ASOs have to
be surrounded by competent people to avoid making
mistakes. Numerous studies have shown that one of the
main reasons for failure of firms in general, and of ASOs
in particular, is not so much the poor quality of the busi-
ness opportunity as the poor quality of management
(Timmons, 1994).
Moreover, the development of a new business cannot
succeed without management expertise (know-how) and
good social networks (know-who) (Mustar, 1997). One
issue at this stage is access to outside ‘coaches’ for men-
toring the ASO management team (Radosevich, 1995:
890–891). Access to such outside expertise raises two
fundamental questions: how to identify key people (the
identification problem); and how to involve these people
in the ASO (the incentive problem).
6.1.2. Tangible resources
Besides these intangible resources, all start-up firms
also need both material and financial resources (Mian,
1997). Universities we visited increasingly provide
access to facilities such as test devices, precise measure-
ment instruments, laboratory equipment, and so forth,
which are very expensive to acquire. At this stage, it is
worth noting that the problem is access to such resources
rather than acquisition of them.
Regarding the financial resources, the challenge is not
so much to find money that to reduce the need for it.
Early on, financial resources have much more value than
later in the development. Indeed, since financial backers
view start-ups like ASOs as very risky, they tend not
only to be very conservative in their valuation of a new
venture, but also to ask for high expected returns as a
compensation of risk. The danger is of course for the
inventor (or the founder of the venture) to lose control
of his/her company as his/her share of the equity is too
diluted. This danger of dilution is likely to increase as
the business grows and injections of new capital are
needed to finance growth.
 F.N. Ndonzuau et al. / Technovation 22 (2002) 281–289
6.2. Relationships with the university of origin
Conflicting interests may arise in the relationship
between a university and its spin-offs. In that respect,
some universities have set a code of best practice in
order to prevent or avoid potential conflicts.
While all ASOs progressively cut their umbilical cord
with the academic environment, most usually retain
some relationships with their original university. Such
relationships can be established either at an institutional
level (between the university and a spin-off), or at a per-
sonal level (between the university and the researcher).
6.2.1. Institutional relationships between universities
and their spin-offs
In terms of purposes, means, and methods, universities
differ so greatly from ASOs that they could consider the
creation of ASOs as the final outcome of a process in
which they are no longer concerned.
However, in spite of their differences, the organiza-
tions generally maintain collaborative relationships with
each other (Doutriaux, 1992; Rappert et al., 1999), for
several reasons (Bray and Lee, 1998):
앫 universities can hold some ASOs’ equity shares
(financial resources);
앫 ASOs can exploit a patented technology owned by
universities (intangible resources);
앫 ASOs can have access to some university facilities
(material resources).
6.2.2. Personal relationships between universities and
their researchers
From doctoral students spending all their time con-
ducting research activities, to professors dividing their
time between research and teaching activities, the range
of researchers likely to launch a spin-off is very wide.
We could observe that the more a researcher is
entrenched and deeply anchored in his/her institution, the
more difficult it will be for him/her to leave the univer-
sity to launch an entrepreneurial project (Udell, 1990),
not only because of the comfortable environment that
he/she would be quitting, but also because of the numer-
ous organizational difficulties involved in quitting.
These various relationships, both institutional and per-
sonal, between a university and its spin-offs can generate
conflicts of interests. Thus, spin-off managers could be
tempted to subcontract a great part of their R&D activi-
ties to the laboratories they came from and incidentally
benefit from an effective research infrastructure accessed
at a lower cost than that available in the market. The
natural complicity between some researchers who have
created spin-offs and their original affiliation could lead
to situations where universities unintentionally subsidize
some of the activities of their spin-offs.
287
7. Stage 4: strengthening the creation of economic
value
Although the creation of new technology-based firms
such as ASOs constitutes a fundamental step in the pro-
cess of valorisation by spin-off, this stage is not the final
one. The perspective must be enlarged and extended to
the ultimate purpose of the process, namely, the creation
of economic value by ASOs, generating for the local
economy both tangible advantages (jobs, investment,
taxes, and so forth) and intangible advantages (economic
renewal, entrepreneurial dynamism, constitution of
centres of excellence, and so forth).
In writing this paper, our intention is not to tackle the
very complex problem of how to boost the economic
development of a region. We limit our considerations to
new technology-based firms with a high growth poten-
tial, for which two specific problems emerge from our
field research and warrant particular attention: the relo-
cation risk; and the non-exploitation of the full industrial
potential of technological projects.
7.1. The relocation risk
This problem concerns the way the local economy can
take full advantage of the economic value created by
ASOs. Most ASOs are generally active in markets with
high growth potential and international scope, so they
can quickly encounter problems regarding infrastructure,
the recruitment of skilled people, or the funding of their
development. In these respects, local authorities should
be particularly careful to prevent technological start-ups
from leaving the region, as in the case of two Belgian
spin-offs that have moved to the Netherlands.
7.2. The change of trajectories
The second problem concerns more specifically tech-
nology-based and product-oriented ASOs. Most of these
technological firms develop a two-step growth strategy
(Monsted, 1998). Indeed, because they do not generally
succeed in raising sufficient funds to implement directly
their industrial strategy, they may decide, in an effort to
reduce risks, to temporarily develop service activities
such as consulting.
These activities generate some cash that may be
necessary to finance technological development so that
the product is ready to be launched on the market. From
the point of view of the local economy, such a growth
strategy presents some risks. We observed that some
ASOs have decided to remain indefinitely at stage 1,
while giving up their initial project that had much more
promising prospects for the local economy.
288 F.N. Ndonzuau et al. / Technovation 22 (2002) 281–289
8. Conclusions
Both academic and public authorities are paying
increasing attention to the commercialisation of scien-
tific and technical knowledge produced within publicly-
funded research institutions (universities, laboratories,
research centres, and so forth). Considered as a key
element in sustaining regional economic development, it
seems imperative that policymakers better understand
the process of ASO creation from public technology
sources.
Based on inductive research, this article opens the
black box by which academic research is transformed
into economic value by the creation of new ventures. It
identifies four key stages interacting in a sequential man-
ner. In doing so, it sheds light on major issues raised
during each stage.
As a consequence, a major contribution of this article
is to pinpoint in a structured way the major issues that
policymakers and university authorities have to take into
account while developing an appropriate spin-off policy
within public-funded research institutions.
Hence, the model gives people interested in the valor-
isation of research by the creation of ASOs a general
framework on which they can rely for conceiving suit-
able institutional mechanisms for supporting and fos-
tering academic entrepreneurship. It also provides some
guidelines to organise in and around universities instru-
ments such as liaison offices, entrepreneurship centres,
venture capital funds and incubators, in an effort to spur
entrepreneurship and favour the creation of value out of
academic research.
Acknowledgements
This paper is a part of a broader project devoted to
benchmark institutional policies carried out by well-
known universities to foster and encourage the creation
of ASOs. This study was prepared with the support of
the Government of the “Communauté Française de
Belgique”, Belgium (Grant No. 598.378 D.O.45–A.B.
31.01.20.48).
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Frédéric Nlemvo received his doctorate from the University of Liège,
Belgium, in 1998, where he has been working as Teaching Assistant since
1995, and as Researcher at the SME and Entrepreneurship Research
Centre. From this year, Dr Nlemvo holds a post-doctoral position at the
University of Lausanne, Switzerland, and is also in charge of teaching
“Venture Creation” in continuous education programmes.
Fabrice Pirnay is Researcher at the SME and Entrepreneurship Research
Centre, University of Liège, Belgium. He conducts his dissertation at the
University of Lille 2 (France) in the area of academic spin-offs.
Bernard Surlemont is currently Professor of International Management
and Entrepreneurship at the University of Liège, Belgium and Professor
of Entrepreneurship at the University of Lausanne, Switzerland. He gradu-
ated from the University of Liège and gained his MBA and his PhD at
the INSEAD, Fontainebleau (France). He is the director of the SME and
Entrepreneurship Research Centre at the University of Liège.