Who Develops a University Invention? The Impact of Tacit Knowledge and Licensing Policies

In this paper, I propose a theoretical model to illustrate how the inventor know-how affects whether the inventor starts a firm to develop her idea or licenses an invention to an established firm for development. Inventor start-ups are characterized as development organizations that serve a temporary role in the invention–innovation process, developing an invention until they can sell the developed invention to an established firm that owns requisite complementary assets for commercialization. This model is then used to analyze the role and impact of a university technology transfer office (TTO) on this process to understand how TTO’s may both positively and negatively impact the transaction. The model posits a general theory of inventor–entrepreneur behavior in university and corporate research labs based on two factors: the importance of know-how and the distribution of inventors’ personal costs to transfer that know-how.