Life Scientist Mobility from Academe to Industry: Does Academic Entrepreneurship Induce a Costly “Brain Drain” on the Not-for-Profit Research Sector?

When academic researchers participate in commercialization using for-profit firms there is a potentially costly trade-off – their time and effort are diverted away from academic knowledge creation. This is a form of brain drain on the not-for-profit research sector which may reduce knowledge accumulation and adversely impact long-run economic growth. In this paper, we examine the economic significance of the brain drain phenomenon using scientist-level panel data. We identify life scientists who start or join for-profit firms using information from the Small Business Innovation Research (SBIR) program and analyze the research performance of these scientists relative to a control group of randomly selected research peers. Combining our statistical results with data on the number of university spin-offs in the U.S. from 1994 to 2004 we find the academic brain drain has a nontrivial impact on knowledge creation in the not-forprofit research sector. Address: Andrew A. Toole Dirk Czarnitzki Rutgers University K.U. Leuven Dept. of Ag, Food and Resource Economics Dept. of Managerial Economics, Strategy and Innovation 55 Dudley Road Naamsestraat 69 New Brunswick, NJ 08901 3000 Leuven United States Belgium E-Mail: [email protected] [email protected] * This research was supported by a grant from the National Bureau of Economic Research, Innovation Policy and the Economy Group. All analysis and interpretation reflect the views of the authors and we are responsible for any errors.