Start-upsNumber of university-hosted start-up incubators grows

Published 18 October 2013

U.S. colleges and universities increasingly resemble business incubators, as the number of school-supported startups is rising.Of the 1,195 incubator programs in North America in 2012, about 400 – or a third — were primarily sponsored by a college or university, an increase from just 20 percent in 2006.In 2012, U.S. higher education institutions earned $2.6 billion in license income, and helped launch 705 startups.

U.S. colleges and universities increasingly resemble business incubators, as the number of school-supported startups is rising.

The University of Michigan’s student startup program, TechArb offer space, mentors, and grants for early-stage student owned companies. Calvin Schemanski began his startup, MyFab5, just before graduating from University of Michigan. MyFab5, a restaurant recommendation app which uses a “favorites” formula, is preparing for a national launch.

AFP reports that UoM’s TechArb is among hundreds of similar college- and university-hosted incubators” across America, aiming to help students launch what could be the next Facebook or Google. “There’s a real spark of entrepreneurship on campus,” said Schemanski, who graduated in 2012 with a business degree. “There are a lot of entrepreneur clubs and programs and events every couple of weeks,” he told AFP.

The incubators represent a different perspective on education, in which curriculum is put into practice with real world scenarios. “I see this as an extension of education which provides practical training,” says Vivek Wadhwa, a technology entrepreneur with affiliations at Stanford, Emory, and Duke universities. Wadhwa is vice president for innovation at Silicon Valley-based Singularity University, a program which draws upon its Silicon Valley proximity to cultivate technology and entrepreneurship. “The likelihood of another Google or Facebook is one in 10,000, but it doesn’t matter. Students gain lots of good experience. They come out much smarter,” Wadhwa said.

The National Business Incubation Association reported that a third of the 1,195 incubator programs in North America in 2012 was primarily sponsored by a college or university; a promising increase from just 20 percent in 2006. Colleges and universities consider business incubators as investments which may contribute to revenue, in addition to the educational and experiential purposes they serve. The Association of University Technology Managers reports that in 2012, higher education institutions earned $2.6 billion in license income, and helped launch 705 startups.

Stanford University is a major benefactor of many startups. The university helped launch Google, its most financially successful investment. A 2010 Stanford report said the university’s Office of Technology Licensing has contributed to 8,000 inventions and earned about $1.3 billion in royalties over forty years.

Carnegie-Mellon University has launched 300 companies and created more than 9,000 jobs in the Pittsburgh, Pennsylvania region. The university opened its Center for innovation and Entrepreneurship in fall 2012.

The University of Michigan reported that venture licensing revenues have increased from $13.8 million to $14.4 million last year on ninety-eight new companies launched within the last decade.

AFP notes that some educators fear that the increasing focus on entrepreneurship and business will ultimately diminish the essence of a liberal arts education. Dennis Basulto, a consultant on innovation, argues that excessive focus on venture capital will destroy the college experience. “The hallmark of a liberal arts education, for example, has always been the idea that college teaches you how to think and meet diverse types of people you might never again meet in your life,” he wrote on his blog. “The focus was on building life-long skills, not just learning how to write a few lines of code.”

Basulto says that “our greatest fear should be that Silicon Valley venture capitalists — and the vast technology ecosystem that they’ve established of incubators, angels and start-ups — are about to forever change the college experience.”