Toward measuring the social and economic value of university innovation: A survey of the literature

Abstract

Colleges and universities play a vital role in the creation and dissemination of the innovations that feed the knowledge economy. First, universities carryout a significant portion of the basic research that is conducted in the United States. In 2006, the National Science Foundation reported having awarded $30 B in research-based funding to colleges and universities (National Science Foundation, 2007). While this figure is not an indicator of innovation output, the number helps to demonstrate the scope of research activity that is occurring within the academy. Mansfield (1995) noted that government funding for university research is bent toward science that holds commercial potential and highlighted that such research is likely to produce a high amount of social benefits. Mansfield also concluded that measuring the social returns of university-born (and federally funded) innovations though difficult, is important. Second, universities are instrumental in the production of economically relevant human capital, including students trained in key science and technology disciplines (Leslie & Brinkman, 1988). Audretsch (2007) indicates a highly educated workforce that is capable of creating and moving innovative technologies into the marketplace is a critical component of the current entrepreneurial economy. Also, faculty who intersect industry through consulting and other commercial-related activities make valuable contributions to the economic growth and prosperity of communities, regions, and beyond. In short, colleges and universities are key contributors to the production and function of the innovations that largely drive the knowledge economy.