Â鶹ÒùÔº

Over the past century, American universities have evolved to be more than institutions for research and learning—they've become engines of innovation fueling economic and societal progress.

Chuck Eesley, a leading scholar in entrepreneurship at Stanford, has spent over 20 years examining what's driven this transformation. His research explores forces that support innovation, such as government policy and investment, as well as the barriers scholars and students face in bringing ideas from the lab to market.

Eesley has also paid close attention to how entrepreneurship education shapes new venture creation, exploring the many ways universities can help students become successful entrepreneurs after graduation.

In a study in Management and Organization Review, he found that providing students with the autonomy and flexibility to take elective courses influences who becomes an entrepreneur, fosters new opportunities, and cultivates an entrepreneurial mindset.

A 2020 study by Eesley showed that mentorship matters as well—students guided by seasoned entrepreneurs make more savvy business decisions and launch companies that last longer.

These are among the many insights Eesley has unearthed throughout his career, illuminating the many factors that contribute to commercial success.

Bridging academia to industry

Eesley joined Stanford in 2009 and recently became a faculty co-director of the Stanford Technology Ventures Program (STVP) in the School of Engineering, which provides resources and programs for students, faculty, and researchers to develop entrepreneurial skills and knowledge. Notable alumni have gone through STVP: One of Eesley's first students was Bobby Murphy, co-founder of the social media platform Snapchat. Kevin Systrom and Mike Krieger, founders of the photo-sharing network Instagram, were fellows in STVP's Mayfield Fellows Program.

Eesley's interest in the relationship between academia and entrepreneurship began as an undergraduate at Duke University in the early 2000s, when he helped launch a biotech startup with a biology professor to commercialize a drought- and pest-resistant corn variety.

Eesley was excited by its potential to address problems in the food systems, particularly in regions experiencing food scarcity. The startup sent seeds to drought-stricken regions of Africa through the United Nations and attracted investor interest, but the team ultimately split over the path forward.

"That was when I saw that it was a difficult process to commercialize these technologies," Eesley recalled. "In our case, we didn't fail because the technology didn't work. We failed because I didn't really know what I was doing as an entrepreneur."

At the time, there were few opportunities for undergraduate students to learn entrepreneurial skills—the only programs were at business schools. When STVP launched in 1997, it was among the first programs to offer entrepreneurship education to students across disciplines and degree levels.

Eesley has since devoted his career to figuring out how to help both scholars and students succeed commercially.

What makes startups successful?

What makes startups that emerge from Stanford and other schools successful? According to Eesley, it's not just the technology.

While a novel software or product is essential, an entire ecosystem is critical to ensuring its success on the market, he explained.

"It also takes a high-quality co-founding team involving academic expertise, industry experience, a supportive venture capital community, and knowledgeable accountants and lawyers who can structure deals," he added.

A strong alumni network also helps by providing graduates with opportunities to meet potential investors, collaborators, and mentors. Programs that provide students with social capital can turn into financial capital, too. In , Eesley found that alumni connections often provided early-stage funding and co-founders, illustrating that the relationships formed in these programs can be as valuable as technical training.

"It's the sum of all of these things—the package together is more helpful than any individual element," Eesley said.

As Eesley also pointed out, findings like this also illuminate inequities, favoring students with greater resources or existing networks. One area he is currently examining is what types of programs are effective, and crucially, for whom.

This new research builds off some of his earlier work. In the aforementioned 2020 study, he conducted a comprehensive study of Stanford's two major programs—STVP and the Center for Entrepreneurial Studies at the Graduate School of Business (GSB)—and found that while these programs didn't lead to an increase in new ventures, they did make them less likely to fail. Courses helped students assess their entrepreneurial potential while improving the quality of starting and managing new ventures.

Just as importantly, entrepreneurial education also helped students figure out whether launching a startup is right for them. Learning early that they're better suited to join a company than to found one can help avoid failed ventures.

Role of government support in innovation

Eesley Stanford's own unique position in Silicon Valley, a place that has become known around the world as the epicenter of technological innovation. Pivotal to that growth has been government investment in Stanford-affiliated research, a long-standing relationship that was accelerated after World War II.

The transformation of Silicon Valley into a hub of innovation has been credited in part , who, as dean of the School of Engineering and later as Stanford's provost, sought ways to bridge university research to industry applications. After WWII, he directed Department of Defense contracts toward research on technologies such as microwave systems and MRI machines, which were initially developed for the military and later widely used by the public.

Terman encouraged Stanford students to scale up their discoveries. "After World War II, Frederick Terman encouraged students like William Hewlett and David Packard to commercialize their technologies," Eesley said.

Today, the current market value of the top 30 companies founded by Stanford alumni is estimated to be over $11 trillion.

Over the decades, other cities and countries have tried to replicate what Silicon Valley has accomplished, efforts Eesley has also studied.

Eesley has examined how government support—through policy and funding—also influences the entrepreneurial ecosystem. One key finding: sustained government investment in research and education is crucial to building high-tech startup ecosystems.

One example is , a program implemented in the late 1990s to boost the country's economy through science and education.

The government provided funding to 39 universities, enabling them to invest in cutting-edge equipment, recruit top faculty, and expand exposure to international ideas and innovations.

Eesley and his co-authors found that graduates of Project 985 universities were more likely to support innovation and go on to found more high-tech ventures of their own than their peers from other universities.

Another factor that Eesley found influences entrepreneurial growth: trust in government.

In conducted before and after the impeachment of South Korea's President Park Geun-hye, Eesley found that trust in government institutions increased following the scandal, as did the entrepreneurial ambitions of engineering graduates.

As Eesley explained, launching a startup requires a long-term commitment—typically eight to 10 years from founding to exit—and entrepreneurs need to believe that their institutions are stable and their contracts will be upheld. In South Korea, entrepreneurs saw the rule of law enforced and judicial oversight effective. When trust in government is low, Eesley found engineering graduates tend to choose safer career paths with established companies.

Importance of continued investment

Eesley believes continued government investment in institutional research is crucial to future innovation.

For one, it addresses market failure. Left alone, private companies rarely invest in basic, also called foundational, research, as it is unclear if or how an industry might benefit or whether it will have commercial value at all. "This creates an economic rationale for the government to fund this early-stage R&D that private industry typically underinvests in," said Eesley.

Far from competing with industry, public funding lays the groundwork for later commercial breakthroughs.

Federal support also helps generate patents and spinoffs, which can then attract private investment. The Bayh-Dole Act allows universities, small businesses, and non-profit organizations to own and commercialize inventions created with federal funding.

"And we do it because we're intellectually curious," Eesley said. "Because we can train the next generation of students who can then take these technologies out into the world."