The study uses new Bureau of Census data to show that university R&D expenditures directly increase the growth of new firms close to the university. The firm formation happens at urban research universities as well as at rural research universities, according to the study, funded by the U.S. Small Business Administration, the Ewing Marion Kauffman Foundation and the National Commission on Entrepreneurship.
“The results of the study,” Kirchoff says, “lends strength to the argument that government and private sector R&D expenditures made through research universities contribute to economic growth. This suggests that future economic development efforts should focus greater emphasis on establishing and expanding research universities.”
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Although this argument has traditionally been made with the expectation of long term lags in the R&D to growth relationship, Kirchoff’s research shows that this lag is relatively small – as little as one year and the effect seems to decrease slowly, but steadily, after the first year but lasts for at least five years. This debunks a commonly held notion that university research does not quickly create new companies, new jobs and economic growth.
University R&D spending is also associated with localities with higher levels of human capital, which also contributes substantially toward generating new firms. Thus, investments in R&D at these universities are major factors contributing to economic growth in the labor market areas where the universities are located.
Before this study, researchers often lacked the empirical data to link university R&D and economic growth. Kirchoff called upon a Census Bureau database to study regions, and universities, all across the country, including the University of Iowa at Iowa City, the University of Alabama at Tuscalossa and the University of Missiouri at Rolla.
NJIT is a public, scientific and technological research university enrolling
more than 8,800 students. The university offers bachelor's, master's and doctoral degrees to students
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College and College of Computing Sciences. The division of continuing professional education offers
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architecture and building science, applied mathematics, biomedical engineering, environmental
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Life magazine cites NJIT as a "perennially most wired" university.