NJIT Business Professor Finds That University-Based Research & Development Quickly Spurs the Growth of New Firms

NEWARK, October 8-- A new study by Bruce Kirchhoff, Ph.D., distinguished professor of entrepreneurship and director of the technological entrepreneurship program at New Jersey Institute of Technology (NJIT), finds that university research and development (R&D) spurs the growth of new firms more quickly, and more pervasively, than conventionally thought.

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.”

Editor’s Note: To talk to or to interview Kirchoff, please call the Office of Public Relations at (973) 596-5203. And for a full copy of the report, click here.

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 in 80 degree programs throughout its six colleges: Newark College of Engineering, New Jersey School of Architecture, College of Science and Liberal Arts, School of Management, Albert Dorman Honors College and College of Computing Sciences. The division of continuing professional education offers adults eLearning, off campus degrees and short courses. Expertise and research initiatives include architecture and building science, applied mathematics, biomedical engineering, environmental engineering and science, information technology, manufacturing, materials, microelectronics, multimedia, telecommunications, transportation and solar astrophysics. Yahoo! Internet Life magazine cites NJIT as a "perennially most wired" university.

Contact Information:   Robert Florida
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(973) 596-5203