Analysis of the Locational Behavior of University Spin-Offs in Japan

This paper examines the locational behavior of university spin-offs (USOs) established in Japan. According to the simple conventional viewpoint, it is characterized only by geographic proximity to the parent university because of the necessity to reduce the cost of collaboration. This paper emphasizes the diversity and dynamism of the locational behavior of USOs based on the results of a questionnaire survey of 151 USOs.<br>To identify and explain their locational patterns, USOs are classified into four types based on two criteria. The first criterion is the relationship between USOs and parent universities, which is classified as “strong” or “weak.” The relationship is considered strong if there is daily contact between a USO and the parent university; more specifically, direct participation of professors in commercialization of R&D results, employment of students in a university, and joint study indicate a strong relationship. In the absence of such contacts, the relationship is considered weak. The second criterion is the nature of business domains of USOs, which are classified into “product-oriented” or “service-oriented.” USOs in product-oriented domains are mainly involved in R&D, for example, life science, machinery, and materials. USOs in service-oriented domains tend to be involved in sales, marketing, and customer support, for example, IT software and education. By multiplying these two criteria, four types are derived: the strong-product (SP), strong-service (SS), weak-product (WP), and weak-service (WS) types.<br>The results of the analysis are summarized as follows. First, type SP firms value proximity to their parent universities, because they need a constant transfer of scientific knowledge or utilization of research facilities. Second, type SS firms also consciously locate near the parent university to utilize other resources like specially educated students and support offered by the university. Type SP and SS firms remain near the parent university for a long time, and thus their locations are distributed nationwide including peripheral regions. However, dynamism of the locational behavior is found among them. Some establish branch offices as sales centers in metropolitan areas. Others locate their headquarters in metropolitan areas and set up branch offices as R&D centers near the parent university. Through this spatial division of labor, they have easy access to the market while maintaining proximity to the university. Third, type WP firms have two patterns. One is firms managed by retired professors without collaboration with the university. Although they also locate near the parent university, it is not intentional. Because they do not value access to the market, their locations remain in peripheral regions. The other pattern is firms that have no connection with the university at the time of establishment, but develop ties thereafter through R&D activities, for example, licensing from the university. They do not consider continuing collaboration with the university and locate in metropolitan areas. Fourth, WS firms value access to their customers, instead of the geographical distance to the university. They easily change location and most are concentrated in metropolitan areas where many customers exist.