Entrepreneurial activity and innovation has been rapidly accelerating across the University of California in recent years, spurring a significant number of jobs, companies and economic activity for the state economy, according to a study released Aug. 17 by the Bay Area Council Economic Institute.
The study, which analyzed startup formation at each campus and across the UC system, found that university research has formed the basis for hundreds of new companies, employing tens of thousands of workers and adding $20 billion to the California economy.
While UC’s role in seeding economic activity extends back many decades, the report found that the pace and number of new companies started by UC graduates and faculty has accelerated over the past 15 years.
– Of the roughly 1,300 start-ups that have come out of UC since 1968, three-quarters were launched between 2000-2015.
– UC-affiliated companies directly employ 38,056 workers and indirectly support 108,460 other jobs across a wide range of industries and incomes, from suppliers to restaurants.
– Those same companies generate total economic activity totaling $20.1 billion and contribute $503.8 million in federal tax revenue and another $88 million in state and local tax revenue.
– UC-affiliated start-ups also have been an important magnet for investment, attracting more than $16 billion in private venture funding since 1968 and hundreds of millions of dollars more in public grants.
The growth of economic activity spinning out of UC reflects a new level of entrepreneurial energy among students and faculty that is driving a broader cultural shift within the system, said Dr. Sean Randolph, lead report author and Senior Director of the Bay Area Council Economic Institute.
Traditional areas like academics and research remain a primary focus, but increasingly students and faculty are looking to apply that work and their knowledge in ways that solve real-world problems and translate directly into economic opportunity.
“The University of California and its 10 campuses are a dynamic and valuable force for the state’s economy,” Randolph said. “UC’s strategic work in harnessing the power of its emerging entrepreneurial culture is providing enormous benefits for the state economy and for the economies of the diverse regions where UC campuses are located.”
Those benefits come in the form of new companies, new jobs, new investment and new revenue for the state, the university and cities.
The report offers a conservative snapshot of what UC-affiliated start-ups and other entrepreneurial activities contribute to California’s economy. Of the total start-ups formed since 1968, the report analyzed the 603 that are headquartered in California and remain active today and the 447 of those for which public data is available.
The report also looked at the ways in which entrepreneurial activity is supported and promoted at both a system-wide level – through the University of California Office of the President – and through robust campus-based programs and initiatives.
One example cited by the report is the Innovation and Entrepreneur Initiative launched by current UC President Janet Napolitano in 2013 that aims to give scale and structure to the fast-emerging start-up culture.