University start-ups and the regional economy

Certain regions in the world are economically very successful. They are connected with prominent universities. Examples are the Route 128 region near Boston which is connected with MIT and the Goteborg area in Sweden which is related to Chalmers University of Technology. In this knowledge era the issue is how to best use the knowledge that is created by universities to enhance economic development. This paper focuses on the role of universities for regional development and in particular university start-ups. Based on a literature review, this paper is concerned with three questions. First, what is the economic effect of a university on the region? Second, what are differences of university startups compared to other start-ups? Third, what is the effect of university start-up companies on the region? It was found that universities have several different economic effects on a region, including direct knowledge effects such as start-ups. Technology based start-ups have a disproportionate effect on the economy. Lastly, although success stories exist about the regional impact of for example MIT and Stanford, there are two issues: what is included in their calculations, and distributions of success are highly skewed. Based on these findings suggestions for further research are provided.