Like other start-up companies, university spin-offs have to go where they can make money. This means that it can be hard for them to stay in the same area as their host university. For example, in the 2015/2016 academic year 12 spin-offs were created using the University of New Mexico’s technology research, but by 2017 eight of these had left the state .
This means that the regional economic benefits that a come with academic spin-offs are also taken elsewhere. In turn, this makes it hard to generate enough venture capital and economic funding in these zones because the companies are going to places where these economic opportunities cluster . These ‘clusters’ of academic spin-offs and other associated businesses play an important role in the economic development of a city, region, or country, and the lack of clusters mean that this development might not take place .
This need to move where funding and continued research opportunities means that spin-offs have to be willing to be flexible in their location, at least until they build up an economic base. In certain cases, this isn’t a big problem, but for some scientific research labs, moving is more than just a hassle and can take from three to six months .
Therefore, the need to move is can be problematic for the company, but also affects the community surrounding the university. And if the situation is not improved in the local area, spin-offs will continue to aggregate where the conditions for growth are better.