Entrepreneurial universities and the third mission paradigm shift from economic performance to impact entrepreneurship: Germany's EXIST program and ESG orientation

The proliferation and intensity of modern grand challenges, and the current broad public awareness of them, has resulted in a demand for entrepreneurship with an eye toward environmental, social and governance (ESG) matters, not just profits and economic gain. When it comes to economic applications, this realigned focus on impact-oriented entrepreneurship has significantly altered the way in which entrepreneurial universities address their third mission of service to society. The overall paradigm shift toward an ESG orientation drives these entrepreneurial universities to structure their efforts in technology transfer and creating academic spinoffs to produce startups which heavily employ impact entrepreneurship and ESG principles. This paper finds that governments can assist with this transition by creating funding programs, or updating existing funding programs, which favor the selection of impact entrepreneurship focused spinoffs that make use of ideas and knowledge from the university sphere. The EXIST program from the German government serves as a prime example of just such a financial mechanism that has evolved across multiple decades to more heavily incentivize academic spinoffs that place ESG at the core of what they do, in addition to the original goals of producing economic and technological development and increasing local, regional and national competitiveness. These findings bear implications for government and university leaders in regard to technology transfer policy and academic spinoffs at entrepreneurial universities.