While the detailed mechanisms of the interplay of knowledge creation and economic growth have been discussed in great detail by endogenous growth theory, this paper is interested in assessing the role that universities play in the knowledge based economy. It does so at the example of best practice scenarios, as currently being undertaken by the University of Oxford, U.C. Berkeley, the M.I.T. and Chalmers School of Technology. It argues that key to successful research commercialization is the leverage of clusters and networks that assure knowledge flows between universities and business. We call this the ‘Third Way’ of university research commercialization, which focuses on systemic change, rather than on single stakeholder intervention. It reflects a novel generation of knowledge policies that focuses on training, awareness raising and the leverage of cluster effects, rather than the development of physical infrastructure (i.e. science parks). This is a unique approach that outperforms existing best practice in many ways; i.e. it focuses on the leverage of networks among the various academic institutions, rather than repeating the traditional ‘one university – one technology transfer office’ approach. The ‘Third Way’ also outperforms existing best practices by adopting latest trends in intellectual property management , such as online trading, perceiving intellectual property as a financial asset and leveraging open innovation for improving patent quality. Organizational values, structures & procedures of various actors (business, academia, government) are recognized and different institutional cultures are sought to be overcome through boundary spanning. The competing demands and interests of business and academia are reflected through the introduction of ‘social responsible university research commercialization’, as currently undertaken by U.C. Berkeley.
