What is the Difference Between Spinoff, Spinout, and Spillover?

A technology spinout, also known as a spinoff, is a process by which technology, intellectual property, or research and development (R&D) results that have been developed within an existing organization, such as a university, research institute, or a larger corporation, are commercialized. While spinouts often involve the creation of a new company to commercialize the technology, it is not always necessary. In some cases, the technology can be licensed to an existing company, which then focuses on turning the technology into a marketable product or service.

A spillover, on the other hand, refers to the indirect effects of an action, investment, or event on parties that were not initially intended to benefit from it. Spillovers can be positive or negative. Positive spillovers (also called externalities) occur when an action generates benefits for parties not directly involved, while negative spillovers result in unintended costs or harm to third parties.

The main difference between a technology spinout and a spillover lies in the intended outcome and the parties involved:

  • Intended outcome: A technology spinout is a deliberate effort to commercialize a specific technology or innovation. The goal is to turn the technology into a viable product or service, generating revenue and creating value for the parties involved in the commercialization process. In contrast, spillovers are indirect effects that may not have been anticipated or planned, resulting from actions or investments that were initially focused on a different purpose.
  • Parties involved: A technology spinout typically involves the direct transfer of technology, IP rights, and sometimes personnel from the parent organization to a new or existing company. The companies involved in the commercialization process and their investors are the primary beneficiaries. In the case of a spillover, the benefits or effects are experienced by third parties who were not directly involved in the original action or investment. Spillovers can affect a wide range of stakeholders, including other industries, the public, or the environment.

A technology spinout is a deliberate effort to commercialize a specific technology either by creating a new company or licensing the technology to an existing company, while a spillover is an indirect effect, either positive or negative, that arises from an action or investment and impacts parties not initially intended to benefit.

An example of a successful technology spinout program is NASA's Technology Transfer Program, which licenses the agency's technologies to existing companies, startups, and for commercial application. This program has resulted in numerous spinouts that have generated economic value, created jobs, and contributed to advancements in various industries, including healthcare, transportation, and environmental monitoring.