Different Missions for Different FolksThe Institutional Logics of Academia and their Impact

on Knowledge Commercialization

Riccardo Fini, University of BolzanoNicola Lacetera, Case western reserve University

What do human insulin, the transistor, and the human genome project have in common?

• Outcomes of “parallel” research efforts– Transistor: Bell Labs, Purdue Univ. (late 1940s)– Human Insulin: Genentech, Harvard, UCSF (late 1970s)– Human Genome: Celera, NIH (late 1990s)

• Different approaches• “Quicker and dirtier” approaches by firms• “Final” discovery (esp. Transistor and Insulin) by firms

(Shockley 1956, Nelson 1962, Braun and Macdonald 1978, Hoddeson 1980, Bray (1982, 1997) Stern (1995), and McKelvey (1996))

What do the Novartis-Berkeley, Amgen-MIT, and DuPont-MIT research alliances have in common?

• Among biggest industry-university research collaborations ($30M-$50M)

• Decision power largely transferred to academic partner

• Hard to sustain following environmental or strategic changes

(Press and Washburn 2000, Lawler 2003)

…and What is different from internal R&D at 3M?

• Quintessential “research friendly” company– Experimentation, bootlegging…

• Commitment issues…‘Previously innovation was driven by management asking researchers: what rabbit can

you pull out of the hat to meet our targets? [...] there were hundreds of initiatives -- you could do anything. But as development became more expensive and riskier, we needed the focus and discipline of the new structure and processes’ (a 3M VP in 1993)

‘Previously a scientist could work on a project for years [...]. Today we try to do a lot more sorting out early’. (Chuck Reich, VP of the Dental Product division).

(Bartlett and Mohammed (1995))

Not so friendly after all…and not necessarily bad!

What do research on autism, hormone therapy, and organic transistors have in common?

• Major impact on business and society in general

• Major academic and social prestige to the authors

• Cooked up!– Fabricated and falsified data!

(Freeland Judson 2004, Ossicini 2007, Chang 2004, ORI2005, CBS 2005, Kintisch 2006, Pollak 1997; Kamin 1974, Hearnshaw 1979, Joynson 1989)

What do corporate scientists and Red Cross workers have in common?

• Accept lower wages in exchange of work conditions consistent with their “intrinsic” motivations (Handy and Katz 1998, Stern 2004)

• Allowing scientists to publish their research might be a very cheap choice for firms!

Why am I asking all these questions?

• Knowledge as key asset for individuals, firms, countries• Scientific research as major vehicle of knowledge creation• Great deal of scientific research produced in Academia

• Norms of the scientific community, individual incentives, identities are different than in the business world (Merton 1973, Dasgupta and David 1994, Sauermann and Cohen 2008, Fini 2009)– A peculiar institutional logic (Alford and Friedman 1985, Thornton and Ocasio

2008)– Matching + institutional influences on individuals (Fini 2009)

• How do the different institutional logics in the scientific community affect the production, transfer and commercialization of research from academia to business?

Academic incentives and the commercialization of research

Lacetera (2009 -- MDE)

• The opportunity cost of commercializing research is higher for academics than for non-academics– Academic may be more reluctant or slower in commercializing

• Transistors, Human Insulin…– Empirical findings of a positive relationship between academics’ involvement and performance

might be driven by selection– Viability of academic entrepreneurship, missed opportunities (Doutriaux 1987, Stern 1995,

Audretsch 2000)

• If additional research is needed for more effective commercialization, and this research has lower recognition in academia, academics might commercialize earlier than non-academics– Early commercialization (Jensen-Thursby 2001, Lowe 2002)– “Nerd Mafia” at Gatech (Feaster 2010)

• Economic incentives on top of academic rules? Multiple changes? Hybrids (David 2005)? • ‘Pure’ academic incentives on top of commercial incentives?

Behavioral patterns in research commercialization

Fini (2010)

• Acquisition of specific abilities and skills consistent with their tasks and mission of their alma mater (Ronstald, 1990)

• Keep “public service motivation” (Perry, 1996); • Interaction with environment influences by academic affiliation

– E.G. different perceptions of market dynamism and entrepreneurial opportunities (Moynihan & Pandey, 2007)

Academic incentives and Industry-University R&D collaborations

Lacetera (2009 – OrgSci)

• Contract Research: delegation of formal authority (GHM, Aghion-Tirole 1997; Kenney 1986, Lerner and Merges 1998, Guedj 2004, my research in progress). In partic.: termination rights

An academic independent contractor continues projects that a firm would stop, if project results consistent with academic mission

Outsourcing a project to an academic partner allows a firm to commit not to alter the course of a scientifically valuable project. Commitment is potentially valuable for the firm if scientific and economic value do not coincide, and scientific workers respond to the incentives by their community of peers. (see also Aghion et al., 2008)

Academic freedom and control can be beneficial to a firm (Dupont-MIT), and may not be replicable within the firm (3M), but may be hard to sustain (Amgen-MIT, Novartis-Berkeley)

Academic incentives and Scientific Frauds

Lacetera-Zirulia (2011 – JLEO)

• Incentive to cheat? Incentive to check?– Account for “strategic” behavior of actors involved in publication process– Account for evaluators being peers and, potentially, competitors or

complementors

(Undetected) fraud in equilibrium Detected fraud may not be representative of actual fraud Policies deemed to detected more / reduce fraud may backfire

– Ease checking costs/replication, soften competition, add layers of control (journal editors)

Academic incentives and monetary rewards

Lacetera-Zirulia (2010)

• Are researchers with a strong taste for science cheaper?– Incentive pay for company scientists is increasing in a scientist’s non-

monetary benefit from basic research. Monetary and non-monetary rewards are complementary

– With high taste for science, research is less costly, and so is providing high powered incentives for research

Summary

• Different institutional logics between academic and industrial environments in the performance of research activities– Different missions, rules and incentive systems

• In particular: academic + commercial incentives

– Why do we need universities to be involved in knowledge transfer and commercialization?

– What are the effects of these differences?

• Understanding (modeling) different institutional logics to understand academic entrepreneurship, industry-university research collaborations, how to rewards scientists, and the limits of “scientific “truth”