Download - Industry Science Links
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Industry Science Links
Prof. Dr. Reinhilde VeugelersKULeuven
Bruegel & CEPR
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Industry Science Links: growing emphasis
New technologies are science-based: Bio-tech, ICT, New Materials
Firms increasingly combine internal R&D capacity with external sourcing: open innovation
Research Institutes/Universities are increasingly looking for alternative funding
Policy favoring ISL
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Diversity of Industry Science Links
Collaborative research, i.e. defining and conducting R&D projects jointly by enterprises and science institutions;
Contract research and know-how based consulting ;
Development of Intellectual Property Rights (IPRs) by science (patent portfolios, the protection of design typologies, the establishment of frameworks for Material Transfer Agreements (MTAs), the protection of databases, the property rights on tissue banks, etc.);
Start-up of technology-oriented enterprises by researchers from the science-base generated at the research institute;
Systematic exchange of research staff between companies and research institutes, (post)graduate student and research mobility.
Informal contacts, personal contacts…
…
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Multiple mechanisms for industry science links
Source: Cosh et al (2006)
% of firms reporting pathway as important for innovation
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Motives Motives for Industry
Access to know-how & infrastructure
Recruitment of R&D personnel
Access to networks Reducing costs for
inhouse R&D
Motives for Science Source for funding Better labour market for
graduates New impulses for
research and education
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Barriers Barriers for industry
Lack of absorptive capacity (qualified own R&D capacity)
Not-invented-here syndrome
Fear of loosing confidential knowledge
Unclear IPR
Barriers for Science Capacity constraints
from other activities (teaching, basic research, administration..)
Lack of incentives (research, teaching based evaluations)
Bureaucratic regulations and cival servants law
“Freedom of research”Divergent cultures, incompatible objective
Appropriation, SR exclusive returns vs free dissemination, LR societal impact
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Some survey evidence on barriers
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Industry Science Links: a policy concern and a
topic for research
Despite growth in (attention for) ISL, nevertheless discours on inadequate scale (esp in the EU, cf European Paradox)
Lack of demand from Industry Side Lack of supply from Science Side Inefficient/insufficient intermediaries ..
In need of more research, but first…
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Industry Science Links
How to measure them?
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Industry Science Link Indicators
ISL data available at EU level EUROSTAT CIS survey (sources
of information, collaboration OECD, R&D (private funding of
research at public research institutes
Patent and citation data (PatStat, NBER…)
Publication and citation data (WoS, Scopus)
Other (non-) recurrent surveys (Proton, ASTP, MORE…
LEED: Linked Employer-Employee data
...
Measures for ISL
R&D contracting/cooperation between Public Research & Industry
Public Research based spin-offs Public Research based patents Co-patenting between Public
Research & Industry Co-publishing between Public
Research & Industry Citations (prior art)
corporate patents to academic patents, corporate patents to academic literature, academic literature to patents..
Researcher mobility… Inventor mobility Author-Inventor mobility LEED
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11
A diversity of science links being used
Figure 1: Linkages to Science by Flemish Firms (CIS 3)
Firms with scientific NPR7 (2 involved in scientific publication)
Use of public sources of information74
Cooperation with public institutions60 (2 involved in scientific publication)
40
Firms without linkage to science 649 (1 involved in scientific publication)
2
5 (4 involved in science)
5(1 involved science)
Source: Cassiman et al (2006)
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Industry Science Links
A firm’s perspective:Do they matter?
What do we know from analysis from their effects?
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Research Questions
Explaining: skew in ISL active firms,
heterogeneity in modes, heterogeneity in
performance effects from ISL
Which firms choose ISL ? Which modes?
What are the effect of ISL on (innovative)
performance of these firms?
What are the effects of ISL on social (innovative)
performance?
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WHY WOULD SCIENCE MATTER FOR INNOVATION
at the firm level?– By providing a map for research and codified forms of problem
solving science helps firms• Increase the productivity of applied research (Nelson;
1959; Evenson and Kislev, 1976)• Avoid wasteful experimentation when working with highly
coupled (complex) technologies (Fleming and Sorenson (2004)
• Better identification, absorption and integration of external knowledge, e.g. what is cutting edge; identifing most promising technological opportunities (Cohen and Levinthal, 1989; Gambardella, 1995; Henderson and Cockburn, 1998).
• Internal Spillovers; cross-projects fertilization of basic knowledge (Cockburn and Henderson, 1994)
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Mansfield (1998): 15% of new products, 11% of new processes representing about 5% of total sales in a sample of major firms in US could not have been developed in the absence of academic research.
But: a skewed phenomenon
E.g. In Eurostat Community Innovation Surveys most firms (68%) indicate universities as not important sources of information at all.
But those firms with basic science links have a better applied innovation performance on average (but heterogeneity)
Do INDUSTRY SCIENCE LINKS matter for FIRM INNOVATION PERFORMANCE?
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As Science and technology use different selection logics and are developed in
different communities (Gittelman and Kogut, 2003): the need to cross
organisational boundaries
at organisational level: boundary crossing firms
at inventor level: boundary crossing inventors
complementarity between organisational and inventor level
Firms capturing value from science requires:
Own internal basic research capacity for
Boundary spanning and search
Collaborative ties with universities
Absorptive capacity
How to build internal basic research capacity? Recruiting scientists, own
scientific activities, …
Do INDUSTRY SCIENCE LINKS matter for FIRM INNOVATION PERFORMANCE?
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Co-authorship with university employees increases R&D productivity by pharmaceutical
firms (Henderson and Cockburn,1998).
Recruitment of university scientists increases research productivity (Kim et al., 2005)
Firm patents with academic inventors on the team have higher value (cited) (Czarnitzki
et al (2010))
…
Evidence onFIRMS CAPTURING VALUE FROM ISL REQUIRES
ABSORPTIVE CAPACITY, ORGANISATIONAL PRACTICES
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Firms with scientific publications have a higher applied research productivity (Setting: All Belgian patent-active firms, all sectors) (Cassiman, Veugelers & Zuniga (2008)) Firm Scientific Orientation measured by the stock of scientific (co-)publications of the firm
Firms that combine a boundary crossing institutional link with boundary crossing inventors have higher valued applied patents and can build cumulative knowledge advantage (Setting: micro-electronics; link to IMEC) (Cassiman, Veugelers, Arts (2012)). Firm boundary crossing institutional link is measured through partnership in cooperative
programs Boundary crossing inventors: inventor mobility on patents
FIRMS CAPTURING VALUE FROM ISL REQUIRES ABSORPTIVE CAPACITY,
ORGANISATIONAL PRACTICES
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Industry Science Links
The perspective of Science
Despite the surge in Industry Science Links, there are significant barriers to commercialization of
basic researchGovernance Structure and Incentive Schemes
affect both the production of new technology and its transfer.
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QUESTIONS
How universities can play a more active role in promoting technical advance?
What drives academic research and technology transfer activities (licensing, spin-offs..)?
What is the role of economic incentives in shaping university research and technology transfer?
Which is the role of organisational structure, i.c. a specialized, decentralized Technology Transfer Office (TTO)?
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Parties involved Researchers University TTO Firms (Venture) Financers
Each with different information and different objectives:
moral hazard & adverse selection issues
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Moral hazard and adverse selection in technology transfer
(Adverse) selection at the hiring stage Moral hazard at the research stage Moral hazard at the disclosure stage Moral hazard at the licensing -
commercializing stage (Adverse) selection at the licensing-
commercializing stage
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Researcher Selection: Taste For Science (TFS) and/or Commercialisation (TFC) TFS and TFC are separate dimensions;
researchers can combine: hybrid scientists; Location in taste-space matters for:
What scientists do: Jobs (academia-industry), activities (pure research, applied research, development, commercialisation, spin-offs..
How effective they are in what they do: scientific and patent performance; scope for complementarity from combining activities;
Sauermann & Rauch (WP Georgia Tech, US), 2011
Sauermann
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Intentions to patent: significantly higher for commercial types; even higher for hybrid types;
Intentions to start spin-offs: significantly higher for commerical types; even higher for hybrid types;
Sauermann & Rauch (WP Georgia Tech, US), 2011
Taste for Science and/or Taste for Commercialisation
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Moral hazard: Incentives Basic principal – agent theory calls for the
use of payment schemes (to researchers and the labs) based on success in research: royalties and equity.
Macho-Stadler, Martínez-Giralt & Pérez-Castrillo (1996, RP): Transmission of non-verifiable technology is often done via royalties.
Know-how is non-contractible and royalties provide incentives to transfer it.
Jensen & Thursby (2001, AER): University transfers innovations in embryonic stage that need the inventor cooperation at the
development stage. Royalties and equity provide incentives to solve this MH problem.
Jensen, Thursby & Thursby (2003): Royalties provide incentives to disclose. Higher quality faculty disclose a higher fraction of inventions
at the proof of concept stage
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Incentives : returns tied to success
Macho-Stadler, Martínez-Giralt & Pérez-Castrillo (1996, RP): Transmission of non-verifiable technology is often done via royalties. Know-how is non-contractible and royalties provide incentives to transfer it.
Jensen & Thursby (2001, AER): University transfers innovations in embryonic stage that need the inventor cooperation at the development stage. Royalties and equity provide incentives to solve this MH problem.
Jensen, Thursby & Thursby (2003): Royalties provide incentives to disclose. Higher quality faculty disclose a higher fraction of inventions at the proof of concept stage
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Informational asymmetries between university and firms
• Quality of the innovation.• Profitability of the innovation.Royalties and equity are useful to:
Signal (by the university) good innovations. Separate bad applications of the technology
from good ones. Gallini & Wright (1990, Rand), Macho-Stadler & Pérez-Castrillo
(1991, AES), Begg (1992, IJIO),
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The Role of TTOsUniversities with high record in ISLs have a decentralized
model of technology transfer (i.c. TTO) Bercovitz et al (2001)
Advantages of TTOs Specialization in supporting services, esp. Reducing transaction costs (screening of projects). Search for potential buyers/financers.
Disadvantages of TTOs Costs of setting up/running TTO Principal-agent problem between TTO and university Principal agent problems between TTO and researchers
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Results from our research
Macho Stadler, I. D. Perez-Castrillo and R. Veugelers, 2007, Licensing of University Innovations: The Role of a Technology Transfer Office, International Journal of
Industrial Organisation,
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A rationale for a TTO (IJIO 2007)
Using a framework where firms have incomplete information on the quality of inventions, we develop a
reputation argument for the TTO to reduce the asymmetric information problem.
The TTO being able to pool innovations across research labs, will have an incentive to “shelve” some of the projects, thus raising the buyer’s beliefs on expected quality, which results in less but more valuable innovations being sold at higher prices.
When the stream of innovations is too small, the TTO will not have enough incentives to maintain a reputation.
Individual research labs will only have a similar incentive to build reputation if they are sufficiently large.
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Empirical evidence on performance of TTOs in US universities (both quantitative & qualitative evidence)
TTOs Present constant returns to scale wrt licensing activities, but
increasing returns to scale wrt licening revenue. Productivity depends on organizational practices.
Most critical organizational factors Faculty reward systems. TTOs staffing Compensation practices: monetary and non-monetary rewards for
researchers & TTOstaff Royalty distribution formula’s work through illicitating efforts plus
selection of skills Boundary spanning role to overcome cultural barriers between
Universities and Firms.Siegel, Waldman & Link (2003, RP)
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Industry Science Links
Some concluding comments
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Some concluding commentsISL policy should be better supported with data and analysis
Still far from understanding ISL for firm’s innovative performance
Better and more measures of industry science links
More theoretical and empirical analysis of effectiveness (private and social)
Avenues for further research