Increasing the return on investment from federally-funded research and development

Abstract

Each year, the United States invests approximately $495 billion in research and development (R&D) – about a quarter of the total global investment. While the private sector accounts for about 67% of U.S. investment, the Federal government plays a critical role in funding R&D, particularly in areas that address societal needs in which the private sector does not yet have sufficient clear or strong incentive to make the required investments. The Federal government invests approximately $150 billion each year in R&D conducted at Federal laboratories, universities and other research organizations. As Federal R&D investments wind down or are completed, additional work is often still needed to translate the knowledge accrued from that R&D into products and services that will improve lives and provide economic growth. Technology transfer is the process by which existing knowledge, facilities or capabilities developed through R&D are utilised to fulfill public and private need. The transfer of technology from federally-funded R&D to the private sector is crucial to realising the taxpayer’s return on investment in the Federal R&D ecosystem. However, moving innovations from the lab to the market is more than inventing products for people to buy. Technology transfer is about creating jobs and growing the economy; ensuring a strong, secure, and resilient Nation; and improving Americans’ health and environment, fostering the conditions for America to maintain leadership in global innovation.     

Research,development and growth in state-owned enterprises: empirical evidence from Ecuador

ABSTRACT

Investment in R&D is essential for the survival and growth of organizations. Recent literature has focused on the study of effects of R&D on the growth of private companies. However, there is no research studying the effects of R&D on the growth of Latin American public companies. This paper estimates, using an endogenous growth model, the effect of investments in R&D on sales growth in public enterprises of Ecuador. Data corresponding to a sample of 86 public companies have been taken from the Survey of Activities of Science and Technology (ACTI) of Ecuador for the period 2012 to 2014. These data are estimated by OLS. The results show that there is a statistically significant positive relation between investment in research and development and the growth of sales in public companies.     

Will China’s quest for indigenous innovation succeed? Some lessons from nanotechnology

Over the past decade, the Chinese state has made major efforts to transition China’s economy away from a focus on manufacturing, and towards a focus on generating indigenous innovation in R&D intensive fields such as nanotechnology. This goal has been pursued through a comprehensive industrial policy framework that aims to give preferential treatment to Chinese companies in domestic markets while also devoting significant resources towards basic and applied R&D, building science parks and research centers, funding focused venture capital funds, and recruiting prominent expatriate scientists and entrepreneurs from universities and businesses abroad. This paper, based on interviews with scientists, engineers, entrepreneurs, and venture capitalists in Shanghai, Suzhou, and Beijing, examines the strengths and weaknesses of China’s push for indigenous innovation. We use the case of nanotechnology to address the pressing question of why China continues to underperform with regards to generating innovative, high-tech companies and products, despite heavy public R&D investment and the presence of one of the world’s largest talent pools of potential scientists, engineers and entrepreneurs.     

Foreign Subsidiaries and Technology Sourcing in Spain

Firms acquire external technological knowledge via different channels. In this paper, we compare the technology sourcing of foreign subsidiaries and domestic firms looking at domestic R&D outsourcing, international R&D outsourcing, domestic cooperation for innovation and international cooperation for innovation. We use data from the Spanish Technological Innovation Panel for the years 2005–2009 for 10,206 innovative firms operating in Spain. We apply a multivariate probit specification which allows for systematic correlations among the different choices. The results show that the different technology sourcing choices are interdependent and that foreign subsidiaries show a different pattern of external technology sourcing. Compared to affiliated domestic companies, foreign subsidiaries show a smaller propensity for external technology sourcing via R&D outsourcing from independent firms in the host country, for international R&D outsourcing and for international cooperation for innovation. In contrast, foreign subsidiaries show a greater propensity for domestic cooperation for innovation. However, foreign subsidiaries are not a homogenous group in this respect.     

The Nature of Innovation in R&D- and Non-R&D-Intensive Service Firms: Evidence from Firm-Level Latent Class Analysis

Innovation in services has been largely characterised by the predominance of non-technological innovation and low intensity in research and development (R&D) activities. However, most cross-industry analyses still overlook the organisational character of innovation in services. In this article, we use latent class analysis to examine the nature of innovation in 2148 firms from 20 service industries in Spain. On the basis of the analysis of 10 innovation types and 5 kinds of innovation activities, a taxonomy composed of 2 R&D-intensive and 2 non-R&D-intensive clusters is proposed. The findings indicate that organisational innovation counts for three of the four profiles, the new management techniques being the most common organisational innovation in all clusters. Furthermore, micro- and small-sized firms from several subsectors are more likely to be R&D-oriented than medium and large companies. The results underline the coexistence of different innovation patterns within the same industry as well as the predominance of hidden innovators in several industries.     

政府研发补贴与企业创新投入:数量激励抑或质量导向?

如何有效发挥政府“有形之手”对企业创新的激励作用,优化公共资源配置效率,是实施创新驱动战略和推动经济高质量发展的关键一环。基于2001-2017年中国非金融类A股上市公司面板数据,用研发投资衡量创新投入数量,用专利产出衡量创新投入转化质量,从理论上分析政府研发补贴对企业创新投入数量和投入转化质量的作用机制,并采用固定效应模型、联立方程模型等进行实证检验。结果发现:第一,政府研发补贴能够显著提高企业研发投资额,表明政府补贴对企业创新投入存在数量激励,同时,企业研发投资对专利产出具有显著正向影响,增加创新投入资金数量是确保投入转化质量的必要非充分条件;第二,在控制内生性后,政府研发补贴对企业专利产出具有不显著负向影响,表明政府研发补贴未能形成创新投入质量导向;第三,在政府干预程度较低、法治水平较好的情况下,政府研发补贴能够同时提升企业研发投资与专利产出,证实寻租行为、逆向选择行为和缺乏政府监管等是政府补贴无法有效发挥投入质量导向作用的潜在原因。     

Economic crisis and company R&D in Spain: do regional and policy factors matter?

The economic crisis which began in 2008 has had a far-reaching impact, including effects on the innovation behaviour of firms. Many companies have reduced their innovation-related activities, although some firms have been more resilient than others. Using a representative microdata panel of Spanish firms, we study the probability of companies abandoning in-house R&D during the crisis and its relationship to regional and policy factors. We find significant regional heterogeneity related to regional economic size and the type of the regional innovation system; regional government R&D support only reduces R&D abandonment rates in regions where a strong system of knowledge exploitation is in place.     

Offshoring and Improvisational Learning: Empirical Insights into Developing Global R&D Capabilities

This study examines how global research and development (R&D) capabilities develop through improvisational learning. Using empirical insights from two large Swedish multinational companies and their early learning from establishing a captive R&D offshore unit in Bangalore, India, we use multicase inductive analysis to identify how companies cope with challenge related to coordinating R&D across geographically dispersed units through improvisational learning. Using a cooperative stage model analysis, we explain how improvisational learning occurs during the setup, start-up and ongoing stages of establishing captive R&D offshoring operations. We find that improvisational actions lead to developing routines as a response to solving unexpected coordination challenges and help explain how global R&D capabilities develop.     

The role of government-industry-academia partnership in business incubation: Evidence from new R&D institutions in China

it is very important to encourage the incubation of new companies for innovative economic growth. Many countries in the world are encouraging “innovation orchards” in the form of government-industry-academia partnership to facilitate the incubation of new technology enterprises. The research focuses on the impact of this partnership between the government, industry, and academia in establishing new R&D institutions on business incubation. Specifically, the research aims to investigate what is the separate effect of the government, enterprises, universities, and public institutions in the establishment of new R&D institutions on enterprise incubation, and the role of cooperation between government-enterprise-academia in the enterprise incubation of new R&D institutions. In empirical tests using data from the 2020 official survey of the Ministry of Science and Technology of China, the results show that for each single cooperator, participation in the establishment of governments, academia has a positive impact on start-ups, while the participation of enterprises has no significant impact. In terms of cooperation, the co-established new R&D institutions are better in business incubation than the single establishment of new R&D institutions. The cooperation between government and academia in the establishment of new R&D institutions has a positive effect on business incubation, and other types of cooperation between government-industry, industry-academia, and government-industry-academia have no significant impact on business incubation. The research conclusion can provide a policy reference for optimizing the holding mode of new R&D institutions.     

Advancing large-scale R&D projects towards grand challenges through involvement of organizational knowledge integrators

Public and private funding bodies make massive investments in research to address the grand challenges of the world. These require collective research efforts of a large number of partners to generate knowledge and ultimately create technologies to meet today’s grand challenges. Surprisingly, little research is conducted on how to design the research consortia appropriately that actually result in the development of new technologies. This article argues that when organisational knowledge integrators are involved in large-scale projects, they ensure that the research findings of earlier technology development efforts in a project are pulled towards innovation outcomes through their own position in the innovation value chain. This article uses a data-set with 376 collaborative R&D projects within energy technologies. Most importantly, this article confirms the existence of organisational knowledge integrators and the positive effects on project outcomes. These results are discussed with implications drawn for both applicants and funding bodies for future projects.     

How does the search for knowledge drive firms’ eco-innovation? Evidence from the wine industry

The importance of eco-innovations to food manufacturing has risen exponentially in recent years. In this paper we investigate the drivers of different types of eco-innovation in the Italian wine industry, a particularly relevant sector both in terms of its economic performance and its use of natural resources. We focus on the internal knowledge sourcing of firms and on the ‘breadth’ and ‘depth’ of their engagement with external agents when performing eco-innovation activity. We test our research hypotheses in the context of cleaner processes, end-of-pipe technologies and the use of organic input factors. The empirical evidence is based on a questionnaire survey administered to 334 Italian wine producers. The econometric exercise provides mixed results: both internal R&D and engagement with external agents have a significant effect on eco-innovations depending on the type of eco-innovation taken into account. Moreover, we find a non-linear relationship between external knowledge sourcing and eco-innovation activity.     

Regional R&D activities and interactions in the Swedish Triple Helix

The Swedish innovation system is analysed in terms of the interaction between academia, government and the private sector. For each of 21 Swedish regions we analyse the distribution of research activities, doctoral employment, and publication output, as well as the flow of doctoral graduates and the distribution of co-authorship links across regions and sectors. The three main urban regions have about 75 percent of all R&D activities and outputs. They also have a more balanced supply of academic, governmental and private research activities than the smaller regions, and the interactions among sectors within these regions are more intense. The inter-regional flow of PhDs is also to the advantage of the big regions. So far, decentralization of the academic sector does not seem to have had as similar decentralizing effect on private R&D. Unless this imbalance changes, smaller regions will continue to be net exporters of skill and knowledge to the big regions.     

Beyond Regional Clusters: On the Importance of Geographical Proximity for R&D Collaborations in a Global Economy—the Case of the Flemish Biotech Sector

When internal knowledge bases are insufficient for developing innovations, companies tend to collaborate with external R&D partners. According to a long-standing literature on “clusters”, “industrial districts”, “local production systems” and “regional innovation systems”, geographical proximity between innovation partners is considered a precondition for inter-organizational collaborations: proximity is said to facilitate trust, the transfer of tacit knowledge and the intensity of interactions. This article investigates the importance of geographical proximity for R&D collaborations between biotech firms and their innovation partners. Are geographically close innovation partners likely to collaborate more intensely? Studies of the Flemish biotech industry shed light on this question. Regression analyses combined with qualitative interview data reveal that geographical proximity has become less important for inter-organizational collaborations. Owing to lower communication and transportation costs, innovation partners can easily collaborate even when they are not situated close to each other. This leads us to conclude that globalization transforms inter-organizational collaborations.     

The interaction mode and geographic scope of firms’ technology alliances: implications of balancing exploration and exploitation in R&D

This paper proposes that the interaction mode, i.e. interactive and iterative, and geographic scope, i.e. domestic and international, of technology alliances generate sources of exploration and exploitation for firms. An implication of this idea is that firms can use these sources for balancing its internal focus on exploratory and exploitative research and development activities (R&D). Then, the paper suggests that the use of this balancing strategy has positive effects on a firm’s innovative performance. Using panel data based on Spanish manufacturing companies for the period 2004–2012, the empirical results confirm that firms balancing their internal exploration or exploitation in R&D with sources of external exploitation or exploration in their technology alliances are the firms with better prospects to produce innovation streams. Implications for the literature on complementarities in innovation, ambidexterity and R&D alliance formation are derived from the analysis.     

Optimal R&D investments of the firm

This paper examines irreversible decisions on innovative activities where it takes time to complete an R&D project. The total amount of R&D investments that the firm needs to undertake in order to obtain the breakthrough in the innovation process is uncertain. R&D investments are limited by the restriction that they must be self-financed. It is shown that R&D investments are more valuable when the level of uncertainty is large. Especially, it is very attractive to undertake R&D investments if a project faces many uncertainties during its early phases. Furthermore we study how R&D behavior is influenced by different levels of the discount rate and the financing limit. Moreover, the effects of R&D subsidies, spillover benefits and a payoff that decreases over time are analyzed. Received: 9 October 1997 / Accepted: 19 March 1998     

Business Group Affiliation and R&D

This paper analyzes whether belonging to a business group enhances firms' propensity for and intensity of R&D based on the greater opportunities to finance and co-ordinate R&D strategies and internalize knowledge spillovers. Compared with the existing literature, this paper has the following novelties: (a) it examines how the organization and diversification of business groups influence the R&D investment of affiliated firms; (b) it analyzes the role of R&D spillovers among affiliated firms; and (c) it distinguishes between propensity for and intensity of R&D. We find that less diversified groups are more likely to centralize R&D, while in more diversified groups firms are more likely to be autonomous. We find that controlled companies are more likely to benefit from knowledge spillovers than firms at the head of the group. Finally, we find that R&D autonomy is significantly associated with both a higher propensity for and intensity of R&D in controlled companies.     

Research and Technology Outsourcing and Innovation Systems: an Exploratory Analysis

The paper discusses the process of externalization and contracting out of research and technology, in particular the outsourcing of R&D and technical activity formerly undertaken by manufacturing and service companies and now contracted out to other firms and specialist organizations. The growth in the external sourcing of R&D, design and other technical activities by firms has contributed to the evolution of new research and technical markets which have important implications for current conceptualizations of “systems of innovation”.     

Economic sanctions and R&D

This article identifies the effects of disinvestment on the R&D activities in South Africa. The importance of the article lies in its relevance for science and trade policy and in the examination of this angle of sanctions against South Africa. The results indicate that foreign owned companies increase their R&D activities as the threat of disinvestment intensifies. The same phenomenon applies to the new management of companies which disinvest. A side finding of importance is the fact that only a small proportion (3%) of the R&D activity in the country is undertaken by foreign owned companies. A number of explanations are offered for the observed behaviours.     

Bibliometric analysis on additionality of Japanese R&D programmes

To justify public investment in R&D activities especially those conducted by private companies, the effect to change their behavior into what could not be realized without public funds is required. This paper studies the "additionality" of Japanese R&D programmes by analyzing the patent applications of five case study projects. Changes and continuations in research themes between the results of the project and the results in five years before and after the project were measured using a similarity index. Also, the similarities between research groups in a project were measured. These show how each project was constituted by researchers with various types of knowledge. As a result, although all projects contained core research groups who continued their research in the project, the effect of mobilizing other researchers into new fields was shown to vary depending on the characteristics of the projects. This revised version was published online in August 2006 with corrections to the Cover Date.