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.     

Assessing coreness and intermediarity of technology sectors using patent co-classification analysis: the case of Korean national R&D

Rapid technological advancements and increasing research and development (R&D) costs are making it necessary for national R&D plans to identify the coreness and intermediarity of technologies in selecting projects and allocating budgets. Studies on the coreness or intermediarity of technology sectors have used patent citations, but there are limitations to dealing with patent data. The limitations arise from the most current patents and patents that do not require citations, e.g. Korean patents. Further, few or no studies have simultaneously considered both coreness and intermediarity. Therefore, we propose a patent co-classification based method to measure coreness and intermediarity of technology sectors by incorporating the analytic network process and the social network analysis. Using IPC co-classifications of patents as technological knowledge flows, this method constructs a network of directed knowledge flows among technology sectors and measures the long-term importance and the intermediating potential of each technology sector, despite the limitations of patent-based analyses. Considering both coreness and intermediarity, this method can provide more detailed and essential knowledge for decision making in planning national R&D. We demonstrated this method using Korean national R&D patents from 2008 to 2011. We expect that this method will help in planning national R&D in a rapidly evolving technological environment.     

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.     

Industry evolution and key technologies in China based on patent analysis

Patents are the manifestation of the industry’s research and development (R&D) endeavor; therefore, this paper studies the industry evolution of and key technologies in China from the perspective of patent analysis. Patents in six types of industries, including Chemical (excluding Drugs), Computers and Communications, Drugs and Medical, Electrical and Electronics (E&E), Mechanical, and Others are analyzed in this study. Findings from the analysis show a steady increase of US granted utility patents in China as well as percentage of these patents in the world over the period between 2003 and 2008. All the above industries in China have been growing rapidly during this period, which is very different from the global industry development. Despite the rapid development, the citation rates of these patents have been low, reflecting a need for improvement in the quality of patents and R&D performance for these six industries in China in order to exert more influence in the industry world. The analysis on patents also reveals China’s industry distribution to be similar to the global industry distribution, with the exception of E&E industry which weights over one third of the total patents in technologies. The E&E industry is also the field with largest economic growth which rises more rapidly after 2006 with a sudden increase of patents in USPC 361. Detailed tracking of the key technology evolution reveals that 90% of the newly issued patents in USPC 361 after 2006 are owned by Foxconn Technology Co., Ltd, pointing to an unbalanced R&D environment in China’s E&E industry sector. By providing the insight into the evolution of China’s industrial and technological development through the perspective of patent analysis, this paper hopes to provide an objective statistic reference for future policy directions and academic researches.     

Identifying technological competition trends for R&D planning using dynamic patent maps: SAO-based content analysis

Patent maps showing competition trends in technological development can provide valuable input for decision support on research and development (R&D) strategies. By introducing semantic patent analysis with advantages in representing technological objectives and structures, this paper constructs dynamic patent maps to show technological competition trends and describes the strategic functions of the dynamic maps. The proposed maps are based on subject-action-object (SAO) structures that are syntactically ordered sentences extracted using the natural language processing of the patent text; the structures of a patent encode the key findings of the invention and expertise of its inventors. Therefore, this paper introduces a method of constructing dynamic patent maps using SAO-based content analysis of patents and presents several types of dynamic patent maps by combining patent bibliographic information and patent mapping and clustering techniques. Building on the maps, this paper provides further analyses to identify technological areas in which patents have not been granted (“patent vacuums”), areas in which many patents have actively appeared (“technological hot spots”), R&D overlap of technological competitors, and characteristics of patent clusters. The proposed analyses of dynamic patent maps are illustrated using patents related to the synthesis of carbon nanotubes. We expect that the proposed method will aid experts in understanding technological competition trends in the process of formulating R&D strategies.     

Using patents and publications to assess R&D efficiency in the states of the USA

Even with the USA spending the largest amounts in R&D, its share in total patent grants worldwide has been declining. This decline is also evident in its share of world scientific publications. These developments have been termed by some as the “American Paradox”. Extant research on R&D efficiency and technological innovation capability has considered the USA as a homogeneous entity and has not focused at the sub-national level. This paper analyses the R&D efficiency of 50 US states and the District of Columbia. R&D efficiency is calculated as the ratio of patents granted and scientific publications to R&D expenditures. Only 14 states out of the 51 regions are found to exhibit positive changes in R&D efficiency between 2004 and 2008. Comparing this performance with that of the BRICS nations over the same period we find that Brazil, India, China and South Korea show significant improvements in R&D efficiency with India taking the lead. This research identifies the states in the US with the highest R&D efficiency and presents benchmarks which can be followed by policy interventions. The paper highlights the importance of conducting analyses of R&D efficiency using patents and publications at the sub-national level for informed policy making.     

Twenty years of US nanopatenting: Maintenance renewal scoring as an indicator of patent value

This paper introduces a new measure of patent value – Maintenance Renewal Score (MRSc) – reflecting assignee valuing the patent by paying successive renewal fees. We generate MRSc's for nanotechnology patents issued by the US Patent Office from 1999 through 2009, with US assignees and US inventors. Patenting increases over this period, coincident with increased US funding of nanotechnology R&D. We compare maintenance rates over the period, and against a comparison set of all 1999 USPTO grants to US inventors/assignees. We find differences in propensity to maintain the nanopatents by institution type, technological sector, and patent complexity.     

Heterogeneous Partners,R&D cooperation and corporate innovation capability: Evidence from Chinese manufacturing firms

In this paper, we examine the differential impact of cooperation with heterogeneous partners on firms' innovation capabilities. We use the number of joint patent applications of Chinese manufacturing firms from 2008 to 2018 to measure cooperation with different types of partners and the number of corporate patents to measure the innovation capability of firms. The results indicate that R&D cooperation with other enterprises, universities, and research institutions all have a significantly positive impact on the innovation capability of enterprises. However, R&D cooperation with universities or research institutions has a higher positive impact on innovation capability than that with other firms. Different internal and external factors moderate the relationship between heterogeneous partners and the innovation capability of firms. Specifically, firms with higher absorptive capacity will benefit more from R&D cooperation with corporate partners. In contrast, in industries with higher market concentration or where firms are at the technological frontier, cooperation with universities will positively impact their innovation capabilities. Further research demonstrates that absorptive capacity has a more positive moderating effect when the cooperation is between firms in the same industry, compared to R&D cooperation between firms in different industries.     

Offshore versus domestic: Can EM MNCs reach higher R&D quality abroad?

In the current discourse about the technological development of emerging market multinational companies (EM MNCs), the internationalization of research and development (R&D) activities is increasingly discussed as a strategy for catching-up to established MNCs. EM MNCs attempt to use international R&D to tap into technologically superior resources abroad which are not available to them in their home market. This study compares the performance of domestic and offshore R&D activities to look into EM MNCs’ ability to conduct high-quality R&D abroad. We use the Chinese telecommunication equipment manufacturer Huawei as a best practice case study. To map their worldwide patent quality pattern, we propose a multiple-patent-office-approach to ensure a balanced view on their activities with data from SIPO, USPTO and EPO. We also employ three different measures to capture different dimensions of patent quality. The results of the empirical model support the assumption of higher quality for patents with knowledge from advanced offshore locations.     

Produce patents or journal articles? A cross-country comparison of R&D productivity change

This paper compares R&D productivity change across countries considering the fact that national R&D expenditure may produce multiple outputs, including patents and journal articles. Based on the concept of directional distance function and Luenberger productivity index, this paper develops a Luenberger R&D productivity change (LRC) index and then decomposes it into R&D efficiency change (catch-up effect) and R&D technical change (innovation effect). Utilizing a panel dataset of 29 countries over the 1998–2005 period to implement the empirical estimation, the results show that the R&D productivity growth is mainly attributed to the innovation effect; meanwhile, non-OECD countries have better performance on both efficiency change and technical change than their OECD counterparts. Moreover, patent-oriented R&D productivity growth serves as the main source of national R&D productivity growth than the journal article-oriented one.     

Determinants of internal and external R&D offshoring: evidence from Spanish firms

This paper analyses the determinants of R&D offshoring of Spanish firms using information from the Panel of Technological Innovation. We find that being an exporter, international technological cooperation, continuous R&D engagement, applying for patents, being a foreign subsidiary, and firm size are factors that positively affect the decision to offshore R&D. In addition, we find that a lack of financing is an obstacle relatively more important for independent firms than for firms that belong to business groups. For these latter, we also obtain that the factors that influence the decision to offshore R&D differ depending on whether the firm purchases the R&D services within the group or through the market: a higher degree of importance assigned to internal sources of information for innovation as compared to market sources increases (decreases) the probability of R&D offshoring only through the group (market).     

Do R&D Spinoffs have Higher R&D Productivity? Evidence from Taiwanese Electronics Firms

The startup mode of spinoffs founded by R&D employees (R&D spinoffs) within the same industry is widespread in high-tech industries. The founders usually own specific human capital and key technological capability, enabling them to take the operational risk and to appropriate rewards of innovations under the industrial environment of rapid technological change. Whether high-tech R&D spinoffs, compared to their other spinoff counterparts, have better R&D productivity remains less well explored. According to the conceptual discussion of the advantages of intangible innovation assets embodied in company founders, this study argues that the founders' innovation cognition, knowledge externalities, absorptive capability and routine experience can help R&D spinoffs to have higher R&D productivity. We thus propose three hypotheses that are then empirically tested. Based on a sample of Taiwanese electronics firms, the empirical findings show that R&D spinoffs invest with a higher R&D intensity and on average have more patents issued. More importantly, the microeconometric estimates show that the patent and output elasticities of the R&D of R&D spinoffs are significantly higher than those of other firms, indicating that they actually have higher R&D productivity.     

Non-linear dynamics of innovation activities over the business cycles: Empirical evidence from OECD economies

This study examines the non-linear and asymmetries of innovation activities in thirty-six OECD countries for the period 1981Q1-2019Q4. The impulse response function and historical decompositions were estimated to check the cyclical property of innovation activities (R&D expenditures, residential patents, non-residential patents, and international collaboration in technology development) during the boom and recessions. The impulse response function provided three important results. First, the results indicated that the R&D expenditures moves pro-cyclically in response to the gross domestic product (GDP), exports, imports, and gross fixed capital formation in both the boom and recession periods. Second, the findings suggested that patents (residential and non-residential) move pro-cyclically in response to GDP, exports, imports, labor force, R&D expenditures, and gross fixed capital formation shocks in the boom and recession periods. Third, variables including, R&D expenditures, GDP, exports, labor force, imports, and gross fixed capital formation shocks significantly affected patents (residential and non-residential) during the boom and recession periods across the sampled OECD states. Fourth, the results also suggested that the international collaboration in technology development moves pro-cyclically in response to GDP, R&D expenditures, exports, imports, labor force, and gross fixed capital formation shocks in the boom and recession periods.     

A Dynamic Comparative Analysis of International Innovation Networks in Emerging Market MNCs

This paper compares the international innovation strategies of emerging market MNCs (EMNCs) with those of developed country MNCs (DMNCs). More specifically, we analyze the patent outcomes related to the use of international innovation networks (IINs) of EMNCs in developed markets compared with those of DMNCs in emerging markets. We explore the convergence and volatility patterns in patent generation within these IINs, considering the use of overseas R&D affiliates and the outcomes of interactions between foreign R&D affiliates and home headquarters for generating patents over a 20-year period. Our findings are broadly supportive of the idea that the trends in the volume and volatility of patents generated from the underlying IINs used by EMNCs are converging with those of DMNCs. This is in line with the predictions of a number of current international business theories regarding EMNC international expansion.     

Systemic aspects of R&D policy subsidies for R&D collaborations and their effects on private R&D

This paper analyses how context- and time-dependent factors determine the impact of R&D subsidies on firm behaviour with respect to private R&D expenditures. Based on German R&D survey data, we combine propensity score matching with a difference-in-difference estimator in order to measure the causal influence of public direct R&D project funding on firm behaviour. Our results indicate that (i) repeated participation in R&D projects on average leads to a higher increase in R&D expenditures than once-off funding; (ii) the aggregate effect of R&D funding on R&D expenditures of business firms is somewhat higher for business–business collaboration projects than for science–business collaboration projects; (iii) R&D expenditures of business firms that cooperate with science show a higher share of external R&D spending. Results of one particular cluster programme indicate that at least the short-term development of R&D does not so much depend on which programme direct R&D project funding is applied to.     

Using patent analysis to explore corporate growth

This study applies patent analysis to discuss the influences of the three aspects of patent trait—a firm’s revealed technology advantage in its most important technological field (RTA_MIT), relative patent position in its most important technological field (RPP_MIT), and patent share in its most important technological field (PS_MIT)—upon corporate growth and discusses the moderation effect of relative growth rate of its most important technological field (RGR_MIT) in the American pharmaceutical industry. The results demonstrate that the three relationships between corporate growth and the three aspects of patent trait are positive, and verify that RGR_MIT moderates the three relationships. This study suggests that pharmaceutical companies should enhance their R&D capabilities, the degree of leading position, and concentration of R&D investment in their most important technological fields to increase their growth. Finally, this study classifies the pharmaceutical companies into four types, and provides some suggestions to them.     

Vaccine R&D in Brazil: The effectiveness of push and pull regulations

Government regulations can guide the technological progress, investment in research and development (R&D), and institutional organization of a specific sector. In this context, using patent data, this study aimed to analyze the effectiveness of three laws that pertain to R&D in Brazilian pharmaceutical market for vaccines. The results reveal an increasing international interest in the Brazilian market since the promulgation of the Industrial Property Law. Despite its limitations, this study reveals significant efforts and promising results in Brazil with respect to ensuring that technological and industrial policies and strategies incorporate innovation in vaccine R&D and change the economy's competitive circumstances.     

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。     

Measuring S&T activities in the Former Socialist Economies of Central and Eastern Europe: Conceptual and methodological issues in linking past with present

The economic and social transformation of countries of central and eastern Europe has deeply affected their S&T systems. However, conceptual and methodological problems in monitoring transformation of their S&T systems are not trivial. In this paper we analyse conceptual and methodological issues involved in measuring S&T activities in the socialist and post-socialist period across the most important S&T indicators (R&D, US and national patents; innovation surveys; bibliometrics). Our conclusions are that: i) the process of methodological harmonisation of S&T indicators has progressed considerably and we have provided some evidence in that respect; ii) the use of similar or identical indicators (business R&D, innovation counts, patents, citations) when making inter-country or inter-temporal comparisons should be approached with caution because of the significant differences between the socialist and post-socialist periods as well as between post-socialist R&D systems and R&D in other market economies. This latter applies especially to the interpretation of business R&D data in the post-socialist period. A first version of this paper was presented at the Conference on the implementation of OECD methodologies for R&D/S&T statistics in central and eastern European countries' which was held in Budapest from 6.–8. November 1996. Research which formed the basis for this paper was funded in case of one of the authors by the EC TSER programme. Correspondence should be addressed to: SlavoRadosevic, SPRU, University of Sussex, BN1 9RF, Brighton. We are grateful to SylvanKatz for stimulative discussions and to two anonymous referees for comments in revisions of this paper. The views expressed in this paper are those of the authors and do not necessarily reflect those of the organisations for which they work.