Some determinants of cost distributions in the process of technological innovation

Industrial research and development (R&D) is a set of activities within the broader set of decisions and activities: the process of technological innovation (TI). It is technology transfer (commercialization of the innovation) that leads to technology diffusion that permits production and employment expansion and hence economic growth — an important goal of industrial policy. Firms' managements and government policy- makers should recognize the close relationships among the phases of TI and direct their policy, planning, budgeting and control decisions to the complete process. Many policies currently focus their attention to only one or a few points (such as R&D).In this study we conducted a detailed cost analysis of a limited number of innovation projects and studied the distributions of TI cost over the process phases. We find that almost half of TI costs are devoted to R&D, which implies that government support of this phase is important. Different cost patterns emerge when we classify innovations by industrial sectors, firms' sizes and project complexity. Complex innovations require larger and more variable (risky) R&D budgets. Smaller firms need more assistance in technology transfer. These are only a few important policy implications. This study emphasizes the importance of post-R&D phases and concludes that differential industrial policy may be required for technological innovations.     

The synergy of corporate r&d and competitive strategies: An exploratory study in australian high-technology companies

This project examines how Australian high technology companies approach the synergy between corporate R&D and strategic management. Research hypotheses are tested empirically using the data collected from a number of Australian firms in three selected industrial sectors: information technology, pharmaceuticals and biotechnology. The results suggest that the responding firms have been aware of the importance of integrating R&D decision making with corporate strategic management as well as the consistency between R&D and competitive strategies. In particular, the development of higher value-added products with a focus on a particular market segment has been stressed in directing corporate R&D programs and projects.     

The differential impact of privately and publicly funded R&D on R&D investment and innovation: the Italian case

This paper explores the impact of a specific R&D policy instrument, the Italian Fondo per le Agevolazioni della Ricerca (FAR), on industrial R&D and technological output at the firm level. Our objective is threefold: first, to identify the presence or absence of private R&D investment additionality/crowding-out within a pooled sample and in various firm subsets (identified by region, size, level of technology, and other features), while also taking into account the effect of single policy instruments or mixes of them. Secondly, to analyse the output (innovation) additionality by comparing the differential impact of privately funded R&D and publicly funded R&D expenditure on applications for patents filed by firms. Thirdly, the paper will compare the structural characteristics of firms showing additionality with those of firms showing crowding-out, in order to determine the firm characteristics associated with successful policy interventions. Our results suggest that FAR is effective in the pooled sample, although no effect emerges in some firm subsets. In particular, while large firms seem to have been decisive for the success of this policy, small firms present a more marked crowding-out effect. Furthermore, the firms’ growth strategies and ability to transform R&D input into innovation output (patents) seem to have a positive effect in terms of additionality.     

Globalization of R&D: recent changes in the management of innovation in transnational corporations

Large multinational firms are the drivers for the globalization of R&D and innovation activities. There was a strong movement to establish a transnational configuration of R&D between 1985 and 1995. In recent years, however, R&D strategies and international location decisions have changed substantially. This paper is based on an in-depth analysis of R&D internationalization in 21 large corporations in Europe, Japan and the US. Our findings suggest that transnational corporations have tended to consolidate and streamline their organizations since the mid-1990s. Distributed R&D activities and globally-dispersed innovation processes have resulted in overly complex and unmanageable organizational architectures. This has induced firms to search for `leaner' and more effective types of managing their international portfolio of innovation activities. We learned that the spatial distribution of learning and R&D performing activities is something different than the spatial distribution of coordination and control. Many companies in our sample have adapted a strategy of multiple centers of learning with one dominant center of coordination. A framework is developed to serve as a basis for analyzing different patterns of internationalization of R&D and innovation, and for assessing the appropriate mechanisms to coordinate and control an international network of technological competence centers.     

R&D laboratory classification and public policy: The effects of environmental context on laboratory behavior

R&D laboratories have changed dramatically in the last few decades. These changes have included the emergence of new laboratory forms such as cooperative and joint venture laboratories and the evolution of existing industrial, university and government laboratories into new and different entities. The utility of classifying R&D organizations as being industrial, university or governmental in character and then further assuming certain behavioral traits based on sector status appears to be limited. Science policy analysts need an updated classification typology that captures the nature of the existing institutional framework for R&D laboratories. To address this need, this paper presents a new conceptual typology for R&D laboratory classification and evaluates the implications of this re-thinking for science policy analysts.It is argued that R&D laboratories, like most organizations, are to a large extent functions of their environment. Realizing that the environment of R&D organizations are heavily influenced by the government, the market or both, the typology presented in this paper classifies R&D organizations accordingly. The resulting classification typology establishes 9 clearly different research laboratory types.Using survey data from a study population of 250 laboratories and case study data from 32 laboratories, it was found that the typology did capture the significant structural and behavioral differences among the array of laboratories operating today. A preliminary analysis of the policy implications of the new classification typology indicates that new initiatives to increase the level of market influence on R&D laboratories or to create more cooperative research ventures should be carefully considered before implementation.     

The challenge of greening technologies—Environmental policy integration in Finnish technology policies

The integration of environmental principles into other policies is perceived as essential in order to combat environmental problems as efficiently as possible. Environmental policy integration in Finnish technology policies is assessed empirically by focusing on technological R&D support at all levels, from policy strategies to project funding decisions. The actors making and implementing technology policies have grasped the idea of environmental protection and environmental issues have been identified especially at the strategy level and in some technology programmes. However, the integration is not overarching and no assessment of environmental impacts is required in funding applications.     

Theoretically sound: practically useless? Government grants for industrial R&D in Australia

For nearly twenty years the Australian government has relied on a system of grants to encourage R&D activity in firms. Despite low and declining R&D effort in this sector and only equivocal evidence that grants were having the desired effect, the Board that administers the grants programme has regularly expressed its total confidence in its success. Indeed. the government has long relied on grants as the foundation of its industrial R&D policy - until recently at the cost of any major alternative programme. Much of this confidence has been encouraged by the combined influence of market failure theory and faith in the linear model of technological change. the first explaining what is wrong rather than how it may be put right and the second imputing a simplicity to the innovative process which suggests that if something is wrong it can be easily and assuredly rectified by stimulating R&D.     

First- and second-order additionality and learning outcomes in collaborative R&D programs

In this paper, we distinguish between firm-level learning effects that result from ‘first-order’ and ‘second-order’ additionalities in innovation policy interventions. ‘First-order’ additionalities represent direct firm-level R&D subsidies, whereas ‘second-order’ additionalities result from knowledge spill-overs, horizontal knowledge exchanges between firms, and from other meso- or community-level effects. Analyzing data from collaborative R&D programs in Finland, we show that enhancing identification with a community of practice among R&D program participants (proxy for second-order additionality) enhances firm-level learning outcomes beyond those resulting from direct R&D subsidy (proxy for first-order additionality). Learning effects facilitated by second-order additionality are not confined to technological learning alone, encompassing also business and market learning. We also show that aspects of program implementation enhance identification with a community of practice, which then mediate the relationship between program implementation and firm-level learning outcomes.     

Dimensions of R&D location in the United States

R&D activities in the United States, as in other advanced economies, are geographically concentrated in certain types of locations. This study presents data on the location of four dimensions of R&D in the U.S.: industrial R&D laboratories, scientists and engineers engaged in R&D, scientists and engineers employed by the federal government, and research universities. Industrial R&D is much more concentrated in large urban areas than the other dimensions, and appears to locate more in response to the location of manufacturing activity than to the location of research universities and federal research facilities. The location of R&D employment, which includes government university, and industrial employees, is associated with facilities for all three types of R&D. Because of these factors, R&D in the U.S. is found on a significant per capita basis in 44 of 177 urban areas, most of them in the northeastern portion of the country. When two dimensions, industrial R&D laboratories and R&D employees, are combined as a measure of R&D concentration, the locational pattern is less clustered regionally. Ten urban areas in all regions of the U.S. are identified as important complexes of R&D. Since the location of R&D is a major indicator of comparative advantage for technological activities and the economic potential of urban regions, only a few areas of the U.S. are likely to remain important in the generation of innovations.     

Does Europe perform too little corporate R&D? A comparison of EU and non-EU corporate R&D performance

This paper examines whether there are significant differences in private R&D investment performance between the EU and the US and, if so, why. The study is based on data from the 2008 EU Industrial R&D Investment Scoreboard. The investigation assesses the effects of three very distinct factors that can determine the relative size of the overall R&D intensities of the two economies: these are the influence of sector composition (structural effect) vis-à-vis the intensity of R&D in each sector (intrinsic effect) and company demographics. The paper finds that the lower overall corporate R&D intensity for the EU is the result of sector specialisation (structural effect) - the US has a stronger sectoral specialisation in the high R&D intensity (especially ICT-related) sectors than the EU does, and also has a much larger population of R&D investing firms within these sectors. Since aggregate R&D indicators are so closely dependent on industrial structures, many of the debates and claims about differences in comparative R&D performance are in effect about industrial structure rather than sectoral R&D performance. These have complex policy implications that are discussed in the closing section.     

Canadian R&D abroad management practices

In the 1980s, Canadian industrial R&D abroad has grown substantially. In 1995, R&D expenditures by Canadian affiliates, only in the United States, represented some US$1.4 billion and employed some 6300 persons. Nearly 60 Canadian-owned and -controlled corporations conduct overseas R&D, mostly in the US, Western Europe, Japan, and Australia. Canadian corporations are performing commercial R&D abroad in order to support their manufacturing subsidiaries and to come closer to customers and markets. A secondary motivation is to hire skilled personnel, monitor foreign technological development and increase the inflow of new ideas into the corporation. They also chose friendly socio-political environments from a regulatory point of view. Technology transfer and adaptation to local markets is also an important mission of the foreign R&D establishment. Foreign R&D activities of Canadian firms are fairly decentralized and autonomous. Most of the foreign subsidiaries undertook R&D abroad before they were acquired by the Canadian corporation; also the number of Canadian managers was reduced and the R&D projects were usually decided in the affiliate. Three main types of expatriate R&D were found: a majority of the subsidiaries were producing goods in the same or related industries as in Canada (such as machines, transportation equipment or housing equipment). A second group of firms were vertically integrated firms, that conducted process research in Canada and advanced materials and final products research abroad, closer to the markets for this type of goods; they were active in the chemical and metal industries. Only one truly global corporation was found, with an international division of labor among its many foreign laboratories. The degree of autonomy varied across the three types of expatriate R&D units. In the last 10 years, the internationalization of industrial research and development has increased very rapidly. Foreign-affiliated corporations operating in the United States represented some 9.3% of all company-funded R&D in that country in 1987, and close to 18% in 1995 (Dalton and Serapio, in this issue). Similarly, foreign R&D expenditures by US-affiliated companies abroad have more than tripled. Canadian industrial R&D abroad has grown at a similar pace. It now includes over 100 research facilities owned by some 60 Canadian corporations, with subsidiaries in the United States, western Europe, Japan, Australia, and several developing countries (China, Brazil, India, Mexico, and Turkey). However, little is known about the characteristics of this foreign R&D: missions, managerial practices, budgets or innovative activity. This study is the first to present original data from a survey of these facilities, complemented by secondary material from annual reports and the financial and technical press. It follows a previous study of Canadian patents abroad, which concluded that diversification into related activities was the overseas strategy of Canadian multinational corporations (MNCs) with foreign R&D activities [Niosi, J., 1997. The globalization of Canadian R&D, Management International Review 37 (4) (in print).]. The first section of this paper presents (1) a short summary of some relevant literature on the management of foreign R&D, (2) the design of the study, (3) the results, and (4) a comparison of theories with Canadian data. It offers conclusions about the existence of three distinctive types of internationalization in Canadian R&D, each with different strategies and outcomes.     

A theory of firm growth: Learning capability, knowledge threshold, and patterns of growth

This paper focuses on the dual role of R&D - knowledge generation and the technological-competence-enhancing effect of R&D - and its implication for the endogenous evolution of R&D productivity and the pattern of firm growth. In particular, based on the evolution of firm-specific R&D productivity or technological competence, this paper derives a simple R&D-based model of firm growth capable of explaining various aspects of firm growth. The model proposes three prototype patterns of firm growth, depending on both firm- and industry-specific characteristics. The former includes firm-specific technological-competence-enhancing capability and the initial level of technological knowledge, and the latter includes industry-specific R&D appropriability. Specifically, firms with low technological-competence-enhancing capability tend to follow a convergent growth pattern in which firm growth gradually declines, while firms with high technological-competence-enhancing capability tend to exhibit either a sustained or a vicious growth pattern depending on the initial size of their technological knowledge stock. An empirical analysis of unique data on firm growth and technological capability provides supportive evidence for the role of technological-competence-enhancing capability in conditioning the pattern of firm growth.     

Liberalisation and R&D in network industries: The case of the electricity industry

Electricity sector liberalisation has coincided with a significant decline in R&D spending. This paper reviews the industrial organisation literature on R&D and innovation to explore the likely causes of the decline in R&D spending in the electricity sector. Meanwhile, R&D productivity and innovative outputs in utilities and equipment suppliers appear to have improved. However, a lasting decline in R&D expenditure can have a negative long-term effect on technological progress and innovation in the sector. We conclude that the decline in R&D could have been predicted from the literature. We also discuss the need to reorient the post-liberalisation technology policy.     

Founder social capital and value appropriation in R&D alliance agreements

This paper investigates the micro-foundations of value appropriation involving startups and examines the relationship between founder social capital and value obtained by startups in R&D alliance agreements. We build on the bargaining framework for surplus division and propose that founder social capital facilitates a more expansive pool of partnering opportunities and thereby bestows bargaining advantages to a startup, leading it to obtain more value in an R&D alliance deal. More importantly, we develop a novel hypothesis about the complementarity between founder social capital and a startup's technological capabilities to suggest that the bargaining impact of founders’ social capital becomes more pronounced when a startup is also endowed with superior technological capabilities. Furthermore, we suggest that founder social capital can be particularly valuable for startups to secure outside opportunities when there is weak institutional financial support available. Empirical analyses of R&D alliance agreements in the biotechnology industry furnish evidence for our theory.     

Creating advantage in peripheral regions: The role of publicly funded R&D centres

Regional investment in R&D, technological development and innovation is perceived as being strongly associated with productivity, growth and sustained international competitiveness. One policy instrument by which policy makers have attempted to create regional advantage has been the establishment of publicly funded research centres (PRCs). In this paper we develop a logic model for this type of regional intervention and examine the outputs and longer-term outcomes from a group of (18) publicly funded R&D centres. Our results suggest some positive regional impacts but also identify significant differences in terms of innovation, additionality and sustainability between university-based and company-based PRCs. University-based PRCs have higher levels of short-term additionality, demonstrate higher levels of organisational innovation but prove less sustainable. Company-based PRCs demonstrate more partial additionality in the short-term but ultimately prove more sustainable.     

Unravelling the cognitive and interorganisational structure of public/private R&D networks: A case study of catalysis research in the Netherlands

This paper presents findings of a study that discloses key features of the Dutch R&D network in the area of catalysis, a sub-domain of industrial-relevant chemistry. The input comprises empirical data on collaborative research publications, informal network ties, and formal R&D linkages. The study aimed at identifying all public and private sector research organisations involved in the network, characterising their R&D output in terms of international scientific papers and patents, and describing and analysing relational and positional dimensions of their interorganisational network. The results provide an overview of Dutch activity within the worldwide cognitive landscape of catalysis R&D — from both a scientific and technological perspective. The interorganisational relationships reveal a strong and integrated network comprising many universities, public research labs, and private enterprises. The results of a mail survey held among academic and industrial researchers who are active within the network not only corroborate these empirical findings, but also elicited relevant criticisms concerning the efficiency and effectiveness of the network, and provided useful suggestions for its improvement. The paper concludes by looking at the benefits of this methodology, which links external quantitative information and qualitative expert opinions, as an analytical tool for government S&T policy and R&D management purposes.     

高新认定办法、研发操纵与企业技术创新效率

基于2008-2017年中国高新技术上市公司的创新数据,从“达标型”和“避税型”研发操纵这一新视角,研究了高新认定办法对企业技术创新效率的影响。实证结果表明：高新认定激励了企业技术创新效率,而两类研发操纵抑制了这种激励效应;达标型研发操纵集中在高新认定初审阶段,且高新开发区以外、销售收入较高的企业更显著;避税型研发操纵集中在高新认定复审阶段,且高新开发区以内、销售收入较低的企业更显著。本文为高新认定办法提供了政策建议。     

中国高技术产业研发产出影响因素实证研究

基于文献研究和理论分析,构建高技术产业技术创新能力指标体系。采用2000—2015年中国高技术产业有关数据,利用统计分析方法和因子分析回归方法,从投入能力、创新能力、支撑能力和政策因素等方面实证分析各因素对高技术产业研发产出的影响。研究结果发现:知识产出与RD经费投入强度、企业资金投入、人员投入、企业数量和引进消化吸收再创新能力等有显著性关系;市场产出与企业资金投入、人员投入、RD经费投入强度、利润率和税负率等有显著性关系。最后,为政府及企业合理规划创新资源、科学提升产业研发产出提出相关对策建议。     

The origin and direction of industrial R&D in India

This paper surveys the trends in industrial R&D in India over the last two decades. It shows that there has been a rapid rise in R&D expenditure and a shift in its composition towards in-house corporate R&D and away from R&D in government laboratories, which is explained by the laboratories' lack of market orientation and manufacturing experience. According to cross-section studies of corporate R&D, larger companies aim towards larger technological advances and take a longer view; but the overall composition of corporate R&D shows no discernible change. This apparent inconsistency is explained by the development of the technology market. Much R&D was triggered off by the need for import replacement arising from import controls till 1965 and later by the need for product diversification in the recession. But construction of new plants and mechanization for speeding up operations, activities where sustained R&D can yield large firms a steady flow of innovations, were unimportant or infrequent, and the demand for technology they gave rise to was largely met by imports.