Foreign direct investment in industrial research in the pharmaceutical and electronics industries—results from a survey of multinational firms

This paper examines motives, location characteristics, inter-temporal characteristics and modes of entry for foreign direct investment (FDI) in research and development (R&D). The paper is based on a detailed empirical survey of laboratory sites established by 32 large multinational companies domiciled in 5 countries. Findings indicate that FDI in R&D has risen considerably over the last 40 years and that firms invest in R&D sites abroad in order to augment their knowledge base or in order to exploit it. The former motive leads to establishment of facilities primarily close to universities while the latter type leads to establishment of facilities close to existing manufacturing facilities and markets. The paper also finds that greenfield investments are the dominant mode of entry and that firms establish multiple R&D sites in their home countries before investing in such sites abroad.     

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.     

Does public R&D funding crowd-in private R&D investment? Evidence from military R&D expenditures for US states

Defense R&D represents the largest component of US public R&D spending and historically has promoted a wide range of civilian innovations. However, the empirical evidence on the impact of defense R&D is scant and it does not provide conclusive results on the possible crowding-in (-out) effects on private R&D investment. Exploiting a longitudinal dataset linking public R&D obligations to private R&D expenditures for US states, we investigate the impact of defense R&D on privately-financed R&D. To address potential endogeneity in the allocation of funds, we use an instrumental variable identification strategy leveraging the differential exposure of US states to national shocks in federal military R&D. We document considerable crowding-in effects with elasticities in the 0.11–0.14 range. These positive effects extend also to the labor market, when focusing on employment in selected R&D intensive industries and especially for engineers.     

The moderating role of internal and external resources on the performance effect of multitasking: Evidence from the R&D performance of surgeons

R&D employees frequently must split their limited time between explorative R&D and exploitative operative tasks. This article explores the influence of this multitasking (pursuing both R&D and operations) on employee R&D performance. The article also analyzes how the relationship between multitasking and individual R&D performance interacts with the degree of access to internal and external resources. We hypothesize that multitasking positively affects R&D performance. Furthermore, we assume that the internal resources (funding, facilities, and support) are increasingly relevant when employees combine R&D and operative activities. However, multitasking employees may show less of a need for external resources (access to networks) in comparison to more focused colleagues. The results of a survey of 332 surgeons from 20 academic medical centers in Germany support our hypotheses. We conclude that managers should ensure that their R&D workforce is also involved in daily operations. Output will be optimized if these employees are not only engaged with explorative tasks but are also involved in exploitative activities. However, managers should also ensure that the appropriate organizational support is provided to individuals who attempt to combine exploration and exploitation. Multitasking individuals benefit the most from access to internal resources, whereas external resources are more efficiently allocated to explorative-only employees.     

Inter-industry technology flows in the United States

This paper presents for the U.S. economy a technology flows matrix tracing 1974 industrial R&D expenditures from their industries of origin to industries in which the use of resulting products and processes was anticipated. The distinction between origin and using industries is crucial to understanding the links between R&D and productivity growth. A regression analysis reveals high social rates of return and substantial productivity impacts from R&D attributed to industries of use.     

Exploration versus exploitation in technology firms: The role of compensation structure for R&D workforce

We investigate the relationship between a firm’s compensation structure and the extent to which its innovation is more exploration versus exploitation oriented. Specifically, we assess two aspects of a firm’s compensation design—horizontal dispersion within job levels and vertical tournament incentives between job levels. A six-year panel of compensation records of 671,028 employees working at 81 U.S.-based high technology firms between 1997 and 2002 are used to construct measures that characterize a firm's pay structure, which are linked to these firms’ patents filed in the U.S. We find that firms with higher-powered tournament incentives in vertical compensation structure report higher fraction of innovation directed towards exploration. Horizontal pay dispersion, on the other hand, shows a negative relationship with the exploration in firms where R&D employees’ age variance is low. In firms where R&D employees’ age variance is high, the negative relationship between horizontal pay dispersion and exploration is muted.     

Weekly,technical and administrative work hours: Relationships to the extent R&D professionals innovate and help manage the innovation process

An exploratory study of 2308 R&D professionals working for U.S. based laboratories belonging to 24 large corporations finds inverted-U relationships between the technical, administrative and total hours R&D professionals work per week and the extent they innovate and help manage the innovation process. These relationships suggest that R&D professionals can increase the extent they accomplish these performance objectives by working up to an optimal number of weekly hours and by combining technical hours with up to an optimal number of administrative hours. When R&D professionals work 60 weekly hours by combining 50 technical hours with 10 administrative hours, they maximize the extent they innovate. When R&D professionals work 60 weekly hours by combining 35 technical hours with 25 administrative hours, they maximize the extent they help manage the innovation process. The implications of these findings for having R&D professionals increase the extent they accomplish these performance objectives and, therefore, develop their careers, are discussed.     

我国R＆D科学家工程师规模预测

本研究采用时间外推与目标增长两种模型预测我国 2 0 2 0年R&D科学家工程师总人数 ,并对两种模型预测结果的差异作了分析。研究认为 ,时间外推模型侧重科学家工程师的质量 ,目标增长模型侧重数量 ;时间外推模型侧重发挥国家导向作用的日本和欧盟模式 ,目标增长模型侧重发挥企业自发作用的美国模式     

R&D manpower and technological performance: The impact of demographic and task-related diversity

We assess the impact of R&D manpower diversity on firms’ technological performance. Relying on insights from two theoretical perspectives on team diversity (i.e. social categorization perspective and information decision-making perspective), we hypothesize that both demographic and task-related sources of diversity within firms’ R&D workforce influence technological performance. In addition, we expect that these two dimensions of diversity interact with each other. To test our hypotheses, we rely on survey data from 938 Singaporean firms, providing in-depth information on three sources of demographic diversity (i.e. gender, age, and nationality of R&D employees) and two sources of task-related diversity (i.e. educational and knowledge area background of R&D employees). Our findings point to significant interactions between different sources of R&D manpower diversity. In particular, we identify substitutive relationships between (a) educational and gender diversity, and (b) nationality and knowledge area diversity.     

R&D in the United States department of homeland security

” The Department of Homeland Security (DHS) began full operations in March by consolidating nearly 180,000 federal employees from nearly two-dozen agencies into a single cabinet-level department . ” The DHS would become one of the major funding sources of R&D . The DHS R&D portfolio would total $1.0 billion in FY 2004, a 50% jump from the $669 million for comparable programs in FY 2003 and nearly quadruple the FY 2002 funding level . 2 ” In FY 2003, DHS R&D would be mostly transfers of existing programs from the Departments of Agriculture (USDA), Defense (DOD), Energy (DOE), and Transportation (DOT), but in FY 2004 a new Homeland Security Advanced Research Projects Agency (HSARPA) would fund extramural R&D. ” Bioterrorism R&D would stay in the National Institutes of Health (NIH), but DHS will have a priority-setting role .     

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.     

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.     

The Bayh-Dole Act and university research and development

This paper examines the relationship between university research and development (R&D) activities and the Bayh-Dole Act. This act made it much easier for universities to obtain patents from research funded by the federal government and may have provided universities with an incentive to alter their R&D activities. The Act may provide an incentive to reduce basic research (which does not generate licensing fees) and increase applied research (which does generate patents and licensing fees). In addition, industry might be more willing to fund university R&D projects since the results would now be easier to patent. This paper differs from the existing literature which uses patent data (a measure of research output) by using research and development data (a measure of inventive input) to examine the effect of the Act.     

The effect of the triple helix system and habitat on regional entrepreneurship: Empirical evidence from the U.S.

The ‘triple helix’ of the university-industry-government relationship and habitat are accepted as important determinants of innovation and entrepreneurship. However, empirical explorations of the effects of these variables and their interrelationships on regional entrepreneurial activities are highly limited. To fill this gap, we investigate the effect of the triple helix system and habitat on birth and death rates of U.S. firms at the state level. As expected, we find that industrial R&D expenditure plays an important role in promoting regional firm birth. However, university and government R&D also generate a synergistic effect that indirectly influences regional firm birth rates. In addition, we find that the synergy between university and industrial R&D enhances the sustainability of firms, while the interactions between (1) university and government R&D and (2) government and industrial R&D are associated with an increase in firm death. Other factors linked to more favorable conditions for firm formation include higher educational attainment in a region, lower tax rate, and habitat factors affecting quality of life, such as lower housing prices and higher rates of health insurance coverage. In regions with high entrepreneurial activity, we find positive synergistic effects of the interactions between (1) university and government R&D and (2) university and industrial R&D on firm birth rate, suggesting that university R&D plays an important role as an ‘entrepreneurial mediator’ among the three spheres in the triple helix system. In low entrepreneurial regions, the only triple helix system factors significantly influencing firm birth rate were tax rate. This finding suggests that the independent and interdependent components of the triple helix system and habitat are less powerful in low entrepreneurial regions.     

External knowledge sourcing in different national settings: a comparison of electronics establishments in Britain and France

In a detailed comparison of matched samples of electronics establishments in Britain and France, this paper finds that the two samples of establishments were operating in distinctively different national labour markets for engineers and scientists, reflecting structural differences in national higher education systems and a far higher level of individual mobility between enterprises in Britain than is found in France. These differences were found to have very little effect on quantitative measures of establishments’ external research interactions which tended to reflect other national-institutional differences such as continued government support for public laboratories in France of a kind which have now been largely privatised in Britain. However, qualitative evidence pointed to a faster rate of development of new external knowledge sourcing and relationship building in Britain which was partly stimulated by the greater mobility of individual engineers and scientists between enterprises and other organisations bringing new personal networks of external contacts with them. These tendencies contrasted with a marked stability in external research linkages in France. The paper suggests that the greater openness of British R&D networks to new ideas and knowledge may be particularly advantageous in fast-changing high-tech industries such as electronics.     

Academic careers, patents, and productivity: industry experience as scientific and technical human capital

We examine career patterns within the industrial, academic, and governmental sectors and their relation to the publication and patent productivity of scientists and engineers working at university-based research centers in the United States. We hypothesize that among university scientists, intersectoral changes in jobs throughout the career provide access to new social networks and scientific and technical human capital, which will result in higher productivity. For this study, the curriculum vitae of 1200 research scientists and engineers were collected and coded. In addition, patent data were collected from the U.S. Patent and Trademark Office. The overarching conclusion from our analysis is that the academic scientists’ and engineers’ research careers we studied are quite different than characterized in the research productivity literature that is a decade or more old. The wave of center creation activity that began in the early 1980s and continues today has resulted not only in greater ties between universities and industry, but also markedly different academic careers.     

The maturation of global corporate R&D: Evidence from the activity of U.S. foreign subsidiaries

This study empirically investigates the impact of foreign country factors like market size, technological strength of industries, and science and engineering (S&E) capability on the conduct of U.S. overseas R&D during the 1991-2002 period. We find that overseas markets primarily predict the entry of U.S. R&D, while the S&E capability of nations is strongly correlated with the post-entry intensity of U.S. foreign subsidiaries’ innovative activity. We also find important inter-industry differences: U.S. electrical, electronics, computer, and telecommunication industries are strongly drawn towards overseas S&E capacity; industries including Machinery, Automobiles, and Transport equipment are primarily attracted by the technological strength of foreign industry; U.S. R&D in Chemicals mostly follows overseas markets. We discuss the implications of our results to the global organization of innovative activity and innovation policy.     

经济全球化背景下企业间合作R＆D的发展趋势及启示

经济全球化背景下企业间合作R＆D的重要性已引起高度关注.分析了企业间合作R＆D的发展趋势,在组织方式上,采用非股权合作方式;企业间的合作主要集中于信息技术、生物制药等高技术领域;合作方主要来自美国、日本和欧盟,其中美国的表现最为突出;我国政府应积极制订政策鼓励企业间合作R＆D.     

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.     

Can intellectual property rights protection and governmental R&D investment promote Chinese enterprises’ R&D investment?

This paper establishes an impact factor model among government R&D input, enterprise R&D input and IPRP in China. It uses data from 1992 to 2012 for regression analysis and finds that government R&D input in enterprises, institutions and universities has a leverage effect on enterprise R&D input, although the leverage effect caused by government R&D input in universities is not prominent, and proper IPRP can promote Chinese enterprise R&D input. The further Granger causality test shows that IPRP produced structural changes in Chinese enterprise R&D input in approximately 2002, and its leverage effect reached 0.147, which is double the previous effect and exceeds the leverage effect caused by government R&D in institutions and in universities. The findings verify that IPRP is the source of power for promoting Chinese enterprises’ technology innovation.