The importance of manufacturing extension—A state perspective

The importance of manufacturing extension programs to the states, who are both sponsors and customers of these programs, centers around the economic impact that states expect will be derived for client manufacturing firms and their local economies. States are driven by the need to preserve and enhance their manufacturing base as a vital, wealth-creating sector of their economies. They recognize that the cycle of rapid and constant change in both the use of technology and business systems which is being generated by the global economy impacts their small and medium-sized companies disproportionately. So they look to manufacturing extension programs to assist these companies through the transition, thus enabling them to survive and thrive in global competition.     

Extension services and intermediaries: Brokering federal technologies to smaller firms

Extension services and other organizations that assist small and medium-size firms can play an important role in brokering technology from federal laboratories and other R&D sources. They can help the firms identify and define their technology needs and can help interpret and apply federal-laboratory technologies to meet those needs. These are some of the conclusions of a recent Federal Laboratory Consortium project, designed and managed by INNOVATION ASSOCIATES and overseen by the National Association of Management and Technical Assistance Centers. Major recommendations resulting from the project include: a re-examination by Congress of the federal technology-transfer structure to eliminate redundancies and fill gaps; funding extension services to facilitate hiring of dedicated technology-transfer staff; and providing additional incentives and creating informal mechanisms that encourage federal laboratories to work with small firms. The author also recommends that extension services view relationships with federal laboratories as long-term development rather than short-term “fix-its,” provide proactive and continuous follow-up of small firms working with federal laboratories, and act as an advocate on behalf of small firms. The following article discusses the project and its findings. Observations, issues, and recommendations are found at the end of the article.     

Technology transfer practice in japanese corporations: Meeting new service requirements

Japanese corporations are undergoing radical transition: they have begun to reassess the role, organization, and management of their internal R&D and technology commercialization activities in response to changing market, business, and technical conditions. From large consumer electronics firms such as Matsushita and Sony to the semiconductor and computing conglomerates such as Fujitsu and NEC, these organizations are under considerable pressure to both invent and innovate more rapidly and cheaply than ever before. As technologies become more complex and integrated—such as the convergence of electronics, computing, video, and broadcast television—it is no longer practical to assume that all of a firm's R&D needs can be met internally. This paper looks first at how major Japanese corporations have embraced technology transfer mechanisms such as licensing, joint collaboration, and the outsourcing of R&D to manage these changes dynamically and effectively. Secondly, this paper looks at why Japanese firms' record of managing collaboration and licensing, particularly on an international basis, has been disappointing because of a number of problems and barriers. These difficulties, which are compounded by the further externalization of research and technology and by increased licensing activity, have given rise to a need for new technology transfer services which, until recently, have not been available either within the organization or through local consulting firms in Japan. This paper concludes by outlining strategic and operational guidelines for managing licensing and collaboration arrangements between U.S. and Japanese firms which are also applicable in the general case. These insights are based on the experiences of managing licensing and collaboration programs between Japanese and U.S. organizations from the dual perspectives of two licensing firms—Innovation Partners, kk. in Japan and Competitive Technologies, Inc. of the United States.     

Waste not, want not—A look at the impact of manufacturing extension centers

Manufacturing extension centers have helped small manufacturers improve performance on the shop floor and thereby reduce costs. This article presents a case study of a metal working firm that was able to increase productivity and profits by instituting measures recommended by a field agent working for the Florida Manufacturing Technology Center (FMTC). As a result of services provided, the company was able to boost manufacturing throughput and increase production efficiencies. Using a simulation model, the article explores how small changes in manufacturing performance can result in significant cost reduction. It then discusses the consequences of alternative strategies designed to enhance the value of goods sold, rather than lower the costs of production. It concludes by arguing that manufacturing extension centers should help companies become more distinctive as well as more efficient.     

The Role of Technology in Small Firm Diversification

Sophisticated technologies are finding applications in an ever-growing number of products, from medical devices to children's toys. As high-technology applications proliferate, their use and development is no longer associated only with large companies, universities, and national laboratories. Many small companies compete on the basis of high technology products, processes and materials. While small companies have long been recognized as fertile ground for developing new technologies, little recognition has been given to the important role they play in transferring technologies between industries. This article therefore describes the central role that technology played in the diversification efforts of nine New England defense contractors. One of the study';s key findings is that successful firms relied upon their existing technical and management capabilities to obtain a sustainable competitive advantage in their new civilian markets. The article also describes a number of other factors that contributed to the success of their diversification efforts.     

The utilization of technology assistance by small manufacturers

This paper examines the extent to which small manufacturers in the Nashville metropolitan area have installed the latest technology and used external public and private sources of technical information. A mail survey of 404 manufacturing firms was conducted with 123 firms responding. Results indicate that small manufacturers in Nashville need technological assistance and that the existing assistance network (e.g., federal and state assistance agencies) is not effectively serving this need.     

SBIR first decade-results,benefits, problems from a Michigan perspective

This paper reports on the economic contributions and impact of the Small Business Innovation Research (SBIR) Program in Michigan during the first decade. The Michigan SBIR experience is examined to learn how researchers and small businesses use the SBIR Program, whether to start or strengthen businesses, how they view SBIR after a decade, and how the program has served Michigan businesses that have successfully carried out Phase I, Phase II, and Phase III SBIR projects. From the beginning of the SBIR Program, MERRA has coordinated annual SBIR conferences for Michigan companies. The MERRA staff has helped small businesses prepare suitable R&D projects and write effective SBIR proposals. Numerous SBIR awards have resulted from MERRA supportive efforts, and the MERRA small business outreach activity has kept MERRA in touch with successful firms to assist them in getting the best results from their SBIR projects and to assess progress. For this study, in-depth evaluations were made of various Michigan firms that won SBIR awards, including both mature small businesses and start-up companies to learn in what ways their SBIR experiences are parallel and in what ways they diverge. The study covers those that have used SBIR funds to diversify and add new areas of business to existing core areas. Other companies examined were created by researchers associated with universities, industry, or research organizations who utilized SBIR awards to assist in starting new businesses. Also considered were Michigan companies at different levels of development that have employed SBIR awards as seed money to perfect innovative new products for marketing.     

Patent cross-licensing,the influence of IP interdependency and the moderating effect of firm size

This paper analyzes technological interdependency as the key factor for companies’ motivation to engage in cross-licensing transactions. It gives evidence on how the incentive effects for mutual technology transfers vary by firm size and the degree to which a firm has to rely on its competitors’ intellectual property (IP dependency). Even though IP dependency exists also among smaller firms, cross-licensing has previously only been analyzed for large firms. This paper fills this gap in the empiric literature using original survey data among German manufacturing companies. Findings suggest that the influence of firm size and IP dependency on the use of cross-licensing can not be regarded separately. While the effect of IP dependency on the relevance of cross-licensing itself has a clear positive effect this seems to be true to a higher extent for small firms and decrease for larger companies. A possible reason for the interaction effect between these two factors is that larger firms have better odds of achieving a technological workaround which can serve as an alternative to in- or cross-licensing; furthermore small high tech firms might need to explicitly use cross-licensing to secure the freedom to operate while a large firm’s patent portfolio itself can serve as an implicit insurance by posing a threat which prevents other technology holders to file patent infringement cases.     

Continuous product and process improvement as keys to success: A case study

Dynamic customer expectations and increased competitive pressures require manufacturing organizations to continually improve both their products and processes. To gain a better understanding of this improvement process so that other firms might benefit from the lessons learned, an in-depth study of a relatively small electronics manufacturing firm was conducted. A review of the organization's product and process improvements over an extended period of time highlighted the importance of the following four “areas”: the firm's sensitivity to its external environment in motivating and guiding product and process improvements, the firm's sensitivity to its product and process strengths as well as the potential advantage these might provide in the marketplace, the firm's management stability and style in motivating and guiding product and process improvements, and the synergistic relationship between the firm's competitive strategy and its product and process improvements.     

Competing with MNEs: developing manufacturing capabilities or innovation capabilities

A challenge facing local firms in China is the selection of effective technology strategies to compete against MNEs in the era of globalization. The existing literature suggests two alternatives, developing strong manufacturing capabilities or developing innovation capabilities, but provides no clear answer to the question of how to select one strategy or the other. This paper explores this issue by introducing two concepts: “barriers to appropriability” and “opportunities for improvement.” We develop four propositions to specify the boundary conditions for local firms to choose their technology strategies and analyze two local firms’ technology strategies to illustrate two of the propositions. We find that development of strong manufacturing capabilities will not necessarily be an effective strategy for local firms competing against MNEs. If there are opportunities for improvement, it might be possible for local firms to compete against MNEs by developing innovation capabilities and core technologies.     

A constitutional moment: How we might reimagine platform governance

We are at a constitutional moment for the future of the internet. Nation states around the world are launching major new initiatives to regulate the internet, both directly against users and by regulating the companies that provide access to telecommunications infrastructure and content services. The giant technology companies that control the bulk of the commercial internet are themselves under unprecedented scrutiny for the policies they set, the decisions they make, and the choices that go into designing their architecture. In my new book, Lawless, I argue that in this moment of change there is a major opportunity for us all to rethink how the internet should be governed, how power is held to account, and whose values prevail.¹     

The economic impact of engineering research centers: preliminary results of a pilot study

This article describes the results of a pilot study that tested the feasibility of estimating quantitatively the regional and economic impacts of NSF-supported Engineering Research centers. For regional impacts, we combined estimates of the direct plus indirect and induced economic impacts of ERC expenditures generated from a regional input–output model with estimates of the additional impact on the state due to center-based start-up companies, licensing income from intellectual property produced by the center, the cost savings enjoyed by local firms that had hired center graduates, and advice and consulting to local firms by center faculty. For national economic impact, a suitably modified version of the regional approach was employed, supplemented by use of a consumer surplus model to estimate the net public benefits of newly commercialized technologies based in center research. As the project proceeded, it became clear that efforts to focus solely on economic impacts that could be quantified relatively easily would greatly underestimate the actual national economic impact of ERCs. The types of impacts included and the kinds of data collected from centers and their collaborating companies were therefore expanded in the later case studies. Results of the first three cases are described here; findings from the remaining two studies did not change our overall results or conclusions. The profile of regional and, especially, national economic impact estimates varied widely across the centers studied. Only some of these variations could be attributed to ERC characteristics; most were the result of variations in the amount and type of data that could be obtained from the centers involved and the companies they worked with. We concluded that even the most conscientious and costly data collection efforts would be unlikely to yield comparable data across centers because the accessibility of key data, especially proprietary data, will differ unpredictably from center to center. Further, focusing on narrowly-conceived, quantifiable economic data alone should be avoided in these kinds of impact studies. Doing so distorts the amount and characteristics of actual impacts, many of which—perhaps most of which—cannot feasibly be converted to monetary terms. Such a narrow focus will greatly underestimate the impact of ERC-like centers, masking the much broader and, based on our findings, larger and more significant impacts on society.     

An alternative industrial extension model: The experience of the food manufacturing industry

The ability to reach small manufacturers with productivity enhancing technology requires implementation of alternative industrial extension strategies. We describe one such strategy being pursued in the food manufacturing industry. Given the large numbers of small manufacturers and of potential technology suppliers, the challenge is to create an effective approach that takes advantage of the market aggregation capacity of food industry trade associations. Through a food manufacturing coalition, this extension effort will identify common industry needs for technology; assess and adapt existing technology;stimulate vendors to capitalize on the technology; and rely upon market forces to encourage innovative problem solving.     

Industry-University Cooperative Research Centers

This paper takes a first look at the effect of Industry-University Cooperative Research Centers (IUCRCs) on industrial R&D laboratories. IUCRCs are small academic centers designed to foster technology transfer between universities and firms. Since IUCRCs depend on industry support we expect them to further the research of member companies. Our findings suggest that IUCRCs promote industry-university technology transfer. We find strong associations between laboratory membership in IUCRCs and the importance of faculty consultants, co-authorship with faculty and hiring of graduate students to the laboratories. IUCRC membership contributes small increments, not always statistically significant, of 2% in laboratory patenting and research expenditures. Both estimates are larger for National Science Foundation IUCRCs, consistent with their quality and their sorting to larger laboratories. These results survive a simultaneous equation analysis of the joint decision to patent and join IUCRCs. Nevertheless more work is needed to separate the effect of the IUCRCs from the matching mechanism that assigns IUCRCs to R&D laboratories.     

Transferring gas-turbine technologies to the former Soviet Union: Opportunities and problems

The new nations of the Commonwealth of Independent States are notoriously energy- inefficient. States like Russia and Ukraine seek technologies from the West that will improve efficient combustion of fossil fuels. Recently, scientists in the United States and the former Soviet Union have explored the idea of transferring technologies to Russia and Ukraine to develop and mass-produce aeroderivative gas turbines, which promise to quickly replace power lost front the shut- down of unsafe nuclear reactors in Russia, Ukraine and the former Soviet republics. Production of these turbines could promote defense conversion in Russia and Ukraine and could provide opportunities for American companies to trade and invest in emerging markets. Despite these clear advantages, formidable obstacles impede the immediate development, production, and commercialization of this technology by American firms in the former Soviet republics. Constraints include competition from European firms that are developing and marketing similar technologies, unfavorable business and economic conditions in the former Soviet republics, and official Russian- US differences concerning the closure of nuclear power plants and development of oil and gas reserves.     

The role of incentives in the deployment of technologies from cooperative R&D

Over 1,400 cooperative research and development agreements (CRADAs) were in place across the U.S. Department of Energy (DOE) laboratory system in May 1995—indicating that a broad sampling of industry endorses the objectives of the National Competitiveness Technology Transfer Act of 1989. The law enables DOE's contractor-operated facilities, such as Oak Ridge National Laboratory (ORNL), to collaborate with companies, industrial consortia, universities, and even state and local governments. Positive impacts cited by industrial CRADA participants thus far include the improvement of existing products and manufacturing processes, the reduction of investment risks associated with cutting-edge research, and an increased awareness of important technical trends. However, such industrial benefits are often hard to measure; that represents a potential problem for federally funded R&D institutions, where metrics associated with tangible economic impacts are assuming greater prominence. Future political support for public/private partnerships may depend on steep growth in quantitative measures of economic value, based on the sale of patented products and services. Boosting such sales in a significant way, could, in turn, depend on the consistent application of incentive-based approaches that motivate individuals and organizations to aggressively pursue technology-based commercialization goals. In Oak Ridge, Tennessee, where Lockheed Martin Energy Systems manages ORNL and other DOE research and production facilities, broadly defined incentives have played a key role in facilitating the sale of licensed products and services. Cumulative sales totaled $102,000,000 in April 1995, with several innovations just beginning to enter the marketplace after years of engineering and product development. The same factors that impact technology deployment in these “stand-alone” licenses will play a key role in the deployment of inventions arising from CRADAs.     

Mystery shopping: demand-side phenomena in markets for personal plight legal services

ABSTRACT

“Personal plight” is the sector of the legal services industry in which the clients are individuals, and the legal needs arise from disputes. This article proposes that competition among personal plight law firms is suppressed by three demand-side phenomena. First, consumers confront high search costs. Identifying competing law firms willing and able to provide the needed services often requires significant expenditure of temporal and psychological resources. Second, comparable price and quality information about firms is scarce for consumers. Both of these factors impede comparison shopping and reduce competitive pressure on firms. A third competition-suppressing factor is observed in tort legal service markets, where offerings are typically priced on a contingency basis. Contingency fees have relatively low salience to consumers, and this reduces consumers’ willingness to negotiate and comparison-shop on the basis of price. This analysis is supported by the author’s empirical research with Ontario personal plight lawyers as well as the existing literature. The article concludes by suggesting possible consequences of this analysis for regulatory policy.     

How consumer information curtails market power in the funeral industry

Based on the French market, the purpose of this article is to show that contrary to common opinion in France about the impossibility of having a deregulation of the business of funeral services without observing abuses of many locally dominant suppliers, improvement in consumer information, along with the entry of a special storing facility service (“chambre funéraire”), imposes enough competitive pressure on the various suppliers, especially the former monopolist. With a Discrete Choice Experiment implemented in Lyon, France, we find evidence that even in this very emotionally charged market, consumer behavior has changed in favor of a better assessment of the different possibilities of services supplied and of their relative prices (e.g., high price elasticities). We also implement simulations in local markets and show that with good consumer information the market power of supposedly dominant firms is far less important than generally believed. Lastly, simulations stress the procompetitive effects of any business setting up a new storing facility.     

The performance of university spin-offs: an exploratory analysis using venture capital data

University spin-offs are defined as firms founded by university employees. Using a large database on venture-backed start-up companies, I describe the characteristics of university spin-offs and investigate whether they perform differently than other firms. I find that venture-backed university spin-offs are concentrated in the biotechnology and information technology industries. Moreover, a spin-off tends to stay close to the university, suggesting that technology transfer through spin-offs is largely a local phenomenon. Multivariate regression analyses show that university spin-offs have a higher survival rate but are not significantly different from other start-ups in terms of the amount of venture capital raised, the probability of completing an initial public offering (IPO), the probability of making a profit, or the size of employment.

Computer aided manufacturing technology transfer needs in Florida

Automation and computers could improve the profitability of a manufacturing organization. While automation is primarily used to perform physical manufacturing tasks, computers are used for both information-type tasks and physical manufacturing tasks. If the manufacturing operations and personnel, as well as the flow of information, material, and energy, could be integrated to perform well-planned sequences of tasks to manufacture families of products in cells, the rewards would be enhanced profitability, quality, and safety. Such an integration is generally termed “computer-integrated manufacturing” (CIM). This paper summarizes a survey designed to determine the current and future service/training needs in CIM-related technologies of Florida manufacturing industries. It also identifies a role for a technology transfer center in offering training/technical services in CIM or related technologies to these companies.