Shaping the path to inventive activity: the role of past experience in R&D alliances

In this paper, we investigate a recurrent organizational event—R&D strategic alliances—and analyze its multidimensional effect on inventive activity; in particular, we examine the quality of the inventive process outcome. In so doing, we address the still-unresolved issue of the impact of past experience in explaining performance differences between firms in the realm of alliance inventiveness. Our results offer new insights concerning the crucial drivers of invention quality and technological breakthroughs. As expected, results suggest that—in the area of R&D—alliances formed by experienced partners are more likely to produce inventions that effectively synthesize technological knowledge from more diverse domains. In fact, experienced alliance partners are more likely to generate useful inventions with a greater innovative impact on others’ subsequent inventions—knowledge that can be built upon. Surprisingly, results are indeterminate with regard to whether innovation via R&D alliance increases invention’s degree of applicability across diverse scientific and technological fields that might cite its patent.     

Multiplicative-innovation synergies: tests in technological acquisitions

Technological innovations enjoy synergies that vary in their speed and magnitude of impact, depending upon whether they are additive or multiplicative in nature. Additive-innovation synergies build incrementally on familiar technologies (as is reflected in the technologies built upon within their patents’ respective antecedents) and the duration of their effect is shorter-lived. Multiplicative-innovation synergies arise from combining greater proportions of diverse technologies and their effects have longer duration. The most-effective organizational-learning processes accompanying exposure to exotic technology streams via technological acquisition will occur if firms have properly invested in adaptive capacity to synthesize inventions using the unfamiliar knowledge. In the first tests of innovation synergies on firm performance, we find that technological novelty in patent content improves return on assets for firms that consistently invested in R&D. Using patent-content scores to characterize whether inventors have integrated greater proportions of exotic technological antecedents into their inventions (or not), we test the impact of innovation synergies on firms’ performance after technological acquisitions. Diversification posture (which could be an alternative explanation for performance differences) is negatively-correlated with innovation synergies in our results.     

Technology proximity between firms and universities and technology transfer

This paper investigates the technological orientation of firms and universities and their propensity to have knowledge and technology transfer (KTT) activities. This study looks at the technological potential for KTT and how it is used, emphasizing differences between smaller and larger firms. To this end we collected information about the technology activities of firms (patent statistics) and the technology activities of universities. Furthermore, we used survey data on technology transfer activities. We combined the three datasets and found??especially for smaller firms??that great technology proximity fosters transfer activities with different universities (case 1). The same is true if proximity is low and expertise is considerable at universities in the respective technology field (case 2). In both cases additional transfer potential exists. In the second case firms engage in transfer activities in order to update and modify their knowledge base and as a consequence improve ??competitiveness?? in certain technology fields. Furthermore, firms show a tendency to diversify their contacts with universities in order to avoid knowledge lock-in.     

Science Is Golden: Academic R&D and University Patents

Many studies have shown indirect effects of academic research by linking academic research to firm patents. However, since the Bayh-Dole Act, universities are allowed to patent inventions that were funded by federal money and to retain the royalties that these patents generate. As a consequence, universities now are interested in protecting their profitable discoveries, just like any commercial firm doing R&D. In this paper, we apply the econometric techniques traditionally used to estimate the patent production function of firms to data on the patents of American universities. We find that more money spent on academic research leads to more university patents, with elasticities that are similar to those found for commercial firms. In addition, we provide estimates of the effect of establishing a Technology Transfer Office on a university's patent output.     

R&;D productivity and the organization of cluster policy: an empirical evaluation of the Industrial Cluster Project in Japan

Industrial clusters have attracted increasing attention as important locations of innovation. Therefore, several countries have started promotion policies for industrial clusters. However, there are few empirical studies on cluster policies. This paper examines the effects of the “Industrial Cluster Project” (ICP) in Japan on the R&D productivity of participants, using a unique dataset of 229 small firms, and discusses the conditions necessary for the effective organization of cluster policies. Different from former policy approaches, the ICP aims at building collaborative networks between universities and industries and supports the autonomous development of existing regional industries without direct intervention in the clustering process. Thus far, the ICP is similar to indirect support systems adopted by successful European clusters. Our estimation results suggest that participation in the cluster project alone does not affect R&D productivity. Moreover, research collaboration with a partner in the same cluster region decreases R&D productivity both in terms of the quantity and quality of patents. Therefore, in order to improve the R&D efficiency of local firms, it is also important to construct wide-range collaborative networks within and beyond the clusters, although most clusters focus on the network at a narrowly defined local level. However, cluster participants apply for more patents than others without reducing patent quality when they collaborate with national universities in the same cluster region.     

Exploring the Patent Explosion

This paper looks more closely at the sources of patent growth in the United States since 1984. It confirms that the increase is largely due to U.S. patenters, with an earlier surge in Asia, and some increase in Europe. Growth has taken place in all technologies, but not in all industries, being concentrated in the electrical, electronics, computing, and scientific instruments industries. It then examines whether these patents are valued by the market. We know from survey evidence that patents in these industries are not usually considered important for appropriability, but are sometimes considered necessary to secure financing for entering the industry. I compare the market value of patents held by entrant firms to those held by incumbents (controlling for R&D). Using data on publicly traded firms 1980--1989, I find that in industries based on electrical and mechanical technologies the market value of entrants' patents is positive in the post-1984 period (after the patenting surge), but not before, when patents were relatively unimportant in these industries. Also, the value of patent rights in complex product industries (where each product relies on many patents held by a number of other firms) is much higher for entrants than incumbents in the post-1984 period. For discrete product industries (where each product relies on only a few patents, and where the importance of patents for appropriability has traditionally been higher), there is no difference between incumbents and entrants.     

Measuring the economic impact of research joint ventures supported by the EU Framework Programme

The objective of this paper is to analyse the effects of international R&D cooperation on firms?? economic performance. Our approach, based on a complete data set with information about Spanish participants in research joint ventures supported by the EU Framework Programme during the period 1995?C2005, establishes a recursive model structure to capture the relationship between R&D cooperation, knowledge generation and economic results, which are measured by labour productivity. In the analysis we take into account that the participation in this specific type of cooperative projects implies a selection process that includes both the self-selection by participants to join the consortia and the selection of projects by the European Commission to award the public aid. Empirical analysis has confirmed that: (1) R&D cooperation has a positive impact on the technological capacity of firms, captured through intangible fixed assets and (2) the technological capacity of firms is positively related to their productivity.     

Linking technological and educational level diversities to innovation performance

In this study, we explore the extent to which diversity of educational levels among research scientists and engineers (RSEs) in the context of a firm’s level of technological diversity influences innovation performance. We used data from the 2004–2008 National R&D Survey in Singapore. The results from 366 firms across different industries indicate that when a firm’s technological domains are heterogeneous, those firms with an RSE workforce comprising similar educational levels have positive innovation performance, measured as the number of patent applications, while those comprising diverse educational levels have negative innovation performance. Our further exploration of the positive interaction between technological domain heterogeneity and similarity of educational levels suggests that firms that had a high ratio of RSEs with lower educational levels had more positive patent outcomes compared to those that had a high ratio of RSEs with higher educational levels. The results show that there are limits to the strength of technological diversity in a firm’s absorptive capacity as explained by organizational demography.     

专利价值之谜及其理论求解

在当今专利制度中,尽管多数专利的价值往往少于专利申请和维持的费用,但专利申请案和授权量却急剧增长。这被称之为专利价值之谜,其理论求解应从专利获取的目的出发。竞争者之所以通过申请大量专利的方式形成专利组合,是因为它既是竞争者的防卫之盾,也是其进攻之矛。非竞争者所拥有的专利组合备受人们指责;但事实上,非实施企业拥有的专利质量大都可靠。此外,大量专利的形成是专利制度为鼓励专利竞赛有意而为的结果。因为由大量专利结合而成的专利组合能够区分市场上真正的创新者和模仿者,从而保障创新者的竞争优势。我国应该采取合理的措施鼓励我国的创新企业形成自己的专利组合。     

University spillovers into small technology-based firms: channel, mechanism, and geography

This study examines how university knowledge spills over into small technology-based firms in Japan. Estimated Heckman selection models taking into account the timing of university-industry research collaboration and geographical proximity to spillover pools reveal that cooperative research with universities positively affects R&D productivity of small technology-based firms with a three-year lag. Among small technology-based firms that collaborate with universities in research, firms with local ties have a greater advantage in improving the quality of their R&D personnel through the acquisition of complementary knowledge. Theoretical and policy implications of empirical results are discussed.     

Sustainability of patent-based competitive advantage in the U.S. communications services industry

Patents have long been assumed to provide firms with competitive advantage, but longitudinal results suggest that some types of patent content provide more enduring advantage than others do. The duration of advantage appeared to wane with time in the highly-dynamic U.S. communications-services industry during a period when technological changes occurred rapidly within it (1998–2012). Results suggest patents integrating technology streams that were different from the technologies of focal-patents’ grants contributed more to sustaining firms’ profit margins during this period than did focal patents that exploited extant technological knowledge. We found that firms who continually pushed their organization’s knowledge envelope outward to incorporate more unknown technologies sustained higher profit margins for a longer duration of time than did firms whose patented inventions were predominantlyincremental—even within difficult settings where competition grew so intense that firms’ average operating margins were deteriorating.     

The contract theory of patents

Two distinct theories of patents, the “reward theory” and the “contract theory,” are customarily adopted by the courts to justify the patent system. The reward theory maintains that the function of the patent system is to remunerate successful innovators so as to encourage R&D effort. In contrast, the contract theory holds that the function of the patent system is to promote the diffusion of innovative knowledge. Assuming that in the absence of patent protection innovators would rely on trade secrecy, it views patents as a contract between innovators and society whereby a property right is granted in exchange for disclosure.This paper develops an economic analysis of the contract theory of patents. To disentangle the disclosure from the reward motive for granting patents, we assume that the innovation process is entirely serendipitous, so that R&D effort is not a concern. Our main finding is that the disclosure motive alone suffices to justify the grant of patents. The optimal patent duration should strike a balance between the incentive to induce disclosure and the aim of limiting the monopoly distortion induced by patents.     

Relationship Dynamics between University Research Centers and Industrial Firms: Their Impact on Technology Transfer Activities

In this study we focus on relationship-oriented factors such as trust, geographic proximity, communication, and university policies for intellectual property rights (IPR), patents and licenses and examine how these factors influence the technology transfer process between university research centers and their industrial partners. Data for this study were collected from 189 industrial firms working with 21 research centers affiliated with prominent research-oriented universities in the US. Our results showed that trust, geographic proximity, and flexible university policies for IPR, patents, and licenses were strongly associated with greater technology transfer activities. The implications for both researchers and practitioners are discussed.     

University–Industry collaboration in the biopharmaceuticals: the Italian case

We investigate the determinants of University–Industry (U–I) interactions in the biopharmaceuticals in Italy over the period 2004–2010, choosing co-publishing as a proxy of U–I partnerships. We construct a novel dataset of co-published articles, that contains measures of proximities, agglomeration, firms’ and universities’ characteristics. Following a consolidated methodology, we integrate our dataset of effective interactions with the set of all potential interactions, to estimate probabilistic models for the occurrence and the intensity of U–I interactions. Our main findings confirm and extend the predictions of the previous literature: (1) geographical proximity and prior partnership increase the probability and the intensity of co-publication; (2) the proximity of a firm to other biopharmaceutical firms and universities attenuates the relevance of geographical proximity; (3) there exists complementarity between prior partnerships and geographical proximity. A novel result is that firms’ and Universities’ size, firms’ R&D and patents expenditure and the composition of the academic staff as well as quality of academic research exert a significant impact on the intensity of co-publishing.     

Strategy first in international joint ventures

International technology- based joint ventures are proliferating despite their inherent complexity and high risk of failure. US firms continue to employ international joint ventures as a vehicle for collaborative research and development (R & D); foreign investors prefer the joint venture for investing in the emerging market economies of Eastern Europe. Tipping the balance in favor of successful joint ventures requires a strategic approach from the very advent of entering into an international R&D arrangement: an approach in which clear objectives are set and alternative ways to reach these objectives are systematically evaluated. Several frameworks are presented that clarify and facilitate the decisionmaking process during the initial phases of considering a joint venture in which project objectives are developed, alternative R&D arrangements are evaluated, and potential partners are identified and eventually selected.     

Determinants of national patent ownership by public research organisations and universities

This paper focuses on the question of whether the national production functions of patents owned by universities and public research organisations (PROs) differ. We use Eurostat patent and R&D data broken down by institutional sector for the European Union 27 and other countries in years 1982–2007, and we estimate dynamic panel models. The impact of R&D expenditure on patent ownership is higher for PROs than for universities. University patent ownership activity is dependent on business funding, while PRO patent ownership is not. We recommend a reversal of the current decline of PRO R&D expenditure and discuss whether PROs perform better at macroeconomic level vis a vis universities.     

The role of openness in explaining innovation performance in a regional context

We investigate the role of search strategy in shaping firms’ innovation performance. Firms use a wide range of external actors and sources to help them achieve and sustain innovation. In particular, the extension (breadth) and the relevance (depth) of such sources determine firms’ ability to extract and exploit knowledge and new ideas and, thus, to be innovative. Using a sample of firms in a regional context active in R&D, we built separate measures of breadth and depth for local (on a regional scale) and global (outside the regional context) search. This allows us to investigate whether localized or global knowledge spillovers are in place. We find that a wider set of partners increases coordination costs, while greater depth in search strategies contributes to innovation. We find that a more diversified search strategy at the local level (greater breadth of search) results in significant payoffs in terms of innovation, while diversifying the partnership with Italian partners has a smaller, although still positive, effect. In contrast, the benefits of depth of innovation are greatest at the global level. In addition, a broader set of information sources for R&D projects has a significant positive effect on innovation. Finally, firms that resort to R&D subsidies are less innovative.     

Patent litigation insurance and R&D incentives

A major policy concern regarding patenting activity is related to the actual enforceability of the patents granted by Patent Offices. The risk of facing elevated legal costs to defend patent rights can affect ex-ante incentives to invest in R&D. This paper analyses whether the availability of insurance policies that cover legal expenditures for patent litigation could increase the appropriability of the innovation. We model a situation in which an incumbent innovator is endowed with a valid patent and an entrant imitator can either directly enter the market or try to apply for a patent, hoping that an error will be made by the Patent Office. The incumbent can accommodate the entrant, file a suit to a civil court or offer a settlement agreement. We model the presence of heterogeneity in the risk that the patents will face an error by both patent examiners at Patent Offices and judges at civil court. We analyse the changes in expected profits for the innovator when given the possibility of buying an insurance policy which will cover legal costs in the event of trial. We compare the cases in which (i) coverage is voluntary and the insurer can discriminate perfectly between risky patents; (ii) coverage is voluntary and the insurer cannot discriminate between patents, and (iii) coverage is compulsory. The model highlights a set of peculiar strategic characteristics of insurance for legal expenditures which contribute to singling out the reasons underlying the underdevelopment of this market. We suggest that the crucial reason for such a failure is not adverse selection; consequently, we challenge the benefits of making coverage compulsory.     

The Catch-up Strategy of Petrobrás through Cooperative R&D

This article seeks to reflect on the possibilities of cooperative R&D to constitute an opportunity for companies in developing countries to take part in the innovation concerning technological frontier. In order to show this thesis can be true, this article is based on the case study of Petrobrás, the Brazilian state-owned oil company, which has employed the resource of cooperative R&D to gain access to the new subsea boosting technology and to acquire a place in the vanguard of such technology. However, the catch-up occurs only when firms in developing countries actively take part in the innovation process and accomplish an efficient process of technological learning, which is reflected on the evolution of interactions with external partners. The experience of Petrobrás is analyzed emphasizing the technological learning process through the transformation in its agreements with external partners. We present three cases of subsea boosting technologies developed by Petrobrás together with a majority of foreign producers or institutes. The analysis of these experiences allows us to show that the learning process and the mastery of in-house processes were accompanied by a significant evolution in the agreements with external sources. Petrobrás passes on from the position of cosponsor to that of articulator of the innovation process in technological cooperation agreements. The article proposes an evolutionary sequence to analyze the company's learning process. The evolutionary trajectories are different in each case, but in all of them it was possible to prove the increasing commitment of Petrobrás to the innovation effort.     

Young innovative companies: Are they high performers in transition economies? Evidence for Vietnam

We study the economic value of both embodied technological change and Research and Development (R&D) investment as proxies for the inputs of innovative activities conducted by Vietnamese firms. Our main focus is on the profitability of young innovative companies (YICs), private innovative companies (PICs), and small and young companies (SYCs). In particular, we test whether YICs could prove successful in fostering economic development through their technological change activities. Results show that (a) although YICs are more R&D intensive and innovative than PICs and SYCs, in general they do not produce equivalent performance; however those specific YICs focusing on technological change potentially outperform their counterparts, and (b) PICs are more capable than the other types of firms in translating their innovative effort to higher profitability.