"There's a popular impression that university and government research only matters in one or two industries," says Wesley M. Cohen of Carnegie Mellon University. "The results of our research suggest the opposite: that the contribution of public research is pervasive and matters a great deal." The study, "Links and Impacts: The Influence of Public Research on Industrial R&D" appears in the journal Management Science, an INFORMS publication. A summary of the study can be found online at http://www.informs.org/Press/industrialr&d.pdf
The authors, Professor Cohen, Richard R. Nelson of Columbia University, and John P. Walsh of the University of Illinois at Chicago, use data from the 1994 Carnegie Mellon Survey of Industrial R&D to reach their conclusions. The Carnegie Mellon Survey evaluated how useful information moves from university and other public research institutions to industrial R&D facilities. It is based on responses from nearly 1,500 companies.
The pharmaceutical industry, say the authors, stands out in the study in many ways. There is no other industry where public research - and particularly a basic science, biology - is thought to be so relevant. Moreover, patents and licenses are key means of conveying information from public research to industry in pharmaceuticals, partly reflecting the fact that patents are more effective in protecting inventions in drugs than in any other manufacturing industry. Finally, the drug industry is one where start-ups clearly are more tied to public research than are firms in general.
Impact Pervasive, Though Often Not a Driver
The authors find that the effect of public research is pervasive across the manufacturing sector, although it can be characterized as critical to industrial R&D only in a small number of industries. In 26 of 34 industries surveyed, half or more of the respondents reported at least one public research field to be at least moderately important, and over 50% of the respondents in 14 of the industries reported public research from at least two fields to be at least moderately important.
University and government research is rarely, however, the most important source of new project ideas outside the R&D lab. Respondents in virtually all industries listed buyers and the firm's own manufacturing operations as the predominant sources suggesting new projects, with 90% listing customers and 74% listing the firm's manufacturing operations.
Public research doesn't just suggest new project ideas, say the authors. It also helps firms complete ongoing projects, contributing about equally to helping companies innovate and helping them complete projects that were already undertaken. Unexpectedly, start-ups were especially dependent on universities to help complete projects.
For most industries, the report suggests, the way that university research affects industry is indirect. Rather than making its major impact through licenses or university/corporate joint ventures, public research reaches the private industry through the traditional academic channels of "open science," especially publications, public conferences and informal interactions, though consulting as well is comparably important.
The authors examine which fields of university and government research contribute the most to industrial R&D. As expected, more respondents consider research in the engineering and applied science fields to contribute importantly to their R&D than research in the basic sciences.
Though the study is unable to address the magnitude of the economic impact of any field of public research, the authors find the field with the most widespread impact on industrial R&D is materials science, followed by computer science.
The Institute for Operations Research and the Management Sciences (INFORMS®) is an international scientific society with over 10,000 members dedicated to applying scientific methods to help improve decision-making, management, and operations. Members of INFORMS work in business, government, and academia. They are represented in fields as diverse as airlines, health care, law enforcement, the military, the stock market, and telecommunications. 2002 is the 50th anniversary of organized operations research in the United States. 1952 was the year that the journal Operations Research and the Operations Research Society of America, one of the founding societies of INFORMS, were born. The INFORMS website is at http://www.informs.org .
Journal
Management Science