Elsevier

Research Policy

Volume 31, Issue 7, September 2002, Pages 1163-1180
Research Policy

Firm size and technology centrality in industry–university interactions

https://doi.org/10.1016/S0048-7333(01)00190-1Get rights and content

Abstract

University research centers can be beneficial to industrial firms by providing firms with a number of relationship alternatives that facilitate the advancement of knowledge and new technologies. This multi-method field study indicates that larger more mechanistic firms especially those in resource intense industrial sectors use knowledge transfer and research support relationships to build competencies in non-core technological areas. In contrast, smaller more organic firms particularly those in high tech industrial sectors focus more on problem solving in core technological areas through technology transfer and cooperative research relationships. We also found that champions at the firm play a key role in these dynamics. Implications for industry and universities are discussed.

Introduction

Intense global competition, rapid technological change, and shorter product life cycles have transformed the current competitive environment (Ali, 1994, Bettis and Hitt, 1995, Prahalad, 1998). Consequently, there are increased pressures on firms to continually advance knowledge and new technologies in order to ensure long-term prosperity and survival (Ali, 1994, Steele, 1989). While past practices favored internal initiatives, it is increasingly more difficult for firms to rely exclusively on in-house activities due to limited expertise and resources (Hamel and Prahalad, 1994, Jarillo, 1988, Parkhe, 1993, Pisano, 1990, Shan et al., 1994).

Firms can acquire knowledge and technology from many external sources. These sources include competing firms, research organizations, government laboratories, industry research associations, and universities. Universities are unique in terms of their potential. Not only can a firm obtain knowledge and technology, but it can also recruit graduates and faculty to serve as employees and consultants. While much of the inter-organizational literature focuses on the collaboration between two or more industrial firms, we concentrate on industrial firm and university collaboration. Industry–university (I/U) alliances represent an evolving trend for advancing knowledge and new technologies (Cohen et al., 1998, NSB, 2000, Okubo and Sjoberg, 2000, SRI International, 1997).

I/U relationships have a long history (Bower, 1993, Bower, 1992). Today, there continue to be compelling reasons for industrial firms and universities to work together. Benefits to a firm include access to highly trained students, facilities, and faculty as well as an enhanced image when collaborating with a prominent academic institution (Fombrun, 1996). Universities interact with industry for additional funds, particularly for research (NSB, 1996, NSF, 1982a). Universities also want to expose students and faculty to practical problems, create employment opportunities for their graduates, and gain access to applied technological areas (NSB, 1996, NSB, 2000). As a result of the complementary nature of I/U relationships, some of these collaborative activities have been instrumental in helping firms advance knowledge and propel new technologies in many areas, e.g. in biotechnology (Pisano, 1990), pharmaceuticals (van Rossum and Cabo, 1995) and manufacturing (Frye, 1993).

Geisler (1995) noted that many of the studies on I/U collaboration do not have a strong theoretical foundation. While some cross-sectional studies have been reported in the literature (e.g. Cohen et al., 1998, NSB, 1996, SRI International, 1997), the overriding research design in these studies has been the small-sample case study (Geisler, 1995) with a focus on the university (Cohen et al., 1998, Mansfield, 1991). We underpin our work with several conceptual frameworks and concentrate on firm specific variables such as size, structure, and technological characteristics in order to examine the association between key firm specific variables and the various I/U relationship alternatives used by firms and universities.

Section snippets

Conceptual framework and hypotheses

We have focused on university research centers because these centers encourage diverse collaborative activities, they have identifiable formal structures, and they have an explicit mission to transfer knowledge with industrial firms (Betz, 1996, SRI International, 1997). From a policy perspective, university research centers are important areas of study as there have been conscious efforts to adopt this standard model to promote I/U collaboration (Santoro and Chakrabarti, 1999). The National

Overall research approach

A multi-method field study was used to investigate this complex phenomenon. First, two different sources of exploratory data were obtained including an initial analysis of 12 recent NSF program evaluations and survey protocols. Next, 15 semi-structured interviews were conducted with industrial firm representatives and university center directors. The combined exploratory data helped to clarify and substantiate our conceptual framework while the semi-structured interviews also served to refine

Results

Table 2 provides descriptive statistics and the correlation matrix. Table 2 indicates a number of strong correlations among several of the independent variables and the dependent variables. Since a number of the independent variables were also highly correlated to one another, a multi-collinearity analysis was conducted to examine this more closely. The results of this analysis indicated that multi-collinearity was not a significant issue since none of the variance inflation factors for any of

Discussion and implications

The results of this study show that industrial firms use a variety of relationships with university research centers to accomplish different things. More specifically, we found that large firms have higher intensity knowledge transfer and research support relationships in order to strengthen skills and knowledge and gain access to university facilities for advancing non-core technologies. In contrast, small firms have higher intensity technology transfer and cooperative research relationships

Acknowledgments

The authors would like to thank the Center for Innovation Management Studies and their corporate sponsors for providing financial support for this research. Thanks also to George Farris at Rutgers University, Saul Fenster at NJIT, and David Hawk at NJIT for their assistance in this research.

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