21st Century Manufacturing The Role of the Manufacturing Extension Partnership Program (2013) / Chapter Skim
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7 Foreign Programs to Support Applied Research and Manufacturing
7 Foreign Programs to Support Applied Research and Manufacturing
Pages 137-165
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From page 137... ...
All of the foreign organizations surveyed here have the same basic mission, which is to translate knowledge from the research base into commercial 1 These leading national programs are not an exclusive list. There are other national examples, such as the Korea Institute for Advancement of Technology (KIAT)
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From page 138... ...
Its mission is to perform contract research for public organizations and companies that transforms basic research from university and nonuniversity laboratories into commercial products and industrial processes. Each Fraunhofer institute specializes in a particular technological competency and is paired with a German university that has relevant scientific knowledge.
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From page 139... ...
Canada's Industrial Research Assistance Program Canada's 50-year-old Industrial Research Assistance Program (IRAP) is a government program administered by the National Research Council of Canada (NRC)
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From page 140... ...
The ITAs and INAs collaborate to determine where gaps exist in regional innovation infrastructures and where to locate research resources to address unmet research requirements. CROSS-COUNTRY COMPARISONS Hermann Hauser, a UK-based entrepreneur, produced a seminal survey of global institutes of applied research in 2010 that provided much of the intellectual foundation for Britain's Catapult initiative.3 He emphasized that the role of each institute was "context dependent" based on a given country's industrial structure, innovation culture, and other research organizations, and that the variation in national contexts might inhibit transfer of a model from one country to another.
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From page 141... ...
The primary objective of France's Carnot initiative is to foster stronger ties and partnerships between that country's extensive public research organizations, on the one hand, and "other socio-economic actors," on the other hand, mainly private companies. The Carnot designation, as well as additional government money, is bestowed based on a given institute's demonstrated willingness and ability to engage in contract research work for industry.
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From page 142... ...
Canada's IRAP is a government program managed by the National Research Council, a government organization. Although governance structures of the research organizations surveyed vary considerably, most of them accord a substantial degree of autonomy to individual institutes within larger networks.
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From page 143... ...
The Fraunhofer is responsible for establishing innovation clusters throughout Germany and is currently pursuing 19 cluster initiatives, each of which usually involves one or more Fraunhofer institutes, a local university, and an array of small, medium, and large industrial partners. Some Carnot institutes are responsible for governance of French Competitiveness Clusters (pôles de compétitivité)
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From page 144... ...
7 34 Institutes Staff 20,000 5728 4,000 Evolving 19,000 Patents 6,131 17,569 NA NA 880/year Annual "Core" 723 300 90 65 79 Government Funding (Millions of Dollars)
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From page 145... ...
A comparison of funding levels underscores the extent to which the volume of government core funding for Fraunhofer and ITRI dwarfs that being made available by the British government for core funding of the Catapult Centres. Moreover, the German figure would roughly double if annual revenues derived from by the Fraunhofer from contract research for government organizations were added to the core funding figures.9 Talent Shortage All countries surveyed in this paper suffer significant shortages of engineers, scientists, and technicians, notwithstanding the existence of excellent education and training programs, some of which are operated by the research organizations covered by the survey.
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From page 146... ...
The Carnot institutes are staffed with 7,700 PhD students. Graduates taking positions in ITRI and the Fraunhofer institutes typically remain for six years before departing for positions in industry for which they are, at that point, highly qualified.
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From page 147... ...
Information about recent and ongoing contract research for companies is therefore sensitive and the research institutions are reticent to disclose details of projects undertaken for industry. The Fraunhofer institutes publish extensive details of their contract research for public organizations, but very little information about their contract research for industry.14 ITRI publicly displays product prototypes developed in its laboratories, but will not necessarily disclose the identities of the companies that will take them to market.
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From page 148... ...
The Fraunhofer institutes are cited as comprising "external, very well equipped research departments of the Mittelstand companies."18 To the extent that this view is accurate, it validates the widely held view of the Fraunhofer-Gesellschaft as one of the most successful research organizations in the world. It does not necessarily follow, however, that programs that consciously seek to emulate the Fraunhofer model will be able to foster new communities of Mittelstand-like firms outside of Germany.
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From page 149... ...
The Fraunhofer Institute for Material and Beam Technology IWS, which maintains a relationship with the U.S.-based Fraunhofer Center for Coatings and Laser Applications, explains that this relationship enables it to identify emerging trends, and "the research and development work performed in the United States generates additional know-how and competencies, which benefit the project acquisition in the German and European markets."21 ITRI is "arguably the most capable institution of its kind in the world in scanning the global technological horizon for developments of interest in Taiwanese industry, and executing the steps required to import the technology -- either under license or joint development -- and then absorbing and adopting the 19 The Fruanhofer ousted its first President, Nobel Prize winner Walther Gerlach, because he was a basic scientist who had little regard for basic research. Christine Egger, "Nachdenken im Auftrag: Eine Geschishte der Fraunhofer Gesellschaft,".
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The process continues today as ITRI acquires technology abroad and develops products and proves manufacturing processes on demonstration plants within the institute for dissemination to companies entering emerging industries such as flexible displays, green buildings, and cloud computing.
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ITRI, Fraunhofer, and the Carnot institutes have formalized this process, endorsing the concept of spin-offs as a mechanism for technology transfer to industry and establishing institutional structures and programs to enhance their spin-offs' prospects for success in the marketplace. ITRI has established a venture capital subsidiary, the Industrial Technology Investment Corporation, which screens proposed spin-offs and takes small equity stakes in roughly one-third of them, with the expectation of selling that interest at some point in the future.
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From page 152... ...
Then you can scale it up, you can have a complete supply chain for the industry. So DTC does not just work with display companies, but also materials suppliers and equipment makers.29 During the past three decades, as ITRI was creating domestic industry supply chains through spin-offs and technology transfer, Britain was witnessing the partial or complete disaggregation of many of its long-standing industrial chains as the application of orthodox-free market policies by successive Conservative and New Labour governments forced a punishing restructuring on the country's manufacturing sector.
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From page 153... ...
The technological support of Fraunhofer institutes enables these SMEs to remain competitive with their Asian counterparts, ensuring that all or most of the industry chains remain in Germany or other European countries. Engaging the Private Sector In Britain and France, a long-standing challenge has been the difficulty experienced by companies, especially small ones, seeking to ascertain which research organization could assist with a specific technological concern.
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From page 154... ...
, establish clients in 45 countries, grow from 7 to 15 employees, develop a relationship with ExxonMobil worth over $3.5 million and create a community of suppliers with the ability to develop laser technology for other companies.35 Britain and France offer advisory services to small businesses that resemble IRAP's services, although they are not part of the Catapult and Carnot initiatives.36 Fraunhofer institutes link the university system with private industry in parallel structures of thematic "research units" and "business units." Contacts with industry are made by Fraunhofer business units, which play a role somewhat analogous to IRAP's ITAs as a bridge between companies and the research base. The business units have business expertise as well as knowledge of the potential applications and markets for the particular technologies in which they specialize.
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From page 155... ...
In addition, many company executives are ITRI alumni, and "most of them graduated from the same university, took the same classes, were taught by the same professors, and had similar work experience at ITRI."38 The interface with industry is enhanced by ITRI's "technology alliances," which convene interested companies on a thematic basis for technology development and diffusion.39 The primary purpose of the Carnot and Catapult initiatives is to improve the flow of technology from the national research base to private industry. The Carnot institutes typically enjoy research alliances with domestic universities and domestic and foreign research organizations.
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From page 156... ...
Proportional Matching of Industry Funding (Fraunhofer, Carnot) The Fraunhofer institutes' headquarters allocates government core funding to individual institutes according to a formula that rewards each organization's success in contracting with the private sector for research -- the more contract research revenue from industry, the more funding the organization receives.
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From page 157... ...
The visiting committees which conduct the evaluations are comprised of individuals with relevant expertise who have no connection to the institution and in a majority of cases are not French. Fraunhofer institutes are also subject to periodic performance audits by external experts drawn from the university and business communities.
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From page 158... ...
LESSONS FOR MEP An overview comparison of MEP with successful foreign programs promoting applied research, such as Germany's Fraunhofer-Gesellschaft and Taiwan's ITRI, raises the threshold question as to whether there are applicable lessons for MEP from the foreign efforts, given that foreign programs are so divergent from MEP in scale, level of public funding, and character. The origins and operations of these programs, explored in detail in Appendix 1, suggests that in fact there are two distinct areas in which these programs have potential lessons for MEP: 1.
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From page 159... ...
Fraunhofer and ITRI also offer technical support, management training, and advice with respect to manufacturing processes as part of their larger function of promoting innovation. However, in addition, Fraunhofer and ITRI projects addressing manufacturing technology also emphasize the development, introduction, and diffusion of new processes and materials including proprietary technologies.
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Success in the foreign programs has been manifested in such terms and in the rapid dissemination of cutting-edge manufacturing processes
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From page 161... ...
The principal sources of relevant research are universities, public research organizations, and technology-intensive major companies. The well-established foreign research organizations surveyed here (ITRI, IRAP, Fraunhofer-Gesellschaft)
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To be specific about the degree of integration between Fraunhofer institutes and German research universities, consider the relationship between the Fraunhofer Institute for Laser Technology ILT and RWTH Aachen, one of Germany's leading research universities. Fraunhofer ILT works closely with four RWTH university chairs: Laser Technology, Technology of Optical Systems, Laser Physics, and Nonlinear Dynamics of Laser Processing.
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From page 163... ...
and use our excellent network to find jobs." International Outreach Internationally, ITRI and Fraunhofer have developed multiple research collaborations with high-tech multinationals and public research organizations which generate a steady flow of cutting-edge technology to domestic companies in Taiwan and Germany. The benefits of these collaborations are sufficiently evident to governments in the two countries that public funds may be used to support research projects in other countries.
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From page 164... ...
They also maintain vast formal and informal networks throughout the German university system and with other public research organizations such as the Max Planck Society, a system of public research institutes focused on basic research. Finally, the Fraunhofer institutes participate in a web of international technology alliances.
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From page 165... ...
The resulting scale, concentration of resources, and institutional development has not proven effective, at least in the past. The leadership of the Fraunhofer tends to assess the prospects for success of government-backed research institutes in other countries with reference to the commitment of governments to sustain core funding at adequate levels over the long term.
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