Technology Transfer Systems in the United States and Germany Lessons and Perspectives (1997) / Chapter Skim
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The R&D Enterprise
The R&D Enterprise
Pages 62-90
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From page 62... ...
technology enterprise are profoundly shaped by the contributions of a spectrum of nonindustrial R&D performers that are not themselves directly engaged in the commercialization of technology. The specific focus of this report is on the institutions and mechanisms involved in the transfer of technology from nonindustrial R&D performers to private firms, which then use this technology to create new products and services.
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From page 63... ...
GOVERNMENT Prior to 1980, the federal government was the leading source of R&D funds, accounting for as much as 66 percent of the nation's R&D spending in the early 1960s. During the past decade, however, with the end of the Cold War and declining defense budgets, the federal government's share has declined rapidly, amounting to only 35.5 percent of the total, about $61 billion, in 1995 (Figure 2.3)
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From page 64... ...
64 TECHNOLOGY TRANSFER SYSTEMS IN THE UNITED STATES AND GERMANY Total R&D/GDP 4.0 3.5 3.0 Germany United States Japan 2.5 Percent 2.0 United Kingdom France 1.5 Canada Italy 1.0 0.5 0 1981 1983 1985 1987 1989 1991 1993 Nondefense R&D/GDP 4.0 3.5 3.0 Germany Japan 2.5 Percent United States 2.0 United Kingdom 1.5 France Canada 1.0 Italy 0.5 0 1981 1983 1985 1987 1989 1991 1993 FIGURE 2.2 Total and nondefense R&D spending as a percentage of GDP, by country. SOURCE: National Science Board (1996)
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From page 65... ...
. The federal government funded roughly 58 percent of all U.S.
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NOTE: Data are estimated. aIncludes an estimated $1.6 billion in state and local government funds provided to university and college performers.
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From page 67... ...
Industry performed an additional $20.3 billion worth of R&D supported by federal funds in 1995; most of this was defense-related development work financed by the Department of Defense (DOD) .4 In addition to R&D performed directly by private firms, federal agencies also funded about $1.8 billion of R&D at industry-administered FFRDCs that year.
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From page 68... ...
68 TECHNOLOGY TRANSFER SYSTEMS IN THE UNITED STATES AND GERMANY Performing sector 100 Federal Government Universities and colleges Industry Other nonprofit 80 60 Percent 40 20 0 Development Applied research Basic research Character of work Source of funds 100 Federal Government Universities and colleges 80 Industry Other nonprofit 60 Percent 40 20 0 Development Applied research Basic research Character of work FIGURE 2.4 National R&D expenditures, by performing sector, source of funds, and character of work, 1995. SOURCE: National Science Board (1996)
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From page 69... ...
This collection of general purpose state or local government appropriations, general purpose grants from outside sources, tuitions and fees, endowment income, and unrestricted gifts totaled roughly $3.9 billion in 1995. The share of academic research supported by institutional funds increased from 13.8 percent in 1980 to 18.1 percent in 1995.
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From page 70... ...
These missions, championed by various federal agencies, have included national security, the cure of disease, space exploration, food production, and world leadership in basic science. National economic development and international competitiveness have rarely been explicit objectives of federal technology policies and investments.
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From page 71... ...
.5 Although federally funded R&D as a share of total industrial R&D has declined rapidly since the late 1980s, from 33 percent in 1988 to 17 percent in 1995, DOD remains the source of over 80 percent of all federal R&D dollars spent by private industry. During the past 4 decades, defense-related R&D and procurement have fostered the development of important "dual-use" technologies (technologies having both civilian and defense applications)
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From page 72... ...
As of 1994, DOD accounted for over 49 percent of all federal obligations for academic research in math, computer sciences, and all fields of engineering combined. This included 60 percent of federal funds for academic electronics and electrical engineering research, 54 percent for metallurgy and materials research, 52 percent for aerospace engineering research, 41 percent for mechanical, 47 percent for civil, and 4 percent for chemical engineering research8 (National Science Foundation, 1997)
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From page 73... ...
appears to have been concentrated in a relatively small number of fields or mission areas, including health, agriculture, and transportation. Although data regarding the distribution of state and local government R&D funds are fragmentary, it is estimated that between 60 and 75 percent of all of research supported with nonfederal government dollars in 1994 was health related.
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From page 74... ...
commercial technology enterprise prepared the way for a number of new initiatives by the federal government that would engage it explicitly, however tentatively, in support of civilian technology for national economic development. A series of laws were passed to promote governmentindustry partnerships and to foster technology transfer and collaborative R&D between and within sectors of the nation's technology enterprise.
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TECHNOLOGY TRANSFER IN THE UNITED STATES 75 Basic research 6 Life sciences 5 Billions of constant 1987 dollars 4 3 Physical sciences 2 Engineering 1 Environmental sciences Mathematics and computer sciences 0 1980 1985 1990 1995 Applied research 6 5 Billions of constant 1987 dollars 4 Life sciences Engineering 3 2 Physical sciences 1 Environmental sciences Mathematics and computer sciences 0 1980 1985 1990 1995 FIGURE 2.6 Federal obligations for basic and applied research, by field. SOURCE: National Science Board (1996)
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From page 76... ...
; programs focused on industrial problem solving, particularly for small business, through the diffusion of technology and bestpractice applications; technology financing programs involving public capital or facilitated access to private capital; start-up assistance, primarily through public support of technology incubators and research parks; and teaming, or assistance in forming partnerships. Major federal technology development programs include the National Science Foundation–sponsored portfolio of university-industry research centers -- Industry/University Cooperative Research Centers (begun in 1973)
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Forty percent of federal spending on cooperative technology programs in fiscal 1994 was for technology development initiatives, 28 percent for technology financing, and 25 percent for industrial problem solving (Table 2.5)
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TABLE 2.5 Federal and State Government Investment in Cooperative Technology Activities, by Type of Program, 78 FY 1994 Industrial Technology Problem Technology Start-Up Federal Agency Development Solving Financinga Assistanceb Teaming $ millions (number of programs) Department of Agriculture 0.0 (0)
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From page 79... ...
estimates that state governments spent just over $384 million in fiscal 1994 on cooperative technology programs. Of this, approximately onethird was used for technology development, mostly matching support for university-industry technology centers funded primarily by federal initiatives (Box 1)
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University-Industry Technology Centers $104,606 University-Industry Research Partnerships 12,118 Government-Industry Consortia 4,810 Equipment and Facility Access Programs 5,965 Technology Financing (26 percent) Project Financing $62,172 Company Financing 30,861 Small Business Innovation Research 3,185 Technology Reinvestment Program/ Advanced Technology Program 5,593 Related Educational Initiatives (21 percent)
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From page 81... ...
industries. Until fairly recently, nonmanufacturing industries were believed to account for less than 5 percent of all industrial R&D spending.
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While the inflationadjusted industrial R&D expenditures overall declined 5.9 percent between 1991 and 1995, industrial performance of basic and applied research declined more than did industrial exploratory development. Since 1991, industrial basic research as a share of total industrial research has declined from 6.7 percent to 5.9 percent,20 that of industrial applied research declined from 23.5 to 22.0 percent, while that of industrial development increased from 69.8 to 72.2 percent.
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From page 83... ...
. Accompanying this latter trend have been an increased emphasis on R&D as a tool for scanning for and exploiting knowledge generated or applied beyond national boundaries, as well as closer integration of R&D with activities farther downstream in the value-added process (i.e., changes designed to leverage scarce R&D dollars and speed commercialization of new technology)
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From page 84... ...
industrial technology enterprise is the critical role start-up companies play in the transfer and commercialization of fast-moving, science-based technologies. This happens generally via movement, or "spinout," of researchers and technology from universities, large established compa
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From page 85... ...
hightech companies established during the past decade is considerably slower than that from the mid-1970s to the mid-1980s, nearly half of all U.S. high-tech companies operating in 1994 were established during the past 15 years (Table 2.6)
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From page 86... ...
innovation system.28 The following are among the most important: • the existence of sophisticated financial markets, particularly access to a large volume of venture capital and highly developed public equity markets;
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From page 87... ...
, as well as relatively risk-friendly sys tem of company law, particularly bankruptcy law; and • a highly individualistic, entrepreneurial culture nurtured in industry and many U.S. research universities by private practices, public policies, and various institutional mechanisms such as technology business incubators and venture capital firms that encourage risk taking.
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From page 88... ...
patent activity by German companies in 1993 indicates an emphasis on technology areas associated with heavy manufacturing industries (motor vehicles, printing, power generation, and new chemistry and materials) that have long been a source of German comparative industrial strength in world markets.30 In contrast to the relative strength of the U.S.
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From page 89... ...
. Numerous federal industrial technology initiatives of the past decade have sought to
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From page 90... ...
Another relative weakness of the U.S. industrial R&D/technology transfer enterprise is its limited capacity for diffusing new technology and know-how, particularly manufacturing or production technology, within technologically mature industries and SMEs in particular (National Academy of Engineering, 1993)
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