Industry-university interactions in Valencia, a peripheral european region

Interacciones Universidad-Industria en Valencia, una región periférica europea

Adela García-Aracil*, Ignacio Fernández de Lucio**, Antonio Gutiérrez Gracia*** y Elena de Castro Martínez****

Contenido

• 1. Introduction
  • 1.1. Background
  • 1.2. Research questions
• 2. Descriptive Analysis
  • 2.1. The context
  • 2.2. Descriptive analysis by technological linkages
  • 2.3. Descriptive analysis by firm size
  • 2.4. Employers’ opinion about Industry-University interactions
• 3. Empirical Model and Results
• 4. Conclusions
• References
• Appendix A

1. Introduction

Intense global competition, rapid technological change and shorter product life cycles have transformed the current competitive environment (Prahalad, 1998; Ali, 1994). 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; Pisano 1990).

Firms can acquire knowledge and technology from many external sources. These sources include competing firms, research organizations, government laboratories, industry research associations, and universities (Mora, 1999; García-Aracil et al., 2003). 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 (Okubo and Sjoberg, 2000; Cohen et al, 1998).

1.1. Background

Industry-university relationships have a long history (Bower, 1993). 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. Universities interact with industry for additional funds, particularly for research (NSB, 2000). 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, 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, biotechnology (Pisano, 1990), pharmaceuticals (van Rossum and Cabo, 1995) and manufacturing (Frye, 1993).

In recent years, the focus of the most of the studies on industry-university interactions has been based on detailed analysis of industry-science links in narrowly defined fields of research and technology (Meyer-Krahmer and Schmoch, 1998), on the aggregate effect of university research on knowledge production in firms (Varga, 2000; Anselin et al., 1997), or on certain types of knowledge interactions such as citations of university research in firm patents (Jaffe et al., 1993), personnel mobility (Bania et al., 1992; Hicks, 2000), formal an informal personal interactions, cooperative education, curriculum development, recruitment of recent university graduates and employing student interns, cooperative education programs, personnel exchanges (Reams, 1986), joint publications (Hicks, 2000), I-U research consortia, trade associations, the co-authoring of research papers by university and industrial firm members (NSB, 2000) and spin-off formations of new firms by university members (OECD, 2000). Furthermore, industry-university relations have been examined in the context of technology transfer with a strong focus on the use and its effects of new technology from universities (i.e. patents, prototypes) by firms (Bozeman, 2000). All of them are interesting examples of efforts to understand which interactive activities are more popular for addressing immediate industry problems.

Firms have a variety of motivations for collaboration with university research center. For example, large firms often pursue risky initiatives outside their current technological domain simply because they have financial strength to do so (NSB, 2000; Rosner, 1968). Large firms work with universities on industry-wide, pre-competitive issues related to a broad range of leading-edge technologies, many of which are unrelated to the firm’s core business (Rea et al., 1997). Relationships with universities are used by these firms to strengthen skills, knowledge, and gain access to university facilities in order to advance a broad range of knowledge bases useful in non-core technological areas. Since knowledge transfer and research relationship are more suited for working on wide-ranging knowledge in a variety of technological areas, it follows that large industrial firms interested in non-core areas would concentrate their efforts in knowledge transfer and research support relationships. Since large firms use I-U relationships to bolster their work on technologies not central to their core business, these firms are less likely to engage in cooperative research and technology transfer activities since these relationships are better suited for pursuing core technological initiatives.

The channels used for transferring knowledge and technology depend on the characteristics of knowledge, such as the degree of codification, the tacitness or the embeddedness in technological artifacts. The potential economic value of knowledge affects the way, knowledge is exchanged between actors, too, demanding for knowledge interactions, which ensure secrecy, increase trust between actors and allow for exclusive appropriation of knowledge (Saviotti, 1998). Certain I-U relationship activities incorporate and demand specific technical knowledge from the technical cores of both organizations. For example, technology transfer happens through a dense network of individual ties between university scientists and engineers and industrial firm R&D personnel (Oliver and Liebeskind, 1998). Much research in organization theory has demonstrated that organization structure is closely linked to firm size and plays a role in a firm’s ability to adapt to the environment, create and assimilate knowledge, and be innovative (Burns and Stalker, 1961). Organizational structure is also a consequential factor that directly impacts dynamic firm capabilities (Teece et al., 1997). As such, an organization’s structure affects both knowledge and technology transfer since knowledge and/or technology transfer involves identifying the appropriate sources, interacting with those source, acquiring the knowledge and/or technology, and integrating them into existing organizational systems and procedures (Zmud, 1982). Thus, a critical success factor in interactive activities depends on the firm’s ability to accurately understand, interpret, evaluate, and absorb specific knowledge and technologies (Cohen and Levinthal, 1990).

1.2. Research questions

All the mentioned studies have dealt with data from industry-university linkage in the United States, Canada and Europe marked with intense interaction between high-technology industries and university research centers. However, in this paper, data was taken from a representative survey from a peripheral Spanish region: Valencia. The analysis of I-U on a regional level has received growing attention in the last few years (Varga, 1998). The analysis of the I-U interaction was based on data from 700 manufacturing firms surveyed in 2001. The data was obtained through a standardized survey named ‘Encuesta a la Comunidad Empresarial Valenciana sobre las relaciones universidad-empresa’ carried out by Valencian government institutions.

The survey addressed the industry-university relationship considering the different I-U linkages, the motives for collaboration, a variety of interactive activities as well as the formality and difficult on the agreements covered by firms and universities, and the role of the government in those commitments. Questions on general characteristics of the firm such as size, organization structure, technological characteristics, as well as the performance of R&D activities and industrial innovation processes in terms of new products or cost reduction were raised in order to determine the extent to which these factors might explain varying R&D performance and differing collaboration paths of firms.

Briefly, this research tries to answer the following questions:

• Which factors contribute significantly to the industry-university interaction?
• Which firms’ motivations for collaborating with university constitute the most obvious explanation for the I-U interactions?
• Are there other variables such as managers’ level of education, technological characteristics or interactive activities that have major effects on I-U interactions?

The paper is organized as follows: section 2 presents a descriptive analysis; section 3 covers empirical model and presents the empirical findings. Finally section 4 provides a summary and conclusions.