project 1. final presentation. december 2016

14
Assessing the effect of University-Business collaboration on business innovation Nola Hewitt-Dundas Stephen Roper Areti Gkypali

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Page 1: Project 1. Final presentation. December 2016

Assessing the effect of

University-Business

collaboration on

business innovation

Nola Hewitt-Dundas

Stephen Roper

Areti Gkypali

Page 2: Project 1. Final presentation. December 2016

Policy Context

UK Research and Innovation (UKRI)

• Purpose: ‘to integrate research and Innovate UK functions, which offers an opportunity to strengthen the strategic approach to future challenges and maximise value from Government’s investment of over £6 billion per annum in research and innovation’.

• Improved collaboration between the research base and the commercialisation of discoveries in the business community, ensuring that research outcomes can be fully exploited for the benefit of the UK’

Source: BIS, June 2016 The case for the creation of UK Research and Innovation, p.4

Protection of science and research funding: £1.5bn Global Challenges Research Fund (2016-2021); £.6.9bn capital investment in new equipment, labs and research institutes (2015-2021)Autumn Statement announcement of £2bn new R&D spend by 2020

Page 3: Project 1. Final presentation. December 2016

New-to-the-market Innovation

New to the market innovation

‘This business introduced a new good or service to the market before competitors’

New to the firm innovation

‘This business introduced a new good or service that was essentially the same as a good or service already available from competitors’

High costUncertainty

Lack of information

High risk

The proportion of UK firms undertaking both NTM and NTF innovation has fallen with a greater fall in NTF innovation.

Page 4: Project 1. Final presentation. December 2016

Profiling UK Innovators

44.9

20.024.0

48.8

43.9

19.4

75.5

51.4

63.4

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

New toMarket Innov

Uni Collab ConsultancyCollab

CustomerCollab

SupplierCollab

CompetitorCollab

In house R&D Design Exporter

All Large Medium Small

Page 5: Project 1. Final presentation. December 2016

New-to-the-market Innovation

• Innovation Strategy will be shaped by internal resources, organisational structures and market environment

• Dependence on internal R&D and organisational routes is unlikely to result in new-to-the-market innovation (Stringer, 2000)

• External knowledge sourcing: reduce costs and risk, access new ideas, knowledge and complementary skills (Un et al. 2010; Hottenrott and Lopes-Bento 2016)

Page 6: Project 1. Final presentation. December 2016

Universities as partners – the ‘two worlds paradox’

• Collaborating with universities will reflect the type of knowledge the firm is seeking as well as their own internal knowledge profile (Miotti and Sachwald, 2003)

• Provide frontier-edge knowledge for new to the market innovation (Amara et al. 2008; Belderbos et al. 2015)

• Reduced risk of moral hazard

• Offset by two-worlds paradox (Hall, 2003; Bruneel et al. 2010) differences in institutional logics and priorities may lead to tensions around project timelines, rewards, commercialisation and administrative procedures

• Can learning from prior collaboration help firms to overcome this paradox?

Page 7: Project 1. Final presentation. December 2016

Hypotheses

NTM Sales (Success)

Page 8: Project 1. Final presentation. December 2016

Data & Method• UK Innovation Surveys (UKIS) 2004-2012 (5 waves)

• Stratified sample, postal, non-compulsory, bi-annual, response rate 51% (2008-10) - 58% (2002-04): unbalanced panel. Focus on responses for 2 consecutive waves; c.1000 obs per double-wave; N=3,581

Dependent variable 1: NTM 0/1

Dependent variable 2: Sales NTM (%)

Dependent variable 3: Uni Collab (0/1)

• C.20% collaborate & more likely for larger firms

• Bivariate dynamic and recursive model allowing the simultaneous estimation of the probability of introducing NTM innovation, conditional on the likelihood of collaborating with a University

Page 9: Project 1. Final presentation. December 2016

Findings

Hypothesis ExpectedSign

Allfirms

Small Medium Large

1. Inter-related decisions + + + + +

2. Uni collab increase NTMI + + + + +

3. Learning other partners (-1) + + +/- + +

4. Learning prior university (-1) + + + + +

5. Learning prior NTMI (-1) + + + + +

Page 10: Project 1. Final presentation. December 2016

NTM Innovation 0/1 NTM Sales £

dy/dx Sig Coeff Sig

All Firms University collaboration (0/1)

.2466 *** 4.085 *

Small Firms(<50)

University collaboration (0/1)

.2214 *** 1.378

Medium Firms (50-250)

University collaboration (0/1)

.2134 *** 15.860 ***

Large Firms (250+)

University collaboration (0/1)

.2119 ** 12.392 ***

So how important is University collaboration to NTM innovation and sales?

Page 11: Project 1. Final presentation. December 2016

• University collaboration increases the probability of NTM innovation as compared to NTF by c.22% for all sizes of firm

• This university effect is equivalent to the combined effect of in-house R&D, design investment and exporting

• University collaboration also increases sales from NTM innovationbut note the marked difference between 12.3-15.9% for medium and larger firms and only 1.4 per cent for small firms

• Significant learning effects from prior collaboration. But small -increasing the percentage of firms collaborating by no more than c. 5%.

Key findings

Page 12: Project 1. Final presentation. December 2016

UKIS, Waves 4-8 Alln=23,616

10-49n=10,910

50-250n=6,629

250+n=6,053

Regional University + + +

National University + + + +

International University - +

! Fact: University Collaboration increases the probability of New to the Market (NTM) Innovation ? Question: Does this relationship hold for all Universities, irrespective of their location

Page 13: Project 1. Final presentation. December 2016

• Universities are impacting significantly on NTM innovation and sales. Are universities a disruptive influence?

• Small firms benefit from university collaboration (introduction of NTM innovation), but appear less able to capitalise on this through sales

• Pipeline effects are therefore different for smaller firms v medium and larger firms. Small firms may need more help commercialising outputs from collaborative research

• Learning effects are observed but are weak. Not sufficient to overcome the two worlds paradox. Policy efforts to encourage collaboration for smaller firms remain important

Implications

Page 14: Project 1. Final presentation. December 2016

Next steps

Finalise and circulate the two research papers:

Hewitt-Dundas, N Gypali, A and Roper, S‘Introducing new-to-the-market innovations: Can learning help to overcome the ‘two worlds’ paradox in university-business collaboration?’

Gypali, A Hewitt-Dundas, N and Roper, S‘So far, so good? Accessibility, utility and learning effects in university-business collaboration’

Along with Policy Briefings and a blog post….