Abstract - DRUID · 2019-09-03 · inter-related universes, is proposed, ... European GNSS...

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Paper to be presented at DRUID19 Copenhagen Business School, Copenhagen, Denmark June 19-21, 2019 Industry-academia innovation co-development: the case of space-based technology Paola Testa Toulouse Business School Strategy [email protected] Abstract The present paper is meant to investigate the matchmaking process among industry and academia for the development of innovation in high-tech industries, such as the satellite-based precise positioning and navigation industry, aiming at identifying critical aspects and propose mitigation tools. To this end, a qualitative approach is adopted; namely in-depth interviews with key stakeholders active in the commercial, academic and institutional environments, triangulated with secondary sources and previous evidence, so to take into account a multifaceted and ever evolving complexity. The analysis lead to identify lack of continuity of existing links, rigidity, inertia and lack of trust of established networks toward external players as main barriers. As way forward, a platform connecting on a permanent basis researchers and practitioners, two different but complementary and increasingly inter-related universes, is proposed, aiming at unleashing the full potential of synergies deriving from the interactions and enhance innovation development and diffusion, on top of boosting the full exploitation of existing data.

Transcript of Abstract - DRUID · 2019-09-03 · inter-related universes, is proposed, ... European GNSS...

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Paper to be presented at DRUID19Copenhagen Business School, Copenhagen, Denmark

June 19-21, 2019

Industry-academia innovation co-development: the case of space-based technology

Paola TestaToulouse Business School

[email protected]

AbstractThe present paper is meant to investigate the matchmaking process among industry and academia forthe development of innovation in high-tech industries, such as the satellite-based precise positioningand navigation industry, aiming at identifying critical aspects and propose mitigation tools. To this end,a qualitative approach is adopted; namely in-depth interviews with key stakeholders active in thecommercial, academic and institutional environments, triangulated with secondary sources andprevious evidence, so to take into account a multifaceted and ever evolving complexity. The analysislead to identify lack of continuity of existing links, rigidity, inertia and lack of trust of establishednetworks toward external players as main barriers. As way forward, a platform connecting on apermanent basis researchers and practitioners, two different but complementary and increasinglyinter-related universes, is proposed, aiming at unleashing the full potential of synergies deriving fromthe interactions and enhance innovation development and diffusion, on top of boosting the fullexploitation of existing data.

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Industry-academia innovation co-

development: the case of space-based

technology

Abstract

The present paper is meant to investigate the matchmaking process among industry and

academia for the development of innovation in high-tech industries, such as the satellite-based

precise positioning and navigation industry, aiming at identifying critical aspects and propose

mitigation tools. To this end, a qualitative approach is adopted; namely in-depth interviews

with key stakeholders active in the commercial, academic and institutional environments,

triangulated with secondary sources and previous evidence, so to take into account a

multifaceted and ever evolving complexity. The analysis lead to identify lack of continuity of

existing links, rigidity, inertia and lack of trust of established networks toward external

players as main barriers. As way forward, a platform connecting on a permanent basis

researchers and practitioners, two different but complementary and increasingly inter-related

universes, is proposed, aiming at unleashing the full potential of synergies deriving from the

interactions and enhance innovation development and diffusion, on top of boosting the full

exploitation of existing data.

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1. Introduction

Technology is increasingly embedded in our everyday life. It's easy to see how connected we

are, how communications got easier, how we benefit from better and more accessible

transports, improved healthcare, interactive education, etc. Technology is evolving at a pace

never experienced before, becoming increasingly complex but also more accessible at the

same time, up to the point in which users became active players in the evolution process. All

this is typically coupled with growing global competition putting quite some pressure on

firms to continuously struggle to be at the forefront and remain competitive.

Such a scenario is quite challenging to face, and firms might find themselves in need of extra

resources, assets or expertise cope with the present environment. This is where collaboration

among commercial players and academics come into play, giving partners the chance to take

advantage of synergies and complementarities, in order to achieve better results faster. Co-

development of innovation is increasingly becoming the habit in high-tech and knowledge

intensive industries, environments in which setting the state of the art is very demanding.

This kind of collaborations attracted scholars attention, who investigated the advantages these

partnerships provide, such as creativity that academic players can offer to private companies,

first-hand information concerning the hot topics that market players can share, steering

academic research and making it up-to-date and more “sellable”, on top of get access to

additional resources of different kind, knowledge and visibility, lowering risks and costs for

each partner involved.

Despite the relevant efforts invested in understanding the dynamics underlying industry-

academia collaboration, the matchmaking process remains quite underinvestigated. It

represents just the initial and short phase with respect to a hopefully long-term collaboration,

but still, it is a quite crucial tiny bit, since no managerial tool can optimise the collaboration

beyond a certain level if you have to deal with a sub-optimal partner.

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Therefore, the purpose of the present piece of work is to analyse matchmaking opportunities

and processes currently adopted by academic and commercial players, in order to disentangle

underlying dynamics and identify drivers, criticalities and room for improvement. In addition,

the author proposes a way forward to optimise such a process, which could also bring

additional opportunities for both researchers and practitioners.

Precise positioning and navigation solutions relying on satellite (Global Navigation Satellite

System - GNSS) technology constitute a suitable context for this research: high-tech

industries, where partnerships, consortiums and different kind of collaborations are more and

more common when it comes to innovation development due to the complexity of the

technology, its potential application in many fields very different from each other and its

economic relevance on a global scale. Nevertheless, those interactions haven’t reached yet the

stage of a structured, stable and permanent framework. As a matter of facts, the different sorts

of partnership are typically projects deployed over a limited and pre-established timespan,

which might imply fragmentation of resources, under-exploitation of results and sometimes

lack of long-term perspective. Within this context, it seems actually suitable the constitution

of a permanent connection between the mentioned spheres, also considering the

unprecedented growth and expansion of commercial applications relying on GNSS

technology in the latest years, and the likely perspective that this trend will continue. This is

particularly true for Europe, which, thanks to Galileo and its innovative services, might enjoy

benefits currently unexplored. Adopting a European perspective, in addition to the private and

local initiatives which brought to the constitution of industry clusters and partnership of

different kind, the European Union is doing an admirable effort to connect academia and

business, through funding programmes for applied research (FP7, H2020) and parallel

training and capacity building initiatives (Marie Curie Actions)

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This elaboration will analyse existing relationship between scientific community and GNSS

industries, and will propose a way to optimise synergies, enhance partners’ matchmaking, and

support information exchange in order to boost the development and diffusion of innovative

solutions and applications. The ultimate goal of this exercise is therefore to identify and

propose a way to mitigate existing barriers preventing the full unlace of innovative potential.

The literature investigating the interactions between industry and scientific community for

innovation-related purposes have mainly analysed the factors making a collaboration

successful, hence focusing on a set of management tools aimed at smoothen the collaboration

and make different players fit on a shared ground.

On the contrary, the present study is devoted to investigating how the perfect partners can find

each other in the easiest and cheapest way, and how synergies deriving from different but

interlinked resources and goals can be fully exploited, in a context which is evolving at an

unprecedented pace and characterised by commoditisation and democratisation of technology.

The study adopted a qualitative approach, so to capture the multifaceted complexity of the

reality under investigation. Namely, several in-depth interviews have been performed

involving stakeholders belonging to the industry, the academia and also public institutions

managing funding lines supporting innovation development and European Space Programmes

(Galileo), to take into account the different perspectives of the actors involved. The

information collected has then been triangulated with secondary sources regarding existing

tools meant to facilitate potential partners' encounters and previous literature.

The reminding of the article is structured as follows: section 2 offers an overview on the

researcher methodology, followed by the literature review in section 3. Section 4 explains the

context in terms of technology at stake, existing initiatives and market trends, followed by the

results of the investigation in section 5 and the presentation of the proposed way forward: a

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two-sided platform as intermediary and data marketplace in section 6. Eventually, section 7

deals with the conclusions and final remarks.

2. Research methodology

To pursue the research objectives, a qualitative approach has been adopted. In particular,

literature review on industry-academia collaboration for innovation, including studies on very

close and therefore relevant topics such as clusters’ dynamics and functioning, allowed to

gain a clear picture of relevant knowledge and findings on the subject. The author also

performed 24 face-to-face in-depth interviews lasting between 45 and 90 minutes with key

stakeholders belonging to the industry, the academia and public institutions. These actors are

all involved in the development of innovation in GNSS downstream industries. It has been

indeed considered important to take into account the heterogeneity of the actors participating

in the innovation process, concerning in particular their different perspectives, experiences

and needs so to gain a comprehensive understanding.

To perform the interviews, semi-standardized, open-ended interview guides have been

adopted, slightly adapted according to the interviewee belonging and field of activity. This

methodology allows flexibility and offer room for the interviewee elaboration and digression,

which can enrich the investigation. Internal validity is ensured involving different categories

of players and interviewing many people for each organisation considered as much as

possible, so to avoid single informant bias. Due to the strategic role played by the industry

under investigation (see section 4), the present study is geographically focused on the

European GNSS downstream industry. By this choice, the author assumes that the players

involved are, in great part, subject to the same laws and regulation that nowadays exist at

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European level. Therefore, this sampling strategy is also meant to mitigate potential bias

related to entities operating in different environment and subject to different constraints.

The interviews were used to collect information on the interviewee experience, knowledge,

difficulties, vision and expectation concerning industry-academia collaboration, and, as

second step, to explore potential mitigations of existing issues.

The information collected has been triangulated with secondary sources regarding existing

tools meant to facilitate potential partners encounter.

The following table offers an overview on the type and number of (European) interviewees

involved:

Type of organization Interviewees per entity Role of the interviewee

Big corporate 3

Technical manager

Business development manager

R&D manager

Big corporate 1 Marketing and sales manager

SME 2 Technical manager

Technical manager

SME 3

Head of department

Senior manager

Head of system operations

SME 1 Managing director

SME 1 Partner

Start-up 1 Funder

European Institution 4

Policy officer

Administrator

Special advisor

Head of sector

European Institution 2 Project officer

Project officer

Public national agency 2 Head of department

Technical manager

Public research centre 2 Researcher

Researcher

University 1 Professor

University 1 Associate professor

Total 13 24 Table 1- List of interviewees

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3. Literature review

Since the early 80s, the relations and collaborations between academia and industry attracted

considerable attention from both scholars and policy makers. Ever since then, the importance

of those kind of interactions has been clear: they provide industries with creativity and help

universities to focus on topic having high relevance for the economy and society, offering

therefore opportunities for education and further research (Burnside & Witkin, 2008).

Following this interest, a considerable volume of literature has been produced covering a

quite ample spectrum of structures, perspectives and effects.

Santoro (2000), sustained that "Global competition, shortened product life cycles, and the

increased pressure on corporate profits make it increasingly more difficult for firms to

advance knowledge and new technologies through the sole use of in-house resourced and

capabilities". Hence, collaboration seems to be a necessary condition to innovate and remain

competitive in the current challenging market environment, on top of exposing scholars to

practical problems and potential employment opportunities.

Open innovation, the paradigm proposed by Chesbrough (2003), assumes that “firms can and

should use external ideas as well as internal ideas, and internal and external path to market

as firm look to advance their technology”.

Bozeman and Corely (2004) suggest that such a cooperation and interaction bring different

advantages such as the possibility to rely on additional equipment or resources of different

kind, to improve access to funding, to access excellent expertise otherwise unavailable, on top

of tacitly learning from partners in an informal way. All this is typically coupled with

increased visibility and prestige.

Both the firm and university perspectives have been adopted, investigating the outcomes of

collaboration for private companies especially in terms of investments in R&D, technological

developments and related patents (Boardman et al, 2009) on one hand, and incentives and

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obstacles faced by academics engaged in collaborations with the industry (Van Dierdonck et

al, 1990) on the other one. What Abramo et al (2009) called the "triangle of knowledge"

involving research, education and innovation seems to be crucial for wealth creation in every

country, providing significant benefits to every partner involved and ultimately to the whole

economy. According to Barnes, 2002, entities can technologically advance at lower risks and

costs thanks to those kinds of collaborations, enhancing also funding opportunities.

Guan et al (2005) identified the following obstacles to successful collaboration:

- Lack of an efficient communication channel,

- Immature technology, and

- Difficulties in commercializing academic products.

Moreover, it is commonly shared that collaboration between different organisations requires a

significant managerial effort to successfully reach its goal. This is due to the multitude of

factor coming into play and the complexity of connecting two words normally following

different logics and dynamics.

According to Siegel et al (2003), in order to succeed while collaborating, universities should

improve their understanding of their true “customers” and give the appropriate importance to

their needs, be more flexible while negotiating technology transfer and licensing agreements,

and gain more awareness regarding the value of social networks. Concerning the industry, it

would be beneficial to be more proactive in its efforts to bridge the cultural gap with the

academia, on top of involving in collaboration with the scientific community preferably

managers with some university experience.

Some scholars (Boardmand & Ponomariov, 2009) analysed the personal interactions

occurring during industry-university collaborations, identifying funding sources, productivity,

university researchers’ behaviours, industrial relations, personal attributes and scientific

values as the most relevant aspects affecting the success of the project.

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Many researchers investigated the most impacting and therefore necessary conditions for

successful collaborations between commercial players and scientific community. Barbolla &

Corredare (2009) identified the following:

Actual usefulness of the project;

Professional qualification and trust in the research team;

Corporate capacity to put the results into use;

Mutual understanding concerning knowledge and technology use among partners;

Appropriate coordination between working teams.

Barnes et al (2002), out of six case studies, proposed a "Good Practice Model" for the

effective management of collaboration and partnership regarding in particular partner

evaluation, high quality project management, real and lasting trust and commitment,

flexibility and capability to adapt to evolving scenarios, on top of the importance of achieving

mutual benefit through the collaboration.

Some authors put an effort in mapping the R&D networks in Europe, as Barber and

Scherngell (2013) did, showing that European R&D networks are not homogeneous, they are

instead characterised by distinct, relevant substructures thematically homogeneous and

spatially heterogeneous.

Concerning the GNSS domain, some analysis on the structure, nature and functioning of

existing clusters and network have been performed. In particular, Vicente et al. (2010) applied

social network analysis to investigate the structural, technological and geographical

dimensions of knowledge flows, the influence of particular organizations in the structure and

the heterogeneity and complementarities of their position and role occurring in the Midi-

Pyrenean GNSS cluster. Also partially based on this work and with a similar methodological

approach, Balland et al (2010) showed that the nature of knowledge involved in relationships

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influences the geographical and structural organizations of the technological field,

determining the coexistence of a relational core-periphery structure with a geographical

cluster-pipeline one.

Balland (2012) proposed a deep dive on how the proximity can influence the evolution of

collaboration networks, empirically determining how organizations choose their partners

according to their geographical, cognitive, organizational, institutional and social proximity.

In particular he concluded that geographical, organizational and institutional proximity favour

collaborations. Cognitive proximity instead does not seem to have a significant effect on

collaboration, mainly because organizations need not only partners with the same knowledge

base but also to access to different knowledge in the GNSS industry. The results also show

that social proximity is less likely to happen in projects with multiple partners than in bi-

lateral collaborations.

This brief literature review reveals that a lot of research has been performed with the goal of

outlining the importance and need of keeping businessmen, policymakers and researchers

working in a close, consistent and mutually reinforcing way; investigating the critical aspects

which make those collaborations successful and the related managerial and strategic tools.

This highlights the relevance of the topic.

It is noteworthy that studies on collaboration are typically focused on technological

innovation, involving researchers and practitioners oriented toward technology excellence,

therefore the role (if any) of people with a social science background, therefore mode oriented

toward the demand side, in the success of innovation development and diffusion tend to be

overlooked.

Taking all this into consideration, this piece of work is devoted to investigating how the

matching of partners belonging to different fields is deployed, trying to understand if and how

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it can be optimised, with the intention of easing the creation of fertile environments for

innovation, within a dynamic and technologically advanced context.

Holzmann et al. (2013) offer a contributions showing that the matching process can be

appropriately represented through multi-sided market models. Nevertheless, the barriers

partners are facing to access potential matching opportunities and how such a process can be

optimised at industry level is yet to be disentangled, and this is where the present study is

meant to contribute.

Concerning partners’ matching, Li et al. (2008) showed that “the more radical an alliance’s

innovation goals, the more likely it is that partners are friends rather than strangers.

However, strangers are preferred to acquaintances, suggesting partner selection preferences

are not transitive”. This interesting insight suggest that the process of finding the right partner

is quite complex and that maximising the potential connection with strangers for the purpose

of co-creation is very relevant especially for incremental innovation. All this features are

perfectly embodied by the GNSS downstream industry, which is indeed characterised by ever

more frequent partnership between businessmen and scientists necessary to improve the

existing technology and actually survive in such a demanding and evolving market.

Furthermore GNSS, as other (space-based and not) technologies, is becoming part of

integrated and hybrid solutions increasingly adopted in many quite different domains, making

the research and actual finding of appropriate partners more challenging and critical to remain

competitive. Together with the changes on the market side, also the technology is evolving. In

particular, the full deployment of the European GNSS constellation Galileo and its innovative

functionalities might offer new and unexpected business opportunities that can be fully

grabbed only through the preparation of an optimal context and necessary infrastructures to

exploit the big data produced and synergies among different actors. The author will attempt to

address these topics proposing a new perspective.

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4. Context

The present section is devoted to the outline of the technology considered, the environment in

which GNSS downstream companies operates, proposing a brief review of the initiatives

undertaken so far to enhance the collaboration between industry and academia, together with

the most important dynamics the market is experiencing.

4.1 What is GNSS all about?

Since the dawn of time, men have always been interested in determining the position of points

on the Earth’s surface relying on the observation of distant objects such as celestial bodies,

from stars, like the Sun, to planets and satellites. However, it was only in the last century that

it became possible to develop a man-made global system for high accuracy positioning and

navigation.

Global Navigation Satellite System (GNSS) refers to a constellation of artificial satellites

orbiting around the Earth at the height of nearly 20.000 km and emitting signals that transmit

position, velocity and time (PVT) data to users equipped with GNSS receivers. The receivers

can then determine the user position by processing the satellite signals. Among the different

positioning technologies available nowadays, GNSS is considered to be the best outdoor

positioning system due to its global coverage, 24/7 availability, affordability and accuracy

performances. The existing GNSS constellations include:

GPS (USA), first developed for military purposes and then opened to civilian use; it

reached full operational capability (FOC) in 1995;

GLONASS (Russia), after a partial abandonment following the fall of the Soviet Union, it

has been fully restored in 2011, it serves military and civilian use;

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Galileo (EU), devoted to civilian use, Early Operational Capability (EOC) started in

December 2016 and the constellation is expected to become fully operative by 2020; and

BeiDou (China), it consists of two separate satellite constellations, a limited test system

that has been operating since 2000, and a full-scale global navigation system that is

currently under construction. BeiDou is used for both military and commercial purposes.

It is possible to distinguish the upstream and downstream GNSS markets. According to the

European GNSS Agency (GSA), the upstream side encompasses those entities which build

the space infrastructure (satellites, ground control segment) and provide a signal to users. The

downstream component supplies instead GNSS-based navigation and /or timing products and

services, which represent significant enablers for many different applications in variegated

domains such as agriculture, surveying, maritime and terrestrial navigation, aviation and so on

and so forth. These products and services include the entire value chain of GNSS-specific

components, GNSS receivers, GNSS-enabled systems, GNSS-enabled software and added-

value services. At times, component manufacturers, system integrators and service providers

might be a single entity.

The following chart offers an overview of the GNSS value chain:

Source: author's elaboration

GNSS downstream markets, i.e. commercial applications relying on GNSS technology, are

the focus of the present study.

Upstreamsegment(GNSS

spaceandcontrol

infrastructure)

Componentmanufacturers

(chipsets,pla orms,devices)

Systemintegrators

Content,applica onandvalue-added

serviceproviders

GNSSapplica on

users

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The GNSS global market experienced a positive trends in the recent years that is supposed to

continue in the future, namely the global number of devices in use is expected to increase

from 5.8 billion in 2017 to 8 billion in 2020*, and this means more than one device per person

on the planet, making GNSS ubiquitous.

It is noteworthy that the GNSS industry is sharply dominated by the mass market of

smartphones, which represent 80% of the devices in use. Nevertheless, GNSS devoted to

professional use still matters in many markets such as agriculture, transports and

telecommunication, especially in terms of revenues.

In addition to traditional markets, many new applications are increasingly relying on GNSS

such as drones, multimodal logistics, autonomous vehicles up to driverless cars, internet of

things (IoT), augmented reality solutions and also for the development of smart cities. It is

therefore clear that GNSS technology is increasingly embedded in our everyday life, and this

trend will become even more prominent in the coming years.

The next chart offers an overview of the GNSS diffusion worldwide:

* European Global Navigation Satellite Systems Agency. (2017). GNSS Market Report.

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Source: European Global Navigation Satellite Systems Agency. (2017). GNSS Market Report.

EuropeanUnion(EU28)

2015 2025

Value % Value %

InstalledBase 666mln16.0 1.2bln 13.2

Revenues(€) 21.9bln 23.1 59.4bln 22.2

Devicesp.capita 1.3 2.4

RussiaandNon-EU28(Non-EU28)

2015 2025

Value % Value %

InstalledBase 264mln 6.3 570mln6.2

Revenues(€) 6.3bln 6.7 15.8bln 5.9

Devicesp.capita 1.1 2.4

Asia-Pacific2015 2025

Value % Value %

InstalledBase 1.9bln 46.1 4.3bln 46.8

Revenues(€) 32.7bln 34.596.8bln36.1

Devicesp.capita 0.5 1.0

MiddleEastandAfrica2015 2025

Value % Value %

InstalledBase 322mln 7.7 1.1bln 11.7

Revenues(€) 3.8bln 4.0 18.5bln 6.9

Devicesp.capita 0.2 0.6

NorthAmerica

2015 2025

Value % Value %

InstalledBase 683mln 16.4 1.2bln 13.3

Revenues(€) 24.3bln 25.661.9bln23.1

Devicesp.capita 1.4 2.3

SouthAmericaandCaribbean

2015 2025

Value % Value %

InstalledBase 312mln 7.5 818mln 8.8

Revenues(€) 5.8bln 6.1 15.7bln 5.8

Devicespercapita 0.6 1.5

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Considering the role research played in GNSS technology development and deployment, it

can definitely be considered a knowledge intensive industry. Collaboration between

researchers and businessmen made the development of multiple satellite constellations a

reality, allowing for the parallel development of commercial applications, creating a virtuous

circle for technology evolution involving also its users. Within this process, the intense

relationship with the academia is been fundamental to support and steer the exploitation of the

GNSS technologies, taking advantages of the synergies generated between the different

partners. In addition, GNSS solutions are more and more used in combination with other

technologies or in very different sectors as ancillary tools; hence these multidisciplinary

aspects increasingly matter due to the multiplication and diversification of actors involved.

This imply that the ecosystem generated by GNSS goes far beyond the space sector itself,

since it also comprises the increasingly pervasive and ever evolving impacts of space-related

products, services and knowledge on the economy and the whole society.

4.2 Past and current initiatives to connect the GNSS industry and the scientific

community in Europe

The European landscape encompasses numerous initiatives aiming at supporting collaboration

among different actors for innovative purposes. The European Commission is doing an

extraordinary effort to enhance the uptake of Galileo and EGNOS-based solutions across all

market segments, together with the European GNSS Agency (GSA). In particular they do so

through two complementary R&D funding mechanisms: Horizon 2020 and Fundamental

Elements.

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Horizon 2020 (H2020)† is the current EU Research and Innovation programme, offering

nearly € 80 billion in funding for the 2014 – 2020 period. The programme is focused on the

development of innovative products, applications, feasibility studies and market tests that are

expected to significantly boost European innovation and know-how. Prior to H2020, the

European GNSS Downstream R&D was funded under other mechanism, namely the

Transport Theme of the 7th Framework Programme for Research and Technological

Development (FP7) between 2007 and 2013, with a total budget of 66 million of euro. It

covered many market segments among which road, Location-Based Services (LBS),

precision, professional and scientific applications, international cooperation aviation,

maritime and rail; with 40% of the 425 beneficiaries being SMEs. The programme was very

successful in generating tangible results, namely 115 demonstrations of E-GNSS-based

applications, 45 products, 80 prototypes and 13 patents/trademarks.

As a result of the Horizon 2020 e-KnoT project, focused on the innovation transfer to

industry, the support to the creation of innovative GNSS downstream applications and the

consolidation of the links and of the initiatives, the Satellite Navigation University Network

(SUN)‡ has been created. It involves many European universities to enhance the development

of joint educational programmes in the GNSS domain and increasing the cooperation between

different players such as industry, academia and public institutions.

Fundamental Elements§, is a program dedicating 111 million euro to the development of

market-ready GNSS chipsets, receivers and antennas. The user communities/target markets

include aviation, LBS, agriculture, surveying, rail, road, maritime, timing and synchronisation

and Public Regulated Services (PRS).

† http://www.gsa.europa.eu/gnss-h2020-projects ‡ http://www.gnss-sun.eu § http://www.gsa.europa.eu/r-d/gnss-r-d-programmes/fundamental-elements

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The European Commission also funds the Marie Skłodowska-Curie Actions**, which

support researchers in the different career stages, including doctorates, combining academic

research with work in private companies and other innovative trainings, which increase future

career development and employment opportunity. These programmes in particular provide the

possibility to experience working abroad and in the private sector, creating a collaborative

bridge between scholars and businessmen, offering a unique training opportunity. Thanks to

this initiative, SMEs might gain access to additional facilities, financial resources, knowledge

and skills hardly available otherwise, easing funding and mitigating innovation risks.

OIPEC†† is a capacity building project, co-funded by the Erasmus+ Programme of the

European Union, which aims at transferring the best European practices in university-

enterprise collaborations to Russian and Chinese partners. This initiative is expected to

promote strategies for durable and fruitful relationships between researchers and enterprises,

with the deployment of an international platform of collaborative laboratories intended as

shared workplaces to develop innovative products and services.

Another interesting collaboration involving researchers and industry is the Space Institute

for Research on Innovative Uses of Satellites (SIRIUS Chair)‡‡; it is a public-private

partnership involving leading operators of the space industry (CNES, Airbus Defence and

Space and Thales Alenia Space) and two educational institutions (Toulouse 1 Capitol

University and Toulouse Business School). SIRIUS is meant to support the European space

industry and policy-makers through the production of reference studies, seminars and

workshop concerning the legal, social, economic and managerial issues faced by the different

players active in the European space industry. It is noteworthy that SIRIUS is one of the rare

** https://ec.europa.eu/research/mariecurieactions/ †† http://www.oipec.eu ‡‡ http://chaire-sirius.eu/en/space-institute-for-research-on-innovative-uses-of-satellites/

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initiatives supporting innovation development focused on social sciences instead of hard

sciences.

Finally, the World Bank Group and the Organisation for Economic Co-operation and

Development (OECD) jointly developed the Innovation Policy Platform (IPP), a digital

open space meant to ease the access information related to innovation policies. In particular, it

is focused on the identification of good practices across different countries and benchmarking.

Its ultimate goal is to facilitate knowledge exchange and collaboration across countries and

regions.

To this non exhaustive list must be added all smaller and manly local incubator-like initiatives

and competitions at both European and regional level which offer support to brilliant

innovative ideas (e.g. Galileo Master Competition§§). Moreover, several networking and

matching opportunities are offered by international exposition (e.g. Intergeo), conferences,

and events organised by public and private institutions related to the aforementioned funding

programmes and deriving projects.

The public effort to encourage and facilitate innovation co-development is conspicuous. This

is not surprising, considering how strategic and promising GNSS downstream industries are.

4.3 Market dynamics: megatrends in technology development and spreading

Large-scale social, economic, political, ecological and technological changes are typically

slow to form, but they might influence many other activities and views, possibly over

decades. A megatrend typically shapes other trends, that’s why it’s important to identify them,

especially in relation to strategic planning and when it comes to investigate new potential

§§ https://www.galileo-masters.eu/

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business opportunities. Any piece of analysis, to be reliable and valuable, needs to be

contextualised, especially in rapidly changing environments.

The following paragraphs present a shortlist of the most influential dynamics that the GNSS

downstream, together with other high-tech industries, is experiencing.

Commoditisation

Commoditisation, intended as the offer of increasingly homogeneous products made by

competitors operating in steady industries characterised by a stable competitive structure to

price-sensitive customers who bear relatively low costs in switching suppliers, is an important

expanding phenomenon interesting many industries, especially high-tech ones (Greenstein,

2004; Olson & Sharma, 2008; Sharma & Sheth, 2004).

As many scholars stated (Unger, 1983; Heil & Helsen, 2001), it is an important dynamic

affecting competitive leverages and potential sources of advantages in many sectors. Namely,

an increasing number of technological industries are facing the challenge of commoditisation

as convergence and growing homogeneity among the offers they supply (Chrinstensen &

Rayon, 2003; Greenstein, 2004; Kohli & Thakor, 1997). This is definitely the case of GNSS

downstream industry. Commoditisation partially derives from more and better-informed

customers and increased transparency in competitive markets, which leave more room for

relatively rapid imitation, increasing the chance to cheaply switch to a different supplier. The

remaining share is due to an easier, quicker and cheaper diffusion of technology.

As a consequence of this osmotic process, the competitive focus partially shifts away from the

core business, since the active players are forced to consider different features, such as

operational excellence (Pelham, 1997) or product- and customer-centred strategies (Robinson

et al., 2002) to remain competitive. Since industries experiencing this phenomenon tend to

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become less attractive from a competitive point of view, it is quite likely that price wars will

be easily triggered, lowering profitability.

According to Reimann et. al., 2010, there are four main aspects determining the level of

commoditisation of a certain industry:

Product homogeneity,

Price sensitivity,

Switching costs, and

Industry stability, in terms of competitive setting.

Adopting this perspective, the effectiveness of a marketing strategy might vary according to

the level of commoditisation of the industry. In particular, they demonstrated that firms

operating in commoditised sectors should heavily leverage on customer intimacy, intended as

deep understanding the customer needs and tailor products accordingly, rather than

operational excellence or product leadership. Customers evolve as markets evolve, which may

lead firms to adopt different strategic positions to effectively drive their performances.

The GSA 5th edition of the market report confirms this trend stating that "The global GNSS

downstream market [...] enables the development of added-value services, which are set to

witness skyrocketing growth between 2015 and 2020 at 20% annually In 2015, the added-

value market size for the first time exceeded the combined size of GNSS devices and

augmentation services. Their annual revenues will hit € 195 bln in 2025, which is more than

2.5 times higher than the expected GNSS device and service revenues that same year."

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Democratisation

The democratisation of information and technology is intended as a process through which

technology become progressively and continuously more accessible to a growing number of

people, up to the point in which users become active participants in the development process.

As a result, products and services are more affordable and user-friendly, thanks also to mass

production and digitalisation.

This phenomenon has been practically translated within the GNSS downstream industry in the

receivers' price decrease and improved accuracy, making mapping- and navigation-related

activities easier and more affordable. This trend is leading the market toward the provision of

integrated, highly performing and easy-to-use solutions that can fit in many different domains

of applications. Indeed "today GNSS receivers are more compact, reliable, highly performing

and yet affordable thanks to modularisation. This trend is also prompting the collection of

crowdsourcing data" (European Global Navigation Satellite Systems Agency, 2017, GNSS

Market Report). Data crowdsourcing is expected to produce an extraordinary amount of data,

which will very likely change the paradigm of traditional mapping and navigation activities,

in combination with the democratisation of GNSS devices.

Standardisation and interoperability

Interoperability refers to the characteristics of a system or product, whose interfaces are

completely understood, to work with other products or systems, in either implementation or

access without any restrictions. In the GNSS domain this is related to the capability of GNSS

devices to combine with other technologies, together with the possibility of merging GNSS

output with data deriving from different sources.

Standardisation instead implies the development and implementation of technical standards

based on a consensus reached among different parties including enterprises, interest groups,

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final users, standardisation organisations and public authorities. Standardisation typically

serves the purpose of maximising compatibility, interoperability, safety, repeatability or

quality. It might also facilitate commoditisation of formerly custom processes.

The diffusion of advanced technologies and related standards is heavily depending on their

level of interoperability with complementary technology and infrastructures. Since the GNSS

infrastructure is treated as a public utility, public incentives have been provided to enhance

standardisation and consequent GNSS-based application development.

GNSS, as cost-effective and globally available source of location and timing information, is

often adopted as ancillary tool in several different industries and applications including the

IoT, big data, mHealth, augmented reality, smart cities, and multimodal logistics.

For this reason, standardisation and interoperability are key features to make such a

technology successful on many different markets. This push towards harmonisation interests

both GNSS complementary technologies such as Lidar, laser scanners, Remote Sensing,

Micro-Electro-Mechanical Systems (MEMS) and robotics, as well as competing

manufacturers and service providers that are under pressure to adopt the same data format,

capability of receive augmentation corrections from networks operating with equipment

different from the one self-produced.

This is even more challenging when considering that operators active in industries quite

distant from the space one increasingly use GNSS data. This is the case for many context-

awareness services.

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5. Findings

The performance of in-depth interviews with 24 stakeholders active in GNSS downstream

industries offered an interesting and comprehensive insight of the dynamics and difficulties

they need to cope with in order to succeed in innovating.

5.1 Advantages and obstacles in industry-academia collaboration

The firms engaged in this study clarified that they are interested in collaborating with

researchers because they are a primary source of first-hand knowledge, and that knowledge is

fundamental for the advancement of the state of the art; a knowledge that they find difficult to

develop internally since they might not have enough resources in terms of time, people or

expertise, keeping in mind that R&D, even though crucial to succeed, is not their core

business. They also stated that one on the main discrepancy with the academia regards the

time horizon they set themselves to achieve results: typically the industry proceed at a pace

that is way faster than the one of universities, and this is linked to different methodologies,

approach and goals. In particular, commercial players are often seeking for very actionable

recommendations, if not for turn-key solutions, while academics tend to offer theoretical

results or prototype to be tested. This misalignment needs to be managed in an appropriate

way for successful co-development. Nevertheless, both parties agree on the value added and

net advantages of industry-academia collaborations, namely recalling increased resources,

shared risks, complementary inputs that can bring to better results faster. Collaboration is

indeed becoming more and more a habit for innovation development in GNSS downstream

markets. Researches and practitioners also highlighted that the collaboration among people

with previous experience in this kind of joint project, or experience in the field of the co-

workers, smooth communication and coordination, improving mutual understanding and

alignment.

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These findings are in line with the conclusions of previous literature.

5.2 Market trends and role of social science

Commercial players confirmed the relevance of identified mega-trends (commoditisation,

democratisation, standardisation and interoperability), modulated by the maturity of each

specific GNSS segment of application. In particular, they seem to be exposed to growing

pressure to make their business economically profitable, since the increasing maturity of

certain market segments in terms of performance and standardisation/interoperability with

other systems, coupled with an educated customer who can relatively easily access

information concerning the market and the technology, make harder to differentiate from

competitors. The development of innovation is typically triggered by a mix of demand-pull

and technology-push mechanisms, giving increasing attention to the experience of the end

user. The relative importance of these two process depends also on the stakeholder

considered, namely incumbents will have more power to push for the adoption of a new

standard or product, while SMEs will take advantage of their flexibility to quickly address

emerging and specific user needs, or ensuring additional customisation.

In this context, being user oriented and proposing solutions aiming at addressing explicit or

latent issues is vital. Therefore, an effective market strategy, supported by an assessment of

side and complementary services and of the necessary level of personalisation of a product or

service become of utmost importance. In this regard, the stakeholders interviewed recognised

the growing importance of social sciences, which had been considered just marginal by

technical innovation developers for a long time. The most successful operator is not necessary

the first one proposing an innovative idea, but it’s the one proposing it in an effective way, so

to engage users that create a profitable market. Social sciences, and the assessment of user

needs, market trends and the development of an appropriate market strategy to offer the best

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customer experience, are indeed complementary to technology excellence, which attracted

almost all the focus so far.

5.3 Matching process

Concerning the matching process, all interviewees agreed that the main channel through

which they reach potential partners is the organisation’s existing network (or the one of the

people affiliated to it). The partners’ research and matching process is therefore based on soft

skills, reputation, experience, expertise, personal attitude and relations. This is true for all

kind of organisation involved.

The majority of the interviewees agreed that existing initiative to enhance networking and

matchmaking, events, conferences, contests and exhibitions in particular, organised by public

authorities are improving the situation with respect to when the process was fully left to the

market. Nevertheless, opportunities to create new connections remain fragmented over time

and space: the mentioned windows of opportunity typically take places every year or second

year, therefore missing one event means to remain out of the loop until the next one. This

explain why operators rely so heavily on their personal/professional networks. This issue is

relevant for both big and small (commercial and academic) players in different ways: huge

stakeholders typically are searching for smaller, more flexible and focused counterparts,

which are the one facing more difficulties to access connection opportunities, most of the time

due to the lack of dedicated resources, which lower the probability of being at the right place

in the right moment. This, in turn, slow and sometimes impede the creation of new

professional relationship, making big players less innovative over time since they struggle to

get brand new inputs.

Such a context brought to the creation of clusters encompassing many medium and small

players orbiting around a few big actors. The creation of the connection net within a cluster

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enhance collaboration for innovation development, even though, in a medium time horizon

(≈5 years), the cluster tend to become quite rigid. Namely the smaller and more innovative

entities become increasingly similar to their counterparts due to mutual spill-overs, which

make them less innovative than they used to be. This imply that the participation in the cluster

of new players and the creation of new connections would be suitable, even though this is

difficult to happen, for several reasons. On one hand, entities which are already part of the

cluster do not want to leave it since it seems too risky; on the other one, operators not

involved in the cluster find difficult to access it due to resistance to change, inertia, too few

matching opportunities and lack of trust towards people with which personal or professional

connections do not exist yet.

According to the multi-faced reconstructed landscape, it can be understood that commercial

players and researchers are facing two main issues in their research for partners to co-develop

innovation:

The lack of a permanent link with potential fellows for innovation co-development to

build new relationship, due to fragmentation over time and space of existing windows

of opportunities for matching ;

Rigidity of existing clusters and therefore difficult accessibility for new potential

partners.

Established networks tend to remain quite stable and actors involved have low incentives in

including new players since, if they are new to the network, they might be more risky that

well-known partners, and the research of information in expensive, or they might be harder to

reach with respect to the usual suspects. After a certain amount of time, this prevent to get real

fresh air. The difficulty of enlarging the existing networks, or of making them more

permeable, reduces the chances of finding the most suitable partner, due to lack of a

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continuous and structured matchmaking framework. This, in turn, harms the innovation

development process; which might not unlash its full potential in term of market

development.

6. Proposition: a two-sided platform as match-making intermediary

and data marketplace

Considering the reconstructed landscape, GNSS downstream industry, as other high-tech

sectors, seems to be interested by the need of close and continuous connection with

researchers in order to innovate and keep the pace with a very dynamic environment where a

general convergence and levelling trend is making harder for commercial players to gain and

maintain an actual competitive advantage.

The present piece of work aims at addressing the identified issues proposing a concept that

might pave a way forward to effectively cope with the presented context and its difficulties. In

particular, this section will present a platform meant to connect on a permanent basis industry

and scientific community playing the role of intermediary, enhancing and increase efficiency

of partners’ matchmaking, and potentially becoming a marketplace for data storage,

processing and selling, therefore offering also new business opportunities.

5.1 Functioning

The proposed platform is meant to play the role of innovation intermediary, as defined by

Dalziel (2010): “organisations or groups within organisations that work to enable innovation,

either directly by enabling the innovativeness of one or more firms, or indirectly by enhancing

the innovative capacity of regions, nations or sectors”.

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By strengthening the link between these two spheres through a permanent, stable and open

connection, the platform is expected to enlarge the array of potential partner who are expected

to become easier to reach, even outside existing networks or clusters, streamlining and

making more affordable the matchmaking process. This, in turn, is meant to pave the way for

better and/or easier innovation thanks to the co-working of best partners.

The platform is intended as private entity, seeking profit maximisation through the supply of

multiple services. On one hand, it would act as intermediary between scholars (with both

technical and social sciences background, due to their increasing relevance) and businessmen

for the purpose of a cheap, fast and optimal identification of the best partner for a determined

innovative project, significantly reducing research costs. GNSS downstream is a very

dynamic environment, with continuous development of new applications based on both

technical GNSS skills and expertise related to the domain to which the ultimate user belong.

The latter could be quite different in terms of requirements and drivers for the GNSS-related

sector. This aspects make the search and finding of good partners for a fruitful collaboration

everything but trivial, since both stakeholders need to make an evaluation of an operator

acting in an unknown field. Solutions build for the development of autonomous vehicles and

smart cities, such as Internet of Things (IoT) and many different applications needing context

awareness are an example.

On the other hand, through the development of collection, storage and processing capacity,

the platform can also take advantage of its role of hub for innovation and serve as marketplace

for data, which is not existing at the moment. Namely, it could offer data management

services (collection, storage, processing, delivery) for data coming from both user groups,

deriving therefore from commercial application (among which crowd sourced data) and from

scientific research aiming at different kind of sensing. The data could be sold, after

appropriate processing and anonymisation if necessary, to a counterpart that could develop

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additional knowledge and/or make profit out of them. A data marketplace would be

particularly useful when the potential market or application that can use data is very different

form the one in which they are generated. To provide a practical example, once autonomous

vehicles and in particular driverless cars will become a widespread reality, they will produce

an enormous amount of data that can provide useful information for traffic and infrastructure

management performed by both public authorities or private operators, pollution monitoring

and they might also be used for atmospheric sensing and to improve GNSS error correction

models by the scientific community. This is just an example out of many others that might

occur in the future.

As shown in the graphical representation below, the platform would engage stakeholders in

two-way relationships, out of which all of them are expected to benefit.

Figure 1- Model of the proposed intermediary platform

Source: author's elaboration

The proposed platform, in order to take-off successfully, needs to create mutual network

effects*** over the groups of users involved, supported by the appropriate price structure so to

*** Mutual network effects are realised if the increased number of participant within a group of users represents

an increased incentive in participating for the other group of users. In this case it would practically mean that the

higher the number of commercial players active on the platform, the higher the incentive for researcher to get on

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maximise the transaction volume; in other words the proposed platform will function as a

two(or multi)-sided market (Rochet & Tirole, 2003). This kind of platform has been

extensively used for methods of payments such as credit cards, but also in innovative and

technological markets. Namely, Google is a multi-sided platform; its success is indeed related

to the creation of mutual benefits and network effects among the different type of users and

services offered.

The intermediary two-sided platform, being a commercial player, will push to increase

matchmaking and transactions occurring through the platform, and in doing so it favours the

market flourishing and ultimately creates value for the whole economy. The platform would

have the capacity to gather together actors working in very different sectors which rely on

GNSS at different level, since typically network dynamics are more observable in

technological fields than in industrial sectors (White et al, 2004).

As shown by Ondrus at al (2015), in order to maximise the market potential of the platform

and engage critical masses of users on each side, it is suitable to open the platform to

interoperable platforms and complementary markets. This is consistent with the growing

diffusion of hybrid technological solutions observed in GNSS downstream markets.

The proposed permanent network could represent a fertile terrain for innovation development,

considering that it enhances information sharing and most of all it considerably raise

awareness concerning the emerging domains of applications and related stakeholders. The

platform itself needs to be a dynamic entity, evolving with the market and flexible enough to

adapt ad serve new emerging user needs. In this respect, being a private player ensures a more

proactive attitude and less resistance to changes than an institutional operator.

board, and the vice versa. Such a mutual network effect is clearly related to the reciprocal benefits users gain

through the interaction.

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In addition, such an intermediary is meant to contribute in bridging the ever existing

innovation gap laying between business and research communities (Partha & David, 1994;

Furman, Porter and Stern, 2002; Kaufmann & Tödtling, 2001; Branscomb & Auerswald,

2002; Murphy & Edwards, 2003; Wessner, 2005). This innovation gap, or the so-called

“valley of death”, is understood to derive from a mismatch in goals and performances

measures of research and commercial players (Partha & David, 1994; Gittelman & Kogut,

2003; Merton, 1973). The innovative capacity of a country is indeed described by Furman,

Porter and Stern (2002) as depending on the strength of its capacity to generate new

knowledge, the strength of industrial clusters and the strength of the linkages between the two

communities. Therefore there is a clear need, confirmed by the interviews performed, to

invigorate the connection among industry and academia so to boost the generation of knew

knowledge and also to contribute in bridging the gap between existing technology and

technology in use. Such an intermediary optimising partners’ matchmaking would therefore

provide benefits not only in the innovation development phase, but also to its diffusion by

better aligning objectives and strategies of co-developers.

A major and very important characteristic of the platform is that, being a private (vs. public)

independent (vs. innovation hub proposed by incumbents or consortium of competitors) entity

seeking profits, it is neutral with respect to the technology. Namely, it won’t have any interest

in steering the technological evolution toward the adoption of a certain standard or

product/service instead of another. Therefore, innovation development will be driven by the

interplay of demand and supply. This commercial logic is expected to hold in the considered

setting because it refers to downstream markets, while it would not be the case for the

upstream segment, since it follows logics and dynamic closer to safety/security critical

industries, like defence.

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5.2 Benefits for users

The proposed platform would allow enterprises to drastically reduce research costs associated

to the finding of the appropriate research partner. As already said, this aspect will become

even more important in the future, considering the general trend of using GNSS technology as

tool serving applications developed in domains which are in principle quite distant in nature

and purposes from the space one. Thus, enterprises working in the GNSS sector might want to

collaborate with researchers belonging to completely different domains, and the other way

around. This holds true for many high-tech industries. In addition, since the platform could

offer data management services, it could represent a mean for a new businesses: data derived

from commercial applications processed and sold to different counterparts such as researchers

or public authorities. Those kinds of GNSS data could indeed be useful for atmospheric

sensing, weather forecasts and many other new activities that might emerge in the future.

As far as the scientific community is concerned, the platform would provide access to a

marketplace for participating in top level projects, being aware of the most attractive topics

for the industry. In addition, this platform would significantly ease access to good quality data

derived from commercial applications that enterprises and service providers could be

interested in selling, since they would be hardly available and probably not exploited

otherwise.

All this is coupled with a strong reputational factor, which is crucial for guaranteeing the

professionalism and quality of actors relying on the platform, limiting free riding and moral

hazard.

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7. Conclusions

Collaboration among industry and academia for innovation development is increasingly

becoming the habit, especially in high-tech industries.

The conducted research allowed the identification of two main critical points that researchers

and practitioners are currently facing. On one hand, the lack of a permanent link with

potential fellows for innovation co-development to build new relationship due to

fragmentation over time and space of existing windows of opportunities for matching. On the

other hand, rigidity of existing clusters and therefore difficult accessibility for new potential

partners; namely actors involved have low incentives in looking for or including new players

since they might be more risky that well-known partners, and the research of information in

expensive, making outsides more risky, costly or harder to reach with respect to the usual

suspects.

The proposed platform is expected to streamline the partners' matchmaking process by

connecting the two groups of users on a permanent basis, easing contacts, information sharing

and involving a strong reputational effect, useful when it comes to evaluate a potential

counterparts without having the necessary technical expertise for a professional assessment.

In addition, the platform can become a marketplace for data exchange, potentially supporting

the development of new businesses and innovative applications, on top of boosting the full

exploitation of existing data. The architecture of the platform is meant to trigger mutual

network effects among user groups, with the platform maximising transactions (matchmaking

and data processing/exchange) to increase its profits, it could result in a more fluid, reactive,

better connected and ultimately more innovative market. Moreover, a better alignment of

goals and strategies of co-developers at an early stage is expected to support the overcoming

of the valley of death in the diffusion phase.

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The intermediary platform, being a private independent entity, will be neutral with respect to

the technology and its evolution, as opposed to other existing initiatives. To enhance the

platform take-off, it is recommended to keep it open to related and complementary industries.

The present study contributes to the extant research on innovation co-development by

revealing and addressing previously undetected cluster dynamics, offering a deeper

understanding of the partners’ match-making process and its importance. In addition, the

proposed platform is meant to offer new business opportunities not yet explored. Another

very novel and interesting finding regard the growing attention devoted to the role of social

sciences in contributing to innovation diffusion in technical knowledge-intensive domains.

These findings are expected to remain valid for the majority of high-tech industries, due to

their similarities with GNSS downstream industries.

The performed study presents a limit in the relatively reduced number of interviews

performed. It would be suitable to enlarge the sample so to provide additional robustness,

even though the performed interviews already reach saturation in terms of new information

collected.

Concerning avenues for further research, it would be interesting to enlarge the present study

to complementary sectors, so to better detail the platform architecture. It would be also

important to develop a strategy to ensure the engagement of sufficient critical mass within

each user group.

8. References

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Balland, P.-A. (2012). Proximity and the Evolution of Collaboration Networks: Evidence

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Balland, P.-A., Suire, R., & Vicente, J. (2013). The Economic Geography of Technological

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Balland, P.-A., Suire, R., & Vicente, J. (2010). How do Clusters/Pipelines and Core/Periphery

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Balland, P.-A., Suire, R., & Vicente, J. (2013). Structural and geographical patterns of

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