Journal of Scientific & Industrial Research Vol. 58, May 1999, pp349-354

Public Sector Research and Industry Linkages in the Context of Indigenous Innovation Diffusion

S Suresh Kumar and KG Satyanarayana Regional Research Laboratory (CSIR), Thiruvananthapuram 695 I) 19

Received : In April 1998. accepted : 26 October 1998

A norm oriented survey conducted in the context of public R&D system in the coulllry vis-a- vis industrial illleraction, aimed at innovations and technology diffusion as a pan of techno logy transfer efforts, has been presented. The resul ts are compared with those reported in a developed coun try contex t. Avail able models on publi c sector research- industry linkages have been di scussed fo r analytical purpose to deri ve informati on on factors criti cal to technology management and in novati on diffusion for industri al competitiveness. Norms and pattern s for info rmat ion tl ows, interaction capabil it ies and lin kages mechani sms have been identi fied to assist in effective technology transfer management efforts in the context of pu blic funded R& D (Publi c Sector Research)

Introduction

Technology innovation is not iso lated fro m social

capac ity. The latter is required fo r prov iding the stimul us

fo r technological innovation I and is acquired to commu­

nicati on network, knowledge or experts leve ls, socia l

mobility and political or decision-maki ng structures. In a developing coun try like Indi a, socia l environment and

ambience is not ve ry much fac ilitated because of lack of

strateg ic think ing directed at structuring socio- technica l

conditi ons and necessary linkages a imed at tec hnology

and its diffusion into soc iety. It has been demonstrated

that the techn ical behav iour of an industria l firm in

ass imilating innovat ion in a third world context is differ­ent from that in a deve loped countrl-3. Studies concern­in g gene rativity and receptivity of R&D (i.e. the

potenti a l for generating and ass imil ating or absorbing innovations) in a developing country contex t S&T and

industrial sectors respecti ve ly show th at in the case of state-funded sectors, thi s is rathe r poolA. Since over 70 per cent of R& D is state-funded, thi s w ill definit ely mean low orders of research effec ti veness, in te rms of indus­

tri all y re levant R&D and the ir commerc ia l leve l utili sa­tion. In thi s contex t, norms and patte rns of public sector

research (PSR) and industry linkages are anal ysed to draw compari sons with c riti ca l fac tors in the Indi an

situat ion as identified through a survey. Public sector R&D effecti veness may be low. But , industry o ri enta­

ti ons is al so to blame. Earli er studies5 have ide ntified

certain conditi ons de te rmining industry innovati veness.

These conditions are: knowledge intensity in the firm, communication networks, nature of market and its dy­nam ics, capita l intensity and organi sational structures.

Di ffusion patte rns are partl y in fl uenced by ind igenous competiti ve forces and part ly by informati on transfer channe ls and in stitu tional structures like banks , financ­ing agencies , Engineering firms, and research capabili­t ies, as wel l as t ra nsfer mec hani sm s. Ne twork of re lati ons among the vari ous ' ac tors' in vo lved like R&D centres, ban ki ng and f inanc ing institutions, and channels of d iffus ion, assume much importance6. According to concepts in fie ld theory and sys te m theory, network behaviour creates a synerg ic surplu s if supported with low - level protocols in the fo rm of well formulated programmes, te rmed monitori ng of progress, interaction fo r feed back, transfer mechani sms, flex ibili ty in st ruc­tures, effect ive communicati on channels, and socio-cul­tural e nvironments through technology learning7 .

A norms - ori ented survey in the Indi an context to identify critical fac tors influenc ing diffusion of indi ge­nous R& D in te rms of effecti ve techno logy transfer has been undertaken. M ode ls on public sec tor research (PSR) - indu stry linkages have a lso been di scussed for understanding the ir norms and patterns and deri ve suit­able opti ons.

A sampl e of 50 respondents was se lected so as to have majo rity representation from CSIR labs, be ing the main public- funded research agency . T he questionnai re was based on a re levant literature survey undertaken to iden­tify the factors to be add ressed , while explaining issues

350 J SCIIND RES VOL 58 MAY 1999

related to PSR - industry linkages as effecting technol­ogy innovation, diffusion and transfer management. thirty five responded with the majority coming from CSIR labs and a few from public sector R&D and major academic centres (with their own industrial consultancy activities). This is felt to be sufficiently representative of technological innovations in Indian Industries based in­digenous R&D since 75 per cent of R&D effort in the country emanates from public funded centres, Anonym­ity was maintained as requested by the respondents. The respondents were mainly scientist- administrators, in their capacity as dealing with coordination ofliaison and information activities, as well as Technology Transfer efforts.

Public Sector Research-Industry Linkages

Research literature on industry - PSR linkages high­lights five important elements:

(i) Industry - PSR linkage from the perspective of the innovating from

(ii) Linkage mechanisms by which industry inter­acts with PSR to understand the institutional barriers preventing firms from utilising PSR inputs.

(iii) Scientific and technological inputs (ST!) analysis of knowledge flows from PSR which companies utilise in the course of new product development.

(iv) Diversity in the nature and extent of industry­PSR linkage and

(v) Selectivity in PSR - industry linkages in re­spect of skills and knowledge.

An appropriate framework for considering the indus­trial view is provided by the innovation literature, start­ing from the early of Languish, et al. 8. A brief analysis of the models revealed:

(a) Rather than attempting to identify the original source of a single piece of knowledge of idea leading to innovation, Gibbons and Johnston9

fought to capture some of the social and cog­nitive complexity of the innovation process within the firm. Around one third of these inputs were obtained from forces external to the firm, another third derived from inhouse R&D, and the remaining arouse from the edu­cation, awareness and work experience of the individuals involved. The contribution of the Public Sector Research (PSR) was only one-

third of all externally funded. Science and Technology Information (STI) Personal con­tacts in the PSR was used to mutually generate ideas in response to specific problems. In ad­dition to actual technology transfer contribu­tion, the role of PSR consists in providing an access to knowledge and to provide advice and assistance for industrial firms.

(b) Further insight into the cogniti ve character of the PSR contribution to industrial innovation have emerged from research on the science -technology relation. Barnes and Edge IO challenged the linear model which implied that technological inno­vation lies in a single idea or scientific discov­ery. The major thrust of this research has been to emphasise the two-way flows between sci­ence and technology. The two-stream model proposed by de Solla Price I 1 noted that science and technology are linked inseparably by in­strumentalities.

(c) Metcalfe and Gibbons I 2 have investigated in­dustry PSR linkages from the perspective of the innovating organisation and noted that a firmlRs ability to move into new areas of inno­vative activity is constrained by its existing capacity, its paradigmatic view oftchnological options, and its gate keeper activities.

(d) List of main mechanisms by which companies interact with PSR is graphically depicted be­low. Formal mechanisms of linkages vary in scale and duration. On-off consultancies based on personal contacts is very frequent. Large­scale and stable investmentsin 'hybrid' re­search facilities is the other extreme.

Existing contacts Informal: New contacts

Semi nars/meeti ngs Consultancy Contracts

Formal: ' hybrid' I consortia arrangement collaborative research training

The success of formal collaboration relies on the strength and friendliness of the informal contacts be­tween partners 13 .

Expensive collaboration may bring little or no sub­stantive benefit, where personal relations at bench level are not strong and positive. Companies generally orient

KUMAR & SATY ANARA Y ANA : PUBLIC SECfOR R&D LINKAGES 351

themselves most purposefully towards the external re­search community when undertaking search activity. Large companies with expensive R&D facility have sophisticated information.

Results and Discussion

Technology Planning

Several respondents of the Survey felt that there is a vital need to incorporate the commercialisation dimen­sions at the planning stage itself of the R&D projects . But it turned out that this practice is very low in the context of indigenous R&D projects.Though they agreed that there is a strong need for R&D being market-ori­ented, and for the commercialisation dimension to be incorporated sufficiently early in the R&D stage, there is a conspicuous absence of formal systems and mecha­nisms to bring this about within the public funded R&D centres. There are also practically no other systemati­cally stmctured effort for project initiation. Although Technology Forecasting (TF) has been hailed as a pow­erful tool in identifying future needs and research oppor­tunities, the fact remains that very few are employing any such techniques.

Management stmctures for S&T systems were also found to be less organic and flexible than what would be desirable, though there is general awareness regarding the advantages of organic systems in management. For­mal methods are considered requisite by the respondent and the criteria that have been opined as most important in performance effectiveness assessment are levels of (a) interdisciplinary effort (b) application effectiveness, (c) Knowledge effectiveness and (d) training effectiveness. It is equally important to note that quite a few respon­dents pointed out the need for more emphasis on research oriented towards adaption and modification in important high tech areas, so that the country's R&D capabilities are developed to an extent where generic technologies are exported from the country at least in the near future .

Technology Transfer and Innovation Diffusion

Organisational and Institutional arrangements for technology transfer were found to be inadequate in most of the state funded centres. Output is usually transferred to user groups at bench scale; there was not proper follow up after that through the commercialisation stage; nor was there adequate engineering support from the R&D centres. In fact process engineering and design expertise was one of the areas identified by the survey for general development, through extra-centre set ups, existing out

side the mbic of the R&D centre. This could be estab­lished through agreements or contracts with consulting and manufacturing firms for demonstration level or in­termediate scale trials and involving agencies providing risk capital funding, commercialisation / marketing sup­port in the form of intermediary mechanisms like Tech­nology Commercialisation Co. This can be a specially equipped venture capital concern which supports indus­trial innovations through equity participation as well as through research sponsorship; another mode is the Tech­nopolis, which is an exclusive research city having new universities, science centres, joint R&D units, venture capital firms and other social overheads to form a critical mass supporting and sustaining the innovation diffusion. However, these will take time to evolve given the current levels of technological dynamism, fund mobilisation and entrepreneurial atmosphere in the country, though they are catching up well in the West. Research consortia and Business incubators were felt by the respondents as more relevant alternatives in the near term to stimulus in ven­tiveness and entrepreneurship .

Technology Marketing

Yet another lacuna, identified by the survey IS In

respect of the organisation of marketing effort, particu­larly in the national laboratories. Commercilization ef­forts did not involve monitoring mechanisms for technology up gradation as a continual process. Market­ing expertise was also sparse. Lack of operational sup­port vis-a-vis informational inputs was cited as one of the reasons for inadequate marketing data generation efforts, since innovation-based products address to an entirely new genre of clients. One of the other reasons for ineffective marketing of product related information diffusion was found to be lackadaisical communication channels 13. Among the various types of methods of information propagation which have a real utility func­tion in innovation diffusion, person - to- person contacts, ad-hoc team visits and demonstration plants were found to be most effective to be followed by ordinary print and electronic media as identified by the Survey. Seminars and exhibitions figured low in the resource constrained context of the developed countries like India particularly for marketing of know-how and stimulation of industrial effort for innovation.

A survey among technology buyers carried out by some of the respondents and as reported by some of them revealed that flexibility of laboratory know-how, avai l­ability of exclusive production and marketing rights as well as arrangements for venture capital financing and

352 J SCI IND RES VOL 58 MAY 1999

engineering and consultancy through institutionalised would go a long way in ensuring technology transfer success. The lack of adequate market information for new products and high capital requirements of innova­tive technologies are usually considered as the major problems in successful technology transfer l4 . However these do not figure high among the problems in technol­ogy diffusion cited by the respondents. At the same time, incentive like tax concessions easy R&D credit, exclu­sive right etc. would be greatly benefit and motivate technology buying organisation . Many of the above cited organisational mechanisms are only in a rudimentary stage of conceptualisation and implementation in the Indian context, where as greater progress is required if only to develop adequate capabilities to take advantage of the globalisation phenomenon. International technol­ogy transfers are seldom effective if not complemented with indigenous adaptive research and a sub technology learning process supported with directed basic research as demanded by the socio - technical situation.

Comparisons broad

Looking at an industry in the developed country, it is apparent that improvement / innovations are needed conti nuously. For basic innovation there is only discon­tinuous demand . But when needed basic innovations are urgent ly required. The assumption here is that firms run a technological rat race with each other, though these are not strictly valid for the LDCs due to low technological dynamism. However due to influx of foreign capital and the technology learning process, coupled with suppor­tive social ambience, it is probable that in the near future simi lar scenarios can come about in the context of Th ird World Development. Consequently the permanent search for an implementation of technological innova­tion is an essential precondition of a finn's survival in a competitive market either through own development or international transfer (al so necess itates adaption effort)

Though incremental innovation s are firm-initiated, basic innovations have to be deve loped elsewhere( I 0), as part of PSR. A firm's R&D department tend to con­centrate on marginal improvements. Thi s sort of de line­ation is di scernible in the Indian context also, since most of the literature on in-house R&D effort in manufactur­ing firms pertained to incremental process or product modification for marketing plus points. This was also true till recently of corporate R&D centres of multina­tionals in India. Most of the expertise-development in high - tech and frontier areas were sought through the S&T capabilities in state - funded R&D sectors, through

there were many associated sector, inadequate institu­tional mechanisms for mobilising resources or diffusion of innovation 15.

One of the important contributions of organisations of organised research has been the satisfaction of the tech­

nological demand of the economy, as the history of institutionalisation of science in countries like Gennany,

U.K., France, and U.S.A would vouchsafe for, Social patronage for science produced basic innovations which imparted technological dynamism, spurred on by incre­mental innovation and finally culminating in the transfer of major capabilities to newer mechanisms (or hierar­chies) which combined the research and commercialisa­

tion dimensions. These trends are discernible in the developing country context to newer mechanisms (or hierarchies) which combined the research and commer­cialisation dimensions. These trends are discernible in the developing country context, though in a protean state, since only an awareness has been created in the form of

socio-cultural awareness and nucleation of techni cal sk ill s. It only remains for organisational and institutional

a1Tangements to further develop and sustain the same.

Public Sector Research had been accumulated a stock of knowledge awaiting technological app lication . This sit uation led to the emergence of industrial research laboratories and organi sed science . Techno logy transfer mechanism between universities and industries were institutionalised as informal but dense personal network.

This survey has shown that in the Indian context also simi lar person-to-person contexts are vi tal to technology

d iffusion through personal network in the developing world context, which however is very much lacking.

Si nce the most important transfer-oriented research institutions in the developed world were estab l ished after the lInd world war in the form of the improvement

innovation centres, and the big sc ience centres (for ge­neric technologies) in the 60s and ear ly 70s, there was also an intensification of direct technology transfer from PSR and uni versit ies to industry during this transit ional phase l5 . Many mechanisms like the Incubators and

Parks were promoted particularly in USA, UK and Ger­many for strengthening thi s link ., which has been crucial to some of the innovation based firms. These also facili­tated personnel transfer which led to a two-way commu­nication process, thus contributing to the innovation and diffusion process 16. The need for such mechanism in the context of Third World development is imminem as has been highlighted by the present study as well.

KUMAR & SATY ANARA Y ANA: PUBLIC SECTOR R&D LINKAGES 353

Conclusions

The survey has identified that inadequate Public Sec­tor Research (PDR) - industry linkages is contributory to poor diffusion dynamics in the country . In this context, the survey has highlighted particular norms and features enabling an understanding of the nature of linkage mechanisms, knowledge information flows and capa­bilities required for effective interaction. Analysis draw from the study in the context of available models and comparisons abroad had identified the following essen­tial features:

I . It was widely felt that commercialisation aspect should be included at the planning stage of R&D project itself. But the analysis of the questionnaire revealed that it is very low in the case of indigenous R&D as it exists, Further, it is revealed that both formal systems and mechanisms for market oriented and commercialisation aspect of the R&D are conspicuously absent despite their necessity as agreed to by most of respondents. It thus becomes evident that formal methods of initiating a dialogue through all stages of innovation process and between all concerned (R&D) institutions / user / fund­ing agency) is to be consciously engineered.

2. The analysis of the survey also revealed that man­agement structures for S&T systems were found to be less organised and flexible than what is desirable despite the general awareness of advantages in respect of organic system of management. In the case of developing coun­tries such as India, a continuous monitoring with neces­sary follow up is essential. The survey has brought out the necessity for formal methods of evaluation and the followin cr have been termed as a set of important criteria for R&Db performance evaluation viz.(i) inter - discipli­nary effort, (ii) application effectiveness, (iii) knowledge effectiveness and (iv) training effectiveness . Parameters (i) and (ii) relate to applied research while the latter two (iii) and (iv) relate to basic research.

3. Further, it was also observed that most of the R&D labs, lack engineering expertise for commercialisation efforts and hence process engineering and design exper­tise are identified as areas for future development. This could be through extra centre set ups existing outside the rubic of the R&D units . The study also brings out the inadequacy of organisational and institutional arrange­ments for TT.

These are not viewed as major problems in technology diffusion in our country due to poor public sector re­search industry linkages as well as the particular socio­technical situation with its inherent features .

4. It was revealed by the survey that lack of opera­tional support vis-a-vis informational inputs and com­munication channels are important reason s for ineffective market and product diffusion. The survey also pointed out that most effective methods of dissemi­nation of information for innovation diffusion are person to person contact, ad-hoc team visits and dem~nstrati?n plants followed by ordinary print and electron~c medIa. On the other hand, despite widely used, semmars and exhibitions figured low in the priority categorisation. With increasing dynamism in industry and state sponsor­ship, it would be possible to improve the sophistication of indigenous technologies so as to be competent from the internationalisation dimensions with essential tech­nology trans fer follow up and feedback.

The active role of technology policy is however re­flected through all this. Mechanisms and systems have been initiated by policy and there is global policy per­ception of even larger collaborations through multiple government involvement for promotion of high - funded research, in fundamental particles, new materials and devices, and biotechnology. These are primarily meant to intensify the transfer of basic innovation to the econ­omy but can confornt policy with problems of immediate relevance and industrial application . This is pertinent to the situation in LDCs not only in respect of technologies new to their context but also for generic development for global competitiveness . This is an arena where S&T policy has a vital role to play.

Acknowledgements

Authors are grateful to Dr A.D. Damodaran, director of RRL, for permitting to publish this study. They are also grateful to M. Tajudeen, T. Vimal Ghosh, A.V. Philip and M.P. Varkey for their cooperation and help in this work.

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