SRI International
OUTCOMES AND IMPACTS OF THE STATE/INDUSTRY-UNIVERSITY COOPERATIVE RESEARCH CENTERS (S/IUCRC) PROGRAM
SUMMARY REPORT
The views and opinions do not necessarily express those of the National Science Foundation
Report by:
David Roessner
Submitted By:
Science and Technology Policy Program
Prepared for:
The National Science Foundation
Engineering Education and Centers Division
TABLE OF CONTENTS
The main sections of this document can be accessed directly by selecting the
appropriate heading below.
EXECUTIVE SUMMARY
- Project Background
- Selected Results
- Conclusions and Observations
PART 1: BACKGROUND
- Objectives and Design of the Evaluation
- Program Origins, Goals, Requirements and Features
PART 2: RESULTS
PART 3: CONCLUSIONS AND OBSERVATIONS
Outcomes and Impacts of the State/Industry-University
Cooperative Research Centers (S/IUCRC) Program
The NSF State/Industry University Cooperative Research Centers Program,
initiated with six centers in 1991 and four more in 1992, drew upon the
Foundation’s favorable experience with other programs intended to promote
industry-university cooperation in research to design a related program that
would incorporate the interests of state governments. In particular, the
S/IUCRC Program called for a "new partnership" between the federal
government and the states to promote industry-university cooperation, but in
a way that would bring explicit benefits to states as well as the nation.
Indeed, the Program was the outcome of an understanding reached in 1990
between NSF and the National Governors’ Association. S/IUCRCs were to
achieve their objectives through programs of fundamental "core"
research, industry-sponsored "non-core" projects that could be
proprietary, specific technology transfer efforts involving both types of
research, and the explicit involvement of small and medium-sized firms.
NSF supported the present study first to answer the kinds of questions posed
by most program evaluations: to what extent has the Program accomplished its
goals? What lessons can be learned that might be used to improve the
Program’s performance? In addition, NSF wished to identify lessons that
could inform the agency’s planning for future NSF-state partnerships. The
existence of the NSF Industry/University Cooperative Research (I/UCRC)
Program, on which the S/IUCRC was modeled, offered an unusual opportunity to
employ comparative analysis. Thus, in addition to outcome and impact data
collected about the S/IUCRC Program itself, equivalent data were collected
about the I/UCRC Program and used for comparative purposes. A comparative
analysis of the two Programs enabled conclusions to be drawn about the
independent effects—the "value added"—of the unique features of the
S/IUCRC Program. These included explicit technology transfer activities
associated with center research, the "non-core" projects sponsored
by one or more industrial members that could involve proprietary work, a
requirement for states to match NSF financial support, and the possibility of
granting exclusive licenses to center members supporting non-core projects.
Most of the outcome and impact data developed for this study were generated
from two surveys conducted by SRI: one of the official representatives of
all organizations that were formal members of the nine S/IUCRCs initiated in
1991 and 1992 and still receiving NSF funding in 1998, and a second, similar
survey of the official representatives of all organizations that are formal
members of seventeen I/UCRCs that have existed for a similar period as the
S/IUCRCs. The surveys were supplemented by an historical analysis of the
origins and state context of the S/IUCRC Program, telephone interviews with
State Representatives to S/IUCRCs, and careful review of S/IUCRC annual
reports.
Center Activities. The profile of participation by member
firms1 in center activities is roughly similar for both types of centers, and
is consistent with the profiles of member firm participation in other
university-industry cooperative research centers. One difference that stands
out is the significantly larger proportion of I/UCRC member firms that
participates in sponsored research (61 per cent) relative to the proportion
of S/IUCRC member firms that participates in non-core research (43 per cent).
This is particularly surprising given that non-core research in S/IUCRCs was
designed to be attractive to member firms as a source of solutions to
problems, cost savings, and commercially applicable ideas and technology.
None of the other potential explanations (given the data available in this
study)--the location of member firms, the size of the firm, the length of the
firm’s membership in the center--accounts for this difference. This puzzling
result indicates that there may be substantial differences between S/IUCRC
non-core research and I/UCRC sponsored research, differences that result in
greater incentives to I/UCRC member firms.
Outcomes and Impacts on Member Firms. The pattern of participation
in center activities by S/IUCRC member firms yields a wide range of specific
results for them. By far the most frequently reported result was
"obtained access to new ideas or know-how," a result deriving
primarily from technical advice to members, core research, and training
provided by center faculty (between 90 and 95 per cent of those participating
in these activities). Following this was product or process improvement, a
result reported by representatives of between 60 and 70 per cent of the
member firms that participated in core research, access to center facilities,
or receiving technical advice. Only a small proportion—19 per cent or
fewer—of representatives of members participating in S/IUCRC activities
reported that their firm received the following specific results:
- Licensing technology or software developed by the center;
- Patenting or copyrighting technology and/or software developed as a
result of interacting with the center;
- Making unexpected operational changes;
- All other direct results.
There is a significant difference between the S/IUCRC and I/UCRC Programs in
the extent to which participation in center activities of any kind results in
more tangible outcomes related to intellectual property: new product/process
development and licensing technology or software developed by the center.
For each center activity, S/IUCRC member representatives report these
relatively tangible results more frequently than do their I/UCRC
counterparts. The higher frequency of results related to intellectual
property outcomes reported by representatives of S/IUCRC member firms was not
associated primarily with non-core research activities, where effects of the
difference in intellectual property provisions of the two Programs should be
most evident. Introduction of other factors such as member firm location,
firm size, and length of center membership failed to account for the pattern
of results observed. Although it seems reasonable to expect that the
difference in intellectual property provisions plays some role here, the
nature of the research actually undertaken and the actual practices regarding
intellectual property protection among all centers, regardless of program,
probably better explain this difference in results between the two
Programs.
Representatives of member firms of both types of centers value center
activities and the specific results that derive from participating in those
activities roughly equivalently. As measured by these representatives’
qualitative assessments of the benefits of center membership compared with
the costs, a slightly larger proportion of S/IUCRC member representatives
estimated that the benefits their firms derive exceeded the costs (62 per
cent vs. 50 per cent), but this difference is not statistically significant.
A large majority—about three-quarters--of representatives to both types of
centers consider the benefits of membership to at least equal the costs.
When member representative reports of specific results associated with their
firms’ participation are analyzed by geographic location, it is clear that
in-state location is a major influence on the type and number of specific
results realized. Regarding member participation in center activities, a
significantly larger proportion of in-state members of S/IUCRCs participates
in non-core research than out-of-state members (60 per cent vs. 26 per cent),
suggesting that S/IUCRCs are more responsive to in-state members, as the
Program’s economic development goal anticipates. (Fifty per cent of S/IUCRC
member firms are located in the same state as the centers in which they
participate, vs. 41 per cent of I/UCRC members.) Representatives of in-state
members of S/IUCRCs report a much wider range of beneficial outcomes than do
out-of-state representatives. Further, these in-state member firms’
participation in non-core research was clearly the activity most likely to
yield beneficial results relative to out-of-state members; and their
participation in this activity resulted in a higher frequency of reports of
access to new ideas, improved products or processes, improved technical
information for customers or suppliers, and influence on R&D agendas.
Economic Impacts. With respect to member representatives’
qualitative assessments of the benefits and costs they associated with center
membership, the differences between the two Programs are striking. In the
case of the S/IUCRC Program, representatives of in-state members consider
center membership to provide far greater benefits than costs than do
representatives of out-of-state members (76 per cent vs. 47 per cent),
whereas the reverse is true for I/UCRC member firms, although the difference
is not as dramatic (46 per cent vs. 52 per cent). If only the extreme
categories are considered, differences in impact by region (at least by this
measure) are even more pronounced. Nearly 40 per cent of the in-state
S/IUCRC member representatives, compared with 17 per cent of the out-of-state
member representatives, regard membership benefits to be much greater than
the costs, while for the I/UCRC Program, 25 per cent of the out-of-state
member representatives vs. 18 per cent of the in-state representatives
consider membership benefits to be much greater than costs.
Regarding member firm participation in specific center activities by region,
a considerably greater proportion of in-state S/IUCRC members participates in
non-core research than out-of-state members (96 vs. 64 per cent), whereas
both in-state and out-of-state members of I/UCRCs participate in sponsored
research in about the same proportion (87 vs. 93 per cent). A general
pattern of more positive results for in-state members of S/IUCRCs is repeated
and reinforced at the level of specific types of outcomes. Representatives
of in-state members report a much wider range of types of beneficial outcomes
than do out-of-state representatives, but the opposite is largely true for
reports from representatives of I/UCRCs.
Based on the analyses conducted in this study, the S/IUCRC Program has been a
modest success in the intermediate term as measured against its goals and
objectives and compared with the outcomes and impacts of the I/UCRC Program.
Centers in the S/IUCRC Program attracted considerably more in-state firms
than out-of-state firms and a much greater proportion of small firms than did
the I/UCRCs examined in this study. Participation rates in center activities
were similar for both Programs, but the frequency and range of beneficial
results related to more tangible research outcomes were greater for members
of S/IUCRCs than members of I/UCRCs. Some of the S/IUCRC Program’s outcomes
and impacts can be attributed to its unique features, some to the more
general nature of university-industry cooperative research activities, and
some to the characteristics specific to member firms in S/IUCRCs. Others
remain unexplained, at least by the data available in this study. For
example, the low participation rates of S/IUCRC member firms in non-core
research, relative to the participation rates of I/UCRC members in sponsored
research, its assumed counterpart, are puzzling and call for further
investigation. Outcomes related to intellectual property occurred more
frequently for S/IUCRC member firms than for I/UCRC member firms, but could
not be clearly identified with the intellectual property provisions attached
to S/IUCRC non-core research that are unique to that Program.
The difficulties that State Representatives associated with justifying
matching funds for S/IUCRCs suggest ways in which future NSF partnerships
with states that involve university-industry collaborative research programs
might be designed. First, from the states’ perspective, the leverage that
the S/IUCRC matching requirement provides is not high relative to other
opportunities. It is seen as one-to-one: one state dollar leverages one
federal dollar independent of the match provided collectively by member
firms. Second, the typical S/IUCRC budget is not large, about $1 million.
States regard this as too small to generate many jobs or result in
significant economic impact relative to other university-industry
alternatives such as Engineering Research Centers or Science and Technology
Centers. Third, small businesses are hard to attract to S/IUCRCs because
they are viewed as needing a broad range of support, especially business
assistance, which is difficult or impossible to provide within the
requirements of the S/IUCRC Program. Finally, a state appears to be better
able to incorporate an S/IUCRC into its own priorities and agendas if the
center can be folded into an established state program intended to foster
university-industry cooperation.
The argument for an NSF-state partnership that targets industry-university
cooperation is as valid now as it was when the National Governors Association
and NSF first discussed such a program in the late 1980s. The design of a
future program, however, must account for the lack of integration in many
states between economic development plans and programs with S&T plans and
programs, and for variations in the nature of state agencies responsible for
support of universities. Given the experience of the S/IUCRC Program, it
would seem prudent for a future program whose goal is to strengthen state
S&T infrastructures rather than promote regional economic development,
with university-industry cooperative research as the means. The form that
such cooperative research programs might take would vary considerably,
depending on state priorities and needs, and on existing state commitments to
such cooperative arrangements.
In future partnerships with states, should NSF, in collaboration with
representatives of states, design programs around ends or means? The S/IUCRC
Program was designed around means: industry-university research
collaboration was the vehicle for implementing the partnership, and the
assumption was that the success of the I/UCRC model made it a suitable guide,
with some modification, for a state partnership program. It proved more
difficult than expected to modify the I/UCRC model, intended as it was to
increase the national competitiveness of industrial firms, in a way that
would achieve regional economic development through industry-university
cooperative research. The difficulties were of two types. First, the model
itself probably was an inappropriate means to achieve the goal of regional
economic development. Second, wide variations across states in the
organizational and political relationships between science and
technology-related programs and strategies on the one hand, and economic
development programs and strategies on the other, were incompatible with the
inflexible requirement for annual state matching being linked to an economic
development goal.
To sum up, the S/IUCRC Program was a valuable experiment in NSF-state
partnerships. The Program succeeded in at least two ways. It accomplished,
to a modest degree, its goal of promoting state economic development. And it
demonstrated that explicit requirements such as state matching, explicit
attention to technology transfer, industry-oriented intellectual property
provisions, and encouragement of small and medium-sized firms as center
members, can contribute to the achievement of this goal, even if applied to a
program model that may not have been ideally suited to the context. The
findings and conclusions from this study suggest that NSF has the ability to
develop future partnerships with the states that will lead to benefits valued
highly by both partners.
OUTCOMES AND IMPACTS OF THE STATE/INDUSTRY-UNIVERSITY
COOPERATIVE RESEARCH CENTERS (S/IUCRC) PROGRAM
The NSF State/Industry University Cooperative Research Centers Program,
initiated with six centers in 1991 and four more in 1992, drew upon the
Foundation’s favorable experience with other programs intended to promote
industry-university cooperation in research to design a related program that
would incorporate the interests of state governments. In particular, the
S/IUCRC Program called for a "new partnership" between the federal
government and the states to promote industry-university cooperation, but in
a way that would bring explicit benefits to states as well as the nation. In
addition to promoting university-based, industrially-relevant research (a
goal common to other NSF centers programs), the S/IUCRC Program was to
"facilitate diffusion of center research results and technology
innovation with a view to impacting economic development. Technology
transfer is considered part of the core program." Thus economic
development that can be attributed to an S/IUCRC and is confined to the state
hosting the center is clearly one desirable, expected impact of the Program.
According to the original NSF Program Announcement (NSF 90-87), the S/IUCRCs
were to achieve their objectives through programs of fundamental
"core" research, industry-sponsored "non-core" projects
that could be proprietary, specific technology transfer efforts involving
both types of research, and the explicit involvement of small and
medium-sized firms.
NSF supported the present study first to answer the kinds of questions posed
by most program evaluations: to what extent has the Program accomplished its
goals? What lessons can be learned that might be used to improve the
Program’s performance? But in addition, NSF wished to identify lessons that
could inform the agency’s planning for future NSF-state partnerships. The
fact that the S/IUCRC Program will not support any additional centers means
that this study’s emphasis is less on measures of the
"cost-effectiveness" of the overall Program and more on how
existing and future programs of this type—especially those involving
partnerships with states--might be improved in their design and their
implementation. Both the design of this study and the kinds of analyses
conducted sought to address these questions.
The existence of the NSF Industry/University Cooperative Research Program
since the late 1970s and its rich set of existing center-level data offered
an unusual opportunity to employ comparative analysis in the present
evaluation, and full advantage of this opportunity was taken. Thus, in
addition to outcome and impact data collected about the S/IUCRC Program
itself, equivalent data were collected about the I/UCRC Program and used for
comparative purposes. The two Programs share important similarities in
structure and programmatic activities that make comparative analysis
feasible: both types of centers consist of groups of university-based
industrial firms and other organizations that provide membership fees; and
both engage in fundamental research supported by pooled membership fees,
project research often funded by a single member, research facilities that
could be accessed by members, technical advice and consulting with center
researchers available to members, and training for member
organizations’personnel. Equally important, the two Programs differ in ways
that highlight the distinctive goals, objectives, and requirements of the
S/IUCRC Program. Thus a comparative analysis of the two Programs enables
conclusions to be drawn about the independent effects—the "value
added"—of the unique features of the S/IUCRC Program – the technology
transfer activities, inclusion of small and medium-sized firms, and the local
economic impact expectation. As a consequence, SRI’s evaluation of the
S/IUCRC Program has two elements: a description and analysis of the outcomes
and impacts of the Program itself (which can be compared with the Program’s
objectives), and a description and analysis of the Program’s outcomes and
impacts relative to those of the I/UCRC Program. These two primary elements
of the evaluation were supplemented by impact data obtained from annual
reports of the nine S/IUCRCs studied, by an historical and political analysis
of the origins and state context for the S/IUCRC Program, and by interviews
with the State Representatives to seven of these centers.
Most of the outcome and impact data developed for this study were generated
from two surveys conducted by SRI: one of the official representatives of
all members (i.e., those organizations that were recognized as formal,
fee-paying members to centers as of 1998) of the nine existing S/IUCRCs that
were initiated in 1991 and 1992 and still receiving NSF funding in 1998, and
a second, similar survey of the official representatives of all firms that
were formal members of seventeen I/UCRCs that had existed for at least a
similar period as the S/IUCRCs. This research strategy was based on the
premise that the major, direct impacts of both Programs are experienced by
the firms that are fee-paying members of centers. The primary link from
center research, technology transfer, technical assistance and other
activities to the regional economy is through member firms’ cost savings,
sales increases, employment changes, capital investments, and other changes
that have economic consequences for the regional economy and can be
attributed to center membership. The official representatives to centers
from member firms were assumed to be in the best position to identify the
range of impacts that center membership has produced for them, and to
estimate the value of those impacts on their firm’s economic performance and
competitiveness, and so were the designated respondents to the surveys. As
noted above, the surveys were supplemented, in the case of the S/IUCRC
analysis, by telephone interviews with state economic development officials
and state science and technology policy officials and careful review of
S/IUCRC annual reports.
In 1989 the Science and Technology Council of the States, a unit of the National
Governors’ Association (NGA), and NSF established a working group to explore
an expanded role for states in NSF engineering research programs. This working
group’s activity led to creation of the S/IUCRC Program, based on the model
of university-industry cooperative research centers established by the NSF I/UCRC
Program. The S/IUCRC Program has a number of unique features, relative to the
I/UCRC Program, related to its origins as a program of partnership with states.
The most important of these features were intended to promote industrially-relevant
research with more immediate potential for payoffs to industry. The mechanisms
for accomplishing this included explicit technology transfer activities, a program
of "non-core" projects sponsored by one or more industrial members
that could involve proprietary work, and the possibility of granting exclusive
licenses to members supporting non-core projects. A key element of the S/IUCRC
Program, originating with the involvement of the NGA in the Program’s design,
was the requirement that NSF annual support must be matched by state governments.
A related requirement was the appointment of a State Representative to coordinate
each center’s activity with the state’s economic development programs and policies.
Finally, the S/IUCRC Program requires its centers to "work closely with
industry (including small businesses) to facilitate diffusion of center research
results and technology innovation with a view to impacting economic development."
Table S-1 summarizes the goals, requirements, operating conditions, and practices
of the two Programs in a comparative format, and Table S-2 summarizes their
formal requirements.
Table S-1.
A Comparison of the Goals, Activities, Requirements, Operating Conditions, and
Practices of the S/IUCRC
and I/UCRC Programs
S/IUCRC Program I/UCRC Program |
GOAL |
Advance state economic development |
Strengthen cooperative research relationships between universities and
industry |
ACTIVITIES |
Provide support for a "core" research program of industrially-relevant
generic and fundamental research. |
Provide support for a research program of industrially-relevant generic
and fundamental research. |
|
Engage in experimentation of technical feasibility to promote technology
advancements, technology implementation services, and "non-core"
sponsored projects with more immediate potential. |
Sponsored research (optional) |
|
Work closely with industry (including small and medium-sized businesses)
to facilitate diffusion of center research results and technology to impact
states' economic development through the center's "core" technology
transfer program. |
|
FORM OF AWARD |
Cooperative agreement |
Grant |
LENGTH OF AWARD |
Initial award of 4 years, with possible renewal for an additional 4 years. |
5 year award; centers may apply for a second period of up to 5 years |
MEMBERSHIP |
Members may be industrial firms or other organizations such as federal
laboratories. |
Members may be industrial firms or other organizations such as federal
laboratories |
NSF SUPPORT |
$150K, $225K, or $300K annually during award period. |
$100 K annually for first 5 years, $50K annually for the second
5 years. |
OTHER SUPPORT
|
NSF annual support must be matched by by the state government and by the
center membership fees. |
Centers must obtain at least $300K annually in cash membership fees from
a minimum of six center members. |
|
Host universities provide cost sharing through in-kind support (not required). |
University cost sharing required. |
TREATMENT OF INTELLECTUAL PROPERTY |
Core research and technology transfer programs provide non-exclusive,
royalty-free licenses or center patents to member companies. Exclusive licenses
are permitted for non-core, sponsored projects. |
Participating university holds patents on NSF-supported inventions, with
participating firms generally receiving royalty-free, nonexclusive rights
or options. |
|
|
Some centers have by-laws in which non-exclusivity is the default but
might allow for non-exclusive royalty-free rights for all members; limited
but royalty-bearing licenses for a member that shares in filing costs; exclusive
license if only one member is interested; or exclusive license for a non-member
if no members are interested. |
OTHER REQUIREMENTS |
|
Uniform membership agreements |
SOURCRE: http://www.eng.nsf.gov/eec/O-intro.htm;
https://www.nsf.gov/pubs/1998/nsf97164/nsf97164.htm: D.O. Gray and S. G.
Walters, Managing the Industry/University Cooperative Research Center: A
Guide for Directors and Other Stakeholders, Columbus,
OH: Baltelle Press, 1998; NSF/EEC staff.
Table S-2
Formal Requirements of the S/IUCRC and I/UCRC Programs
Program
Feature S/IUCRC I/UCRC
|
Fundamental shared, core research
|
Required |
Required |
Directed projects sponsored by one or a few
firms for its interest |
Required |
Not required (or desired by NSF) |
Scope of impact |
State |
National |
Emphasis on industry input to project selection with
evaluator/ center analyst |
Required |
Required |
Industrial support |
Required |
Required |
State support |
Required |
Not Required |
Core technology transfer activities |
Required |
Not Required |
The S/IUCRC and I/UCRC Programs are structurally similar programs that
encourage university-industry cooperation through the formation of
university-based groups of firms pooling some of their resources to support
fundamental research. Thus, some of the patterns of involvement in centers by
member firms and the results experienced by them should be similar.
Differences in these patterns will be due primarily to:
- Unique features of the S/IUCRC Program, as described above;
- Features of individual centers such as leadership, organizational
setting, level of financial and other support, staffing, etc.; and
- Characteristics of center member firms and their representatives.
Only the first and third of these types of factors were considered in this evaluation.
Center Activities. As a requirement of membership in either type of
center, member firms provide fees that are pooled to support a program of
fundamental, generic research. Virtually by definition, most member firms
would be expected to participate at some minimal level in core research
(S/IUCRCs) and fundamental research (I/UCRCs). Participation in all other
center activities is discretionary, although the program of non-core research
is required of S/IUCRCs, whereas its assumed counterpart, sponsored research,
is not required of I/UCRCs. If these two activities are, in fact, reasonably
similar, then it might be expected that member participation in non-core
research in S/IUCRCs will occur relatively more frequently than participation
in sponsored research in I/UCRCs. But in at least one obvious respect,
stemming from the unique intellectual property provisions of the S/IUCRC
non-core program, the two activities are not comparable. Specifically, while
I/UCRCs are not encouraged to develop intellectual property protection for
products of their research, the opportunity to grant exclusive licenses for
the products of non-core research was expected to provide an incentive for
S/IUCRC member firms that does not exist for members of I/UCRCs.
Nearly all members of the nine S/IUCRCs studied participate in core
research—at minimum they pay their dues, participate in research project
selection, and are sent information about research results. Forty-three per
cent of the members participate in non-core research, about 60 per cent use
center facilities and receive technical advice or consulting from center
personnel, and just under a third received training from their center. In
the case of the I/UCRC Program, essentially all members of the I/UCRCs
studied participate in fundamental research as a consequence of their
membership fees. Sixty per cent support sponsored research; 42 per cent use
center facilities; 66 per cent receive technical advice or consulting; and
about a quarter receive training. Although the profile of participation in
center activities is roughly similar for both types of centers, one
difference that stands out is the significantly larger proportion of I/UCRC
member firms that participate in sponsored research (61 per cent) relative to
the proportion of S/IUCRC member firms that participate in non-core research
(43 per cent). This is particularly surprising given that non-core research
was designed to be attractive to member firms as a source of solutions to
problems, cost savings, and commercially applicable ideas and technology.
None of the other potential explanations (given the data available in this
study)--the location of member firms, the size of the firm, the length of the
firm’s membership in the center--accounts for this difference. This puzzling
result is thus due to a factor not included in the analysis, and may indicate
that there are substantial differences between S/IUCRC non-core research and
I/UCRC sponsored research, differences that offer greater incentives to
I/UCRC member firms.
Outcomes and Impacts on Member Firms. Two formal requirements of the S/IUCRC
Program not shared by the I/UCRC Program are state financial support and the
inclusion of technology transfer activities as part of the program of
research. Both of these requirements reflect the S/IUCRC Program’s goal of
state economic development, and predict that, relative to I/UCRC member
firms, S/IUCRC member firms might be more likely to be located in the same
state as the center with which they are involved (as a consequence of the
center’s recruiting strategies and explicit attention to technology
transfer). The proportion of small firms choosing to become members of
S/IUCRCs would also be expected to be greater than in the case of I/UCRCs,
since other research has suggested that large firms are more likely to join
university-based groups of firms than are small firms, for reasons related to
the kinds of benefits firms more frequently experience from such involvement
(longer term, less tangible benefits such as access to students, ideas,
expertise, and know-how rather than shorter term problem solving and new
technology). In particular, the S/IUCRC Program’s differential emphasis on
technology transfer and on the involvement of small and medium-sized firms
should produce this result. Despite these differences, however, both
Programs share the common core of fundamental research, so it would be
surprising if the profile of results obtained by member firms of these two
types of centers differed widely from the profile of results recorded in
studies of other industry-university cooperative research activities: the
most frequently experienced results have longer term and relatively
intangible benefits for the involved firms; students are highly valued;
specific, tangible results such as new products and processes, licensed
technology or software, and patentable technology are relatively infrequent
outcomes (but highly valued when they do occur).
The pattern of participation in center activities by S/IUCRC member firms
yields a wide range of specific results for them. By far the most frequently
reported result was "obtained access to new ideas or know-how," a
result deriving primarily from technical advice, core research, and training
(between 90 and 95 per cent of those participating in these activities).
Following this was product or process improvement, a result reported by
between 60 and 70 per cent of the member firms that participated in core
research, access to facilities, or receiving technical advice. Only a small
proportion—19 per cent or fewer—of representatives of members participating
in center activities reported that their firm received the following specific
results:
- Licensing technology or software developed by the center;
- Patenting or copyrighting technology and/or software developed as a
result of interacting with the center;
- Making unexpected operational changes;
- All other direct results.
In the case of the I/UCRC Program, by far the largest proportion of member
representatives (82-95 per cent) reported that, as a result of their firm’s
participation in center activities, they obtained access to new ideas or
know-how. About 30 per cent of the representatives reported that their firm
developed a new product or process, with project research as a the primary
route to this result, although other activities except training led to new
products or processes at a just slightly lower rate. Less than 9 per cent
reported licensing technology or software developed by the center, or
patenting or copyrighting technology or software developed as a result of
interacting with the center. Between 10 and 20 per cent reported making
unexpected operational changes.
There is a significant difference between the two Programs in the extent to
which participation in center activities of any kind results in more tangible
outcomes related to intellectual property: new product/process development
and licensing technology or software developed by the center. For each
activity, S/IUCRC member representatives report these relatively tangible
results more frequently than do their I/UCRC counterparts. One possible
explanation for this is the difference in the guidelines for intellectual
property protection provided by each type of center to its member firms.
However, the higher frequency of results related to intellectual property
outcomes reported by representatives of S/IUCRC member firms was not confined
to non-core research activities, where effects of the difference in
intellectual property provisions of the two Programs should be most evident.
Introduction of other factors such as member firm location, firm size, and
length of center membership factors failed to account for the pattern of
results observed. Although it seems reasonable to expect that the difference
in intellectual property provisions plays a role here, the nature of the
research actually undertaken and the actual practices regarding intellectual
property protection in each type of center probably better explain this
difference in results between the two Programs.
Representatives of member firms of both types of centers value center
activities and the specific results that derive from participating in those
activities roughly equivalently. As measured by these representatives’
qualitative assessments of the benefits of center membership compared with
the costs, a slightly larger proportion of S/IUCRC member representatives
estimated that the benefits their firms derive exceeded the costs (62 per
cent vs. 50 per cent), but this difference is not statistically significant.
A large majority—about three-quarters--of representatives to both types of
centers consider the benefits of membership to at least equal the costs.
Geographic proximity is clearly a factor in the levels of member
participation in center programs and, consequently, in the benefits derived
from participation. When member representative reports of specific results
associated with their firms’ participation are analyzed by geographic
location, it is clear that in-state location is a major influence on the type
and number of specific results realized. Regarding member participation in
center activities, a significantly larger proportion of in-state members of
S/IUCRCs participates in non-core research than out-of-state members (60 per
cent vs. 26 per cent), suggesting that S/IUCRCs are more responsive in their
research program to in-state members, as the Program’s economic development
goal anticipates. Representatives of in-state members of S/IUCRCs report a
much wider range of beneficial outcomes than do out-of-state representatives.
Further, these in-state member firms’ participation in non-core research was
clearly the activity most likely to yield beneficial results relative to
out-of-state members; and their participation in this activity resulted in a
higher frequency of reports of access to new ideas, improved products or
processes, improved technical information for customers or suppliers, and
influence on R&D agendas.
Although less prominent than regional economic development as a program goal,
the S/IUCRC Program encouraged centers to recruit and retain small and
medium-sized firms as members. The mean percentage of small firms
represented across the nine centers studied was 41.2; looking only at the
in-state members, 45 per cent are small businesses. Small firms participate
in center activities in about the same proportion as larger firms and,
although the differences are not large, non-core research and technical
advice are slightly more highly valued than core research and access to
facilities by small and medium-sized firms (representatives of only three
small firms assigned a value to the training they received, and the mean
value was very high). Representatives of small firms assessed their overall
ratio of benefits to costs in about the same way that representatives of
larger firms did. Eleven per cent of the I/UCRC member firms are small
businesses. A somewhat larger proportion of these small firms are in-state
than out-of-state: 14 per cent vs. 10 per cent. Across center activities,
slightly fewer small firms seek training than do larger firms, and slightly
more participate in project research. Representatives of small firms assess
the comparative costs and benefits of center membership in the same way that
representatives of larger firms do.
Economic Impacts. Despite SRI’s efforts to use a variety of measures
of regional economic impact, lack of reliable data limited this study to
reports of various types of benefits by representatives of member firms,
classified by region—whether or not the member firm was in the same state as
the center in which it participated. First, with respect to member
representatives’ qualitative assessments of the benefits and costs they
associated with center membership, the differences between the two Programs
are striking. In the case of the S/IUCRC Program, representatives of
in-state members consider center membership to provide far greater benefits
than costs than do representatives of out-of-state members (76 per cent vs.
47 per cent), whereas the reverse is true for I/UCRC member firms, although
the difference is not as dramatic (46 per cent vs. 52 per cent). If only the
extreme categories are considered, differences in impact by region (at least
by this measure) are even more pronounced. Nearly 40 per cent of the
in-state S/IUCRC member representatives, compared with 17 per cent of the
out-of-state member representatives, regard membership benefits to be much
greater than the costs, while for the I/UCRC Program, 25 per cent of the
out-of-state member representatives vs. 18 per cent of the in-state
representatives consider membership benefits to be much greater than costs.
Only 6 per cent of the in-state S/IUCRC member representatives regard the
benefits to be much less than the costs, while 18 per cent of the in-state
I/UCRC representatives consider the benefits to be much less than the costs;
20 per cent of the out-of-state member representatives of S/IUCRCs and 12 per
cent of the out-of-state representatives of I/UCRCs had this negative
response.
Regarding member firm participation in specific programmatic activities by
region, a considerably greater proportion of in-state S/IUCRC members
participates in non-core research than out-of-state members (96 vs. 64 per
cent), whereas both in-state and out-of-state members of I/UCRCs participate
in sponsored research in about the same proportion (87 vs 93 per cent).
Geographic proximity matters (positively) to members of S/IUCRC in obtaining
technical advice or consulting (71 per cent vs. 53 per cent) but much less so
for members of I/UCRCs (71 per cent vs. 64 per cent). This general pattern
of more positive results for in-state members of S/IUCRCs is repeated and
reinforced at the level of specific types of outcomes. In the case of the
S/IUCRC Program, in-state members report a much wider range of types of
beneficial outcomes than do out-of-state members, but the opposite is largely
true for members of I/UCRCs.
Another measure of the economic impact of centers is the number of center
graduates or students hired by member firms, and the geographic pattern of
those hires. Neither the S/IUCRC nor the I/UCRC Program has an explicit
educational component, so that the hiring of center students and graduates is
not an expected outcome of either Program. However, several studies of the
impact on industrial firms of participation in university-industry
cooperative research (e.g., SRI’s study of the impact on industry of
participation in ERCs) consistently show that companies value human
capital—the staff with whom they interact and the students and graduates they
hire—more than many other products of university research. By this measure,
the S/IUCRC program does not do as well as does the I/UCRC Program.
Proportionately fewer members of S/IUCRCs hire center graduates or students
(17 per cent vs. 33 per cent); and in-state members are no more likely than
out-of-state members to hire students or graduates (although all members who
hired them value them highly). In contrast, 43 per cent of the I/UCRC member
firms that hired center students or graduates were in-state, while 28 per
cent were out-of-state. This result is not readily explainable but may be a
consequence of the higher concentration of small firms—small firms that are
not apparently hiring or can attract center graduates—in the S/IUCRC
program.
As part of this study, SRI reviewed selected state science and technology
(S&T) and economic development plans and strategies. The review revealed
a lack of consistency and integration between the two in many states. In the
small number of states in which both kinds of planning occurred formally,
often the groups and agencies involved were different, and the resulting
plans had different emphases. Typically a structural and political gap
exists between state economic and S&T strategies and activities. Only a
few states have successfully integrated S&T quickly, smoothly, or
permanently into existing agencies responsible for economic development; in
other states the loci of political support and stakeholders involved in
S&T differ from those involved in economic development.
SRI’s interviews with the State Representatives to S/IUCRCs revealed in some
detail the tensions implied by the inconsistencies and gaps just described.
First, from the states’ perspective, the leverage that the S/IUCRC matching
requirement provides is not high relative to other opportunities. It is seen
as one-to-one: one state dollar leverages one federal dollar. Second, the
typical S/IUCRC budget is not large, about $1 million. States regard this as
too small to generate many jobs or result in significant economic impact
relative to other university-industry programs such as ERCs or Science and
Technology Centers. Third, small businesses are hard to attract to such
centers because they are viewed as needing a broad range of support,
especially business assistance, which is difficult or impossible to provide
within the requirements of the S/IUCRC Program. A state appears to be better
able to incorporate an S/IUCRC into its own priorities and agendas if the
center can be folded into a broader state program intended to foster
university-industry cooperation.
To increase the payoffs for states from university-industry cooperative
research, the federal government can encourage state-based firms to join
university-industry research centers, encourage the conduct of shorter-term,
industrially-relevant research, facilitate the transfer of results from
university research to industry, and encourage intellectual property
guidelines that offer incentives for industry to collaborate with university
researchers. The S/IUCRC Program was designed to accomplish all of these
results. Unique among federally-supported, university-industry collaborative
research programs is the S/IUCRC Program’s requirement for state matching of
federal (NSF) and industrial funds for centers. This requirement implies a
more systematic integration of this Program into state S&T and economic
development plans than is the case for other state-supported
industry-university cooperative research programs. At least initially, the
S/IUCRC Program must compete for state funds with other federal programs that
require matching. The formal matching requirement, which calls for new money
in state agency budgets rather than a reallocation of university funds or
passthroughs, can result in tension between economic development agencies or
S&T agencies and state Boards of Regents.
SRI’s interviews with State Representatives to S/IUCRCs provided additional
information about the complex setting in which state-supported
university-industry collaborative research programs exist. Over the more
than seven years that the nine S/IUCRCs that SRI studied have been in
existence, State Representatives initially designated to oversee the centers
have remained largely stable in both organizational location and identity.
About half the Representatives (and thus the oversight activity and initial
budget justifications for matching funds) are located in state or nonprofit
agencies responsible for economic development, and about half are located in
some form of state S&T agency. Representatives report that matching
funds typically were approved initially as part of a larger agency budget
request to the state legislature (e.g., the Ohio Edison Program, the New York
State Centers for Advanced Technology within the NY State Office of Science,
Technology and Academic Research). Subsequent budget requests proved
somewhat easier to justify, since they often occurred within the request of a
larger, more well-established entity. Yet justification for S/IUCRC matching
funds was not straightforward, either initially or subsequently.
The difficulties that State Representatives associate with justifying
matching funds for S/IUCRCs are revealing. They reflect the tensions
discussed briefly above, and provide suggestions for ways in which future NSF
partnerships with states that involve university-industry collaborative
research programs might be designed. First, from the states’ perspective,
the leverage that the S/IUCRC matching requirement provides is not high
relative to other opportunities. It is seen as one-to-one: one state dollar
leverages one federal dollar. Second, the typical S/IUCRC budget is not
large, about $1 million. States regard this as too small to generate many
jobs or result in significant economic impact relative to other
university-industry programs such as ERCs or Science and Technology Centers.
Third, small and medium-sized businesses are hard to attract to S/IUCRCs
because they are viewed as needing a broad range of support, especially
business assistance, which is difficult or impossible to provide within the
requirements of the S/IUCRC Program. A state appears to be better able to
incorporate an S/IUCRC into its own priorities and agendas if the center can
be folded into a broader state program intended to foster university-industry
cooperation.
Based on the analyses conducted in this study, the S/IUCRC Program has been a
modest success as measured against its goals and objectives and compared with
the outcomes and impacts of the I/UCRC Program that served as its model. The
S/IUCRC Program attracted considerably more in-state firms than out-of-state
firms and a much greater proportion of small firms. Participation rates in
center activities were similar for both Programs, but the frequency and range
of beneficial results related to more tangible research outcomes were greater
for members of S/IUCRCs than members of I/UCRCs. Some of the S/IUCRC
Program’s outcomes and impacts can be attributed to its unique features, some
to the more general nature of university-industry cooperative research
activities, and some to the characteristics of center member firms. Others
remain unexplained, at least by the data available in this study. For
example, the low participation rates of S/IUCRC member firms in non-core
research, relative to the participation rates of I/UCRC members in sponsored
research, its assumed counterpart, are puzzling and call for further
investigation. Outcomes related to intellectual property occurred more
frequently for S/IUCRC member firms than for I/UCRC member firms, but could
not be clearly identified with the unique intellectual property provisions
attached to S/IUCRC non-core research.
What lessons for NSF does this study suggest for future partnerships with the
states? NSF’s prior experience with formal intergovernmental partnerships is
limited primarily to the series of programs initiated by the
Intergovernmental Science and Public Technology Program in 1967 and extending
until 1982, and the EPSCoR Program, begun in 1978 and continuing today in
expanded form. The latter Program’s survival can be attributed in large part
to its use of the merit review process for proposal review, its focus on
research universities as the award recipients, the fact that research is a
primary output from the Program’s awardees, and its focus on states that have
been relatively less successful in attracting NSF research money. All this
is consistent with NSF’s mission, and it is likely that any future programs
involving partnerships with states would have to incorporate these elements.
In future partnerships with states, should NSF, presumably in collaboration
with representatives of states, design programs around ends or means? The
S/IUCRC Program was designed around means: industry-university research
collaboration was the vehicle for implementing the partnership, and the
assumption was that the success of the I/UCRC model made it a suitable guide,
with some modification, for a state partnership program. The goal of state
economic development came second and seemed entirely appropriate at the time
of the NSF/NGA meetings from which the S/IUCRC Program’s features emerged.
It proved more difficult than expected to modify the I/UCRC model, intended
to increase the national competitiveness of industrial firms, in a way that
would achieve regional economic development through industry-university
cooperative research. The difficulties were of two types. First, the model
itself probably was inappropriate for the goal of regional economic
development. Second, wide variations across states in the organizational and
political relationships between science and technology-related programs and
strategies on the one hand, and economic development programs and strategies
on the other, were incompatible with the inflexible requirement for annual
state matching linked to an economic development goal.
Two decades of state experience with using science and technology as a lever
for economic development has led to mixed results, widely varying strategies
across the states, highly uneven levels of political and financial support
over time, and no clear lessons—other than the obvious one that state
political timetables and criteria do not mesh well with the timetables for
payoffs from university research, or with the intangible forms that those
payoffs typically take. If there is any single ingredient that seems
necessary, if not sufficient, for a successful state program of
S&T-leveraged economic development, it is continuing political commitment
from successive administrations. The design of the overall strategy seems
less important than the level and stability of commitment. Some states
appear to have accepted the theory that investment in S&T infrastructures
pays off, thus integrating current economic development theory into concrete
state programs intended to promote economic development. In other states,
economic development plans remain isolated politically and organizationally
from S&T plans, and in still other states there is only limited
commitment to S&T. Some states have made university-industry cooperation
an integral part of their S&T and/or economic development plans (e.g.,
New York), while others have not. The S/IUCRCs studied faced quite different
environments when it came to justification for matching funds. In some cases
the Center Director developed the rationale and made the case before the
legislature; in others, the organization charged with providing the matching
funds in the state (e.g., the New York State Office of Science, Technology,
and Academic Research; the Ohio Department of Development) included the
request in a larger budget request, shielding it somewhat from close
scrutiny.
States such as Ohio and New York, which have made a considerable and stable
commitment to the support of university-based research centers whose goal is
state economic development, provided a more hospitable atmosphere for
S/IUCRCs. The Edison Centers in Ohio and the Centers for Advanced Technology
(CAT) in New York offered existing homes for the S/IUCRC budget and a
relatively well-accepted rationale for state investment in
university-industry collaborative research. Beyond this, state-supported
programs of university-based centers such as CAT can provide the greater
flexibility and broader range of program elements that are more consistent
with the requirements of regional economic development than were the features
of the S/IUCRCs. Despite the Program’s relative success in attracting small
businesses and state-based firms as members, it could not, alone, provide the
business assistance and spin-off assistance so often needed by firms and
entrepreneurs approaching the university for help.
The EPSCoR Program did not face the uncertainties and variable political
environment across states that the S/IUCRC Program did. With no explicit
connection to state economic development via its formal matching
requirements, NSF/EPSCoR could work with the state agency in each state most
closely associated with supporting research universities. The political and
organizational links to economic development either had already been made or
were forged as part of larger state plans for developing the state’s
university-based research capabilities. Although a strong university
research system is a means to larger state goals, it has increasingly been
accepted by states as virtually an end in itself, requiring little further
justification. Thus there is an advantage to partnering with states with
programs that either do not prescribe the means, or that emphasize means that
have achieved the status of ends.
Does an "EPSCoR" for university-industry cooperative research make
sense for NSF? There is little doubt that a rationale for federal support of
state efforts to create or strengthen university-industry cooperation in
research exists, nor is there much doubt that such cooperation pays off both
regionally and nationally. The argument for an NSF-state partnership that
targets industry-university cooperation is as valid now as it was when the
NGA and NSF first discussed such a program. The design of such a future
program, however, must account for the lack of integration in many states
between economic development plans and programs and S&T plans and
programs, and for variations in the nature of state agencies responsible for
support of universities. Given the experience of the S/IUCRC Program, it
would seem prudent to design such a program as one whose goal is to
strengthen state S&T infrastructures rather than promote regional
economic development, with university-industry cooperative research as the
means. The form that such cooperative research programs might take would
vary considerably, depending on state priorities and needs, and on existing
state commitments to such cooperative arrangements. A winning proposal to
New York or Ohio would look quite different from one from, say, Oklahoma,
where universities only recently have been encouraged by the state to engage
in cooperative research with industry.
To sum up, the S/IUCRC Program was a valuable experiment in NSF-state
partnerships. The Program succeeded in at least two ways. It accomplished,
to a modest degree, its goal of promoting state economic development. And it
demonstrated that explicit requirements such as state matching, explicit
attention to technology transfer, industry-oriented intellectual property
provisions, and encouragement of small and medium-sized firms as center
members, can contribute to the achievement of this goal, even if applied to a
program model that may not have been ideally suited to the context. The
findings and conclusions from this study suggest that NSF has the ability to
develop future partnerships with the states that will lead to benefits valued
highly by both partners.