International Management of Knowledge and Technology - Essay Example

 Table of Contents Introduction 3 Roles of universities in international knowledge and technology networks 3 Benefits to companies 5 Costs or risks7 Conclusion 9 Reference List 10 Introduction Universities often act as the cradle of economic investments and corporations find the right place to locate their research and development related activities. The outcomes of research are applied to business situations, which imparts dynamism to the business environment of the country. Universities are facing tight budgets since after the financial crisis many governments have tightened up their fiscal policies. Thus grants and subsidies to the universities have declined remarkably. Research departments have to provide a strong justification for the research project that is going to be sanctioned by the authority or the government for provision of financial aid (Broström, McKclvey and Sandström, 2009). Hence, the projects are increasingly becoming collaborated with the corporate firms. Both the universities and the firms have their own needs to collaborate with one another on research projects. Firms have the need to make continuous research works in order to make new innovations and find methods to improve their existing products or services (Lillywhite, Hawkes and Libbin, 2005). Industries might collaborate with the universities in formal as well as informal terms or making research projects (Shane, 2005). These projects might be short term, meant for only some particular project or it might be long term contract for a period of several years. Roles of universities in international knowledge and technology networks Research studies show that educational qualification combined with professional experience plays an important role in entrepreneurial activities. Universities act in various ways to enhance the knowledge and technology networks on an international platform. There are examples of different well known universities that provide infrastructural facility to companies for making their research and development activities. For instance, University of Tokyo has collaborated with Nestle and the company has established their R&D department in the university’s research labs. Toshiba has collaborated with Cambridge University and established their corporate R&D lab within the university campus. Hitachi has also embedded its research laboratory with the Cambridge University. These collaborations have taken the state of modern microelectronic technology to a more advanced level (J. G. Thursby and M. C. Thursby, 2002). The operations of multinational companies require a varied skill set. If the company human resource base does not contain all these specific skills, it might search for the skill in external sources. A single university is not likely to possess the complete skill set that a company might require (Ponomariov, 2007). In such cases, cross-institutional research would be needed to satisfy the firm’s needs within a particular area. Hence, companies look forward to other sources of innovation and have termed this act as ‘open innovation’ (Perkman and Walsh, 2007). University students can gain practical knowledge by taking part in the research activities or simply by updating themselves with the processes of innovation that is taking place through the collaboration of their own university or a joint venture of many universities. They can benefit from this knowledge and be further encouraged to become innovative in their personal and professional lives. These research opportunities are also beneficial for students during their educational phase; they would be able to make various educational experiments to enhance their knowledge and improve their capacity (Lillywhite, Hawkes and Libbin, 2005). Recent research studies highlight that a significantly large number of academic institutions engage themselves with the corporate organizations through different channels simultaneously. This is visible most often in particularly R&D activities in applied sciences. Companies interact more with universities to gain their support in these research activities. The age and experience of academicians and their professorial status indulge companies to enter into contracts with them. Various university patents and copyrights also increase the propensity of organizations to increase their interaction with the industry. A study by D’Este and Patel (2007) reveals that lower-ranked departments in various universities set up greater levels of interaction with the university than the high rankings departments. Benefits to companies Analysts as well as academic researchers are becoming increasingly interested in studying and understanding the relationship that exist between the levels of economic activity and academic research. The aspect of study that receives maximum interest is the method of measuring net benefits that is generated through the mutual relationships between the firms and industries. In order to measure the return to university- industry collaboration accurately, all gains and associated costs must be accounted for. There are various kinds of benefits that might be generated from the collaborative efforts between the universities and the industries. However, the level of extend of benefit would depend upon other external factors, such as, kind of research project undertaken, level of financing, time constraint and level of motivation of the university staff towards completing the project judiciously and successfully. Some of the broad positive sides of these research include the following; development of new scientific information, creation of new networks and interactions, expansion of problem-solving capacity of the companies and technologies better and detailed social knowledge (Malik, 2004). Additionally, the universities are the reserves of skilled human resource. The new pass outs posses fresh minds and rich academic knowledge that might be absorbed into the industrial sector for improving its productivity (Sherwood and Covin, 2008). If a firm has a tie up with a university, it would be able to hire the best students of that industry more easily than if it would conduct temporary campus recruitment. Companies enjoy various benefits by entering into contracts with the universities. Firms seek partners with whom they might jointly share the process of innovation and development. Universities do not have the necessary funds to conduct research projects, while the firms in the corporate industry do not always have the required skilled human resource or the infrastructure for making high end research (Sherwood and Covin, 2008). Die to the financial crisis academic institutions do not receive enough funding from the government. This provides both universities and firms the reasons to collaborate with one another for making various research activities (Oehmke, 2000). Partnership, in most cases, has proven to be beneficial in successfully generating new ideas and technologies. Organizations fund various R&D activities that are conducted in the universities on behalf of the industry partners and the outcomes of these researches are patented by them (Santoro and Betts, 2002). Research study highlights two distinct benefits that firms enjoy by working with universities and academic research institutes. These can be briefly described as the firm’s interest in “shaping creative and mutually beneficial incentives” (Santoro and Betts, 2002, p. 43) for intellectual property rights, licensing of research outcomes and patenting. The second benefit is the power enjoyed by firms when the organizational knowledge is complemented by the knowledge and skills of academic research units. The research facilities that is developed through collaboration with academic institutions encourages companies to take the initiative to make various kinds of research (most frequently in applied sciences) that would bring certain amounts of benefits to both parties. One key benefits of large scale collaboration between universities and companies is that it creates a framework within which the both the institutions engage into an agreement covering both aspects; research work and training needs. This implies that separate contracts are not made for research activities and training or knowledge-transfer activities. Another implication that arises from this facility is that transaction costs might be reduced by a large amount. Companies can reduce cost on infrastructure by utilizing the existing infrastructure of the university. Furthermore, companies might use the human resource of various countries for the advancement of their own research and development department. Collaboration of multiple universities makes it easier for the corporation to access the knowledge resources and also mobilize various sources of funds. As in case of Nestle, the company is based in Switzerland, but, has developed its R&D department in Tokyo. Syngenta AG, a global agribusiness company marketing seeds and pesticides, has developed six university innovation centres (UICs) in different parts of the world. Each of these centres concentrates on different set of technological development opportunities (Malik, Georghiou, and Grieve, 2011). Costs or risks University industry collaboration brings various benefits to the industry as well as the research institute that provides the research base for the organization. However, there are various risks associated with this act of collaboration between academics and economic or industrial activity. Some of the costs include the cost incurred by the university or the research department for project related expenses. These projects require considerably large amount of expenditure and covering these costs is an important concern for both the company as well as the university (Deere, 2005). After a new invention is made, it has to be adapted for commercial uses which require certain costs. Providing training to company staff for updating them with them with the new inventions requires certain expenditure on part of the company. Another cost of research projects is represented by time. Time is one of the most costly resources that require efficient allocation and utilization. Hence, the time framework for the project should be pre-planned so that the cost might be estimated close to accuracy (Verspagen, 2006). Companies should assess the cost to the society for undertaking the project. This cost can be calculated by considering consumers’ surplus and producers’ surplus on implementing the new innovation and comparing it with the amount of lost wages that is incurred by the company owing to training and development of its own staff for making them suitable for working under the new conditions. For making the cost benefit analysis, researchers have to consider direct costs incurred by the firm and also indirect cost incurred by the other firms operating in the industry (if any) as well as the costs to the environment (Tranfield, Denyer and Smart, 2003). If the total surplus is greater than cost, the society is better off; otherwise the society bears the burden of the project undertaken. If the project is a high impact mission and if it fails to achieve its objective, the society faces considerable risk due to the launching of this project. The company that is funding the project might have various issues due to which they might halt the project for a short period of time or even for an undecided period of time. Risks include change in government policies in the country in which the company is operating (that might go against or hamper the research objectives); there might be some natural or manmade hazard that might affect the financial position of the company due to which it might withdraw support from the project; or change in consumer preferences over a certain period of time which might no longer necessitate the research (Vonortas, 2000). Other risks also include differences between opinion between the firm and the research unit. There might be a time frame, set by the corporate plan, within which the research has to be completed or specific issues might be mentioned which ‘only’ need detailed study. These conditions might not be agreed to by researchers at the R&D department according to their understanding of the needs of the research. Conclusion Companies are increasingly becoming dependent on the external sources of innovation. In the fast paced business world, organizations prefer to involve the external sources of knowledge and innovation rather than relying merely on one single source of internal R&D (Chesbrough, 2006). As a result of many cross-institutional, a technology network of university-based research centers is created (Malik, Georghiou, and Grieve, 2011). On behalf of businesses, academic institutions are operating in a challenging atmosphere and advancing the process of innovation and growth. It helps businesses to increase productivity so as to remain profitable in the competitive business environment. In this scenario, university to industries collaboration is one method of marking a new pathway towards growth. Financial crunch is another factor that is acting as a major thrust for the universities to collaborate with the corporations do launch research projects. Such collaborations also allow the university to gain considerably through the process of knowledge transfer. Therefore, industry experts recommend making tie ups between the universities and the industries. However, corporate policy makers must take care of the fact that the benefits received by the university, firm and the society is greater than the cost incurred for undertaking the research project. Reference List Broström. A., McKclvey. M., and Sandström, C., 2009. Elite European universities and the R&D subsidiaries of multinational enterprises. Cheltenham: U.K.: Edward Elgar Press. Chesbrough, H. W., 2006. Open innovation: Researching a new paradigm. Oxford: Oxford University Press. D’Este, P. and Patel, P., 2007. University–industry linkages in the UK: What are the factors underlying the variety of interactions with industry? Oxford: Oxford University Press. Deere, J., 2005. Deere & Company 2004 Annual Report. [pdf] Deere & Company. Available at: [Accessed 31st October 2013]. Lillywhite, J. M., Hawkes, J. and Libbin, J., 2005. Measuring Net Benefits Resulting from University-Industry Collaboration: An Example from the New Mexico Chile Task Force. [pdf] UMN. Available at: < http://ageconsearch.umn.edu/bitstream/27995/1/04010019.pdf > [Accessed 31st October 2013]. Malik, K., 2004. Coordination of technological knowledge flows in firms. Journal of Knowledge Management, 8 (2), pp. 64-72. Malik, K., Georghiou, L. and Grieve, B., 2011. Developing new technology platforms for new business models: Syngenta’s partnership with the University of Manchester. Research Technology Management, 54 (1), pp. 24-31. Oehmke, J. F., 2000. Impacts of high-efficiency pesticide sprayers on Michigan apple growers. Michigan: Michigan State University. Perkman, M. and Walsh, K., 2007. University-industry relationships and open innovation: Towards a research agenda. International Journal of Management Reviews, 9 (4), pp. 259-280. Ponomariov, B. L., 2007. Effects of university characteristics on scientists’ interactions with the private sector: An exploratory assessment. The Journal of Technology Transfer, 33 (5), pp. 485-503. Santoro, M.D. and Betts, S. C., 2002. Making industry-university partnerships work. Research Technology Management, 45 (3), pp. 42-46. Shane, S. A., 2005. Economic Development through Entrepreneurship: Government. Cheltenham: Edward Elgar Press. Sherwood, A. L., and Covin, J. G., 2008. Knowledge acquisition in university-industry alliances: An empirical investigation from a learning theory perspective. Journal of Product Innovation Management 25 (2), pp. 162-179. Thursby, J. G. and Thursby, M. C., 2002. Who is selling the Ivory Tower? Source of growth in university licensing. Management Science, 48 (1), pp. 90-104. Tranfield, D., Denyer, D. and Smart, P., 2003. Towards a methodology for developing evidence informed management knowledge by means of systematic review. British Journal of Management, 14 (3), pp. 207–222. Verspagen, B. 2006. University research, intellectual property rights and European innovation systems. ECIS Working Paper No. 06.05 . Vonortas, N. S., 2000. Multimarket contact and inter firm cooperation in R&D. Journal of Evolutionary Economics, 10 (1–2), pp. 43–271. Read More