2 Cooperation the need to share costs and risks with partners Extend technological capabilitiesIntegrate into firm production processes technological knowledge coming from different sources;R&D alliances strategies followed starting from the late '80s2 aspects inherent to the R&D cooperation process:the need to share costs and risks with partnersto access to complementary knowledge
3 Aim of Firms’ cooperation strategies Introduce a new product (or process) in a brief time span;Have a rapid and privileged access to new knowledge increasing the firms' understanding of scientific developments (Belderbos)The main research interest resides in four broad areas:The motives which induce firms to form these alliances;the selection of partners;the management of the alliances,the measurement of alliance performance (Bayona et al., 2001)
5 Partner selectionThe partner selection is one of the most critical decision for a firm when forming an alliance as the simultaneous management with multiple partners cause a rise in complexity and coordination costsuse of a multinomial logit model
6 The choice among three main strategies Three different cooperation strategies:mixed cooperationwith both market and science partners.market cooperationR&D cooperation with market partners (suppliers, clients or competitors)science cooperationR&D cooperation with science partners(public research institutes and universities)
7 Theoretical Approaches in the Analysis 2Theoretical Approaches in the AnalysisThe industrial organization literature (IO)has focused on incoming and outgoing spillover as the major determinants of R&D cooperation strategies.The second theoretical approach followed is grounded in the management literature. It applies transaction cost approach that may favour the sharing of costs and risks among partnership participants (e.g. Das and Tend, what determines how firms choose different partners)
8 Firms cooperating with… Public institutionsFace less cost constrains while it is not the case forfirms cooperating with rivals.are targeted in order to pool complementary resources together.UniversitiesForeign and Domestic partnersCincera et al., (2003) found negative result on firms' productivity collaborating with foreign partners and may be affected even by international R&D cooperationCompetitorsLhuillery and Pfister (2009) collaboration with competitors may induce failures differentiating among vertical partners.
9 Determinants of R&D cooperation Incoming spilloversApproprialityFirm sizeCost of innovationSubsidiesParticipation in a multinational groupInternational statusR&D expenditures
10 MAJOR FACTORSINCOMING SPILLOVER: external flows of knowledge that a firm may be able to grasp directly from partners or from other sources of technology such as patents, publications, meetings and so on….COST OF INNOVATIONS: high costs for innovation induce firms to search for a partner to alleviate financial problems and reduce costs
11 Incoming spillovers If they are high: may induce firms to collaborate and it may result more profitable than non cooperating strategy. Firms in high-tech sectors prefer horizontal cooperations especially when the costs of innovation are high .On the other hand, the possibility of knowledge leakages may increase firms' willingness to take advantage of partners R&D investments.collaborating with research organizations = higher incoming spilloversFirms attempt to minimize outgoing spillovers and maximize incoming spillovers.
12 EU GUIDELINES FOR R&D COOPERATION “Collaboration in the field of research and development as well as knowledge transfer activities between the Community and third countries should be based on clear and uniform recommendations and practices that ensure equitable and fair access to intellectual property generated through international research collaborations, to the mutual benefit of all partners involved.”
13 STAGES TO CHOOSE A PARTNER Identification of the respective interests of the partiesParticipant’s knowledge transfer policyIP* strategy and exploitation model of the partnerIdentification of background IPIdentification of personnelIdentification of the partnersDue diligence evaluation of new partnersFreedom-to-operateAnalysis of the legal system, particularly the IP framework, of apartner's countryCultural issues relating to contract negotiation and execution ofcontractsDrafting R & I collab.agreement*intellectual property
14 Case Studies Science Cooperation UCB and Harvard University announce new research allianceThe new alliance creates a unique drug discovery bridge between industry and academia.It pairs Harvard’s long-standing excellence in medical research with UCB’s expertise in drug development-It’s about collaboration-it’s about innovation-it’s about sharing ideas.Harvard will benefit from UCB’s strengths and industry experience in drug discovery and development; while Harvard’s exceptional research will complement UCB’s internal expertise.’’
15 Market cooperation+Matheson Tri-Gas, Inc., a global manufacturer and supplier of industrial, medical, electronics and specialty gases and welding supplies headquartered in Basking Ridge, N.J., has announced the completion of the acquisition of Continental Carbonic Products Inc., an Illinois-based manufacturer and supplier of dry ice and liquid carbon dioxide.Going forward, CCPI presents a tremendous opportunity for MATHESON by providing a new platform for growth and extension of our product offering.
16 Mixed cooperation+Prompt, Québec’s premier ICT R&D consortia, altogether with McGill University and the California Institute for Telecommunications and Information Technology has announced another key milestone towards the development and application of environmentally sound ICT-based infrastructure and networksBenefitsincrease energy efficiencyreduce carbon emissions across university campuses, companies and government departments.
17 Continue…Focus on maximizing the positive environmental benefits of ICTBuilding on the results of an initial strategic planning meeting hosted in October in San Diego, California, the workshop brought together more than 35 participants from industry, academia and government. This included representatives from emerging companies across Quebec to multinational industry leaders such as Ericsson, IBM and DMR-Fujitsu that maintain a strong R&D presence in the province.Delegates identified three key priorities for the proposed consortium:green telecommunications,wireless access,intelligent transportation systems.
18 Partnerships create new opportunities "This workshop enabled us to develop specific tactics that will help translate our vision into action, while making important progress on the implementation of our Green ICT Strategy,” Together with our partners, we will focus on technological collaboration, governance and intellectual property management support the launch this new Canada-California Consortium, and provide entrepreneurs with new opportunities to capitalize on growing market for Green ICT.”said Dr, Charles Despins, President and CEO of Prompt.
19 Continue…“The University of California recently hosted the Third Governors’ Global Climate Change Summit, which called for collaborative action that enables the development of a green economy; technology will play an important role in this equation,” said Jerry Sheehan, Chief of Staff at Calit2. “This workshop reinforced how Canada-California R&D cooperation in green ICT could help to achieve this goal and influence others around the world.”“This bilateral consortium promotes the development of a sustainable environment and global ICT industry,” said Pierre Coderre, Sr. Director of Technology with DMR-Fujitsu, which has three offices in Quebec. “It will enable multinational companies such as Fujitsu to leverage a network of Green ICT partners, optimize the development of new technology-based, climate change solutions, and demonstrate Fujitsu leadership in green ICT.”
20 References http://www.youtube.com/watch?v=fMnhEfvF3og Reading on «Firms’ R&D cooperation strategies: Partner Selection, written by Gussoni and Franco