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Natalia Zinovyeva


UNIVERSITIES AND INDUSTRIAL INNOVATION: EMPIRICAL EVIDENCE Natalia Zinovyeva Foundation for Applied Economic Research - FEDEA – PowerPoint PPT presentation

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Title: Natalia Zinovyeva

  • Natalia Zinovyeva
  • Foundation for Applied Economic Research - FEDEA

  • Lisbon strategy Investing in RD, Boosting
    innovation, Better education and skills
  • Close interactions between government, university
    and industry
  • Which form should they take?

Theoretical arguments
  • Market failures
  • Suboptimal allocation of resources to knowledge
  • Causes
  • Fundamental uncertainty in research outcomes
  • Non-proprietary nature of knowledge
  • Information asymmetries between users and
  • System failures
  • Inefficiencies in interaction among agents
  • Suboptimal supportive structures
  • Causes
  • Lock-ins in existing networks
  • Structural inertia
  • Failures in infrastructural provision

Correction strategies
  • Government as a risk taker direct procurement of
  • Incentives public procurement, taxation relives,
    university labs, government funding
  • IPR legislation
  • Enabling collaborative schemes
  • Collaboration between university and industry

Evidence on system failure?
  • Edwin Mansfield (1991, 1998)
  • 2 samples of 76 major American firms for
    1975-1985 and 1986-1994

Role of university in knowledge clusters
  • Silicon Valley beginning in 1938 from
    Hewlett-Packard - a spin-off of Stanford
  • Route 128 knowledge cluster since the 1930s MIT
    has spawned 4,000 companies employing more than a
    million people
  • Do these cases represent a rule or an exception?

  • Descriptive evidence
  • Surveys and case studies
  • Econometric studies

1. Descriptive evidence on technology transfer
  • Claim that university presence is important
  • Route 128 (Dorfman 1983)
  • Silicon Valley and Route 128 (Saxenian 1985)
  • Cambridge, UK (Wicksteed 1985)
  • Counter-examples
  • High technology centers in England (Breheny and
    McQuaid 1987)
  • Some US centers (Colorado Springs and Portland)
    (Rogers and Larsen 1984)
  • John Hopkins University (Feldman 1994)

2. Survey and case study evidence Effect of
university on firms location
  • Several studies find that firms consider
    university presence as an important factor for
    firms location
  • Premus 1982 60 of surveyed US firms
  • Schmenner 1982 52
  • Other studies on the US
  • Counter-examples
  • Howells 1984 only 2.6 of firms in
    pharmaceuticals in England indicate university as
    their first reason for choosing location, ¾ that
    it is not significant
  • Gripaios et al. 1989 only 9 indicate any
    university effect in the Plymouth region,

2. Survey and case study evidence Effect on
innovation activity
  • Mansfield (1991, 1998)

3. Econometric evidence Effect of university in
high-tech location
  • Claim that university is important for high
    technology location
  • Glasmeier (1991)
  • 247 US metropolitan statistical areas in 1982
  • Dependent variable High tech employment
  • University variable number of colleges
  • Controls climate, housing prices, property tax,
    wage rate, migration, educational options,
    freeway density, poverty rate,..
  • Method OLS
  • No effect on high tech location
  • (Markusen et al, 1986)
  • 264 US metropolitan statistical areas in 1977
  • Dependent variable High tech employment
  • University variable university RD
  • Controls climate, housing prices, property tax,
    educational options, freeway density, business
  • Method OLS

3. Factors determining the effect of university
on high-tech location (Cont.)
  • Sectors
  • Some evidence of positive effect in various
  • Electrical and Electronic Equipment (Bania et
    al., 1993)
  • Biotechnology (Audretsch and Stephan 1996, Zucker
    et al. 1998)
  • Ambiguous evidence
  • Chemicals and instruments
  • Ownership structure
  • Headquarters consider important proximity to
    universities, branch plants no (Malecki, 1986)
  • Firm size
  • Big firms tend to locate close to universities
    (Rees 1991)

3. Econometric evidence Effect of university on
private innovation activity
  • Positive effect of universities in the US
  • State level (Jaffe, 1989)
  • 29 states in 8 years
  • Dependent variable Number of industrial patents
  • Independent variables Academic RD investment
  • Private RD investment
  • Controls Population size, year dummies
  • Method 3SLS.
  • Instruments number of private and public
    universities (in Academic RD equation) and
    manufacturing VA (in Private RD equation)
  • Feldman (1994) and Feldman and Florida (1994)
    confirm the findings of Jaffe using innovation
    count data
  • Metropolitan statistical areas (Bania et al.
    1992, Varga 1998)
  • Within a metropolitan area (Sivitanidou and
    Sivitanides 1995)

3. Econometric evidence Effect of university on
private innovation activity (Cont.)
  • Positive effect of universities in Europe
  • France
  • Autant-Bernard 2001
  • Austria
  • Fisher and Varga 2002
  • Italy
  • Audretsch and Vivarelly 1994
  • Cowan and Zinovyeva 2007

More on the channels of technology transfer
  • The most important channels through which firms
    benefit from university research publications,
    conferences, informal information channels, and
    consulting (Cohen et al., 1998).
  • Informal interactions (Bercovitz and Feldman,
  • Even in pharmaceuticals firms heavily rely on
    these channels (Gambardella, 1995)

How academic research differentiate from any
other RD company?
  • Different researchers Balconi, Breschi, Lissoni
  • Academic inventors are more persistent and more
  • Networks hosting scientists are larger and more
    connected than other research networks
  • Different research output Henderson, Jaffe,
    Trajtenberg (1998)
  • University patenting between 1965 and 1988
  • Until mid-1980s university patents were more
    cited, cited by more technologically diverse
  • Why they are different?
  • Self-selection
  • Other selection
  • Incentives
  • Tasks

  • Academic basic knowledge takes long time before
    being used in innovation activity
  • Both basic and applied academic research is
    important for industrial innovation activity
    (local, regional, national) in the short run
  • Academic research output has the features of
    general purpose knowledge/technology

Possible risks of increasing university-industry
collaboration and challenges for future research
  • Crowding out of basic research
  • Limiting the freedom of academic research
  • Decline in scholar productivity
  • Affecting the culture of university oriented on
    public good creation
  • Restriction on the dissemination of research
    results (Example patents on research tools
    (genetic materials) in biology)
  • High cost of administrative support and
  • Science becoming inappropriate for graduate
  • Decreasing quality of education
  • Public institutional expenditures on instruction
    declined by 6, - on research rose 4
  • Crowding out of private research (professors as
    cheap labor for industry)

Thank you for your attention!
  • Contact Natalia Zinovyeva
  • Foundation for Applied Economic Research (FEDEA)
  • c/Jorge Juan, 46
  • 28001 Madrid

Summary of identification problems in the
econometric analysis
  • University effects ?? Industrial innovation
  • (Universities might be created in response to
    the needs of regional industry in human capital)
  • Academic research ?? Industrial innovation
  • (Academics might themselves benefit from
    interaction with innovative industrial sector by
    getting more and better research ideas and
  • Location unobserved heterogeneity
  • Separating the direct effect of academic research
    from the effect of teaching and ultimately
    graduates human capital

CZ 2007 Hypotheses
  • New universities have a positive effect on
    regional innovation in the short-run.
  • Some of this effect corresponds to the spillover
    effect via traditional channels like academic
    patenting and publishing activity.
  • New universities might push firms to rely more on
    collaboration with academics as a source of
    scientific knowledge rather than on own effort on
    searching the scientific literature.

Main features of the paper
  • The effect of new university departments in
    sciences, medicine and engineering in Italy
    during 1985-2000
  • Short-term effect of new university departments
    the channel corresponding to graduates human
    capital is excluded
  • According to Italian Ministry of Education the
    decision about the distribution of university
    departments across Italian regions was largely
    independent of any features of regional economy

Observatory for the evaluation of the university
system 1997
  • The rule by which new institutions were created
    does not seem to have followed the logic of
    tailoring university development to territorial
    specificities. It seems not to have made
    reference to a demand for university education,
    nor to the demand for graduates or to existing
    infrastructure. So, at least to a large
    extent, the prevalent logic was the one of
    incremental expansion and distribution "by drops
    of rain", without giving evaluation opportunity
    to the suppressed initiatives

Number of new departments open between 1984 and
2000 by regional demand for corresponding
Number of new departments Sciences, Medicine,
The estimation models
With fixed effects for each university and
  • 20 Italian regions during 1985-2001
  • Number of university departments (Sciences,
    Chemistry and Pharmacy, Agriculture, Medicine,
    Veterinary, Engineering, Architecture) Italian
    National Statistical Bureau
  • Regional economic characteristics GDP,
    population, RD expenditure
  • Innovation activity from KEINS EP-INV database
    (Lissoni, Sanditov, Tarasconi, 2006)
  • Academic and Industrial Patents
  • Patent citations
  • Non-Patent Literature (NPL) citations
  • Academic publications ISI Thompson Science
    Citation Index

Annual change in the number of industrial patents
Number of patents conditional negative binomial
Academic publications conditional negative
The channels of the university effect on
short-term industrial patenting
Evidence of crowding-out? Non-patent literature
citation intensity by industrial patents
Summary and conclusions of CZ 2007
  • New universities positively affect regional
    innovation activity
  • Industrial Patenting responds within 3-4 years
  • Academic patenting and scientific activity
    increases already after 1-2 years
  • Part of the increase in industrial patents
    (around 30 percent) is explained by the
    corresponding growth of academic research
  • Negative correlation between new universities and
    NPL citation potential crowding-out of resources
    devoted by industry to searching the academic
    literature. If this is the case, it might
    suppress firms continued development of
    absorptive capacity.

Descriptive evidence
  • 1988-2003 academic patents quadruple 800 to 3200
  • 1992-2003 number of US scientific publications
    flat, causing US decline in world article output
    from 38 to 30
  • 1988-2003 number of US patents referenced in
    scientific articles increased dramatically

Share of industrial RD expenditures in total
university RD expenditures and the share of
expenditures spent on basic research, US 1953-2006
SOURCE  National Science Foundation/Division of
Science Resources Statistics, Survey of Research
and Development Expenditures at Universities and
Colleges, FY 2006.
(No Transcript)
Individual level evidence how academic
scientific productivity changes after academics
engagement in collaboration with industry?
  • Zucker, Darby, several co-authors (1998a, 1998b,
  • Star scientists collaborating with or employed by
    firms, or who patent, have significantly higher
    citation rates than pure academic stars
  • Thursby and Thursby (2007)
  • 3,241 faculty from six major US universities from
    1983 through 1999
  • probability that a faculty member will disclose
    an invention increased tenfold, the portion of
    research that is published in basic journals
    remained constant
  • Link, Siegel, Bozeman (2006)
  • Academics who allocate a relatively higher
    percentage of their time to grants-related
    research are more likely to engage in informal
    commercial knowledge transfer
  • Lowe and Gonzalez-Brambila (forthcoming, 2007)
  • 15 research institutes
  • Faculty entrepreneurs in general are more
    productive researchers than control groups in
    terms of publication rate and the impact of their
  • Productivity does not decrease following the
    formation of a firm

The Relationship between Academic Research,
Teaching Quality and Graduates Employment
  • Sylos Labini and Zinovyeva (2007)
  • Several surveys of Italian university graduates
    in 1995-2001
  • Rich information on individual quality and
    socioeconomic background
  • No negative effect of academic patenting activity
    at the faculty level on teaching quality and
    graduates employment outcomes

Public and Private RD complements or
  • David, Hall, Tool (2000)
  • Concern Main focus in the literature is on
    publicly funded research performed in academic
    institutions, and nothing on its comparison with
    the impacts of publicly sponsored RD conducted
    under contract by industrial corporations
  • Public funding of research might crowd out
    private research via its generic impacts on the
    price of research and development inputs that are
    in inelastic supply
  • Not taking onto account price (researchers wage)
    effect leads to overestimation of positive
    effects of public RD expenditures
  • Investment displacement It is likely to exist
    the lobby for subsidies for projects with high
    private marginal rates of return, which would
    enable firms correspondingly to reduce their own
    outlays (because RD activities are heterogeneous
    rather than homogeneous)

  • Audretsch D. and Stephan P. (1996)
    Company-scientist Locational Links The Case of
    Biotechnology, American Economic Review 86,
  • Audretsch D. and Vivarelli M. (1994) Small Firms
    and RD Spillovers Evidence from Italy,
    Discussion Paper 953, Centre for Economic Policy
  • Autant-Bernard C. (2001) Science and Knowledge
    Flows Evidence from the French Case, Research
    Policy 30, 1069-107
  • Balconi, Breschi,Lissoni (2004) Networks of
    inventors and the role of academia an
    exploration of Italian patent data, Research
    Policy, Elsevier, vol. 33(1), pages 127-145
  • Bania N., Calkins L. and Dalenberg R. (1992) The
    Effects of Regional Science and Technology Policy
    on the Geographic Distribution of Industrial RD
    Laboratories, Journal of Regional Science 32,
  • Bania N., Eberts R. and. Fogarty M (1993)
    Universities and the Startup of New Companies
    Can We Generalize from Route 128 and Silicon
    Valley? The Review of Economics and Statistics
    75, 761-766
  • Bercovitz, J. and M. Feldman (2006)
    Entrepreneurial Universities and Technology
    Transfer A Conceptual Framework for
    Understanding Knowledge-Based Economic
    Development, Journal of Technology Transfer, 31,
  • Breheny M. and McQuaid R. (1987) H.T.U.K. The
    Development of the United Kingdoms Major Centre
    of High Technology Industry. In Breheny M. and
    McQuaid R. (eds.) (1987) The Development of High
    Technology Industries An International Survey,
    London, Croom Helm, 296-354
  • Cohen, W., R. Florida, L. Randazzese, and J.
    Walsh. (1998) Industry and the Academy Uneasy
    Partners in the Cause of Technological Advance,
    in R. Noll, ed., Challenges to the Research
    University. Washington, D.C Brookings
  • Cowan, R. and N. Zinovyeva (2007) Short-Term
    effects of new universities on regional
    innovation, UNU-MERIT working paper WP2007-037.
  • David, P, B. Hall, A. Tool (2000). "Is public RD
    a complement of substitute for private RD? A
    review of the econometric evidence", Research
    Policy, Elsevier, vol. 29(4-5), pages 497-529
  • Dorfman N. (1983) Route 128 The Development of
    a Regional High Technology Economy, Research
    Policy 12, 299-316
  • Feldman M. (1994a) The Geography of Innovation,
    Kluver Academic Publishers, Boston
  • Feldman M. (1994b) The University and Economic
    Development The Case of Johns Hopkins University
    and Baltimore, Economic Development Quarterly 8,

Bibliography (Cont.)
  • Feldman M. and Florida R. (1994) The Geographic
    Sources of Innovation Technological
    Infrastructure and Product Innovation in the
    United States, Annals of the Association of
    American Geographers 84, 210-229
  • Fischer M. and Varga A. (2002) Spatial Knowledge
    Spillovers and University Research Evidence from
    Austria, Annals of Regional Science
  • Gambardella, A. (1995) Science and Innovation
    The US Pharmaceutical Industry During the 1980s,
    Cambridge University Press.
  • Glasmeier A. (1991) The High-tech Potential.
    Economic Development in Rural America. New Center
    for Urban Policy Research, Brunswick, NJ
  • Gripaios P., Bishop P., Gripaios R and Herbert C.
    (1989) High Technology Industry in a Peripheral
    Area The Case of Plymouth, Regional Studies 23,
  • Henderson, R., A. B. Jaffe and M. Trajtenberg
    (1998) Universities As A Source Of Commercial
    Technology A Detailed Analysis Of University
    Patenting, 1965-1988, The Review of Economics and
    Statistics, MIT Press, vol. 80(1), pages 119-127.
  • Howells J. (1984) The Location of Research and
    Development Some Observations and Evidence from
    Britain, Regional Studies 18, 13-29
  • Jaffe A. (1989) Real Effects of Academic
    Research, American Economic Review 79, 957-970
  • Link A. and Rees J. (1990) Firm Size, University
    Based Research, and the Returns to RD, Small
    Business Economics 2, 25-32
  • Lissoni, F., B. Sanditov and G. Tarasconi (2006)
    The Keins Database on Academic Inventors
    Methodology and Contents, CESPRI Working Papers
    181, CESPRI, Universita' Bocconi, Milano, Italy
  • Lowe, R. and C. Gonzalez-Brambila (2007)
    Faculty Entrepreneurs and Research Productivity,
    The Journal of Technology Transfer, Springer,
    vol. 32(3), 173-194.
  • Malecki E. (1986) Research and Development and
    the Geography of High-Technology Complexes. In
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    Industrial Innovation, Research Policy 20, 1-12
  • Mansfield, E. (1998) Academic research and
    industrial innovation An update of empirical
    findings, Research Policy, 26, Issues 7-8, April
    1998, Pages 773-776
  • Markusen A., Hall P. and Glasmeier A. (1986)
    High Tech America The What, How, Where, and Why
    of the Sunrise Industries, Allen Unwin, Boston
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    Firms and Regional Economic Development, US
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Bibliography (Cont.)
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    Industry Experience in the United States, Review
    of Urban and Regional Development Studies 3,
  • Rogers E. and Larsen J. (1984) Silicon Valley
    Fever, Basic Books, New York
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    Regional Prototypes or Historic Exceptions? In
    Castells M. (ed.) (1985) High Technology, Space,
    and Society, Sage Publications, 91-105
  • Schmenner R. (1982) Making Business Location
    Decisions, Prentice-Hall, Inc., Englewood Cliffs,
  • Sivitanidou R. and Sivitanides P. (1995) The
    Intrametropolitan Distribution of RD Activities
    Theory and Empirical Evidence, Journal of
    Regional Science 25, 391-415
  • Sylos Labini, M. and N. Zinovyeva (2007) The
    Relationship between Academic Research, Teaching
    Quality and Graduates Employment Outcomes, paper
    for the EALE conference, Oslo, 20 22 September.
  • Thursby, J. and M. Thursby (2007) Knowledge
    Creation and Diffusion of Public Science with
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    Property Rights and Technical Change," Frontiers
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    Publishers, Boston
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    Geographically Localized Knowledge Spillovers or
    Markets? Economic Inquiry 36, 65-86