# Presentation: 791766

## Fostering Research Partnerships To Boost Competitiveness and Growth

**Dr. Robert Atkinson**
**President**
**Information Technology and Innovation Foundation**

## Research Partnerships Have Become More Important to the Innovation Process

**Fewer than 10% of American firms, 20% of European firms, and 40% of Japanese firms reported a high reliance on external sources for R&D in 1991.  By 1999 the figure was above 80% for all.**
**Cooperative R&D agreements between federal labs and industry increased from 34 in 1987 to 2,936 in 2003. **
** **
**From 1988 to 2003 science and engineering articles that were authored by more than one institution increased from around 40% in 1988 to around 60% in 2003. **

## Inter-firm Worldwide Research Partnerships

- Source:  Organization for Economic Co-operation and Development (OECD), *Science, Technology and Innovation in the New Economy* (Paris: OECD, 2000).

## Percentage of International Co-Authored Documents 

## U.S. Sector and Foreign Coauthorship Share of U.S. Academic S&E Articles 

- Source: National Science Foundation, *Science and Engineering Indicators 2006, Figure 5-52*, <www.nsf.gov/statistics/seind06/c5/fig05-52.htm>.

## Universities becoming more a important player in the innovation and commercialization process

**Between 1991 and 2002, the number of patent applications filed by universities increased from 12.6 applications per institution to 35.**
**Licensing income increased from $1.4 million per university to $5.8 million.  **
**New start-ups formed increased from 241 in 1994, to 450 in 2002.**

## Industry Funding of University R&D

**Source: David Roessner and Andrew Reamer, “Technology Transfer and Commercialization: The Role of Economic Development, EDA, March 2003**

**Industry Funding of University R&D**

## Industrial R&D support to universities in current dollars reached its peak in 2001 and has declined to 2004.  The share of academic R&D provided by industry peaked in 1999 and has declined every year since. 
    (Alan I. Rapoport, “Where Has the Money Gone? Declining Industrial Support of Academic R&D,” (National Science Foundation, Division of Science Resources Statistics, Sep. 2006)

**    ****(****Alan I. Rapoport, “Where Has the Money Gone? Declining Industrial Support of Academic R&D,” (National Science**** ****Foundation, Division of Science Resources Statistics, Sep. 2006)**

**But Recent Trends Are Down**

## Most states fund technology-led economic development strategies.  Many include industry-university research partnership programs.   But relative to the opportunity, the programs are under funded.

**States have emerged as drivers of collaborative R&D**

## In the new economy, “collaboration capital” is as important as financial or physical capital.

Participation in research consortia has a positive impact on firms’ own R&D expenditures and research productivity. (Branstetter and M. Sakakibara, “Japanese Research Consortia: A Microeconometric Analysis of Industrial Policy,” Journal of Industrial Economics 46 (1998): 207–233.)

Yet, firms are less able to capture all the benefits of collaborative research, leading them to under invest in such research relative to socially optimal levels.

- Participation in research consortia has a positive impact on firms’ own R&D expenditures and research productivity. (Branstetter and M. Sakakibara, “Japanese Research Consortia: A Microeconometric Analysis of Industrial Policy,” *Journal of Industrial Economics* 46 (1998): 207–233.)
- Yet, firms are less able to capture all the benefits of collaborative research, leading them to under invest in such research relative to socially optimal levels.

**Benefits of Collaborative R&D**

## Tax Policy

Direct Funding

**Direct Funding**

**What Can the Federal Government Do?**

## Other countries, including Norway, Spain and the UK, Denmark, Hungary, and Japan, provide more generous tax deductions for collaborative R&D with public research institutions. 

The U.S. should allow firms to take a flat (as opposed to incremental) credit for collaborative research conducted at universities, federal laboratories, and research consortia.  

**The U.S. should allow firms to take a flat (as opposed to incremental) credit for collaborative research conducted at universities, federal laboratories, and research consortia. **** **

**Collaborative R&D Tax Credit**

## U.S. Rank in R&D Tax Credit Generosity Has Fallen Significantly

## Current NSF Industry-University Cooperative Research Center (I/UCRC) program is highly effective, but dramatically under-funded ($7 million per year). 

Use a portion of the planned increase in the NSF budget to expand this program and transform it into a true partnership with the states. 

**Use a portion of the planned increase in the NSF budget to expand this program and transform it into a true partnership with the states. **

**Transform the Industry/University Cooperative Research Center Program into a SIURC Program**

## Federal initiatives -- such as the Focus Center program operated by the Microelectronics Advanced Research Corporation (MARCO) -- can be very effective means of spurring collaborative research partnerships.

But such programs are the exception rather than the rule.

- But such programs are the exception rather than the rule.

**Expand Support for Collaborative Research Alliances**

**The Information Technology and Innovation Foundation**

*ratkinson@itif.org*