Joint Ventures, Universities, and Success in the Advanced Technology Program

I. INTRODUCTION The Advanced Technology Program (ATP) at the National Institute of Standards and Technology (NIST) aims to fund enabling technologies that firms are not likely to pursue in a timely way without the ATP. The role of the ATP is to bridge the gap from demonstrating a promising but risky idea to garnering the organizational resources to commercialize a product. In doing so, the ATP increases the prospect of commercial capture of advanced technology. NIST made its first awards in 1990, based on peer-reviewed proposals submitted by either individual firms or joint ventures of two or more collaborating firms. Over its 10-year history, the ATP has managed over 1000 participants and subcontractors. A necessary (but not sufficient) condition for the success of the ATP is that it contributes to the success of participant firms. If the participant firms do not benefit from the new technology, others are unlikely to adopt it. Hence, as a first step, the authors search for evidence of ATP's overall impact on firm success. The second step is to investigate what might explain any impact on firm success that may be discovered. The authors consider the effect of program design. The ATP makes two types of awards--for projects that explicitly involve collaboration between two or more firms (and also possibly other organizations, such as universities and federal laboratories) and for projects proposed by individual firms, with no formal collaborative framework. The former the authors term joint venture (JV) projects and the latter single participant (SP) projects. This study examines the effects on firms related to these project structure differences and also related to participation by universities (as a full member in a JV or as a subcontractor in either an SP or JV project). The authors evaluate the ATP's effects in terms of overall change in successful patent applications during the period of ATP support. Patents are a useful measure of innovation for all ATP participants: small, privately held firms; larger public firms; universities; and other research organizations. During the period 1988 to 1996, firms and organizations that participated in the ATP accounted for over 40% of all patents granted to U.S. entities by the U.S. Patent and Trademark Office. Firms comprise 88% of the total number of all ATP participants and account for over 80% of all patents awarded to ATP participants. Innovation in advanced technology and patenting appear to go hand in hand for nearly all the firms and organizations participating in the ATP. This concentration of technological progress in relatively few firms is stressed by Harberger (1998) and Darby and Zucker (2003). In these authors' view, the ATP not only provides funding awards to participants but also promotes institution-building in the process, encouraging applicants to establish new organizational structures that facilitate innovation and the capture of inventions in technologically advanced commercial products. Institution-building takes place in the ATP in a number of ways. First, the ATP supports firms willing to experiment and develop approaches that are novel and at the technological frontier. The ATP stimulates industry to initiate projects that are higher in risk, with greater potential for broader economic impact. Second, the ATP encourages cooperation and collaboration in research and development (R & D) activities among JV partners and also through subcontracting relationships with universities, firms, and other organizations. Linkages that are important to innovation and technology transfer among firms/organizations are emphasized by the ATP in selecting projects initially and later in project review and monitoring activities. In social science terminology, the ATP changes participants' "social embeddedness" in networks of relations with other firms and organizations. Although this effect may be especially prominent for JV participants, firms in SP projects also note the importance of R & D subcontractors and relationships for achieving objectives. …