TIINS, the missing link for innovation and economic development
Authors: J. L. McKenzie, J. A. Rodman
Venue: Proceedings of the 1987 Fall Joint Computer Conference on Exploring technology: today and tomorrow (1987)

This paper will discuss previous studies and modeling undertaken in the field of innovation. Specifically the goal of the paper is to show the economic need for innovation in a developed country and then provide a synopsis of how the Texas Innovation Information Network System (TIINS) aides in achieving this goal. Both the development of TIINS and the support for TIINS are outlined. The lack of accurate, timely communication between research and development personnel and marketing personnel has created an &ldquo;innovation time gap&rdquo; which is costly to the firm and the economy of the country. In order to perceive the seriousness of the implications of the problem a clear picture of the relationships of trade, wages, and innovation is necessary, more precisely, a cognizance of how innovation drives trade, wages, and transfer of technology. David Dollar presents an econometric model which details this relationship. The model presented by Dollar divides the world into two sections which he calls the North and South. The North is defined as a developed country and the South as a developing country. His theory would hold if one were to call the areas Texas and Mississippi or the U.S. and Mexico, considering Texas more advanced technologically than Mississippi and the U.S. more advanced technologically than Mexico, instead of North and South. Dollar says, &ldquo;&hellip;the North's ability to introduce and temporarily monopolize new technology enables its workers to earn a premium over the wages paid to their counterparts in the South; this difference in labor costs in turn provides the incentive for technology to be diffused to the South, driving the product cycle.&rdquo;1 While emphasis in this model is on wage rate differentials it should also be noted that a comparative advantage of one geographical area over another in any one of the parameters driving the model may generate the same results. It is the feasibility of this model being applied to local, national, and international economies which makes it of interest in explaining the necessity of innovation in our current market structure. Many times modeling, and particularly economic modeling is viewed as being somewhat unrealistic, however, Dollar points out, &ldquo;The process described by the model is consistent with recent experience. In the 1960's the main effect that population growth and industrialization in the Third World had on the economies of the developed nations was to generate demand for the North's products. In the 1970's and 1980's however, many northern industries have been loosing out in competition with Third World suppliers, significantly reducing the demand for industrial labor in the developed countries and putting downward pressure on wages there.&rdquo;2 Dollar notes that as technology flows to the South the product will be produced there rather than in the North due to the less costly production function. Taking into consideration this technology flow he makes the following statements in summation: &ldquo;The model constructed in this paper pinpoints innovation in the North as the factor that enables and in fact requires that workers in the North earn a premium over wages in the South. &hellip;constant innovation is necessary just to maintain living standards in the North; in the absence of innovation the transfer of capital and technology to the South would undermine northern wages. &hellip;Much of the production in industries like steel, textiles, automobiles, and electronics has moved to the South; new industries, however, have not arisen at a fast enough pace to employ all of the displaced workers in the developed countries. This process has no doubt been a prime cause of the high levels of unemployment in the industrial nations over the last decade.&rdquo;3 Dollar shows the need not only for innovation but for continuous innovation by developed economies. In addition to Dollar's model, D. Bruce Merrifield developed a model for determining the merit to a company a new R D project might have. Merrifield defines this model as an index of merit and defines it as: Im = return on investment*probability of success/cost*time required Merrifield indicates, &ldquo;The index of merit is a direct function of the return on investment (ROI) expected from the successful effort times the probability of technical success and is an inverse function of the projected cost and time to achieve success.&rdquo;4 One of the main components contributing to this lack of speed has been seen as the deficiency of communication between research and design companies personnel and marketing firms personnel. Roger A. More, in the 1986 Journal of Business Research, discusses innovative new products and states, &ldquo;Adoption of such products has frequently been slower than expected, has provided lower profit margins, has required much greater developer resources than expected, and, in some cases, has resulted in withdrawal of the product from the market with severe financial losses.&rdquo;5 He further notes the causative relationship for this failure stating, &ldquo;&hellip;the major failure of developers is in effectively understanding their temporal interorganizational relationship with potential customer companies.&rdquo;6 Gupta, Raj and Wilemon, in their article in the April 1986 issue of Journal of Marketing, point out, &ldquo;Although all functional interfaces are important in the product development process, the R D-marketing interface is one of the most critical ones.&rdquo;7 In discussing integration and innovation success Gupta, Raj, and Wilemon say, &ldquo;Several major studies have concluded that innovation success rests on a combination of technical feasibility and market demand recognition and interpretation (Gruber 1981). Research by Dunn and Boyd (1975), Young (1979), Crawford (1977), Schon (1967), Carroad and Carroad (1982), Monteleone (1976), Mansfield et al. (1971, 1975, 1981), Gerstenfeld and Suniyoshi (1980), Wind (1981, 1982), and Cooper (1983a) have emphasized the importance of effective integration of R D and marketing for innovation success. Supporting these conclusions are several studies (Gruber, Poensgen, and Prakke 1973; Sonder 1977, 1981, Young 1973) which have noted that the failure to integrate R D and marketing early in the innovation process is one of the biggest contributors to new product failure.&rdquo;8 It is in this information access and linking phase that the Texas Innovation Information Network System (TIINS) can substantially aide R D, manufacturing and marketing. Through the TIINS data base the information gap can be drastically reduced and innovation in Texas and the U.S. enhanced resulting in expanded economic growth. More explicitly TIINS can decrease the &ldquo;time required&rdquo; variable in Merrifield's model thereby increasing the index of merit. It becomes obvious that as Im (index of merit) increases more innovation, as is necessary per the Dollar model, takes place. In the model below, developed by the U.S. Department of Commerce, TIINS network will be instrumental in reducing the time loss in the area labeled GAP. Again, this will reduce the 7-10 year time line and enhance the competitiveness of American companies. Texas businessmen and politicians alike have recognized the importance of the TINNS network in developing and strengthening the economy. William M. Winsor, president of INFOMART at Dallas is quoted, &ldquo;INFOMART supports this effort because there is a critical need for educators, scientists and business people to be working more closely together in Texas and in the United States. Everyone involved with INFOMART knows how critical it is to have a competitive edge. TIINS will provide scientists and entrepreneurs with a competitive edge by helping bring together talented people. To put it in simple terms, this network will help make sure that the 'left hand' knows what the 'right hand' can do &mdash; and is doing.&rdquo; Senator Chet Edwards noted, &ldquo;Economic diversification is essential for Texas. The need for a comprehensive system that represents current scientific and engineering capabilities is long overdue.&rdquo; TIINS was created after studies indicated that Texas needed a research and technology information system to develop new technology business and help diversify the economy. TIINS has subsequently received enthusiastic support from Texas' former governor, Mark White, and the present governor, William Clements. Although similar programs are working in Ohio, New York and Illinois, they deal primarily with the relationships between universities and industry. With its regional centers and heavy emphasis on advanced technology business and professional service organizations, TIINS is much broader in scope than its predecessors. TIINS is a people to people data base which list the engineering and scientific expertise of scientist and engineers throughout the state of Texas. In addition the data base will include venture capitalist, industry firms with interest in technological innovation and professional services such as patent attorneys and marketing firms. The key is that through the computer program, currently operating, TIINS can link these individuals, disseminating pertinent information, in a very timely, cost effective manner. The TIINS database system currently runs on any IBM compatible micro system with a hard disk. The software programs developed to manage the TIINS information uses PC Manager, an advanced data base management system. The system allows a very fast keyword search up to five terms using bullion logic. It has an inverted file that rapidly searches the keyword capability listed on individual and company profiles. The data base management system was chosen because of PC Manager's cooperation, cost and understanding of this system by local programmers. This DBMS is similar to others such as DB-3, R Base, Revelation, and Data Flex. Also, TIINS is working with Keplinger Companies in Houston and plans to transfer the data to their mainframe when sufficient records are entered. However, the system will continue to be available on the micro computer. The uniqueness of TIINS in comparison to other states is the selection of the data bases to be included in the system (Scientists Engineers, Advanced Technology Companies, and Professional Services), and the fields selected to be included in each of these data bases. As an example, to determine what types of information should be included in the Scientist and Engineer data base the project director interviewed over 50 companies in three states to determine the specific type of data these advanced technology companies need to know quickly about specific qualified researchers. Also, he examined other information sources such as Who's Who, Illinois Resource Network and faculty profile systems in place at many universities. The six screens of information, which compile a very nice two page resume of research, consist of major information required by the user to determine with whom to interface. Major data fields include: name, address, phone number, title, degree, institution received terminal degree, research and technology key codes words, major and minor current research capability, four major publications, four recent grant/contracts, consulting arrangements, education and training capability, research honors awards, patents, copyrights, and licenses. The majority of business executives interviewed were dissatisfied with 20 page vitaes faculty members were sending them and only needed the above information. Expertise can be searched very efficiently by using the NSF/NIH Keyword Thesaurus terms but the system can also search on any field in the data base with user selected specific criteria. An example of the search screen and printout is listed below: The previous example shows three engineering terms were selected and the screen displays the name, phone number, institution, and TEDC Region of the scientists and engineers that have all three terms listed in their specific profile. From the screen you can select any of the individuals listed, examine their complete record and print the profiles of the individuals selected. Working with the TIINS Advisory Council, consisting of leading business and academic professionals, two additional data bases (Advanced Technology Companies and Professional Service Organizations) have been developed. Information requested from these organizations includes: name, address, R D director and phone number, research technology keywords, current research capability, current research needs, type of service/product provided, R D support, SBIR activity, and university/industry interface programs (sharing of equipment, serving on Boards, fellowships, contracts, etc.) Questionnaires have been sent to over 3,000 advanced technology companies and 1,000 professional service organizations in the state. Two additional data bases are planned. One will capture continuing and professional educational training opportunities, while the other will deal with research equipment, instrumentation and facilities available in the state. Any person or corporation involved in the innovation process is a potential TIINS customer. Accounting Firms, advanced technology companies, attorneys, bankers, chambers of commerce, city/county agencies, libraries, major corporations, non-profit research institutes, publishing companies, state legislators, scientists and engineers, universities, and venture capitalists are all potential clients who will benefit from TIINS. As an example, a small business entrepreneur seeking assistance in writing an SBIR grant application for DOD (Department of Defense) needs technical assistance from a university professor, a venture capitalist looking for experts to evaluate the technical feasibility of the business plan, an engineer with a recent patent looking for an advanced technology company in the region to manufacture the product, a large defense company seeking a small disadvantaged high technology companies for subcontractors, an advanced technology company seeking companies with similar or complimentary research and technology to work on joint ventures, and law firms needing expert witnesses, are just a few of the ways TIINS will be utilized. There will be four ways for individuals to access the data base once completed. First, individuals calling one of the seven regional innovation centers and getting professional assistance in identifying the appropriate research and technology information they require and receiving a hard copy of the data. The second, will allow companies with terminals and modems to have an ID number and dial directly into the data base and do their own searching. Keplinger Companies in Houston has contributed use of their main frame computer and software for this access. The third, will be allowing a major data base service like DIALOGUE, to market TIINS to out-of-state users. Finally, charter subscribers and other major users will be licensed to use TIINS software and have complete updated information available for use on their own micro computer. This will allow major companies unlimited use of all the data bases for one low annual subscription fee. The major objective is to have current information on all sectors of the innovation process easily available at low cost. Developing a system with accurate and current information that will be constantly used by all sectors in the innovation process is the key to TIINS success. The infrastructure, as currently established, consist of one central office in Dallas and seven regional centers located at Texas Tech University in Lubbock, North Texas Commission in Dallas, The University of Texas at Tyler in Tyler, Texas Engineering Experiment Station in College Station, Small Business Development Center in Houston, The University of Texas at Austin in Austin, and Texas Research Technology Foundation in San Antonio. The regional centers are the service arm of the organization and as such are the direct contact point for users. The regional centers collect, update, and input data into the system on a daily basis. On a monthly basis this data is copied on floppy discs and forwarded to the central office. The central office acting as a coordinator then merges the data from the seven centers and redistributes the data to the centers. This gives each center statewide information which is current to within thirty days. Support from the state has been very positive. During the 1987 session of legislature, Senate Bill 776, introduced by Senator Chet Edwards, and House Bill 1406 introduced by Representative Paul Colbert, passed both houses authorizing appropriations of $250,000.00 per year for the next two years. This funding will be used to help cover the cost of building the data base up to the ten thousand records and maintaining these records once they are on line. After the third year of operation projections indicate TIINS will be capable of self support from user and membership fees.