Page Back Ground <ul><li>Incentives for Private Investment in R & D is low </li></ul><ul><li>Knowledge Spill Over </li></ul><ul><li>Affordability </li></ul><ul><li>Indivisibility and high Uncertainty </li></ul>Failure in Financial and Technological market, indivisibility and economies of scale in R & D add up to a private under investment in R & D. Government should finance research at public research institutions so that private businesses can use them for industrial innovations. <ul><li>Reasons for ineffective public research propensity </li></ul><ul><li>Inefficiencies in the transfer of technology </li></ul><ul><li>lack of orientation towards the commercialization of scientific results </li></ul><ul><li>Why ? </li></ul><ul><li>Government funds but fails to set an incentive for scientists to support commercialization </li></ul><ul><li>Only applied research is fruitful for product and process development </li></ul>
Page Publicly Funded Research in Germany <ul><li>3 Mega Sources of Publicly Funded R & D </li></ul><ul><li>Universities </li></ul><ul><li>Polytechnics </li></ul><ul><li>Non- University Research </li></ul>Development of Non-academic public research to fill in the gaps in the wide spectrum of technology transfer, support national economy, maintain the competitiveness of private businesses and to close German Technological gap to other nations mainly US. By mid 60’s policy shifts leads to new developments in Research at Germany focusing mainly on Defense (Nuclear and Aircraft) and computer Industry. If there is no inherent separation of basic and applied research, it cannot fulfill the economic objectives.
Page Research Objectives Identifying type of public research as well as firms most likely to accomplish the public objective. Assess the Economic justification for publicly funded research that directly supports industrial innovation which otherwise would not be developed by private businesses. Closeness of firms and research institutions has a positive effect on commercialization of findings of public research.
Mobilink Proposals Page Research Design Approach, Sample Distribution and Data Collection Technique
Page Research Design Quantitative Approach followed Questionnaires were posted to the firms with largest Credit Rating Stratified random sample which includes 2300 firms located in East and West Germany. Major Focus was on West Germany Selected from Engineering, Manufacturing and Software Industry. Firms with less than 5 employees were deliberately excluded. Follow up with Calls and Personal Interviews of Head of R & D departments and Directors.
Page Results Table 1: Share of companies with innovations which could not have been developed without recent public research (%) between 1993 and 1996 R & D intensive industry includes chemicals, machinery, medical, computer, agricultural, pharmaceuticals etc Industry Firms with public research based innovation to all products or process innovators Of which Firms with public research based product innovations to all product innovators Firms with public research based process innovations to all process innovators Products only Processes only Products and Processes Manufacturing 8.5 5.5 1.5 1.5 7.9 3.4 R & D intensive 15.9 12.0 2.4 1.5 14.0 5.2 Non R & D intensive 6.2 3.5 1.3 1.4 5.7 2.9
Page The amount of spillover knowledge received by a firm rises with the firms' R&D activities and the size of the firm. To test the hypothesis they used a simple model for the probability of industrial innovation with public research support. IPUB i = I i g (R&D i , Size i , Closeness is ) I i = 3m / PLC i Hypothesis