EAGER: University and Corporate Research: Substitutes or Complements?

National Bureau Of Economic Research Inc, Cambridge MA

Investigators

Abstract

Even as they focus on innovation as a source of growth, American corporations have steadily move away from in-house research. This is not because research is not relevant for invention. To the contrary, inventive activity relies on research more than ever before. One explanation might be the growing size and relevance of university research and an emerging division of innovative labor in which firms and universities specialize in different sets of activities that innovation requires. If university research substitutes for corporate research, expansion of relevant university research will reduce corporate research. However, firms differ not only in the pool of relevant knowledge, but also in the type of inventive activity they perform. Specifically, firms that are producing more novel inventions, and inventions that rely more on recent scientific advances, may have greater incentives to invest in internal research because the scientific problems they face are likely to be less generic and hence less likely to be solved by university scientists. The broader value of the project consists of significantly expanding the data infrastructure for the science of science policy. Specifically, this project provides firm level measures on the use and production of scientific and engineering knowledge, and on the novelty of the inventive activity of the firm. The information will be useful to policy makers, industry practitioners, scholars, and anyone interested in the role of science and engineering knowledge in innovation. This project leverages advanced machine learning techniques to explore this question. It matches 20 million scientific publications to 6 million patents for the period 1980-2016 to develop measures of the relevance of science and engineering research to inventive activity. It uses this measure to quantify the relevance of university research for 4000 R&D performing publicly traded American headquartered corporations. It then analyzes how variations in the flow of relevant university research is related to in-house research by a corporation. A second part of the project develops a measure of the degree of novelty of the patents filed by US headquartered corporations in order to analyze how firms with more novel inventions respond to changes in the flow of relevant university research. These firm level data are available to the broad public, through an easy-to-use web platform.