The evolving role of research consortia in East Asia

Innovation: Management, Policy, & Practice, July, 2006 by Mark Dodgson, John Mathews, Tim Kastelle

SUMMARY

Research consortia have played an important role in the economic success of several East Asian countries. This paper looks at the ways these consortia--which are created for strategic rather than cost-saving purposes--have evolved over time. Three models for institutional learning are suggested, and three case studies are presented of research consortia in each model. The cases demonstrate the centrality of learning in facilitating the development then transition from innovation diffusion capabilities to innovation generation capabilities in East Asian firms. Cases are provided of the Samsung Electronics in Korea, the clusters of firms that are associated with ITRI in Taiwan, and the technological development of Ericsson China. Reference is made to the use of institutional innovations in the East Asian context such as patent pools that supplement more conventional forms of R&D collaboration.

KEY WORDS

research consortia; institutional learning; innovation in East Asia

INTRODUCTION

The management of innovation is now widely seen to be an important contributor to corporate competitiveness and national wealth. As the interconnectedness of economic and business processes increases, and costs and risks of research and development mount, so firms in the industrial heartlands of the USA, Europe and Japan have sought new organizational forms to collaborate in managing the process of innovation. Inter-firm R&D collaborative alliances and consortia have flourished, and with them new institutional foundations and facilitative mechanisms have been discovered (Ouchi & Boulton 1988; Evan & Olk 1990; Kleinknecht & Reijnen 1992; Dodgson 1993a; Aldrich & Sasaki 1995; Sakakibara 1997a,b; Dodgson 2000; Nakamura 2003). These developments, whether called R&D alliances, R&D consortia or strategic technology partnerships, or simply collaborative innovation networks, are the subject of growing interest in management and public policy circles, and of a growing scholarly literature (Levy & Samuels 1991; Hagedoorn 1996; Vonortas 1997, 2000; Hagedoorn, Link & Vonortas 2000).

Of interest in this regard is the series of collaborative R&D ventures that have emerged in East Asia, in Japan initially, and latterly in Taiwan, Korea, China and Singapore. (1) The emphasis here has been less on the joint creation of new knowledge, than on the efficient dissemination of existing knowledge to firms which can utilize such knowledge. While the case of Japan has been widely studied (Sakakibara 1993, 1997a, 1997b; Aldrich & Sasaki 1995) the processes through which firms collaborate in the other East Asian countries are much less studied and understood (Mathews 2002b; Sakakibara & Dodgson 2003). Yet these cases are of great relevance for countries with intermediate technological and R&D levels, which cannot hope to excel in every facet of advanced science and technology and which therefore have to make arrangements for keeping up with developments around the world. Unlike the case of many of the collaborative innovation arrangements between established firms in the US or Europe, where mutual risk reduction is frequently the driving influence, in the case of these East Asian countries it is technological learning, upgrading and catch-up industry creation that is the object of the collaborations. In other words, the difference is between collaboration as a form of economising versus collaboration as a strategic tool. This difference is what makes the East Asian countries of such interest, and of potential general application to other countries and firms around the world.

Within East Asia there are massive differences in science and technology capabilities, seen particularly clearly in disparities in R&D expenditure and employment (Dodgson 2000; Lall & Urata 2003). Whilst Singapore, Taiwan, Korea and Malaysia have developing research infrastructures, particularly in some industries, and relatively coherent national innovation systems, other East Asian countries do not possess significant research capacity. With countries like Indonesia and Thailand spending around $2 per capita annually on R&D, technological collaboration is only likely to be a marginal concern for the limited number of science and technology-based organizations and firms. However, whereas the sort of research partnerships found in developed economies based on 'pre-competitive' R&D is likely to be extremely rare in these countries, the more 'diffusion-orientated' partnerships are of central importance to the development of the national technology base.

Research consortia that have emerged in East Asia, in countries like Taiwan, Korea and Singapore, differ from their counterparts in the Triad regions in that their goal is rapid adoption of new technological standards, products or processes developed elsewhere, and their rapid diffusion to as many firms as possible, rather than extending the envelope of R&D (Freeman & Hagedoorn 1994). Their organizational form owes much to the R&D collaborative vehicles developed in the leading industrial centres, particularly in the way that Japan structured many relatively short-lived R&D alliances with clear technological learning goals (Sigurdson 1986/1998; Fransman 1990/ 1992; Sakakibara 1997a, 1993).