Cooperation of European firms in R&D activities.

Palcic, Iztok ; Polajnar, Andrej ; Buchmeister, Borut 等

1. INTRODUCTION

Modern business environment characterized by high competitiveness and frequent turbulences make firms aware on the benefits and outcomes of possible cooperative agreements. The ever growing amount of new knowledge and birth of new technologies make firms specialize in order to achieve excellence in at least one specific area. OEMs transfer their activities to their suppliers. The knowledge is distributed among industries, but there is a need for interdisciplinary approach in new product and service development. This approach can only be achieved by linking firms with other actors.

We are surrounded with new business forms, such as business networks, technological networks, industrial clusters, platforms, virtual organisations, living laboratories etc. The actors in this business forms have all identified a need to cooperate with other partners. There are also different areas where firms cooperate with other actors. Firms can cooperate in the area of R&D, manufacturing, purchase, sales, distribution, education, training, ICT issues, marketing etc. This paper will provide characteristics of cooperative behaviour of manufacturing firms in six European countries: Spain, Germany, Austria, Switzerland, Croatia and Slovenia.

The paper deals with different areas of cooperation within each country. We will present results on how firms cooperate in the following areas:

* R&D area with universities and other research institutions,

* R&D area with other firms (customers and suppliers excluded).

We will interpret the findings and explain different patterns in different countries.

2. EUROPEAN MANUFACTURING SURVEY

The European Manufacturing Survey (EMS) was conducted in 2003/2004 as a pilot survey in nine European countries. The survey covers Austria, Croatia, France, Germany, Great Britain, Italy, Slovenia, Switzerland and Turkey. In total 2249 firms answered questions concerning manufacturing strategies, the application of innovative organisational and technological concepts in production and questions of personnel deployment and qualification. In addition, data on performance indicators such as productivity, flexibility, quality and returns was collected. The responding firms present a cross-section of the main manufacturing industries. Producers of rubber and plastics are represented by 11 percent, producers of metal works by 27 percent, mechanical engineering by 31 percent and electrical engineering by 10 percent.

In the year 2006 a new survey was conducted in even more European countries, where Greece, Netherlands and Spain joined the project. We have received around 4000 responses from European manufacturing firms. The authors of this paper were conducting a survey and analysis for Slovenian manufacturing firms. In 2009 a new survey will take place in all previously mentioned countries.

3. R&D COOPERATION

Many researchers have proved the importance of cooperation in all mentioned areas. A special focus is on R&D cooperation between firms and R&D institutions and with other firms, also competitors (e.g. like in industrial clusters). Why are firms cooperating in R&D area with universities? There are several reasons according to Veugelers and Cassiman (2006):

* Since universities are no direct competitors in the output markets of the collaborating firm, not being able to appropriate exclusively the benefits from the new know-how generated is not an issue for firm-university cooperation, as it is in cooperation among firms competing in output markets, unless the know-how would leak out to competitors indirectly through common partners.

* Science institutions offer new technical knowledge which is mainly needed in innovation activities oriented towards developing new technologies and for products very new to the market. These innovation activities take place in the early stages of the innovation process characterized by high technological uncertainty and still low demand for the outcomes of innovation activities (Jensen et al., 2003).

* Given the specific characteristics of scientific knowledge, R&D cooperation between universities and industry is characterized by high uncertainty, high information asymmetries between partners, high transaction costs for knowledge exchange requiring the presence of absorptive capacity, high spill-overs to other market actors (i.e. a low level of appropriation of benefits out of the knowledge acquired), and, restrictions for financing knowledge production and exchange activities due to risk-averse and short-term oriented financial markets. In addition, enforcing partner compliance in cooperative contracts will be more difficult when the technology is characterized by a large amount of uncertainty. Nevertheless, the more generic nature of research projects with universities and research institutes involves less intellectual property right issues.

The results show that almost half of firms in each country cooperate with R&D institutions. That was quite a surprising finding as other studies show lower numbers (e.g. Community Innovation Survey, 2004). A more in-depth survey is needed to find out in what kind of cooperative agreement in R&D area firms engage in with R&D institutions. It was especially surprising to see that companies in Croatia and Slovenia were at the top. We argue that in Slovenia the government fosters different types of industrial clusters and technological platforms, where companies cooperate with other R&D institutions.

[FIGURE 1 OMITTED]

R&D partnerships among firms are part of a relatively large and diverse group of inter-firm relationships that one finds in between standard market transactions of unrelated firms and integration by means of mergers and acquisitions (Hagedoorn, 2002). There are different types of R&D partnerships: e.g. contractual partnerships, such as joint R&D pacts and joint development agreements, and equity-based joint ventures. Joint ventures are certainly one of the older modes of inter-firm partnering. Joint ventures, including those with a specific R&D program, have become well-known during the past decades (Berg et al., 1982; Hagedoorn, 1996; Hladik, 1985). Joint ventures are organizational units created and controlled by two or more parent-firms and as such they increase the organizational interdependence of the parent firms. Recent studies have established that non-equity, contractual forms of R&D partnerships, such as joint R&D pacts and joint development agreements, have become very important modes of inter-firm collaboration as their numbers and share in the total of partnerships has far exceeded that of joint ventures (Hagedoorn, 1996; Narula and Hagedoorn, 1999; Osborn and Baughn, 1990). These contractual agreements cover technology and R&D sharing between two or more firms in combination with joint research or joint development projects. Such undertakings imply the sharing of resources, usually through project-based groups of engineers and scientists from each parent-firm. The costs for capital investment, such as laboratories, office space, equipment, etc. are shared between the partners.

[FIGURE 2 OMITTED]

It is no surprise that the percentage of firms cooperating in R&D area with other firms is lower than in case with R&D institutions. Approximately one third of firms admitted this cooperation. The only exception is Slovenia with a bit higher rate. This can be a consequence of the fact that majority of surveyed firms were a part of some kind formal network organisations that were promoted in Slovenia at the beginning of this century (e.g. industrial cluster, technological platforms). We could conclude that this formal network business forms lead to a higher cooperative behaviour in R&D projects (Figure 2).

4. CONCLUSION

General finding for each country can be interpreted as follows (we also took into account the geographical dimension of cooperation, the number of cooperation partners and the formality of cooperation):

* German manufacturing firms like to cooperate with many partners, but in a very formal way. They like to cooperate with other actors within national borders, while at the same time they show tendency for international cooperation (especially in sales).

* Switzerland and Austria are extremely similar. Their manufacturing firms show less cooperation activities than firms in other countries. But when they engage in cooperation they like to work with several partners, where cooperative agreements can be formal or informal. Both countries are very internationally oriented.

* Croatia and Slovenia are also quite similar. They have the highest share of firms that cooperate with other actors. Their firms prefer bilateral agreements that are mostly informal. Slovenia is very internationally oriented, while Croatia is still looking to become (joining EU will certainly help their firms).

We have to mention that these results are direct presentation of firms' answers. A more in-depth analysis of the survey will be made in the future, where size of firms, level of R&D activities and other characteristics will be considered. Nevertheless, these results already show a very good picture of cooperation behaviour in selected European manufacturing firms.

5. REFERENCES

Berg, S. V.; Duncan, J. & Friedman, P. (1982). Joint Venture Strategies and Corporate Innovation, Oelgeschlager, Cambridge, MA

Hagedoorn, J. (1996). Trends and patterns in strategic technology partnering since the early seventies. Review of Industrial Organization, Vol. 11, 601-616

Hagedoorn, J. (2002). Inter-firm R&D partnerships: an overview of major trends and patterns since 1960. Research Policy, Vol. 31, 477-492

Hladik, K. J. (1985). International Joint Ventures, Lexington Books, Lexington, MA

Jensen, R.; Thursby, J. & Thursby, M. (2003). Disclosure and licensing of university inventions: the best we can do with the s**t we get to work with. International Journal of Industrial Organization, Vol. 21, No. 9, 1271- 1300

Narula, R. & Hagedoorn, J. (1999). Innovating through strategic alliances: moving towards international partnerships and contractual agreements. Technovation, Vol. 19, 283-294

Osborn, R. N. & Baughn, C. C. (1990). Forms of interorganizational governance for multinational alliances, Academy of Management Journal, Vol. 33, 503-519

Palcic, I.; de Castro Vila & Bikfalvi, A. (2008). La cooperacion en la empresa manufacturera europea, In: European Manufacturing Survey, de Castro Vila; Bikflavi, A. & Llach Pages, J. (Ed.), La Universitat de Girona, Girona, Spain

Veugelers, R., Cassiman, B. (2005). R&D cooperation between firms and universities. Some empirical evidence from Belgian manufacturing. International Journal of Industrial Organization, Vol. 23, 355-379

Fig. 1. R&D cooperation with R&D institutions

Germany 45.40%
Swiss 38.99%
Austria 37.37%
Spain 40.40%
Croatia 44.44%
Slovenia 48.61%

Note: Table made from bar graph.

Fig. 2. R&D cooperation with firms

Germany 32.95%
Swiss 33.91%
Austria 28.83%
Spain 31.79%
Croatia 28.70%
Slovenia 41.67%

Note: Table made from bar graph.