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Buying and Selling Research and Development Services, 1997 to 2002

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  • Mohnen, Pierre

    ()
    (United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology)

  • Rose, Antoine

    ()
    (Statistics Canada, Science, Innovation and Electronic Information Division)

  • Rosa, Julio

    ()
    (Statistics Canada, Science, Innovation and Electronic Information Division)

Abstract

Research and development is a crucial activity in the innovation process. Not every firm is in a position to overcome constraints to R&D, such as costs. Those that perform R&D must choose between forming a partnership with other firms, governmental organisations, universities or doing it themselves internally. Others may sell R&D services or buy them. This study provides a statistical portrait of the strategies Canadian companies used in conducting research and development between 1997 and 2002. It is based on data from the Survey of Research and Development in Canadian Industry. During this time period, the majority of R&D spending, around 62%, was of internal origin, that is, it was conducted by the performer. The remaining 38% portion was comprised of two groups: one group representing 24% performed R&D on behalf of another organization, that is, they contracted in. The remaining 14% was conducted by another R&D performer, that is, they contracted out. An estimated 42% of research and development was conducted with no external partnerships. Foreign-controlled firms were much more heavily involved in selling R&D services than their Canadian counterparts. About 22% of all foreign-controlled firms conducted R&D for outside organizations, more than twice the proportion of only 9% of domestic performers. However, Canadian-controlled firms on average spent more on research and development. As a result, the 9% of Canadian-controlled performers allocated 23% of their total R&D spending to selling R&D services, virtually the same proportion as the 25% allocated by foreign-controlled firms.

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Bibliographic Info

Paper provided by United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) in its series MERIT Working Papers with number 018.

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Date of creation: 2006
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Handle: RePEc:unm:unumer:2006018

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Keywords: Research and Development; Public-Private Partnerships;

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References

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  1. Keilbach, Max & Bönte, Werner, 2004. "Concubinage or Marriage? Informal and Formal Cooperations for Innovation," ZEW Discussion Papers 04-11, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  2. David Pérez-Castrillo & Bruno Cassiman & Reinhilde Veugelers, 2000. "Endogeneizing know-how flows through the nature of R&D investments," UFAE and IAE Working Papers 464.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  3. Kleinknecht, Alfred & Reijnen, Jeroen O. N., 1992. "Why do firms cooperate on R&D? an empirical study," Research Policy, Elsevier, vol. 21(4), pages 347-360, August.
  4. Claudio A. Piga & Marco Vivarelli, 2003. "Internal and External R&D: A Sample Selection Approach," Papers on Entrepreneurship, Growth and Public Policy 2004-05, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
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  6. Miotti, Luis & Sachwald, Frederique, 2003. "Co-operative R&D: why and with whom?: An integrated framework of analysis," Research Policy, Elsevier, vol. 32(8), pages 1481-1499, September.
  7. Fritsch, M. & Lukas, R., 1998. "Who Cooperates on R & D ?," Papers 98/12, Bergakademie Freiberg, Faculty of Economics and Business Administration.
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  9. Veugelers, Reinhilde & Cassiman, Bruno, 1999. "Make and buy in innovation strategies: evidence from Belgian manufacturing firms," Research Policy, Elsevier, vol. 28(1), pages 63-80, January.
  10. Breschi, Stefano & Malerba, Franco & Orsenigo, Luigi, 2000. "Technological Regimes and Schumpeterian Patterns of Innovation," Economic Journal, Royal Economic Society, vol. 110(463), pages 388-410, April.
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  12. Hagedoorn, John & Link, Albert N. & Vonortas, Nicholas S., 2000. "Research partnerships1," Research Policy, Elsevier, vol. 29(4-5), pages 567-586, April.
  13. Arora, Ashish & Gambardella, Alfonso, 1990. "Complementarity and External Linkages: The Strategies of the Large Firms in Biotechnology," Journal of Industrial Economics, Wiley Blackwell, vol. 38(4), pages 361-79, June.
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  15. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
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Cited by:
  1. Ulrich Witt & Christian Zellner, 2009. "How firm organizations adapt to secure a sustained knowledge transfer," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 18(7), pages 647-661.
  2. Martin Woerter, 2011. "Driving forces for research and development strategies: an empirical analysis based on firm-level panel data," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 20(7), pages 611-636, March.

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