Research, Development, and Engineering Metrics
We seek to understand how the use of Research, Development, and Engineering (R,D&E) metrics can lead to more effective management of R,D&E. This paper combines qualitative and quantitative research to understand and improve the use of R,D&E metrics. Our research begins with interviews of 43 representative Chief Technical Officers, Chief Executive Offices, and researchers at 10 research-intensive international organizations. These interviews, and an extensive review of the literature, provide qualitative insights. Formal mathematical models attempt to explore these qualitative insights based on more general principles. Our research suggests that metrics-based evaluation and management vary according to the characteristics of the R,D&E activity. For applied projects, we find that project selection can be based on market-outcome metrics when firms use central subsidies to account for short-termism, risk aversion, and scope. With an efficient form of subsidies known as "tin-cupping," the business units have the incentives to choose the projects that are in the firm's best long-term interests. For core-technological development, longer time delays and more risky programs imply that popular R,D&E effectiveness metrics lead researchers to select programs that are not in the firm's long-term interest. Our analyses suggest that firms moderate such market-outcome metrics by placing a larger weight on metrics that attempt to measure research effort more directly. These metrics include standard measures such as publications, citations, patents, citations to patents, and peer review. For basic research, the issues shift to getting the right people and encouraging a breadth of ideas. Unfortunately, metrics that identify the "best people" based on research success lead directly to "not-invented-here" behaviors. Such behaviors result in research empires that are larger than necessary, but lead to fewer ideas. We suggest that firms use "research tourism" metrics, which encourage researchers to take advantage of research spillovers from universities, other industries, and, even, competitors.
Volume (Year): 44 (1998)
Issue (Month): 12-Part-1 (December)
|Contact details of provider:|| Postal: 7240 Parkway Drive, Suite 300, Hanover, MD 21076 USA|
Web page: http://www.informs.org/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rebecca Henderson & Iain Cockburn, .
"Scale, Scope and Spillovers: The Determinants of Research Productivity in Drug Discovery,"
ec25/94, Department of Economics, University of Lancaster.
- Rebecca Henderson & Iain Cockburn, 1996. "Scale, Scope, and Spillovers: The Determinants of Research Productivity in Drug Discovery," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 32-59, Spring.
- Holmström, Bengt, 1989. "Agency Costs and Innovation," Working Paper Series 214, Research Institute of Industrial Economics.
- Holmstrom, Bengt, 1989. "Agency costs and innovation," Journal of Economic Behavior & Organization, Elsevier, vol. 12(3), pages 305-327, December.
- Richard R. Nelson, 1959. "The Simple Economics of Basic Scientific Research," Journal of Political Economy, University of Chicago Press, vol. 67, pages 297.
- George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69, pages 213.
- Zvi Griliches, 1990.
"Patent Statistics as Economic Indicators: A Survey,"
NBER Working Papers
3301, National Bureau of Economic Research, Inc.
- Griliches, Zvi, 1990. "Patent Statistics as Economic Indicators: A Survey," Journal of Economic Literature, American Economic Association, vol. 28(4), pages 1661-1707, December.
- Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 287-343 National Bureau of Economic Research, Inc.
- Henry Grabowski & John Vernon, 1990. "A New Look at the Returns and Risks to Pharmaceutical R&D," Management Science, INFORMS, vol. 36(7), pages 804-821, July.
- Mansfield, Edwin, 1980. "Basic Research and Productivity Increase in Manufacturing," American Economic Review, American Economic Association, vol. 70(5), pages 863-73, December.
- Bernstein, Jeffrey I. & Nadiri, M. Ishaq, 1988.
"Research and Development and Intraindustry Spillovers: An Empirical Application of Dynamic Duality,"
88-06, C.V. Starr Center for Applied Economics, New York University.
- Jeffrey I. Bernstein & M. Ishaq Nadiri, 1989. "Research and Development and Intra-industry Spillovers: An Empirical Application of Dynamic Duality," Review of Economic Studies, Oxford University Press, vol. 56(2), pages 249-267.
- Jeffrey I. Bernstein & M. Ishaq Nadiri, 1986. "Research and Development and Intraindustry Spillovers: An Empirical Application of Dynamic Duality," NBER Working Papers 2002, National Bureau of Economic Research, Inc.
- Acs, Zoltan J & Audretsch, David B & Feldman, Maryann P, 1992. "Real Effects of Academic Research: Comment," American Economic Review, American Economic Association, vol. 82(1), pages 363-67, March.
- Block, Zenas & Ornati, Oscar A., 1987. "Compensating corporate venture managers," Journal of Business Venturing, Elsevier, vol. 2(1), pages 41-51.
- Taylor, Curtis R, 1995. "Digging for Golden Carrots: An Analysis of Research Tournaments," American Economic Review, American Economic Association, vol. 85(4), pages 872-90, September.
- Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-96, September.
- Jaffe, Adam B, 1989. "Real Effects of Academic Research," American Economic Review, American Economic Association, vol. 79(5), pages 957-70, December.
- Julio J. Rotemberg & Garth Saloner, 1995. "Overt Interfunctional Conflict (and its Reduction Through Business Strategy)," RAND Journal of Economics, The RAND Corporation, vol. 26(4), pages 630-653, Winter.
- Gary Erickson & Robert Jacobson, 1992. "Gaining Comparative Advantage Through Discretionary Expenditures: The Returns to R&D and Advertising," Management Science, INFORMS, vol. 38(9), pages 1264-1279, September.
- repec:fth:harver:1473 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:44:y:1998:i:12-part-1:p:1670-1689. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.