Quality of research as source and signal: revisiting the valorization process beyond substitution vs complementarity

In recent years, the growing interest of universities in valorization of research activities (tipically through technology transfer—patenting and licensing—and academic entrepreneurship) has generated a debate on its impact on scientific knowledge production. There have been controversies on the potentially negative effect of university research valorization on public research, in terms of quality, long term vs short term orientation, and accessibility. The debate has been traditionally framed in terms of substitution vs complementarity between public research and valorization. In this paper we argue that the key to understand the relation between public research and valorization lies in the role of research funding, particularly: (a) competitive public research funding; (b) third party commercial funding. If the funding system (both public and private) takes the value of academic research as signal of quality, then high quality researchers are able to attract extra-funds beyond ordinary endowment. In turn, these additional funds can be used as a source to organize an effective and long-term division of labor in laboratories in order to support inventions and licensing (patents) and entrepreneurial activities (spin-off companies). In this case academic quality and commercialization are strong complement and positive feedback loops are generated. This interpretation on the role of funding is strongly supported by original data from the Italian Evaluation of Research Quality VQR 2011–2014 dataset. The paper is based on a unique and novel dataset, that integrates data on valorization of research activities at individual and institutional level on all the Italian universities and microdata on research quality on 32,616 researchers in STEM disciplines.