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The Spillover Effects of Publicly Supported Private R&D : Analysis of NEDO Follow-up Survey Data

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  • Matsushima, Kazunari
  • Aoshima, Yaichi

Abstract

Innovation creating economic values has become a vital issue due to severe global competition. Given such a circumstance, government funding has flowed not only into pure research, but into applied research and product development linked directly with commercialization as well. Such a tendency has been accelerated since “Bayh-Dole Act” was enacted, which made it easier for firms to appropriate R&D outcomes. Increased appropriablity that promotes commercialization, however, may prevent technological outcome produced by a government-funded R&D project from being widely utilized in a society. The project aimed at immediate commercialization may tend to create context-specific knowledge that can be applied only to the particular product category rather than generalized technological knowledge that can be widely available for other products or technological fields. Such a project may also have strong incentives to keep such technologies in-house. Therefore, the policy side confronts dilemma that the more government attempts to encourage private R&D activity with public support that are linked directly with market competition, the more the indirect spillover effects are sacrificed because of increased appropriability. To resolve this dilemma, we must identify the factors that influence the spillover effects of private R&D projects receiving public support. In this paper, we first classified a spillover effect in accordance with three dimensions, spillover contents, scope of the spillover, and spillover recipient field. Furthermore, spillover contents can be divided into “technological spillover,” “cognitive spillover” and “social-relations spillover.” And then, we empirically investigate the factors that influence spillover effects by analyzing data obtained from 301 private R&D projects supported by NEDO (New Energy and Industrial Technology Development Organization), Japan’s public management organization promoting private R&D. Our findings show that while the project starting at the exploratory phase had positive effects on technological spillover both within and outside the firm, and that spillover outside the firm is restricted when the project is of great strategic importance for a firm. We also found that information exchanges with other internal divisions had positive effects on not only technical spillover but on cognitive spillover and social-relations spillover. Results imply that it is necessary for supporting institutions to confirm that projects are not isolated internally and that there is a system in place to receive assistance and cooperation from other divisions.

Suggested Citation

  • Matsushima, Kazunari & Aoshima, Yaichi, 2014. "The Spillover Effects of Publicly Supported Private R&D : Analysis of NEDO Follow-up Survey Data," IIR Working Paper 14-04, Institute of Innovation Research, Hitotsubashi University.
  • Handle: RePEc:hit:iirwps:14-04
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    References listed on IDEAS

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