Joint R&D projects of industrial firms and technology institutions with developmental financial institutional support: a strategy process study

Abstract

Introduction: This study develops an empirically based conceptually derived typology and model of the process through which industrial firms and technology institutions (Tis) such as technology universities and national laboratories, initiate and implement joint research and development (R&D) projects with the support of developmental financial institutions (DFIs). Research Context: The emerging research on support for technology co-operation does not cover the participatory role of DFIs in a triad with firms and Tis. Though no research exists with a specific focus on DFI-TI-firm joint R&D projects, a review of research on TI-firm joint activity, emerging from the broader areas of R&D management and inter-organizational studies, reveals that they have concentrated on the content of their antecedent conditions and consequences while neglecting their important intervening developmental and management processes. This research focuses on the initiation and implementation process of DFI-TI-firm joint R&D projects and therefore complements content studies in this area. Research Objective: Drawing from the context and the identified research gap, the objective of this study was to develop a middle range theory of the process through which firms, Tis and DFIs initiate and implement joint R&D projects. Research Site: The Industrial Credit and Investment Corporation of India (ICICI), a DFI, initiated the Sponsored Research and Development (SPREAD) programme in 1991 to support TI-firm joint R&D projects. It is a unique programme in the developing country context in project financing being conditional to formal TI-firm co-operation. The ICICI acts as a catalyst for the joint activity, bears part of the project risk and also provides managerial support if required. The SPREAD programme provides a unique and important research site for triad joint R&D projects with implications beyond the research site to the generic case of support for TI-firm technology co-operation, an area which needs process research and informed policy support. Methodology: Given the lack of adequate process research in this area, the exploratory case study method was used to conduct a process study to build an empirical base for theory development. The joint R&D project was chosen as the unit of analysis. Twelve SPREAD support projects (of six firms with seven Tis) were selected to reflect a range of investment quantum and project sizes, a variety of technologies and industrial sectors, differences in technology levels between firms and Tis, types of R&D, and types of firms and TIs. Both single location (firm and TI located in different cities) projects were covered. The variety of projects chosen was in an effort to develop richer theory and provide an opportunity for replication and comparison, thus expanding the domain of generalization. Data was collected through in-depth semi-structured and open-ended interviews of key project participants and administrators were interviewed in multiple rounds spread over a period of thirteen months in 1994-95. Based on this data, process cases of all the projects were developed. Synthesis and Analysis: The interactive as well as individual process in the project cases, including the context, motivations, decisions, administrative systems and outcomes were synthesized to develop a proposed process typology and model of joint R&D projects. The model presents a contingent view of the confluence of forces, processes, events and activities at the individual, organizational and inter-organizational level which combine in the creation and execution of the joint R&D project. Three significantly different ideal types of project process labeled Contract Technology Development, Interactive Technology Transfer and Joint Technology Development, Interactive Technology Transfer and Joint technology Development, which closely fitted case data, were derived from the projects studies and development into three empirically derived sub-models of the project process. The ideal types could be differentiated on the combinations of the level of knowledge (regarding the technology area of the project) in the firm and the TI and this factor was found to be pivotal in guiding the project process in the cases. An integrative typological frame was developed which indicated the theoretical existence of a fourth ideal type not found in the empirical data. A theoretically derived sub-model of this fourth ideal type, labeled Reverse Interactive Technology Transfer, was also developed. A comparative analysis of the ideal type project processes and outcomes from the viewpoint of the firm, TI and DFI was developed to explain the logic and internal consistency within and across the ideal types. Implications: Each ideal type description is an internally consistent combination of project factors and processes, broadly implying that match of a project with the factors and processes of the appropriate ideal type, the more likely the project will be completed (insurmountable technical difficulties apart) and perceived as successful and beneficial by project participants. At a practical level, firms, Tis and DFIs can use the process descriptions as templates for predicting and guiding the course of their joint projects and to examine the appropriateness and adequacy of their roles in initiating, executing and sustaining a progressive programme of such projects. Directions for Future Research: As the SPREAD programme only support TI-firm joint R&D projects initiated and financed by firms, joint R&D projects initiated by TIs were excluded from the empirical data. Similar research on the latter type of projects is required to complement this research and DFIs can also explore the need to support such project such projects. Future research is also required in operationalizing and testing the accuracy and completeness of the proposed process model and in validating the proposed typology.