Response of National R&D Laboratories to Environmental Change: A Study of Five Indian Industrial R&D Laboratories

Abstract

Background: In a country like India, where more than 60% of the national expenditure on research and development is made by the central government, national RSLD laboratories have a major role to play in technological development.

India's Council of Scientific and Industrial Research (CSIR) was set external earnings target in the late 19805 with the objective of making CSIR laboratories more responsive to user needs. The laboratories had to respond to this target in an environment made more complex by

(a) the new Indian economic policies of J July I991 that (i) de-regulated the import of technology

(ii) removed industrial licensing in most sectors, and

(iii) announced a more liberalized trade

The region, and (ii) the signing of the GATT accord in I994 that signifies impending changes in the Intellectual Property Rights Regime.

There is -little-published work about how national R&D laboratories face peculiar and difficult issues like managing technical and market uncertainty, marketing technology in a competitive market, and managing researcher motivation while retaining their public status in facing such environmental changes, given their traditional values and beliefs that may constrain action.

Main Research question of this study: How to Have the National Research and Development laboratories Responded to Major Changes in the Environment and What Explains the difference Between the Responses of the Different Laboratories ?

Framework Developed: A review of the literature indicated that existing frameworks for organizational adaptation are independently inadequate to explain the response of national R&D laboratories to environmental change. A framework was therefore developed that

(i) conceptualized strategy formation of a laboratory as a set of decisions and actions in three inter-related areas - a mix of R&D projects, a mix of related activities and marketing strategy; (ii) conceptualized the character of the laboratory as arising from its values and beliefs, the pattern of responsiveness and distinctive competencies and

(iii) identified different environmental factors likely to affect the response of the laboratories.

Research design methodology: Given the complexity of the phenomenon due to the large number of interlinked variables likely to determine the response of a laboratory, a multiple cases the study design was adopted. Five laboratories were chosen from among the industrial research laboratories under the purview of the CSIR. Each case, covering the period 1987-95, was constructed based on published and unpublished documents and serni~stn1ctured interviews with laboratory directors and division heads. Each case study was analyzed in terms of the above framework to link the response of the laboratory to its character and the environmental changes. Comparisons were made across the cases to answer the research questions.

Major Findings I The major findings are:

l. The national R&D laboratories in this study were found to exhibit three types of Response:-

(a) Increase the scale their R&D and related is in existing areas to meat industry needs and move into selected new areas that provide future opportunities. For these laboratories. The pressure to increase external earnings and thereby demonstrate responsiveness to user needs was consistent with the traditional philosophy of the laboratory. Inter-divisional competition was encouraged to increase external earnings. Response was continuous from the time the pressures Began.

(b) Offer R&D and related services to new (international) markets whose needs match the competencies of the laboratory better. The response was formulated by a top management team and elaborate support measures like organizational innovations were used to facilitate its implementation. The new economic policies provided the policy framework to make the response possible.

(c) Seek R&D projects in existing areas from government agencies. The Research Councils of the laboratories played a more prominent role than in (a) and (b). The response was principally after 1991, with the realization that the survival of routine R&D activities in the laboratory could be at stake.

2. The major factor driving the response of laboratory was its predominant values and beliefs. These had influenced the responsiveness of the laboratory to industry needs and, in turn, the competencies developed. Where the match between the competencies of the laboratory and the needs of Indian industry arising out of its structure and orientation is strong, the laboratories have displayed response type (a) above. Where such a match is not strong, the laboratories have displayed response type

(b) if their competencies are valued in other markets and type

(c) in the absence of such competencies of the study include

(i) the important role of leadership in the reorientation of national R&D laboratories

(ii) the need for government programmatic support to build competencies in the laboratories

(iii) the need to revise assessment and promotion systems to avoid demotivation; and

(iv), for researchers, the need to investigate the links between nature of technology and technological change, and industry structure more closely in the developing country context.