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WebSite: www.chem.uoa.gr
Research and Development. The Role of Universities for the
Knowledge-based Society and Technological Innovations
Expenditure in Scientific Research and Applications as Crucial Factors for
Economic Growth and the New Technological Frontiers
Athanasios Valavanidis, Thomais Vlachogianni
Department of Chemistry, National and Kapodistrian University of Athens, University
Campus Zografou, 15784 Athens, Greece
Abstract. Research and Development (R&D) has been proved to be crucial factor
moving the world technological frontiers, while at the same time facilitating new
technological and scientific innovations. Investing in research by state and private
institutions and industrial enterprises, as well as applications of advanced
technology in the various sections of the economy, has been proved to play a
significant role in the economic growth and prosperity of a country. R&D comprise of
creative work undertaken on a systematic basis in order to increase the stock of
knowledge in various fields of science and technology and advance education,
. In the last decades international
knowledge, in natural sciences, social and economic fields, flows continuously and
studies showed that is a major factor in world economic growth. Universities are an
increasingly important component of the scientific innovation and technological
advances in many sectors of the economy and production.
The role of R&D is evidenced by the recent scientific literature on the impact of
science and technology spillovers on growth and productivity of developed and
developing countries. Expenditure in scientific research and technological
development in most countries provided a set of indicators that reflect the increased
economic progress and the advanced technological structure at national level.
Appropriate use of R&D provide solutions to infrastructure systems (motorways,
transport facilities, energy storage and electricity grids, telecommunications, sewers,
naval ports, environmental protection facilities, etc) serving the economy, industry,
and agriculture on a global scale. This review provides a comprehensive outlook,
statistical data and important research papers on the levels of R&D expenditure in
various developed countries (US, China, Germany, UK, Japan, Greece) and the
competitive edge that provides in the introduction of new technological discoveries
and innovation in economic fields, increase growth at national and international
levels, productivity, advance knowledge and expertise among manpower.
Corresponding author: Prof. Athanasios Valavanidis, E-mail : valavanidis@chem.uoa.gr
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1. Introduction: Research and Development and Economic
Growth
Economic theory points to the fact that the process of industrial revolution
and technological changes in the last century proved to be major sources of
productivity growth in developed and developing countries in the long run. New
technological processes allowed industrial enterprises, units of primary production
(raw materials, industrial engines, energy, agriculture, fisheries, etc) and services to
increase output per worker or per unit of capital. Applications of technological
change in transport, housing, energy, telecommunications, new consumer products
and food contributed to improving the well-being of citizens, workers and
consumers. Research and Development (R&D) has been proved to be crucial factor
moving the world technological frontiers and facilitated new technological and
scientific innovations. Sustained and significant economic growth in develop0ed and
developing countries per capita income started roughly with the first era of the
industrial revolution. There is little doubt that technological progress through
industrial innovations played the key role in initiating, accelerating, and sustaining
economic growth in the modern era, especially after the Second World War in North
American and European countries.1-4
Innovation in the primary, secondary and service sectors and extensive
application of new technological methods that have been invented through vigorous
R&D can make economic growth sustainable and durable. Especially information
technology over the 1990s, has substantially contributed to recent improvement in the
productivity of enterprises, industrial production and services. The existing scientific
to R&D as being the
ultimate source of technological change. Most studies in this field of research have
confirmed that domestic business R&D and foreign R&D are major drivers of
economic growth. A number of studies have also provided evidence about the
economic effect of research in state institutions and private enterprises. There is
strong statistical macroeconomic evidence of the simultaneous impact of business
R&D, foreign R&D and public R&D on economic growth of developed and developing
countries.5,6
After the initial stages of industrial revolution in selected countries, new
applications of scientific discoveries took place to solve practical problems. The
goals were to increase productivity, improve properties of materials, increase quality
of life, improve health, sanitation, etc. Scientific and technological advances were
based on research and prior discoveries, methods and application and new
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knowledge were disseminated, refined and revised through additional
experimentation. Many crucial discoveries brought substantial economic growth and
wealth to industrial countries. Some of the most important technological innovations
and discoveries as a result of R&D in the last 150 years were: electricity (1873), light
bulb (1850-1878) telephone (1876), radio (1897), automobile (1886), X-rays (1895),
Quantum physics (1900), airplane (1903), refrigeration (1913), television (1926),
penicillin (1928), atomic bomb (1945), computer (1946), the structure of DNA
(1953), microprocessor (1971), internet (1991), the integrated circuit (1959), mobile
phone (1973). These of course are the most important discoveries which changed
the industrial civilization and improved human life in the modern era.7
Figure 1. Electricity and electric power distribution in the 1880s were the most
important innovations after the industrial revolution. A computer processor was
another technological revolution. It incorporated the functions of a computer's
central processing unit on a single integrated circuit or few integrated circuits.
In 2015 the Scientific American asked some scientists which are the 10 top
emerging technologies in 2015, and the answers were: Fuel-cell vehicles, next-
generation robotics, recyclable thermoset plastics, precise-genetic engineering
techniques, emerging artificial intelligence, distributed manufacturing (factory on
line), additive manufacturing (printable organs, 3D products, intelligent clothing),
neuromorphic technology (computer chips that mimic human brain) and digital
genome (health care).8
2. The “Triple Helix” Institutions in a Knowledge-based
Society for Research Innovation and Development
Research & Development by scientific institutions (public research laboratories
and universities) and private industrial enterprises comprise creative work
undertaken on a systematic basis in order to increase the stock of knowledge in
various fields of science and technology and advance education, learning and
in
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modern, industrial economies for improved economic performance through the
ability to absorb new technologies coming out of domestic and foreign R&D.
Although the relationship between R&D and innovation is complex and nonlinear, it
is clear that substantial advances in technology cannot occur without scientific work
being undertaken on a systematic basis. R&D performed by private business results
in new goods and services, in higher quality of output, in higher productivity, lower
prices of consumer products, new production processes and sources of economic
growth at the macroeconomic level. Investigations in many developed countries
(especially in the USA and the European Union countries) showed that R&D does
return, for the long-term
effects on the prosperity of the country. Cross-national spillover effects of
government and private investment in R&D (data set of ten OECD countries)
showed that domestic private research is a significant determinant of both domestic
and foreign productivity growth.9-11
Government and university R&D have a direct effect on scientific, basic
knowledge and on public missions. Basic research performed mainly by universities
enhances the stock of knowledge available for the society. New knowledge is not
considered as an output in the current system of national accounts (contrary to new
equipment and software for instance), and as such it is not included in GDP
measures; hence the direct outcome of basic research is overlooked. However,
basic research may open new opportunities to business research, which in turn
might improve productivity. Social and economic research in the last decades,
established technological i
-industry-government interactions.12-14
Figure 2. Etzkowitz H. The Triple Helix. University-Industry Government Innovation in
Action . Routledge publs, New York, 2008. Viale R, Etzkowitz H (Eds). The
Capitalization of Knowledge. A Triple Helix of University-Industry-Government. EE
Edward Elgar, Cheltenham, Glos, UK, 2010.
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Institutional research leading to technological discoveries is based on new
knowledge and the role of the university is very crucial. Basic research and
fundamental technological progects m in university laboratories play an important
role in the incubation of technology-based enterprises. The entrepreneurial
university takes a proactive stance in putting knowledge to use and in broadening
the input into the creation of academic knowledge. In this respect the university
operates according to an interactive rather than a linear model of innovation. As
industrial enterprises raise their technological level in the pursuit of innovative
products, they move closer to an academic model, engaging in higher levels of
training and in sharing of knowledge. Government acts as a public entrepreneur and
venture capitalist in addition to its traditional regulatory role in setting the rules of the
game.
Figure 3. The concept of Triple Helix innovation of university-industry-government
relationships initiated in the 1990s by Etzkowitz and Leydesdorff. The concept
interprets the shift from a dominating industry-government dyad to a growing
relationship between university-industry-government in the knowledge-based
society, with rigorous economic development, transfer and application of innovation
and technological discoveries.
Moving beyond product development, innovation then becomes endogenous
process which encourage hybridization among the institutional spheres. In the last
two decades there is a fundamental transformation of the universities as teaching
institutions into a combination of teaching with research, a process that is not only
obvious in the USA, but in many other developed countries. It is considered as a
second academic revolution. Intellectual capital is becoming as important as financial
capital as a basis of future economic growth. The development of an entrepreneurial
academic ethos that combines an interest in fundamental discovery with
technological application, emerges as an influential actor and equal partner in a
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- -based society.
Industry operates as a locus of production (machines, consumer products, electronic
instruments, etc) government operates as a source of contractual relations that
guarantee stable interactions and universities operate as a source of new knowledge
and technological discoveries.15-17
In the last two decades universities around the world are increasingly shifting
from their traditional primary role as educational providers and scientific knowledge
additional role of the commercialization of knowledge and active contribution to the
development of private enterprises in the local and regional economy. As a result,
universities become an increasingly important component of the national innovation
system.18-20
3. Gross Domestic Spending on Research and Development
(R&D) in Developed Countries
Gross domestic spending on Research and Development (R&D) is defined as
the total expenditure (current and capital) on R&D carried out by all resident
companies, research institutes, university and government laboratories, etc., in a
country. It includes R&D funded from abroad, but excludes domestic funds for R&D
performed outside the domestic economy. This indicator is measured in million US$
and as percentage of GDP (Gross Domestic Product).21
Eurostat in the EU devotes a special section where Statistics are Explained
for R&D Expenditure. [http://ec.europa.eu/eurostat/statistics-explained/index.php/
R_%26_D_expenditure]. Eurostat uses data that are obtained through statistical
surveys which are regularly conducted at national level covering R&D performing
entities in the private and public sectors. The EU during the last decade encouraged
the increase of investment in R&D
competitiveness in the economic sectors (industry, agriculture and services). The
objective of the EU countries was to devote 3% of their GDP for R&D activities by
2010. The target was not reached by many countries (e.g. Greece, below 1% of
GDP) and subsequently the 3% target formed one of five key targets within the
Europe 2020 strategy.
The Gross domestic expenditure in R&D (GDE-RD) (public and private
sectors) for the 28 countries of the EU stood at 272 billion in 2013, which was 43%
higher than 2003. In 2012, the level of expenditure on R&D in the EU-28 was
equivalent to 75% of that recorded by the USA. Other countries that are in
competition with the EU economies have higher expenditure for R&D. For example,
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Japan and South Korea expenditure for R&D was 3.5% and 4.2 % respectively of the
GDP of these countries in 2014.22
In the last decade China is advancing by 8-10% annually and it is
estimated DP will surpass that of the
USA. In the same period D intensity increased rapidly, rising from 1.13%
in 2003 to 1.98% in 2012, an increase of 85%. Among the EU member states, the
highest R&D intensities in 2013 were recorded in Finland (3.31%), Sweden (3.3%)
and Denmark (3%). Also, there were 10 member states that reported R&D
expenditure that was below 1% of their GDP in 2013 (Greece, and the countries that
joined the EU in 2004 or more recently).22
Figure 4. Although US is leading the Gross Domestic Product (GDP) list of the
-8% rising to
the top of GDP list by 2020, The US has been a global leader since overtaking the
United Kingdom in 1872.
In November 2011, the European Commission presented a successor for the
7th framework programme by announcing Horizon 2020, a programme for investing
nearly EUR 80 billion (€) in research and innovation, implementing the goal of EU for
R&D. Horizon 2020 focuses on turning scientific breakthroughs into innovative goods
and services that have the potential to provide business opportunities, increase
employment
to create new growth and jobs in the
European countries.22,23
The Organization of Economic Development and Co-operation (OECD,
Paris), is an intergovernmental economic organisation with 35 member countries,
founded in 1961. The countries in the OECD are the most developed industrial
economies on Earth. OECD collects data on R&D expenditure and science and
technology indicators. Data are: Semiannual, DOI: 10.1787/data-00182-en, Years
covered: 1981-2012. Main Science and Technology provides a set of indicators that
8
reflect the level and structure of the efforts undertaken by OECD Member countries.
According the OECD and other statistical data the expenditure on R&D was
approximately one trillion dollars (US$) in 2010 and now (2015) is at 1.7 trillions.24,25
Table 1. OECD, 2016, Gross domestic spending (GDS) % on Research and
Development (R&D) for selected developed countries doi: 10.1787/d8b068b4-en.
The world's total nominal R&D spending was approximately one trillion dollars in 2010
[http://royalsociety.org/uploadedFiles/Royal_Society_Content/Influencing_Policy/Reports/
2011-03-28-Knowledge-networks-nations.pdf ]. (accessed October 2016)
R&D -- Gross domestic spending on R&D - OECD Data". data.oecd.org. (retrieved 2016)
[http://www.stats.gov.cn/tjsj/sjjd201605/ t20160531_1362661.html ].
Countries
Year 2002
of GDP
2010
2012
Expenditure R&D, billions
US$ PPP and as % of GDP
Australia
2.25%
2.2%
2.1%
23.3 billions, 2.12% (2014)
Belgium
1.89
2.05
2.93
11.9 billions, 2.46%, (2014)
France
2.7
2.18
2.23
58.4 billions, 2.25% (2014)
Germany
2.42
2.71
2.87
106.5 billions, 2.84 (2014)
United Kingdom (UK)
1.72
1.74
1.62
43.7 billions, 1.70 (2014)
United States
2.55
2.74
2.70
473.4 billions, 2.74% (2013)
514 billions (2016)
Israel
4.13
4.1
4.13
11.2 billions, 4.1% (2014)
Japan
3.12
3.25
3.58
170.8 billions, 3.58% (2014)
South Korea
2.27
3.47
4.03
91.6 billions, 4.29%, (2014)
European Union of 28
countries
1.71
1.84
1.92
334.3 billions, 1.94%,
(2014)
Russia
1.25
1.73
1.13
42.6 billions, 1.18%, (2014)
China
1.06
1.73
1.93
409 billions, 2.2%, (2014)
India
0.5
0.7
0.8
66.5 billions, 0.85%, (2013)
Greece
0.55
0.76
0.8
1.48 billions, 0.84% (2014)
*PPP. Purchasing power parity. The concept of PPP allows one to estimate what the exchange rate between
two currencies would have to be in order for the exchange to be at par with the purchasing power.
The forecast for the top list of countries with R&D expenditure per year in
2016 and as % of GDP were published in the R&D Magazine (www.rdmag.com).26
Table 2. Forecast for 2016, for the Gross Domestic Product (GDP) of the 10 top
developed countries, the % of expenditure for R&D and total expenditure (forecast)
Countries
GDP (2016 forecast)
trillions of US$
% GDP for
R&D
Total expenditure billions
US$ for R&D (2016)
USA
18.5 trillion of US$ (25% of
global GDP)
2,77 %
514 billions of US$
China
11.3 (2016) (15% of global GDP)
1,96 %
396
Japan
4.9
3,4 %
166
Germany
3.7
2,92 %
109
India
8.4
0,85%
71
France
2.6
2,26 %
60
UK
2.5
1,78 %
45
Russia
3.4
1,5 %
50
South Korea
8.4
4,0 %
77
Italy
2.09
1,27 %
26,6
**Forecasts for 2020. GDP of China is expected to reach 20.85 trillion US$ while USA will remain
the same at 18.5 trillion, India 8.4 trillion US$ and Japan 5 trillion US$.
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The USA continues to remain on the top of investing in research and
technological innovations, despite the slowing down in the last years, but China is
advancing recently, by increasing substantially its expenditure for R&D. At present
the U.S. R&D investment is 25% of all global spending. U.S. scientists publish the
highest proportion of scientific papers in high impact factor journals with the highest
citation index. R&D total investment in the U.S. is supported by the industrial sector
(66%), by federal government (25%) and by academic/non-profit institutions (7%).25
There are substantial changes
science R&D, for more than 10 years, has been the largest sector in the industrial
technology arena. For 2016, many of the large players in this sectorNovartis,
Pfizer, Merck, Sanofi, Astra Zeneca, Eli Lilly, GlaxoSmithKline (most have large U.S.
industrial installations)are expected to reduce their large multi-billion dollar annual
R&D investments. Some pharmaceutical companies in recent years had reduced
revenues and a reduced ability to continue funding mega-scale R&D programmes. In
other industrial areas, most global automotive companies (except for Volkswagen,
the largest global company with the largest total R&D expenditure) are expected to
grow their R&D programs due to strong technology shifts from internal combustion to
electric propulsion, automated driving systems and integrated electronic systems.25,26
Figure 5. The U.S. is failing to keep pace with investments in R&D. As
6-8% per year in
pursuit of the globally-recognized 3% GDP goal, U.S. investments (blue line) have
pulled back. At this pace, China will surpass the U.S. Data Source: OECD, Main
Science and Technology Indicators, 2013, Gross Domestic Expenditures on R&D as a
percentage of GDP. Available at: http://stats.oecd.org/. Lane NF. Investments in basic
research are just that, investments. Scientific American 22.7.2014.
10
All statistical evidence showed that the U.S. is failing to keep pace with
investments in R&D especially with China. The U.S. expenditure is at
2.7% of GDP and ranks 10th in national R&D investment as a % of GDP, or R&D
intensity (annual increased to R&D spending). D intensity (red line)
rapidly grows at an average of 6-8% per year, while U.S. investments (blue line)
have pulled back.
and technology, but the qualified scientists and technologists as a percentage of
population remains extremely low. China lacks world-class researchers, compared to
the U.S. and West Europe countries. For instance, the US is home to 35 of the
engineering. The universities of European Union also are on the top list and their
research activities and scientific publications are high quality with very high citation
index. Chinese universities awarded over 27,000 doctorates (science and
engineering, 2011) with U.S. universities (24,792).27
Innofund program was a special government R&D program established upon
the approval of facilitate and
encourage the innovation activities of small and medium technology-based
enterprises (SMTEs) and commercialization of research by way of financing, trying to
bring along and attract outside financing for corporate R&D investment of SMTEs
China Innofund was providing three forms of financing, namely, appropriation,
interest-free bank loans, and equity investment. Appropriation was provided as start-
up capital for small firms founded by a researcher with scientific achievements.
Partial subsidies are also provided to SMEs for the development of new products
and pilot production. From 1999 to 2011, Innofund provided more than 19,17 billion
RMB to 30,537 projects, 27,498 (86%) of which were supported through
appropriation, 2880 through interest-free loans, and 1159 through other forms,
including bank loan insurance, equity investment, and other forms of subsidies. The
size of direct investments by Innofund appears to be modest compared with the total
expenditure for government R&D in China [1 USD$ =6.7 Chinese Yuan Renminbi
(RMB)]. Since 1999, the program has created approximately 450,000 new jobs and
generated 209.2 billion RMB in sales, 22.5 billion RMB in tax income, and 3.4 billion
RMB in exports. By the end of 2008, 82 out of 273 publicly listed companies in
China's SME Stock Exchange were once supported by Innofund.28
The Gross domestic expenditure (GDE) in the industrial countries in the
period after 1995 was increasing at a rate of 2-3% every year, but as is shown In
Figure 5 the GDE-R&D rate is slowing down in the USA and EU countries with the
exception of China in which R&D increased with steeper growth. 29
11
Figure 6. The range of Gross Domestic Expenditure in the period 1996-2013
increased substantially in China, South Korea and Germany. Increase of R&D
expenditure. The U.S. remains the world leader, with 28% of the $1.7 trillion spent on
R&D globally (2013). China with 20% of the total R&D, is second in the world.29
Figure 7. The rise of China, India, and South Korea is taking place against the
backdrop of a lack of growth in U.S. research intensity a measure of R&D
expenditure as a percentage of the GDP. The U.S. has fallen from first to eleventh
place in R&D intensity, which puts the nation behind many European countries,
Japan, South Korea, and Israel.29
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4. What Drives R&D Intensity Rates in Developed Countries?
The Role of Universities
Many studies in the last decade investigated the drives of R&D intensity (%
yearly increases for long periods) in developed countries, especially the OECD
countries which are among the most industrialized and entrepreneurial in scientific
innovations and technological discoveries. A study investigated (2007) the potential
determinants of business-sector R&D intensity expenditures (in OECD countries for
the period of 19752002). Estimates showed a high degree of tax incentives for R&D
have a significant and positive impact on business R&D spending regardless of the
specifi for R&D are
significantly positively related to business enterprise sector expenditures on R&D,
indicating that public sector R&D and private R&D are complementary. Direct R&D
subsidies and the high-tech export share are significantly positively related to
business-sector R&D intensity. Also, countries characterised by strong patent rights
appear to have higher R&D expenditure intensities.30
Universities in developed countries have been the subject of research for
their R&D expenditure by quite large number of researchers since 1980s. Most of
their work focused on the universityindustry technology transmission mechanism
using firm or industry level data. In the USA the Bayh-Dole Act of 1980 gave
universities the right to patent inventions resulting from federally funded research.
The result was a large increase in patents, and in licensing of university patents. The
Economic Recovery Tax Act in the U.S. of 1981 extended the R&D tax credit to
company-financed academic research, thereby promoting company support for
universities. The Small Business Innovation Research Act of 1982 (U.S. SBIR)
intended to help small businesses conduct research and development (R&D).
Funding takes the form of contracts or grants. The recipient projects must have the
potential for commercialization and must meet specific U.S. Government R&D
needs. The SBIR program was created to support scientific excellence and
technological innovation through the investment of federal research funds. In 2010,
the SBIR programme run across 11 federal agencies and provided over US$ 2 billion
in grants and contracts to small U.S. businesses for research in innovation leading to
commercialization. The programme required to put aside funds to support start-ups,
including some headed by university researchers. The rewards from university
research traditionally come from reputation but also from the financial incentives.
Reputation in universities promotes mobility which in turn generates salary increases
in researchers-professors. Also, the rewards from R&D to academic research
13
depend on the dissemination of findings and open science (publications,
conferences, financial support). But the rewards to industrial research derive mostly
from corporate profits, and these rely on confidentiality. Hence the coming together
of academic and industrial research moves academic research towards secrecy, in
conflict with standard academic practice.31,32
Academic science and industrial research as well technology transfer from
the laboratories to the industrial sector in USA, Japan, United Kingdom (UK) and
other developed countries is the result of stronger links between higher education
institutions (universities and technological and research institutes) with industrial
enterprises that use technological innovations for applications in the production of
their products.33-35
Studies in the last decade showed that Industryuniversity cooperation in
R&D in most developed countries has been very effective in generating innovation.
The interaction facilitates the advancement of knowledge and the advancement of
new technologies and in addition has positive effects on both scientific results and
economic performance. For industrial firms, universities represent unique sources of
knowledge and discoveries, while for academic researchers, the cooperation with
industrial companies represents an opportunity to obtain funds for their own
research, for equipment, and for research assistants (leading to MSC and PhDs
degrees and expertise among young researchers). The expertise among young
graduates can lead to opportunities to test practical applications of their theories
and start-ups for new business and increased employment.36,37 There are various
benefits derived from industryuniversity joint research projects. For example,
competitive advantages for firms, opportunities for field experimentation, the funding
hnology transfer among partners. A
recent study compared the coordination and control systems implemented in 6
industryuniversity joint research projects their planning and mutual adjustment
practices and incentives. 38
These strategic relationships university-industry on R&D are a dimension of
entrepreneurial activity, and they are thus important drivers of economic growth and
development in many countries. Business collaboration with universities increased
the efficiency and effectiveness of industrial investments. Studies have found that
universities are more likely to collaborate with industry if the business is mature and
large, is engaged in exploratory internal R&D, and there are not major intellectual
property (IP) issues between both parties. Businesses gain from such collaborations
through increased commercialization probabilities and economies of technological
scope. A recent study analysed information based on publicly available data
14
collected by the Science-to-Business Marketing Research Centre of Germany, as
part of a European Commission project. The study found positive dimension in the
relationships to fostering university-business R&D collaborations.39
During 2013, 14 EU country reports were published, each presenting
te of university-business collaboration
as quantified through the S2BMRC survey (Science-to-Business Marketing
Research Centre of Germany). Figure 7 (below) showed the results from EU 14
countries from the survey-responses to questions by universities (Higher Education
Institutions, HEI) indicating to what extend cooperate with business (industry) with
respect to collaboration in R&D. Over 3,000 universities participated in the study
(responses from 6,280 academic researchers).40,41
Figure 8. Extent of Industry-Business Collaboration in R&D, by Country. Note:
Mean responses from universities (academic researchers), by country, based on a
10-point scale. Response scale: 1 . The
highest response was from UK, Ireland, Finland, Sweden and the lowest from
Poland.
As we can see from Figure 7, the majority of the responses showed that
universities in European Union cooperate with industry in R&D and participate in the
development of innovations for technological applications. The scientific
bibliography contains in recent years various statistical projects and research
papers on the partnerships of universities with industry in research projects for
discoveries and explorations of technological innovations.42-44 Another macro study
on higher education R&D and its impact on productivity growth in 17 high-income OECD
countries suggest that R&D performed by higher education is positively affecting
productivity growth in all specifications. 45
15
5. List of Most Innovative U.S. Universities and R&D
Expenditure
The U.S. universities have very high budgets of expenditure in R&D. Most of
the money for research comes from federal government, local government and
businesses. Also, non-profit organizations offer funds for research. Top-ranked
Johns Hopkins University in 2012 received most of the R&D funding of 2,1 billions
US$ for science and engineering. JHU committed nearly $40 million toward
environmental science research in 2012. The top list of universities in the U.S. was:46
1. Johns Hopkins University. JHU is on the top of the list for expenditure on
R&D. Life sciences (particularly biology and medicine) and electrical engineering
were the fields that received the most R&D funding. Total R&D expenditure was:
US$ 2,106,185 (thousands of dollars) (or 2,1 billion of US$), Science: $1,233,438,
Engineering: $859,561. Funding Sources (thousands of dollars): Federal
government: $1,857,580, State and local government: $5,109, Institution funds:
$80,988, Businesses: $47,102, Nonprofit organ: $114,054, Other donors: $1,352
2. University of Michigan. The university receives very little funding from state
and local government sources, but manages to offset this shortfall with more than
$433 million in institution funds; Total R&D Expenditure: US$1,322,711 (thousands
of dollars), Science : $1,026,614, Engineering: $221,066, Other: $75,031
3. University of Wisconsin. Nearly 80% of R&D funding is allocated for
scientific fields; life sciences alone comprise more than 50% of the entire R&D
expenditure. Total R&D Expenditure: $1,169,779 (thousands of dollars), Science:
$916,863,Engineering: $113,742, Other: $139,174
4. University of Washington. Funding for medical science research represents
more than 33% of annual R&D expenditure, while environmental and biological
science research comprises more than 25%. Total R&D Expenditure: $1,109,008,
(thousands of dollars) Science: $961,218, Engineering: $104,196,Other: $43,594
5. University of California San Diego. In 2012, UCSD allocated 87.5% of its
R&D funding toward scientific studies. Medical sciences-related projects received
more than 50% of this amount. Total R&D Expenditure: $1,073,864 (thousands of
dollars), Science: $939,199, Engineering: $126,107, Other: $8,558.
6. University of California-San Francisco. All of the R&D funding at UCSF is
allocated to scientific studies. Medical science received the vast majority of these
monies (roughly $987 million in 2012). Total R&D Expenditure: $1,032,673
(thousands of dollars), Science: $1,032,673.
7. Duke University. Expenditure of $950 million to R&D studies in biology,
medicine, and other life science fields. Engineering research, received less than $60
million for projects related to either electrical or bio/biomedical engineering. Total
R&D Expenditure: $1,009,911 (t.o.d), Science:$946,167, Engineering:$58,592.
8. University of California-Los Angeles. Nearly $900 million of UCLA’s 2012
R&D budget was given to researchers in scientific fields; $686 million was allotted for
medical research. Total R&D expenditure: $1,003,375 (thousands of dollars).
9. Stanford University. The university ranked third among the top 10 schools
on our list in terms of R&D expenditure for engineering projects. Total R&D
Expenditure: $903,238 (thousands of dollars).
10. Columbia University in the city of New York. Life science fields (such as
biology and medicine) claiming nearly $600 million. Other fields that received a
relatively large amount of funding include physics and electrical engineering.
Total R&D Expenditure: $889,487 (thousands of dollars).
16
11. University of North Carolina at Chapel Hill. Total R&D Expenditure
$884,791 (thousands of dollars).
12. University of Pittsburgh. Total R&D Expenditure: US$883,791 (t.o.d).
13. University of Pennsylvania. Total R&D Expenditure: $847,077 (t.o.d) .
14. University of Minnesota-Twin Cities. Total R&D Expenditure: $826,173
(t.o.d).
15. Massachusetts Institute of Technology (MIT). Total R&D Expenditure:
$824,130 (thousands of dollars).
16. Cornell University. Total R&D Expenditure: $802,387 (thousands of dollars).
17. Harvard University. Total R&D Expenditure: $799,432 (thousands of dollars).
18. Pennsylvania State University. Total R&D Expenditure: $797,679 (t.o.d).
19. Ohio State University. Total R&D Expenditure: $766,513 (t.o.d).
20. University of California-Berkeley. Total R&D Expenditure: $730,348 (t.o.d).
It is no surprise that famous universities like Harvard, Stanford and MIT are not
on the top of the list of the R&D expenditure. Some U.S. universities are very big,
like Michigan that has more than 6,000 academic personnel and their research
facilities are very diverse. Johns Hopkins for many years has some of the most
advanced scientific facilities among U.S. higher education institutions. JHU scientists
and engineers operated the first spacecraft to visit Pluto, researchers made progress
on finding and eradicating dormant HIV in infected cells, designed protective gear for
doctors caring for Ebola patients, scientists studied threats to ocean ecosystems
from Hg in dolphins and an accelerating buildup of CO2. The JHU research was
supported by the return on investment made from past discoveries. In 2014 reported
earnings of 16.5 million US$ by licensing patented technology and 17.9 million US$
in 2015. JHU in 2014 spun off 13 new companies and received 92 new patents.47
Most of the statistical data for the R&D expenditure of the USA academic
institutions are derived from the National Science Foundation (NSF) Higher
Education Research and Development, Fiscal Year 2015. The Federal share of
university R&D remained around 60% and historically played a major role in R&D
funding. The NSF funding was around US$ 8 billion (1960) and increased to more
than $40 billion in the last years distributed to 645 universities and colleges, out of a
total R&D expenditure of US$ 67 billion in 2013.48
6. R&D for Technological Innovation in the United Kingdom
The United Kingdom (UK, England, Scotland, Wales, N. Ireland) is the
world's 5th-largest economy by nominal GDP, the world's first industrialised country
and the world's foremost economic and military power during the 19th and early 20th
centuries. The UK has 127 universities and higher education institutions. The UK
service sector makes up around 73% of GDP with London
financial "command centres" of the global economy (alongside New York, Tokyo,
17
Frankfurt). London has the highest educated population in the world and the highest
per capita income in the world. London is a leading global city, in the arts,
commerce, education, entertainment, fashion, finance, healthcare, media,
professional services, research and development, tourism, and transport. The UK
attracts large investment funds for industrial innovations. Its pharmaceutical industry
plays an important role in the UK economy with the third-highest share of global
pharmaceutical R&D expenditures (after the United States and Japan). The UK
illions in 2011. The aerospace industry of the UK is
the 2nd- or 3rd-largest national aerospace industry in the world. The automotive
industry is a significant part of manufacturing sector and employs around 800,000
people, with a turnover in 2015 [Office of National Statistics, UK
2015: The Official Yearbook of the United Kingdom of Great Britain and Northern
Ireland].
In 2013, UK expenditure for R&D was (43.5 US$). In 2014, the
gross domestic expenditure on R&D, in current prices, increased by 5% to
billions (yearly increase of 3%)
expenditure in 2014 (65% of total expenditure), represented 1.67% of Gross
Domestic Product (GDP) which is below the European Union (EU-28) provisional
estimate of 2.03% of GDP. Despite the low percentage of GDP among European
countries, the UK has one of the most innovative and advanced technological basis
and produces high quality scientific publications, patents and technological
discoveries. Statistical data on R&D are from the U.K. Office of National Statistics.49
Figure 9. R&D annual expenditure 30.6 billion (2014). Expenditure subdivided by
sector: UK Business 65%, Higher Education 26%, Government and Research
Councils 7%, Private Non-profit 2%. Business R&D 19.9 billion (2014)..
, Computer programming and information service
, ,
billion),
[ Office of National Statistics].
18
R&D in Higher Education institutions of the UK (2014) represented 26%
of the total UK R&D expenditure
in 2013. The funding for this sector is mainly provided by the Higher Education
Funding Councils, the seven UK research councils and the research funds from the
European Union. Considering just Framework Programme funding of EU, UK
universities were among the most successful in securing EU research funding,
receiving 71% of total Framework Programme (FP7) funding awarded to the UK. A
total of 13 UK universities are ranked in the top 25 European universities, rated in
terms of the number of participations in Framework Programme 7. Oxford,
Cambridge, Imperial College and University College of London occupied the top four
spots and are a. The EU has supported 3,539
UK based researchers to access 1,055 European research facilities between 2007
and 2013. Over the period 2007
through FP7 Framework Programme. In 2013-2014 the
million of research income from EU.50,51,52
Pan-European research facilities in the UK. The UK hosts the
headquarters of 6 pan-European research facilities, with facilities distributed across
multiple participating countries.53
High Power Laser Energy research Facility (HiPER) Harwell, Oxfordshire
(Central Laser Facility)
ELIXIR (European Life-science Infrastructure for Biological Information) Hinxton
Integrated Structural Biology Infrastructure (INSTRUCT) Oxford
Infrastructure for Systems Biology-Europe (ISBE) London (Imperial College)
Square Kilometre Array (SKA) Manchester (Jodrell Bank)
European Social Survey (ESS ERIC) London (City University).
The UK also hosts 10 facilities that are part of pan-European research
facilities headquartered in other European countries and is a member of pan-
European research facilities entirely based beyond its borders, such as the
European Hard X-Ray Free Electron Laser (European XFEL) based in Germany.
The UK Science Parks Association lists over 100 locations in the UK
(including Science, Research and Technology Parks, Technology Incubators and
Innovation Centres) as its members. These provide the environments for 4,000
companies employing around 75,000 people. In 2012 the UK Government
introduced Start Up Loans to provide finance and mentoring to young entrepreneurs.
.
International Comparative Performance of the UK Research Base (BIS 2013),
4.1% of researchers, it accounts for 9.5% of downloads, 11.6% of citations and
19
15.9% of the world's most highly-K has now overtaken the US
to rank 1st by field-weighted citation impact. In the UK, approximately 55,000 patent
applications in the period 2000-2010, while around 64,000 patents. The UK is a
highly productive research nation in terms of articles and citation outputs per
researcher or per unit of R&D expenditure. In the UK there were 262,303
researchers in 2011 (expressed as full-time equivalents rather than as a simple
headcount), representing 3.9% of the global total and increasing at just 0.9% per
year over the period 2007-2011.54,55
7. Research & Development Expenditure in Japan
Japan is the rd-largest economy in terms of GDP with 4.807 billion
(2014), 4.855 billions (2015) and 4.913 billion (2016, forecast). Japan as a highly
industrialised country has some of the most successful motorcar and electronic
industrial enterprises. Japan is home to some of the largest and most technologically
advanced producers of motor vehicles, electronics, machine tools, steel and
nonferrous metals, ships, chemical substances, textiles, and processed foods. As of
2014, Japan's public debt was estimated at more than 200 % of its annual GDP, the
largest of any nation in the world. In 2014-2016 Japan
development (R&D) and innovation was 3.4 % of GDP. The total gross expenditure
was 166 US$ billion (forecast of 2016). 56
Figure 10. Japan is a world leader in R&D with successes in the fields of electronics,
semiconductors, automobiles, industrial robotics, optics and chemicals.
Japan is a world leader in fundamental scientific research, having produced
22 Nobel laureates in physics, chemistry and medicine. Some of Japan's more
prominent technological contributions are in the fields of electronics, automobiles,
20
machinery, earthquake engineering, industrial robotics, optics, chemicals,
semiconductors and metals. Japan leads the world in robotics production. The Japan
Aerospace Exploration Agency (JAXA) conducts space, planetary, and aviation
research, and leads development of rockets and satellites. In 2014 Japan employed
844,000 scientific personnel for R&D and produced 265.959 patents on technological
and natural science fields and Japanese scientists published 103.377 (2014) high
quality scientific papers in the research journals. There are approximately 780
universities in Japan, of which about 80% are private.
ranking is currently claimed by the University of Tokyo, which ranks 34th in the QS
World University Rankings 2016/17. Close behind are (joint 37th) and Tokyo
Institute of Technology (56th), with a further 36 Japanese universities ranked among
57,58
8. Research and Development Expenditure in China
Until 2015 China was the world's fastest-growing major economy, with growth
rates averaging 10% over the ten years but lately dropped to 6.5%. China is the
second largest economy after the USA and the largest manufacturing economy, as
well as the largest exporter of goods in the world. In the last decades China is the
world's fastest growing consumer market and second largest importer of goods and
net importer of services products. China1.371.220 and its
nominal GDP was 11.006 billion US$, but its GDP per capita was very low at 8.027
US$. Most of China's financial institutions are state owned and 98% of banking
assets are state owned. China is the world's largest producer and consumer of
agricultural products and there are some 300 million Chinese
Industry and construction account for 47% of China's GDP. China ranked in the
previous decade 3rd worldwide in industrial output after USA and the European
Union, but after 2010 China contributed to 20% of world's manufacturing output and
became the largest manufacturer in the world that year, after the US had held that
position for about 110 years. In 2009 China manufactured 13.8 million motor vehicles
thus becoming the number-one automaker in the world. Substantial investments in
China were made in the manufacture of solar panels and wind generators by a
number of companies, supported by liberal loans by banks and local governments.
China has budgeted $50 billion to subsidize production of solar power over the two
decades. As of 2011, China was the world's largest market for personal
computers.59,60,61
21
Figure 11 is increasing very fast mainly because costs are
very low comparatively with other countries. Companies are investing in China for
their manufacturing purposes as well as for the best suppliers in China.
[ http://www.china2west.com/china-suppliers-china-quality-manufacturers/ ].
Research and development (R&D) spending in China reached one trillion
yuan renminbi (RMB) (or US$ 164.1 billion) in 2012, about 1.98% of its GDP, viewed
as an important indicator of a country's investment in research, engineering
discoveries and innovation. According to the Global Competitiveness Report (by the
World Economic Forum), China's innovation capabilities ranking rose to 26th in 2012
from 48th in 2006. Measured by purchasing power parity, China's Gross Expenditure
on R&D (GERD) reached US$ 294 billion, behind the USA (GERD $454 billion) and
the European Union's R&D (US$ 341 billion) but ahead of Japan's (US$152 billion).
China's GERD (1.98%) more than tripled since 1995, surpassing the 28 member
states of EU.62,63,64
According to the OECD report, China is forecast to overtake the USA in R&D
spending by 2022. While China is ascending the global R&D ladder, it has work to do
on improving the quality of its science, technology and innovation products.
largest pool of human resources for
science and technology but the university graduates and doctoral-qualified share of
the population remains extremely low. The quality of Chinese science is still behind
the world average, which is reflected by citation indicators (research papers,
scientific reports, innovations, international patent, productivity) and the share of
PhDs among researchers. Chinese universities awarded over 27,000 doctorates in
science and engineering in 2011, more than the USA universities (24,792) 65
In the last decades China increased substantially the numbers of research
and technology institutions in universities and industrial enterprises. China attracted
substantial amounts of investment in research, innovations and industrial production
for the last decade. In 2015, China saw 453 organizations offering technology
22
transfer services and 30 organizations dedicated to technology property
transactions. China's gross technology trade amounts reached 983.5 billion yuan in
2015, up 14.7% from the year before. China moved up to 18th spot in 2015 in the
rankings of with innovative capacities. The rate of scientific and
technological contributions may increase from 50.9% to 55%. In 2015, China's gross
R&D expenditure amounts to 1.43 trillion yuan (registering a growth of 100 % (Wan
Gang, China's Minister of Science and Technology). To date, China has more than
2,300 business start-up platforms, 2,500 technology business incubators, 11 national
innovative demonstration zones and 146 national high-tech zones.66
9. Research & Development Expenditure in Germany
Germany is the 4th biggest economic world power and is considered as a
leading powerhouse for industrial R&D and high valued innovative research and
discoveries in German universities. Recently, Germany increased its R&D
expenditure to 3% of GDP, the highest in EU (5th among the developed countries).
Germany even beats the USA and is far ahead of France and UK, only South Korea
n in Germany. In 2012, public and private
spending on research projects was EUR 79.4 billion representing 2.98% of GDP. 67
Figure 12. The new research campus in Renningen is to become the new hub of the
engineering activities. The construction
costs of the new campus was around 160 million Euros. Volkswagen (VW) is the
single biggest industrial spender on R&D worldwide with US$17 billion on R&D in
2014. Second enterprise was Intel (USA) with US$13.6 billion for R&D.
In Germany, as in Japan and South Korea, more than 85% of R&D carried
out in the private sector relates to manufacturing industries. The figure in the USA is
less than 70%; in France it is just under 50% and in UK only 37%. R&D investment
within German industry is also concentrated relatively highly within certain sectors.
23
Vehicle manufacturing, computing, electronics and mechanical engineering account
facturing alone making up 31 %. Data
on R&D are provided by the Scientific Commission of Experts for Research and
Innovation (Expertenkommission Forschung und Innovation EFI).68
Germany is home to approx. 400 higher education institutions which offer the
entire range of academic disciplines: 110 universities 230
universities of applied sciences
Wissenschaften), and 60 art- music colleges (Kunsthochschulen/Musikhochschulen).
German universities have 380.000 academic staff (2014) and 2.8 million students of
which 12,3% are foreign students. The gross domestic expenditure on R&D in
universities was 14.9 billion euros (2014). The investment for R&D are 81% public,
14% from industry and 5% from international funds. The German Higher Education
Institution system is characterised by a close link between learning, teaching and
research.
(1/6 of doctoral degrees in German universities are given to international students).
German universities and research institutions have worldwide connections and a
reputation for top-class research. In 2014, there were 85,000 international
academics teaching and conducting research at German universities and non-
Wissenschaft weltoffen
2016 German Academic Exchange Service(DAAD) in
cooperation with the German Centre for Higher Education Research and Science
Studies (DZHW). Over 40,000 academics work in German HEI and 18,000
researchers from other countries (mostly supported by EU funding). 69
Excellence Initiative that provides additional support for R&D activities in various
disciplines at German universities. From 2006 to 2017 a total of 4.6 billion euros will
be invested to promote top-level research and to further enhance the international
competitiveness of German higher education and research. Within the framework of
the Excellence Strategy these measures will be continued on a long-term basis.
From 2018 onward, the Federal Government and the German states will yearly
provide 533 million euros in funding for a limited number of excellence universities or
university consortia and up to 50 excellence clusters. Universities and other HEI offer
a broad spectrum of research activities, including basic research and applied
research and development (R&D). It is estimated that 360,000
R&D researchers work at HEI and university hospitals. The largest share of R&D
expenditure in Germany, roughly 4.2 billion euros, goes to the fields of mathematics
24
and the natural sciences; they are closely followed by medicine and health research,
which have access to roughly 3.4 billion euros a year.69,70
10. Research & Development Expenditure in Greece
The Greek economy during the period 19812007 went through a period of
structural reforms and adjustments. The accession of Greece to the European
Economic Community (EEC) in 1981 and the accession to the European Monetary
Union (EMU) in 2001 were two major events. Positive growth rates were achieved in
the 1990s and in the period 2000-2008 with average annual growth rate of GDP
2.4% in the 1990s and 4.1% during the period 20002007. Greece is a developed
country with an economy based on the services (80%), the industrial sector is small
(13 %) and the agricultural sector ~6-7% (for 2015). Two important economic sectors
are Greek tourism and shipping. With more than 23 million tourists in 2015, Greece
was the 7th most visited country in the EU and 16th in the world. The Greek
Merchant Navy is the largest in the world. The economic crisis of 2009-2016 reduced
substantially the GDP of Greece, from the highest point of 354 billion US$ (2008) to
235 billion US$ (2014) to 195 billion US$ (2015). Despite the significant increase in
R&D expenditure in absolute terms, the R&D intensity has remained very low in
comparison to the EU average (more than 2%). In 2015 the investment was 1.683
million (euros) or 0.96% of GDP.
Figure 13. Eurostat statistics for Greece in the period 2011-2014 with the effects of
the economic crisis. The GDP of Greece from 207 billion euros (2011) decreased to
177 billion to 2014. The R&D expenditure increased slightly from 1.391 millions
(2011) to 1.481 million (euros) in 2014. The % of GDP expenditure for R&D
increased from 0.67% to 0.84% because of the fall of GDP (by ~30 billions).
25
Most of the funds (2015) were for the state budget and the EU. Government
investment for R&D (2015) was 52% of the total amount, at 887 million euros. The
expenditure was boosted by the funds of the EU under the ESPA programme (385
million euros for Greece in 2015). The ESPA or NSRF (ESPA =
, or National Strategic Reference Framework, European
Union) was a very promising financial fund programme for all European countries but
it proved very important in Greece. For example, a total of 19 billion euros were
approved for Greece by for the 7 years of 2014-2020 period. The funds will be
distributed for manufacturing, tourism, energy and the agricultural and food industry.
Other sectors in ESPA were research and technological development, aquaculture,
specialty health services, creative development of cultural heritage, modern Greek
creativity, pharmaceuticals industry, computer science, communications, waste
management, trade, freight services [See more at:
http://greece.greekreporter.com/2014/12/22/ nsrf-e19-billion-for-greece-in-the-2014-
2020-program/#sthash.ikYx2mHM.dpuf].
[** 2014-2020,
,
(
CO2, .)].
The second most important contributor to R&D expenditure (2015) in Greece
is the private sector with 534 million euros (or 32% of total) and 2,4 million euros
from nonprofit organizations. Research found that the technological and research
innovation network in Greece appeared to be built around a few highly connected
central actors, which were the leading and more innovative Greek firms and the most
reputed academic institutions and research centres (Demokritos, National Research
Foundation, etc). The majority of Greek firms had very low or no systematic
participation in R&D projects.71,72
In 2010, under the National Strategic Framework for Research & Innovation
(2014-2020) Greece established the National Council for Research & Technology
(NCR&T) ( & , 2010-2013) to advise
the government on R&D and identify areas where critical mass exists to enable rapid
progress and innovation, to promote and strengthen connections of the research
establishment with the entrepreneurial Greek community. Members of NCR&T were
well known professors from Greek and foreign universities: Prof. Stamatios Krimigis
[(Johns Hopkins University, USA and Academy of Athens (Chair)], Prof. Chrousos G.
[Medical School, University of Athens, (vice Chair)], Prof. Dafermos C [Brown
University, USA (member)], Prof. Kevin Featherstone [London School of Economics,
26
UK (member), Haliassos M (Goethe University, Frankfurt), Iliopoulos J (Ecole
Normal Superiere, Paris), and others].
The Executive Summary of the NCR&T for the National Strategic Framework
for Research & Innovation identified, strengths and weaknesses of the R&D
enterprise, while some areas where critical mass exists to enable rapid progress and
innovation, promote and strengthen connections of the research establishment with
the entrepreneurial community, and allocate investments in a fair and competitive
manner. The NCR&T identified the development of a Strategic Plan as an important
priority (2010) and a draft plan was completed in the fall of 2013. The principal goal
of the strategic plan was the identification of areas of strength and excellence that
can be further advanced and can become engines for progress and growth. The
NCR&T found
1. Areas of traditional strength (examples: shipping, tourism, energy).
2. Areas of recent successes in terms of critical mass and on-going activities
(examples: IT, pharmaceuticals, engineering, energy).
3. Areas of high added value and able to deliver major economic benefit and
employment prospects (examples: energy, nutrition food sciences).
4. Areas of major national interest (examples: food production, archaeology,
culture, energy, defense, biomedicine).
The NCR&D set as a first priority the increased investment of R& from the
current 0,6-0,8% of GDP to 1.5% of GDP by 2010. The NCR&D concluA
sustainable long-term growth path for Greece will require investment in the creation
of knowledge and the stimulus to innovation. Reviving GDP via a consumption-led
boom will not meet the new European and international challenges that Greece
faces nor represent the necessary break with past vulnerabilities. This National
Strategic Framework for Research and Innovation (,
) must be seen as an integral part of a new
growth model that is why NCR&T (,
) advances the need for a substantial increase in the share of GDP
devoted to R&D in the 2014-2020 period, together with a range of targeted initiatives
for research and innovation. This is not a matter of ideals, but rather of practical
necessity: there is ample economic evidence of the role of investment in R&D as a
key driver to sustainable, long-term growth. Over the last decade, Greece has been
an outlier from this equation of R&D investment and overall growth: graph 2.1, for
example, shows the levels of R&D investment amongst our EU partners and those of
GDP growth in 2010.73
27
11. Industry-University Partnerships in R&D. Are they
Important for Innovation and Technological
Achievements?
Research and Development (R&D) is linked to new technological practices
and innovation of new products, processes and methods. Innovation combines
changes in technology, business models, organization, and in a competitive
economy, no business and technological enterprises can survive long term without
updating its products and services or the ways in which they are produced or
delivered. Science-
to innovate, but there is no linear route from advanced research to innovation. The
time from patented invention to a useful product took in most cases long time. For
example, the float glass process was invented in 1902 and the commercial material
produced in 1943, the fluorescent lighting was invented in 1901 and the product in
1938, the helicopter in 1904 and produced in 1936, the jet engine in 1904 and 1936,
the tape recorder took 39 years to be produced (invented 1898), the radio took 18
years to produce, the television 13 years, and the synthetic detergent 42 years.74
Most of the advanced industrial firms invest 5-15% of their revenue every
year for R&D expenditure. Also, it is well known that research-based competence
and cooperation with academic research can contribute in many innovation
processes by adding new competence, identifying new areas of knowledge that
present future technological opportunities, or by identifying and solving crucial
technological processes and fundamental scientific problems.75
The biggest industrial spenders on R&D in 2014 were Volkswagen
(VW, Germany) with US$ 17 billion expenditure on R&D (in 2014), second was Intel
(Santa Clara, California, U.S.) with $13.6 billion, third was Samsung (South Korea
2013): 13.4 US$ billion (6.4% of revenue), fourth was pharmaceuticals company
Roche (Switzerland): $11.9 billion, fifth was Microsoft (U.S.): $11.9 billion, sixth was
the IT company Google (U.S.): $10.9 billion, seventh the consumers company
Johnson & Johnson (USA, -largest consumer health company):
$10.3 billion, and then pharmaceuticals company Novartis (Switzerland): $10 billion,
Toyota (automobiles, Japan) 9.1 $ billion (3.5% of revenue), pharmaceuticals and
chemicals company Merck (New Jersey, USA) 7.5 $ billion (17% of revenue,
2013).76
Universityindustry links and their impact on innovation processes have been
a longstanding object of analysis in various scholarly communities in management
studies, the economics of innovation, industrial organization, the sociology of science
28
and science studies, and science and technology policy. Factors such as changing
legislative environments, the growing number of government initiatives to promote
translational research and publicprivate research partnerships as well as increasing
policy pressure for universities to help improve national economic competitiveness)
have contributed to a growing involvement of universities with industry. This is
indicated by various trends: an increasing patenting propensity by universities,
growing university revenues from licensing increasing numbers of university
researchers engaging in academic entrepreneurship a growing share of industry
funding in university income and the diffusion of technology transfer offices, industry
collaboration support offices and science parks.77,78
Factors such as changing legislative environments, the growing number of
private research
partnerships as well as increasing policy pressure for universities to help improve
national economic competitiveness have contributed to a growing involvement of
universities with industry. This is indicated by various trends: an increasing patenting
propensity by universities, growing university revenues from patent licensing,
increasing numbers of university researchers, academic entrepreneurship, a growing
share of industry funding in university income and the diffusion of technology transfer
offices, industry collaboration support offices and science parks.79,80,81,82
Research papers evaluated the importance of innovation collaboration
between university and industry. The data showed that there were differences
between manufacturing and service firms and between small firms and larger firms.
On balance, robust evidence was found that university collaboration positively
influences innovation sales as well as the propensity to apply for patent for
manufacturing firms with more than 100 employees.83 An empirical study analyzes
2010 data for Spanish public universities and their R&D activities. Results indicated
that successful R&D contracts depend on university and Technology Transfer
Offices characteristics, and the university's location. The study also presented a set
of managerial implications for improving the establishment of universityindustry
partnerships to become more affective and promote technological innovations.84
In September 2015 Thomson Reuters published its Ranking of Innovative
Universities (RIU). Covering 100 large research-intensive universities worldwide,
which have very innovative technological laboratories and partnerships with
industry. First on the top was Stanford University (U.S), MIT (Massachusetts
Institute of Technology) was second and third was Harvard University (Cambridge,
MA, US). Harvard University is the oldest EHI in the U.S., and has produced 47
Nobel laureates over the course of its 380-year history. Studies projected these
29
partnerships and the outcome by various types of metrics available. One metric in
particular was universityindustry co-authored publications (derived from the
bibliometric analysis of 750 research universities). The analysis of all data showed
that universities-industry R&D increased university competitive ranking in innovation
and technological achievements.85,86
Although Stanford is 9th in the list of U.S HEI for R&D expenditure, is leading
the Reuters Top 100 WorldInnovative Universities. The Stanford University is
located in the heart of California's Silicon Valley and has earned a reputation as a
hotbed for innovation in computer hardware and software: faculty
members (professors, researchers, engineers) and alumni (older graduates who
work in innovative technological enterprises) have founded some of the biggest
technological companies in the world, including Hewlett-Packard, Yahoo and
Google. A 2012 study by the university estimated that all the companies formed by
Stanford entrepreneurs generated total global revenue of $2.7 trillion annually. 86
Outside the U.S. half of Reuters Top 100 Innovative Universities are located
in Canada, Europe or Asia (China, South Korea and Japan). Japan is home to 9 of
the most innovative universities - more than any other country except the U.S. Also,
South Korea performs well on the list: the Korea Advanced Institute of Science &
Technology (KAIST), is the only non-U.S. university to place in the top No. 10.
According to the list, the most innovative university in Europe was Imperial College
(one of the University of London institutions, ranked No.11). The No. 16 was
Katholieke Universiteit Leuven (Catholic University at Louvain, Belgium) and at No.
25 the University of Cambridge. Elsewhere in Europe, Switzerland with 3 universities
on the list, has more innovative universities (on the top 100) per capita than any
other country in the world.85.86
Some of the universities in the Reuters 100 top innovative list are (for 2015) :
1.Stanford, 2. MIT, 3. Harvard, 4. University of Washington, 5. Univ of Michigan, 6.
Northwestern Univ., 7. Univ. of Texas System, 8. Univ. of Wisconsin System, 9.
Univ. of Pennsylvania, 10. Korea Advanced Institute of Science and Technology
(KAIST), 11. Imperial College, Univ. of London,,16. KU Leuven (Belgium), 18. Osaka
University (Japan), 22. Kyoto University (Japan), 24. Univ. of Tokyo (Japan), 25.
University of Cambridge, 27. .. 31. Seoul
National University, .37. Swiss Federal Institute of Technology Zurich, 40. University
etc].85,86
The full list of the 100 most innovative institutions broken down by country
includes 46 universities from the United States;, 9 from Japan; 8 each from France
and South Korea; 7 from Germany; 5 from the United Kingdom; 3 each from
30
Switzerland, Belgium, and Israel; 2 each from Denmark, China, and Canada; and 1
from both Singapore and the Netherlands. All of these universities produce original
research, create useful technology, and stimulate the global economy.85
The Reuters Top 100 most innovative universities for 2016 published in
September 2016 and has slightly different ranking for some of the universities, but
also big changes for KAIST, KU Leuven and Pohang University in S. Korea.86
The 2016 list: 1.Stanford, 2. MIT, 3. Harvard Univ., 4. Univ. Texas System, 5. Univ.
Washington System, 6. KAIST (S. Korea), 7. Univ. Michigan System, 8. Univ. of
Pennsylvania, 9. KU Leuven, 10. Northwestern Unv., 11. Pohang University of
Science and Technology (POSTECH, S. Korea). 12. Imperial College London. 86
The big change from the previous year 2015 (elevated to No. 11) is the
Pohang University of Science & Technology (POSTECH) in South Korea. It is a
private research-oriented university with unique ties to industry. Its 400-acre
university campus is located only a few minutes away from the big industrial
enterprise of POSCO headquarters (a multinational steel-making company).
POSTECH's revenue from research grants and contracts was more than US$149
million in fiscal 2015. The university's 72 research units include the Institute for CO₂
reduction and Sequestration, the Intelligent Robotics Laboratory and the Machine
Learning Center. The Pohang Accelerator Laboratory has the only synchrotron
radiation accelerator in Korea.
The well known weekly Times Higher Education (Supplement) publishes
every year, in collaboration with Elsevier, a list of the world of the best and most
innovative universities. The list of university innovations and inventions are
calculated taking into account four indicators: the ratio of papers co-authored with
industry, the proportion of papers cited by patents, the quantity of research income
from industry and the proportion of research income from industry.87
There are great differences among universities in developed countries for
industry-university partnerships and funding for R&D from state and private
enterprises. In China, for example, universities receive only 8% of national research
funding directly, but they also work closely with government-controlled enterprises
In China, academics are given a
bonus salary for patenting, even if it is not commercialized. Researchers in Europe
An example,
Southwest Petroleum University has the highest percentage of papers co-authored
research, produces the highest proportion of papers that have been cited by patents.
31
the largest quantity of research income from industry, and the Siberian State
University of Geosystems and Technologies has the highest proportion of income
from industry sources. Eindhoven University of Technology, which
produces the seventh-highest proportion of papers co-authored by industry,
according to the innovation indicators, also refuses to conduct research with industry
that cannot be published.
than that of many institutions. Of its 300 professors, half work full time and are
employed by the university. The other half are part time and about 80% of staff in
this group are employed by industry, splitting their time between working at the
university and working in business. The university agrees to fund half the cost of
long-term research programmes with industry, as long as the academics involved
can secure the rest of the funding from business. One-
budget comes from industry or European funding, with the rest from government.88
some extent, reflected in
the broader nati Global Competitiveness
Report 2015-2016 found Switzerland, Finland and Israel are the 3 most innovative
countries in the world, U.S., Japan and Germany ranked No. 4, 5 and 6th. Sweden,
Netherlands, Singapore and Denmark (7, 8, 9 and 10) Taiwan is No. 11 and United
Kingdom No. 12. 89
Figure 14. The World Economic Forum, using data for R&D expenditure of GDP, the
university-industry relationships for R&D and competitive ranking in technological
discoveries and innovations for 2015-2016.
32
Another Global innovation index among industrial countries takes into
account investments in R&D, quality of universities, collaboration among universities
and industry, publications of research papers in high impact journals, patent filings
and successful applications for economic growth. The innovation Inputs are:
Institutions (political, regulatory, business environment), Human capital and research
(education, tertiary education, R&D). Infrastructure (ICTs, ecological sustainability),
Market sophistication (credit, investment, trade), Business sophistication (knowledge
workers, innovation linkages, knowledge absorption). Innovation Outputs taken into
account are: Knowledge and technology outputs (creation, impact and diffusion of
knowledge), Creative outputs (intangible assets, creative goods and services, online
creativity). With these criteria, the collaboration of Cornel University, World
Intellectual Property (WIPO) and INSEAD Knowledge, The Business School of the
World ration des Affaires) has produced an
authoritative and balanced list of The World’s Most innovative Countries for 2016.90
The List for 2016 was: 1. Switzerland (also, number 1 in 2015), 2. Sweden, 3.
United Kingdom, 4. United States of America, 5. Finland, 6. Singapore, 7. Ireland. 8.
Denmark, 9. Netherlands, 10. Germany, 11. Republic of Korea, 12. Luxembourg, 13.
Iceland, 14. Hong Kong (China), 15. Canada, 16. Japan, 17. New Zealand, 18.
France, 19. Australia, 20. Austria, 21. Israel, 22. Norway, 23. Belgium, 24. Estonia,
25. China. [ http://www.wipo.int/pressroom/en/articles/2016/article_0008.html ].
Studies showed that innovation in the three sectors of the economy
(agriculture, industry and services) is critical to raising long-term economic growth.
Worldwide, in the current economic climate it is imperative to discover new energy
sources, environmentally friendly processes for sustainable development, and
uncovering new sources of growth and leveraging the opportunities raised by global
innovation. Sustainable development requires radical and systemic innovations
because the world is facing a significant number of long term challenges including
climate change, population ageing, desertification, water scarcity, pollution, and
critical raw materials scarcities. At the same time, the international economic context
has moved to a new, multi-polar era in which the rules of the competitive game are
being reset. The policies that have ruled international competitiveness are rapidly
changing in the last decade. The financial crisis that started in 2008 has made it
abundantly clear how short term-profitability mindsets and related strategies, policies
and actions of individuals and individual firms can cause global economic, ecological
and ethical crises.91
33
Conclusions
Empirical evidence has suggested that Research and Development (R&D)
expenditure and investment in the high technological sectors is positively related to
economic growth of a country. High-technological industrial R&D spending has a
strong positive effect on Gross Domestic Product (GDP). Quality of university
research, investment in R&D and entrepreneurial initiatives can play a very important
role. University-industry relationships can promote collaborative actions, extensive
research discoveries and development of new and innovative products. In the last
decades many governments have vastly increased their economic and policy
commitments to innovation with significant impacts on levels of R&D expenditures of
their countries. Since the mid-90s, along with the information technology revolution,
high-technology industry is playing a key role in promoting economic development.
Innovation is regarded as a major force in developing the positive relationship
between high-technology goods and economic growth. Sustainable economic growth
in the last decade has been expanded from the U.S.A, Canada, Western Europe,
and Japan to the newly industrialized economies of East Asia (China, India, South
Korea, Taiwan, Indonesia) and Latin America (Brazil, Mexico, Argentina) countries,
and has contributed greatly to their national economic growth.
Recently, (EurActiv 14.11.2016) Carlos Moedas, Commissioner for
Research, Science and Innovation in EU countries, praised the increased spending
turning euros into knowledge, it has not been so successful at turning knowledge into
euros. So we need to get better at translating excellent research into new products,
processes and services that boost growth and jobs. The EU still has a considerable
performance lead over many other countries, as attested by the European Innovation
Scoreboard 2016 and is catching up with Japan and the USA. The 4th industrial
revolution is driven by technology. But R&D is just one side of the coin. The right
framework conditions must accompany any financing and investment in R&D. This
means resolving new regulatory challenges and implementing legislation related to
issues such as confidentiality of data, access to systems and protection against
cyberattacks. The remaining regulation must remain light and easy, to make
investment attractive for venture capital.92
34
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