Public-Private Innovation: Mediating Roles and ICT Niches of Industrial Research Institutes

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ABSTRACT

Innovation processes involve diverse sets of organizations including universities, private firms, corporate research labs and public research institutes. Collaborative forms of knowledge production and innovative activity enable actors to reduce risk, specialize, and take advantage of knowledge internal and external to the own organization. This paper discusses interactions and collaborations between public and private sector innovation. This is done through an analysis of semi-public research institutes in Sweden and their roles as arenas for R&D processes involving industry, university and government in terms of funding, research and public-private innovation. Particular attention is paid to technological niches of research institutes and utilization of research findings from collaborative R&D. The results show that institutes occupy specific niches which influence their ways of transferring knowledge. It is argued that diversity among R&D performers as well as funding opportunities is paramount for innovation systems to thrive.

Keywords: Absorptive capacity; basic science; industrial research institutes; innovation systems; intellectual property rights; knowledge transfer; technological niche

INTRODUCTION

In the Swedish institutional landscape industrial research institutes serve as an arena for collaborative research and development (R&D) activities between university and industry. The research is supported by industrial funding, competitive research funding from government agencies directed towards specific research programs in targeted areas and governmental core funding dedicated to broadly defined long-term capability development. Swedish research institutes are active in a wide array of areas such as environmental technology and management, information and communication technology (ICT), food production and processing, paper and pulp, composite materials, and other fields considered relevant for the Swedish economy and innovation potential. Their general purpose lies in stimulating knowledge transfer while simultaneously both serving industry and having public sector relevance. This paper examines the issue of public sector innovation through the lens of interaction between public and private sector innovation in the context of industrial research institutes. In particular, examples of different roles and strategies of Swedish institutes active in the area of ICT are discussed along with consideration of the niches of specialization of the research institutes.

Industrial research institutes are a group of research and technology organizations (RTOs) which can be partly or totally publicly financed and 'contribute either directly or indirectly to systems of innovation' (Preissl 2006). In the terminology of innovation systems, research organizations that serve industry and public sector interests have both intentional and unintentional technological spillovers (Carlsson et al. 2002: 234). In practice, these spillovers can be inventions in terms of physical artefacts but also knowledge and skills embodied in researchers and engineers that move across organizational boundaries. This is also referred to as the human capital model of innovation, often emphasized in studies evaluating linkages and value arising from interaction between university and industry (Faulkner and Senker 1994). As important for this model as large and comprehensive research universities has been the existence of a number of big private and public firms with close relations to the state, infrastructures and other vital systems (as described in Fridlund 1999). Amongst these firms in Sweden are ABB (power and automation technologies), Ericsson (telecommunications equipment), Saab (military defense technologies), SJ (Swedish train operator), Posten (Swedish Post Office), Telia (telecommunication services) and Vattenfall (electricity and heat provider), all with extensive relations to a symmetrically organized range of public agencies, such as FMV (Swedish Defence Material Administration), and government departments for vital infrastructures such as railways, roads, telecommunications, energy and defense. …