(1) University Technology Transfer Theory
At the regional level, universities are engines of regional economic growth, because they can commercialize their intellectual property through technology transfer (Link and Siegel, 2007). According to Link and Siegel (2007), the major university technology transfer commercialization mechanisms are the following:
Licensing agreement between the university and private firms
Research Joint Ventures(RJVs)
University-based start-ups
In many countries, national governments have provided support through:
Legislation to facilitate technological diffusion from universities to firms
Collaborative research
Subsidies for RJVs involving universities and firms
Shared use of expertise and laboratory facilities
Along these lines, national, state, and regional government authorities have also supported science parks and incubators.
(2) The institutional contexts of university technology transfer
University technology transfer is usually done through licensing and new business formation. The institutional structure, organizational capability, and incentive systems to encourage participation by researchers are the key success factors of a
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university‘s licensing program. Specifically, informational and cultural barriers existed between universities and firms, especially for small firms. Clarke (1998) found the importance of institutional norms, standards, and culture. He concluded that an entrepreneurial culture at those institutions was a critical factor in their success.
Franklin, Wright, and Lockett (2001) observed UK universities regarding entrepreneurial start-ups that emerge from university technology transfer. They distinguished between academic and surrogate (external) entrepreneurs and old and new universities in the United Kingdom. Old universities accept entrepreneurial start- ups because they have excellent and established research reputations, and world- class professors. New universities are not good at academic research and they do not accept entrepreneurial easily. The most significant barriers to the adoption of entrepreneurial –friendly policies are cultural and informational. The old universities have the most favourable policies according to external entrepreneurs. In China the link between Universities and manufacturers is not well developed at all.
(3) Industrial Linkages with universities
The innovative activities in business firms have become more professionalized, and university research more specialized. Universities play an important role in providing trained researchers for a company‘s innovative activities. Firms also realize that universities can provide them very effective processes, and they also can benefit from long-term research programmes in universities which help their current and future activities.
Companies and universities carry out different functions in the innovation process (Pavitt, 2005). Firstly, university scientists make discoveries through fundamental research; then business companies turn the discovery into a marketable product or
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service that can generate commercial profits. So the company may cooperate with the university scientists to exploit it. This exists extensively in the chemical industry, and in biotechnology and pharmaceutical industries.
Secondly, the trained researchers are familiar with the latest research techniques; they are also becoming part of worldwide research networks in their research field. These are very useful for the company. Martin and Salter (1996) state that many industrialists think the above are the greatest benefits provided by the universities. There have less direct applications in mechanical engineering than research in chemistry, but universities still can provide mechanical engineers trained in simulation and modelling techniques that are vital in design and development of automobiles and aero-engines.
Thirdly, there are some complementary interactions between companies and universities. The collaboration process links the university research with industrial innovation. It includes direct industrial funding of university research, university- based consultants, and the exchange of researchers between industry and academia.
As Pavitt (2005) emphasises, there are three features of university-firm links:
The importance of personal and often informal contacts. Informal relationships provide the practitioners with entry points into the academic world. Through informal relationships, they can know the most important developments and the relevant people to interact with. The researcher can also know about the industry‘s current problems and become aware of the company‘s leading edge technology. As Hicks (1995) mentions, industrial publications in scientific
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literature can be signals to the wider academic community of fields and problems of industrial interest that benefit from more intense personal exchanges.
Much university research that is useful to industrialists is also valued by the academics. Some academics separate industrially relevant applied work and fundamental research. This is the reason why some universities make technology transfer into a Business Company. Mansfield (1995) and Narin et al (1997) suggest that most industrial research is publicly funded, researched in universities and published in top academic journals.
The University also indirectly contributes to the industry. Because the researchers in the university train the graduates, the graduates learn research methods. When they are employed by the business company, they can bring their new theoretical insights, new techniques, and new skills to the industry, and all these skills cannot be obtained from industrial firms alone. The graduate will work either for an industrial company or for consultancies which provide the innovation-supporting services to industrial companies.
Some fields of university research, including many fields of biotechnology and some of software provide an increasing number of inventions with potential industrial applications. University licensing activity in university-founded spin-off firms and private funding of university research are increasingly common nowadays.
University-industry relationships are vitally important. Business managers always complain that universities extend the timeline by ignoring the urgent deadlines of industry. Companies argue that universities should not be nominated as the leader of many important projects as they are not generally time aware. However universities
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feel that they are often treated as cheap performers in industry projects. The government and research councils encourage ‗technology transfer‘ between universities and industry. As Salter et al (2000) mention in the worst situation, some industry programs only focus on the short-term requirement of industry, but should use the long-term quality of universities‘ basic research, graduate training, and experimentation more extensively. Technology transfer programmes are usually based on innovation in universities, in which the university does the science or basic research and generates innovation for industry to take up in its engineering, manufacturing, and marketing activities.