Knowledge that Transforms

The past decade has witnessed a resurgence in innovation awards, in particular of grand innovation prizes (GIPs) which are rewards to innovators developing technologies reaching performance goals and requiring breakthrough solutions. GIPs typically do not preclude the winner also obtaining patent rights. This is in stark contrast with mainstream economics of innovation theories where prizes and patents are substitute ways to generate revenue and encourage innovation. Building on the management of innovation literature which stresses the difficulty to specify ex-ante all the technical features of the winning technologies, we develop a model in which innovative effort is multi-dimensional and only a subset of innovation tasks can be measured and contracted upon. We show that in this environment patent rights and cash rewards are complements, and that GIPs are often preferable to patent races or prizes requiring technologies to be placed in the public domain. Moreover, our model uncovers a tendency for patent races to encourage speed of discovery over quality of innovation, which can be corrected by GIPs. We explore robustness to endogenous entry, costly public funds, and incomplete information by GIP organizers on the surplus created by the technology.

This paper studies the interplay between two defining features of technology-based firms: licensing as a commercialization strategy and the reliance on equity financing. Within the context of an IPO, we argue that the technology commercialization strategy of a firm going public affects information asymmetries and, therefore, IPO underpricing. In particular, we theorize that underpricing will be higher when a firm’s technology commercialization strategy is more based on licenses. We also posit that the size of the patent portfolio will mitigate this effect. Our results from a sample of 130 IPOs in the U.S. semiconductor industry confirm these predictions.

In the UK, higher education is increasingly a marketised service sharing many characteristics with other professional services such as legal, medical or financial services. With marketisation comes competition, and the need for Higher Education Institutions (HEIs) to develop and maintain strong programmes to attract and retain high-class faculty and fee-paying students. Here, we consider the drivers of programme innovation − i.e. the introduction of new programmes and the withdrawal of existing programmes − in UK universities. Our focus is on undergraduate programmes as these account for three-quarters of all student enrolments. Using panel data for UK universities we identify significant resource, internationalisation and business engagement effects. Financial stringency and more extensive international market engagement both encourage programme introduction. Collaboration with businesses has offsetting effects depending on the nature of the interaction. The results have both strategic and systemic implications.

Research and Development (RD however, we find pockets (specific countries and certain groups) generating positive spillovers. A carefully choreographed policy focusing on such pockets might be fruitful. We hope that this study (i) complements the micro literature, (ii) furthers the existing macro literature and (iii) provides some new policy insights. Our results are robust to a range of robustness checks, including the estimators – a cointegration approach versus a simple fixed effects OLS estimator.

International research collaborations are widespread, but few have studied those that reach the scale and scope of what we call international university research ventures (IURVs). In an IURV, a university sets up a formal and organizationally consolidated research relationship in a foreign country. This paper puts forward an institutionalization framework to explain the development of IURVs with different forms. Five case studies are presented of IURVs in the countries with the largest number of IURVs involving US universities: China and Singapore. The five cases are examined relative to the elements of the institutionalization framework: nominal, leadership, administrative support, multi-year funding, research targets, formal researcher-to-researcher exchange, visibility, evaluation, and supporting characteristics. The results show that the emergence of IURVs depends on the specific connections between the role of government and the availability of resources with the realization of mutual benefits, leading to different patterns of institutionalization. This variation is in part a function of the degree of involvement of the government agency or department providing the funding for the IURV, which influences retention of the knowledge produced by the IURV in the region through institutionalized mechanisms as well as the development of scientific and technical human capital in the host country. Institutionalization is not a benefit without limits; nevertheless, an institutionalized structure may be necessary if ambitious research-driven goals are to be achieved.