Never mind the quality feel the width: University–industry links and government financial support for innovation in small high-technology businesses in the UK and the USA (journal article)
by Andy Cosh and Alan Hughes
from Journal of Technology Transfer, Vol 35 No 1 Feb 2010, pp. 66-91
"In this paper we use a size and industry matched sample of over 1,900 UK and US businesses for the period 2004–05 in the manufacturing and business services sectors to analyse the relative “strength” of the university–industry ecosystems in which these firms operate in the two economies. Our analysis shows that in both countries universities per se play a quantitatively smaller role as a source of knowledge for business innovation than either the business sector itself or a variety of organisations intermediating between the university and business sectors. Our analysis reveals a much more diffuse university–industry ecosystem in the UK in which a higher proportion of businesses claim links external to themselves in their pursuit of knowledge for innovation and a higher proportion report directly connecting with universities. US firms are more likely to access knowledge through a combination of business and intermediary sources and are less likely to have established formal collaborative or partnership agreements in the 3 years prior to the survey. We also find, however, that a higher proportion of US firms place a very high value on the connections they have with universities and are much more likely to commit resources to support such innovation related university interactions. A similar pattern of diffuse but weaker links characterise the supply of public sector financial assistance for innovation in our sample firms. UK firms are more likely to be in receipt of assistance, but receive far less per firm in absolute terms and relative to their R&D expenditures. It appears that the UK university–industry ecosystem is characterised by a greater width than quality of interaction. "

Adverse selection and financing of innovation: is there a need for R&D subsidies? (journal article)
by Tuomas Takalo and Tanja Tanayama
from Journal of Technology Transfer Vol 35 No 1 Feb 2010, pp. 16-41
"We study the interaction of private and public funding of innovative projects in the presence of adverse-selection based financing constraints. Government programs allocating direct subsidies are based on ex ante screening of the subsidy applications. This selection scheme may yield valuable information to market-based financiers. We find that under certain conditions, public R&D subsidies can reduce the financing constraints of technology-based entrepreneurial firms. First, the subsidy itself reduces the capital costs related to the innovation projects by reducing the amount of market-based capital required. Second, the observation that an entrepreneur has received a subsidy for an innovation project provides an informative signal to the market-based financiers. We also find that public screening works more efficiently if it is accompanied with subsidy allocation. "

Influence of research funding and science policy on university research performance: a comparison of five countries (journal article)
by Laura Himanen, Otto Auranen, Hanna-Mari Puuska, Mika Nieminen
from Science and Public Policy, Volume 36, Number 6, July 2009 , pp. 419-430(12)
"The ability of universities to efficiently produce high-standard knowledge has become an important goal in science policies of many developed countries. Thus, many countries nowadays steer universities based on performance monitoring and competition. This article analyzes the connection between the competitiveness of the university funding environment and research performance in five OECD countries in 1987-2006. Besides funding, other science policy factors are analyzed using the framework of four state steering models. Results indicate that the university funding environment has become more competitive in all the compared countries, but the extent and pace of this development varies. Countries also differ in relation to steering models but all have employed policy elements typical of at least two models. In terms of competitive funding environment and research performance, there is no straightforward relationship between the two. With reference to the state steering models, the most traditional model which emphasizes university independence from the state seems to be the most beneficial to research performance. "

Picking winners is government's real task (journal article)
By Michael Vitale
From ATSE Focus, June/July 2009
"Objections to picking winners are generally either philosophical or practical - both lack factual support and fly in the face of actual government practice. The goal of government support for commercial R&D is to encourage projects with large social benefits but inadequate returns to private investors, and around the world many governments offer such support.
There have been relatively few rigorous attempts to demonstrate the benefits of such support, and there is an ongoing dispute about 'picking winners' - although theoretical objections to that approach rarely seem to stand in the way of accepting cash when it is offered, even if not all the companies shall have prizes. "

Hunting the snark: some reflections on the UK experience of support for the small business sector (journal article)
by Alan Hughes
from Innovation: management, policy and practice, Vol 11, No 1, April 2009, pp.114 - 134
"The UK has experimented with a wide range of policies to promote small and medium-sized businesses (SMEs). Recently there has been a major overhaul of SME support polices in general, and of science and innovation support in particular. So it is a convenient time to reflect on the emerging lessons from this experience."
This journal is in the library. Please contact us for a copy of the article.

The Spontaneous Order of Science
Policy, Vol 22 No 4 Summer 2006/2007
This is an 8 page excerpt from the book The Australian Miracle: An Innovative Nation Revisited, by Thomas Barlow.
"Among the biggest problems any country, and, in particular, any government, faces, is where
to invest in order to maximise the likelihood of innovation."