Content provided in partnership with

Research and technology outsourcing and innovation systems: An exploratory analysis

Industry and Innovation, Jun 1999 by Howells, Jeremy

INTRODUCTION

Most Popular Articles in Business: Research and Markets : Tesco Plc - SWOT Framework Analysis; Do Us a Flavor - Ben & Jerry's Issues a Call for Euphoric New Flavors; eBay made easy: ready to start an eBay business? These 5 simple steps will ...; Katrina's lawsuit surge: a legal battle to force insurers to pay for flood ...; Wal-Mart's newest distribution center opened last month near the southwest ...; More »

This paper is based on a wider, ongoing research project investigating the process of research and technology outsourcing and externalization.1 This paper is exploratory in nature, in that it seeks to posit the process of research and technology outsourcing in relation to the wider innovation process and to investigate the growth of the phenomenon within a systems framework. To reflect this, the paper is in three main parts. The first section outlines the growth and dynamics of the outsourcing process in relation to research and technological activities using material based on Howells (1999a). Developing some of these initial research findings, the paper then places the process of research and technology outsourcing within the wider framework of innovation outsourcing and externalization. The final section of the paper reviews the implications of research and technological outsourcing and innovation outsourcing more generally within the wider conceptual and analytical context of systems approaches to innovation. These approaches centre on the "systems of innovation" model based originally on the "national systems of innovation" (NSD studies developed by Freeman (1987, 1988), Lundvall (1988, 1992), Nelson (1992), and Nelson and Rosenberg (1993), but also includes the "technology system" approach developed by Carlsson (1995). The term "innovation system approaches" is used throughout the text to denote both the "systems of innovation" (both national and sectoral) and the "technological system" models.

The paper seeks to explore in detail the following key issues. Firstly, it aims to emphasize the significance and growth of research and technology outsourcing in knowledge-based economies. Secondly, it highlights the fact that research and technology outsourcing is not a new phenomenon, being the dominant form of innovation activity up until the end of the nineteenth century, then gradually declining throughout the first half of the present century before beginning to expand again in recent decades. Thirdly, the paper explores existing theoretical and conceptual interpretations of the factors behind the existence of research and technology outsourcing. More contentiously the paper then goes on to suggest that research and technology outsourcing is part of a wider phenomenon within knowledge-intensive economies reflecting the growing importance and changing role of service-based firms within modern innovation systems. Lastly, the paper takes up this theme more centrally and explores research and technology outsourcing within the context of the systems of innovation approach. It is stressed here that this paper is discursive and exploratory in nature.

The discussion is primarily based on secondary material, although it is imbued with insights gained from preliminary discussions with directors, managers and other senior staff from 20 UK organizations which were purchasers (P) and/or suppliers (S) of research and technology. These interviews formed part of a pilot survey carried out between March 1997 and November 1998 which represented the first stage of an ongoing longer-term study of UK research and technology outsourcing. The companies and organizations involved at this stage included the following: AMTRI [advanced machine services and manufacture] (S)*;2 BICC [cable manufacture and construction] (P); British Telecommunications [telecoms services] (P); CRL [electronics R&D services] (S)*; CRT [refrigeration technology] (S)*; General Electric Company (P); Imperial Chemical Industries (P&S); LGC [formerly Laboratory of the Government Chemist] (S)*; MIRA [Motor Industry Research Association] (S)*; Nortel [telecoms equipment manufacture] (P&S); Pilkington [glass manufacture] (P); Quintiles [contract research and drug trialing] (S); Reuters [news and electronic media] (P); Riccardo [vehicle consulting and research] (S); SIRA [measurement and instrument research] (S)*; Smith Systems [system engineering] (S)*; Technology Partnership [contract research] (S); TWI [materials joining] (S)*; United Utilities [water and electricity utility] (P); and Zeneca [pharmaceuticals and biotechnology] (P). The companies contacted for this pilot phase stage were selected to represent as broad a range of industry and technology sectors as possible as well as including a varied mix of purchasers and suppliers (although small- and medium-sized purchaser firms were under-represented at this stage). The main phase of the study will look at a narrower range of industries but sampling will be stratified by size to ensure a better representation of SMEs.

THE DYNAMICS OF RESEARCH AND TECHNOLOGY OUTSOURCING Growth and significance

Much of the recent discussion and analysis concerning research collaboration has concentrated on inter-firm relations between manufacturing companies operating in the same or related sectors. Such analysis has been within the context of long-term dynamic competitive and technological trends. It has stressed that firms, even large multinational corporations, can no longer expect to be totally dependent on their own in-house research and technical resources to maintain their innovative performance. More recently, the growth in the external sourcing of R&D and other design and technical activities by firms has played an important role in the creation and development of the research and technology "market",3 in terms of the commercial purchasing and trading of R&D and technology. Related to this has been the growth of organizations serving this contract research and technical "market". This includes Contract Research and Technology Organizations (CRTOs) as well as a wider group of companies and organizations with some involvement in the CRT "market", which has important implications for the development of the innovation support infrastructure in national and local systems of innovation.

Research and technology outsourcing and innovation systems: An exploratory analysis

Industry and Innovation, Jun 1999 by Howells, Jeremy

Find Research Guides for:

Find Featured Titles for: Sports

Most Popular Articles in Business

Most Popular Publications in Business