R&D Consortia: A Benchmark Study

In one form or another speculative or reflective interest in cooperation is as old as human thought From Confucius, Lao-tze, and Gautama in the Far East as from the prophets of the Old Testament, the centrality of the ethic and psychology of cooperation may be easily inferred. For both Plato and Aristotle, cooperation was the keystone of the good state (Nisbet, 1968, p. 386)

Cooperation is widely viewed as a good idea. Individual organizations may pursue projects they would not dare do alone. Risky and long-range work might be possible with cooperation. Sharing also has the allure of efficiency in avoiding waste and duplication. In short, pooled effort has appealing potential. Such is the promise, but what is the reality? The substance of that reality is the subject of this book.

Aims of the Study

The immediate purpose of this study was gathering descriptive data on organized cooperation on technological R&D in the United States. The focus of the study was historical in that the data are from the 1970s; a period when policymakers were actively interested in cooperative innovation. The data describe:

a. Functions served by consortia in the innovation process;

b. Differences between cooperative and competitive R&D;

c. Benefits members obtain from consortia;

d. Extent of cooperative R&D by both field and by industry;

e. Organizational means used to define, pursue, and use cooperative work; and

f. Managerial lessons about consortia from their formation to their demise.

Scope of the Book

While the study’s immediate purpose is descriptive, it is also seeks to assist those who manage and set policy on cooperative R&D in industry, academia, and government. One targeted audience was those in government who formulate policy on technological innovation.

As noted in the beginning quote, cooperation is a basic social process. Therefore, the considerable research on this process is not surprising. As this study progressed, it became clear that, while the right questions were being asked to describe the nature, extent, and practices of R&D consortia, the set of questions needed to analyze the management of cooperation was missing. This absence is partly due to the maxim of social research that 'you can't get fish to describe water'. Managers, the 'fish' in this study, could not describe their behavior and structures for cooperation. These basics were developed over so many years and had become such everyday matters that they were taken for granted.

As the relevance of theoretical literature grew, it became evident that managerial processes cannot be taken for granted. The need for guidance on important managerial issues also became clear such as on member definition, committee structure, liaison procedure, and rules for agreement and negotiation. In other words, formulating a framework on consortia management needed to be part of this study.

Definition of Consortium

How did this study define 'R&D consortium'? Unfortunately, a satisfactory definition was not identified. Dictionary definitions range from the impossibly broad ('any association') to the impossibly narrow ('international banking cartel'). The most intriguing definition is: 'an intimate association of organisms formed for the purpose of mutual, physical satisfaction'. In lieu of an existing definition, the study used the following:

R&D Consortium: A formal association of three or more companies that cooperate in funding and planning technical research and development.

It was difficult to both locate and make a systematic sample of firm–to-firm partnerships versus one of formal associations that fund and plan multi-project programs. Multiple members supporting multiple projects at a formal consortium differs from a single project partnership such as National Cash Register and Control Data’s cooperation on point-of-sale terminals. Another example was the oil industry’s Catalytic Research Associates described by Enos (1962) as a series of entirely separate groups … deployed on the [existing] problems of better synthetic catalysts, operating conditions for catalytic reaction, and … patent conflicts.

The Questionnaire Survey

The questionnaire on cooperative R&D is available from the author (see copyright page). The questionnaire was mailed to 610 organizations and elicited 331 replies (a 54% return) from 123 organizations conducting R&D. Table 1 summarizes the sample, and Table 2 the variables studied.

Sample Design: The list of organizations receiving questionnaires was compiled from the Encyclopedia of Associations. This standard reference has data on thousands of American associations of national stature. The mailing list was compiled from sections on:

a. Trade, Business, and Commercial Organizations

b. Agricultural Organizations and Commodity Exchanges

c. Scientific, Engineering, and Technical Organizations, and

d. Health and Medical Organizations.

Questionnaires were only sent to organizations whose descriptions implied involvement in scientific and technical R&D with such as references as:

a. R&D programs (examples funds R&D, runs an R&D program, operates a laboratory),

b. Formal R&D Committees, and

c. Committees possibly focused on Science and Technology (a Technology Committee).

One question on the questionnaire asked for the names of three consortia in the respondent's field. This question added fourteen organizations to the sample. Ninety questionnaires were also sent to a random sample of associations whose descriptions implied no involvement in R&D. Only one return showed R&D activity.

Table 1

Questionnaire Sample*

*a) Cited w/R&D Program, b) Cited w/an R&D Committee., c) Cited w/a Technical Committee, and d) Cited by Interviewees.

Table 2

Variables Included in the Questionnaire Survey

1. Location of R&D

a. By industry or professional specialty.

b. By type of sponsoring organization.

c. By geographic proximity to industrial and academic activity.

2. Extent of R&D

a. By dollar budget.

b. By growth of dollar budget over the past five years.

c. By importance vs. other activities of the consortium.

d. By age of program.

3. Nature of R&D

a. By involvement in functions in the innovation process.

b. By extent of commitment to basic research.

c. By government and proprietary contracts.

4. Organization of R&D

a. By funding mechanism used.

b. By location where the R&D is