In what sorts of technology development activities does public sector research engage?

PRIs and, to a lesser extent, research universities engage in technology development in at least two important ways:

• First, they conduct applied research and experimental development that can lead to the creation of technology prototypes. There are several examples, for example, in agriculture, where finished technologies have been developed solely by PRIs without much involvement of business firms. For the most part, however, such prototypes are further developed and commercialised by firms. This might be done through technology licensing to firms via knowledge markets, or it might involve the establishment of spin-off firms with the sole purpose of commercialising a particular technology.

• Second, for the purpose of carrying out their research activities, public sector researchers often develop or improve (as ‘lead users’) specific experimental equipment and other types of technological devices. While many of these are relevant only for the purpose of research, others can be applied more widely, for example, in medicine.

While assessment based on patent statistics will not cover the whole spectrum of technology development by public sector research, they are a suitable first indicator for this purpose.

How do the technology development activities of public sector research relate to innovation performance?

The development of these new technologies can itself be considered a technological innovation. But they can also contribute to innovation elsewhere. Prototypes can be used by business firms as a basis for developing commercial products and processes. They might more easily foster such innovations than, for example, the scientific record, which tends to be less accessible to the majority of firms and further ‘upstream’ in terms of development.

Which actors are important for technology development by public sector research?

Much depends on the capabilities of researchers and their incentives to develop innovative novel technology prototypes. The infrastructure and resources provided by public research institutes and research universities determine the extent to which technology development takes place. Business firms – notably large foreign firms, domestic firms and high-tech SMEs – are often useful partners to foster the development of prototypes based on applied research. Technology transfer offices can be central links between the business sector and public sector research.

What are the main factors shaping technology development by public sector research?

Several sets of factors shape the technology development activities of public sector research:

• The scope and scale of public sector research and particularly its orientation towards applied research and experimental development is an important influence, as are the expected roles and status of public sector research.

• The state of economic development and specialisation shape the types of opportunities for technological development by public sector research. In less developed economies, firms might be heavily dependent on PRIs – for example, through extension services – for introducing and adapting technologies. In more technologically advanced economies, where the presence of technologically-advanced firms is the norm, public sector research is likely to work on experimental technologies, sometimes in collaboration with firms.

• Favourable IPR regimes are important for the transfer of technologies developed by public sector research, as is the orientation of financial markets to provide risk capital, particularly in those cases where commercialisation involves exploitation by spin-off firms or existing high-tech SMEs.

What policies are important for supporting technology development by public sector research?

Many different policies can have a bearing on the extent to which public sector research contributes to innovation through technological development. The most significant are likely to be those that foster close partnership between public sector research and business firms. These include collaborative R&D programmes, university-industry linkage schemes, cluster initiatives, technology platforms, science and technology parks, and technology diffusion schemes. Other policies, such as risk capital measures in support of spin-offs and technology incubators, can enable PRIs and research universities to further develop and exploit technologies themselves.