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Academia and industry: advancing science and technology together

The differences between academia and industry create risks and opportunities for firms and scholars

By Michaël Bikard and Anna Johnston 12 July 2018

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Academics want to get published. Firms want to make money. When something of value in one arena isn’t as valuable in the other, what’s the incentive of working more closely together?

Michaël Bikard, Assistant Professor of Strategy and Entrepreneurship at London Business School, believes that there are opportunities that come from those differences.

Made in academia

If you’ve ever read the ‘untold’ story of Google’s Larry Page, he went to Stanford after receiving his bachelor’s in computer science from the University of Michigan and had to make a hard choice: become an academic or build a company. The former would mean giving up the chance to become a billionaire. The latter would force him away from the knowledge frontier.

Are the two worlds really at odds?

Dr Bikard’s research, ‘Made in Academia: The Effect of Institutional Origin on Inventors’ Attention to Science’, explores how often ideas stemming from academia are adopted by innovators. The takeaway? “Inventors use scientific knowledge made in academia, but perhaps not as much as they potentially could,” he says.

While it’s true that inventors can benefit from academic knowledge, it’s also true that uncovering useful knowledge amounts to discovering a needle in the proverbial haystack. At the frontier of science, explains Dr Bikard, literature is “complex, vast, fast-changing”, and often “unreliable”.

“Inventors pay significantly less attention to discoveries made in academia than to those made in industry,” he says. Dr Bikard used a novel empirical approach. He identified 39 occasions in which at least one team from industry and another from academia were involved in the same discovery. Those “paper twins” have in principle the same level of usefulness for technology development, but inventors appeared to be 23% less likely to cite the academic paper than its industry twin.

“These results don’t stem from differences in the scientists’ abilities, their social status or their social networks. Inventors pay systematically less attention to scientific knowledge made in academia than to that made in industry.”

As a map, science is probably half-way between easy-to-use Google map and some kind of fantastical treasure map that sends you on a false errand.

Science. It’s an (imperfect) map

Developing breakthrough technologies is hard work, so inventors rely on science as a map to guide them through the development process. There is, however, an issue. As a map, science is probably half-way between easy-to-use Google map and some kind of fantastical treasure map that sends you on a false errand. There are at least three reasons for that.

First, a large share of academic findings are not reliable. From interviews, Dr Bikard found that firms have gone to startling lengths to create ‘trusted scientist’ lists – sometimes captured in an Excel sheet, floating on a desktop. “Corporates can’t afford to waste millions of dollars on science they can’t use, so they create good lists and blacklists.”

Second, science involves a good dose of tacit knowledge. “There’s a big difference between reading a paper and reproducing it in a lab,” notes Dr Bikard. Take OncoMouse, the first genetically modified lab mouse to be patented. It was created at Harvard Medical School in Boston in research funded by DuPont in 1984. “This was a phenomenal breakthrough,” notes Dr Bikard, “but it was hard to replicate. It took many years for people to figure out how to use the OncoMouse in the lab.”

He points to Karl Polanyi, an economic historian who argued In The Great Transformation that as an economic factor, labour was mediated by complex mutual obligations of master, journeyman and apprentice. “Academics learn through a process of apprenticeship. Much knowledge is tacit, otherwise, you would just read books and papers to figure it out, right?”

Third, science is vast. Every year, millions of academic manuscripts get published. Staying ahead of the latest trends is costly. For instance, more than 15 million scientists have authored at least one article indexed by Scopus – the citation database. In context, these numbers are on a par with the population of the Netherlands. Is it any wonder that sheer volume makes staying up-to-the-minute an impossibility?

Volume, tacitness and lack of replicability exposes the challenges of using science as a map for technology development. “At this point, this is the best map we have, so inventors often have no choice but to use it,” notes Dr Bikard. “The primary incentive of academics is to publish and to contribute to theory, it’s not to produce a Lonely Planet Guide for inventors.” At the same time, inventors have limited resources and attention, and they can’t spend all their time pondering the value of each new academic finding. So, they rely on simplifying heuristics to guess which discovery deserves their attention.

The tension between the incentives of academic scientists and inventors means that useful academic findings might not get as much attention as they really deserve. Many firms don’t have time or patience, so Science gets trapped before it has the chance to flourish into new technologies.

The stakes are high for both parties. “For scientists, inventors’ scarce attention is likely to influence how much impact their research has on the economy. For inventors, the way they manage their attention is likely to affect their ability to develop technological breakthroughs.”

When inventors put academic insights to good use they can give themselves a competitive edge. The same is true for academics when they tap the resources of industry – skills, labs, data.

Which leads us to this.

The collaboration opportunity

In a separate study, Dr Bikard examines how the same tension plays out in collaborations between academia and industry. With co-authors Keyvan Vakili, Assistant Professor of Strategy and Entrepreneurship at LBS, and Florenta Teodoridis (University of Southern California), he found that it can be a source of advantage. The paper entitled, ‘When Collaboration Bridges Institutions: The Impact of University–Industry Collaboration on Academic Productivity’ reveals that collaboration can enable specialisation and therefore boost academic contribution to open science.

Before diving into those findings, let’s revisit what decades of research tells us. The well-established rhetoric is that industry collaboration “pollutes” academia. While firms can provide useful financial resources and equipment, they often come with strings attached. Sometimes academic scientists are diverted away from theoretically interesting issues. Other times, firms limit the academic freedom to share and publish research results.

Dr Bikard explains: “There’s a fear with academic scientists that they’ll be forced to share less once they start working with firms. And industry leaders also have cause for concern: what if the findings they are funding are broadcast?” Businesses would become vulnerable if their intellectual property got into the hands of their rivals. Protection, patenting and confidentiality could hamper academics’ ability to publish, academics’ desire to publish could fetter corporates’ market edge.

Yet, governments across the globe want academics to connect with industry more, not less. Dr Bikard puts it: “Academia brings knowledge, industry brings commercialisation. You want both to come together and have your country prosper.” The public money invested in research impacts people via social gains – by improving their lives and solving problems. It also impacts businesses by driving innovation and economic growth.

Upending what we know

While previous research shows that academics who collaborate with firms tend to produce fewer papers, it doesn’t necessarily mean that industry collaboration hurts academic research. “The correlation might simply be that academics who choose to work on applied projects have fewer opportunities to publish and more opportunities to collaborate with firms,” says Dr Bikard.

To test the actual impact of collaboration, he used the twin-papers approach again – multiple scientists making roughly the same discovery around the same time. (It’s worth noting that to find 33 twinned discoveries, the researchers put significant effort into sifting through millions of scientific publications.) Then, they compared the output of academic scientists who collaborated with industry with those who didn’t.

“The results are the exact opposite to what we expected, based on prior literature” says Dr Bikard. “Instead of reducing the quantity of publications, academic-industry collaborators had greater output than their non-collaborating peers.” This did, however, depend on the size of the partner. For instance, academics didn’t reap the same benefit when working with smaller start-ups. Intuitively, it might have something to do with the division of labour and available resource (but the data doesn’t extend that far.)

“We also found that those who collaborated with firms filed fewer patents,” says Dr Bikard. Why the slide in the patenting activity? As long as academics are rewarded for their contribution, they are probably happy to leave patenting to their industry partner.

So, this is good news? Dr Bikard says, yes. Collaborations thrive under specific circumstances. “When the research has both scientific and commercial potential, collaboration can enable specialisation and a better allocation of tasks and responsibilities.” Academics can give their scientific output a boost by gaining access to industry skills, know-how and equipment, while leaving the commercial work to their industry partner.

One academic scientist told Dr Bikard: “The fact that we collaborated with [the firm] meant that we could go faster. That did give us a competitive advantage.” Scientists in industry shared similar views. For example, a scientist in a US-based big pharma said he found that academic collaborations are a way to “know the science before it comes out as a publication, it’s a way of helping the field move forward.” The same scientist said that “making new medicine has a 99% failure rate… I think what you gain is more than what you lose by being transparent.”

Mapping the academia-industry interface

Academia and industry advance together, but their relationship is a complicated one. Side-by-side they can complement each other. Academia produces new knowledge and firms find ways to commercialise it. At the same time, academia and industry are very different institutional environments, which builds tension. How can managers and scientists navigate this complex landscape?

Dr Bikard’s two recent publications contribute to the current “map” helping us understand how individuals, firms and nations can use the academia-industry interface as a source of competitive advantage. The fact that the two institutional environments differ can complicate the collaboration journey. However, the exact same differences also create opportunities for specialisation and increased performance for both sides – a voyage worth taking.

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The Institute of Innovation and Entrepreneurship equips and inspires entrepreneurs, innovators and the leaders who design the ecosystems in which they thrive.

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