Facing up to the risks in commercially focused university–industry R&D partnerships

Abstract

The number of university–industry R&D partnerships (UIPs) has increased significantly over the past decade, in most OECD countries and in Australia, yet the study of risk in such commercially focused collaborative ventures is still a developing area. This review paper seeks to contribute to debate on this increasingly important phenomenon by addressing three key areas of risks for universities in entering such collaborations. The commercialization of research findings presents particular risks to universities, most notably the possibility of financial loss, which has a greater impact than for companies in cross‐sector collaborations. Another major type of risk faced by universities is relational risk, and this can significantly alter the trust dynamics that underpin research and innovation. There are also institutional risks to universities and their research staff engaged in commercializable R&D and, ultimately, to their reputation as a neutral source of expertise. It is argued there is a need for universities in Australia to develop comprehensive policies to manage the risks of commercialization and R&D collaboration with industry partners.

Acknowledgements

The authors gratefully acknowledge the two anonymous referees who provided very useful and constructive comments on an initial draft of the paper. This paper was based on research that was funded by the Australian Research Council under a Discovery Grant, and we also acknowledge the Council for its support.

Notes

1. We use the term ‘UIP’ to cover a wide range of cooperative arrangements between companies, universities and sometimes also other public sector agencies. Such arrangements may be either formalized—e.g. as equity or non‐equity joint ventures—or they may be informal relationships—e.g. participation in innovation networks (see also Hagedoorn et al., 2000).

2. The CRC Program was established by the Australian government in 1990 to encourage closer relationships between researchers in the public sector and research users in industry. CRCs operate as government‐subsidized consortia, the partners of which collaborate to establish research and education programs. There are now more than 70 CRCs in operation, covering six sectors: Manufacturing Technology, Information and Communications Technology, Mining and Energy, Agriculture and Rural‐based Manufacturing, Environment and, Medical Science and Technology.