How R&D subsidies alter firm activities and behaviour

Figures & data

Table 1. Categorisation of the science-based and engineering-based case firms

Case	Type of firm (size* and industry)	Total budget (million NOK)**	Exploitation of technology (Autio, 1997)	Technology development (Autio, 1997)	R&D ties (Arrow, 1994; Asheim & Coenen, 2005)	R&D orientation (Autio, 1997)
1	Science-based (Small biotech start-up)	1–10	Scientificbreakthrough	Newtechnology	Collaborations with several universities and R&D organisations	R&D is a key part of the firm
2	Science-based (Micro ICT start-up)	1–10	Scientific breakthrough	New technology	Employs several researchers; close relationships with academic researchers	R&D is the main activity of the firm
3	Science-based (Small science start-up)	1–10	Patent testing	New technology	Established by researchers and has a connection with one research organisation in particular	R&D is the main activity of the firm
4	Science-based (Micro biotech start-up)	1–10	Scientific breakthrough	New technology	Spun off from a university with which it collaborates	R&D is the main activity of the firm
5	Science-based (Small science start-up)	1–10	Technological opportunity	New technology	Established collaboration with a new research organisation as part of the project	R&D is the main activity of the firm, which spun off from an R&D organisation
6	Science-based (Small manufacturing)	11–20	Market opportunity	New technology	Strong connection with one research organisation	R&D is the main activity of the firm and was important in developing the firm
7	Science-based (Medium manufacturing)	> 20	Technological opportunity	New technology	Several collaborations with research organisations	Internal R&D department and prior experience with R&D projects
8	Engineering-based (Medium engineering)	1–10	Market opportunity	New technology	Limited use of research organisations	Internal R&D department and prior experience with R&D projects
9	Engineering-based (Large process industry)	> 20	Market opportunity	Improved technology	Strong connection with one research organisation	Internal R&D department and long experience with R&D
10	Engineering-based (Large process industry)	> 20	Market opportunity	Improved technology	Strong connections with one research organisation and a university	Internal R&D team and long experience with R&D
11	Engineering-based (Large process industry)	11–20	Market opportunity	Improved technology	Several collaborations with (national and international) R&D organisations and universities	Internal R&D department and long experience with R&D
12	Network, several engineering-based firms (varying sizes)	11–20	Technological opportunity	Improved technology	Strong connection with an R&D organisation that played a central role in the project	Several smaller R&D projects have been conducted by the network partners
13	Engineering-based (Medium engineering)	11–20	Technological opportunity	Improved technology	Spun off from an R&D organisation and has a strong relationship with a university	Internal R&D team and ongoing R&D
14	Engineering-based (Medium engineering)	1–10	Market opportunity	Improved technology	Collaboration with one main R&D organisation	Internal R&D team but low prior R&D experience
15	Engineering-based (Large process industry)	Notavailable	Market opportunity	Improved technology	Limited connections to R&D organisations	R&D team with internal and external members

*EU measures of firm size are used: large > 250 employees, medium < 250 employees, small < 50 employees, and micro < 10 employees.

**To preserve anonymity, we created a total budget range.

Table 2. Interviews and secondary data sources for each case

Case project		1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	Sum
Interviews	Firm project manager	x	x	x	x	x	x	x(p)	x	x	x	x	x	x	x	x(p)	15
	Firm researcher	x		x	x		x	x			x		x	xx		xxx(p)	12
	University project manager*						x	x			x	x		x	x	x(p)	7
	University researcher				x(p)			x		x	x(p)	x	x				6
Secondary data sources	Project description	x	x	x	x	x	x	x	na	x	x	x	x	x	x	x	14
	End report	x	x	x	x	x	x	x	na	x	x	x	x	x	x	x	14

(p) = phone interview, na = not available.

*University researcher with the role of manager of the university portion of the project.

Figure 1. Process model on firm-level additionalities developed from subsidised R&D projects.

Table 3. Additionalities for the science- and engineering-based firms at project start

	Science-based firms (1–7)	Engineering-based firms (8–15)
The extent to which the project would have been carried out without public support (Clarysse et al., 2009) (input additionality)	None of these projects would have been carried out without support: ‘The support was essential for the existence of the firm … and the support was important for us to work with several topics at the same time’ (Firm 1). ‘We got access to the resources we needed to carry out the project’ (Firm 4).	The projects would most likely have been carried out without public support but with a narrower scope and slower progression: ‘The project would probably have been much smaller [without the support] with fewer results. The financial support was vital internally for the firm to run this project’ (Firm 10). ‘We would have continued with the same theme [without the support], but we would not have had the ability to invest the needed resources to reach the goals’ (Firm 15).

Table 4. Additionalities developed during and after the projects for the science- and engineering-based firm

		Organisational goals (behavioural)	Knowledge development (Hsu et al., 2009) (indirect output)	Innovation (Clarysse et al., 2009) (direct output)	Firm performance (Ciabuschi et al., 2020; Georghiou, 2002) (indirect output)
Science-based firms (1–7)	Duringproject	Changes in organisational goals that amplified the firms’ strategic and long-term R&D orientation and improved the firms’ internal credibility and collaboration: ‘The support had a stabilising effect during the actual project period; it was easier to maintain the level of R&D ambition and to avoid a situation in which people were prioritised for other tasks’ (Firm 7).	Developed knowledge in several areas and learned how to collaborate with different actors: ‘Knowledge is our most important output, and it has many dimensions: increased networking, accumulated knowledge over time, and knowledge that in turn can generate new ideas’ (Firm 7). ‘We got in good contact with [the supplier], which we enjoy the fruits of in other contexts, as well. We learned how they could contribute to our work’ (Firm 5).	Developed mainly research results and prototypes: ‘Even though it was a user-driven project, it was basic research. The technology we developed can be used for very many purposes’ (Firm 2).	The projects were the commercial foundation for the firms, contributing to increased turnover and access to new customers: ‘Had it not been for the Research Council, the company simply would not have existed’ (Firm 1). ‘The [project] led us to get [a large customer]. We also got some funds from [another firm] …. We got a lot of attention from actors in the environment, so that generated some income, too’ (Firm 2).
	After project	The changes were manifested after the project: ‘In our application to the research council, we wrote that the goal in this project was to develop a market-ready product. But, in retrospect, the project can be considered a pre-study. It was the first milestone to realise our goal of commercialisation’ (Firm 4)	Further knowledge development: ‘The competence from the projects has been vital. It is the reason why we were able to become a partner in EU projects and to work together with [larger international firms] in new R&D projects’ (Firm 2).	Developed several products and spin-off products: ‘Because of this [the project and its results], we later came up with a larger project over three years to try to get products out to the market’ (Firm 4).	Further growth and investments from different sources for several firms: ‘Today, we sell for 6–700 million NOK based on the project’ (Firm 1). ‘I was invited to [meet with] a group of [international] investors that would like to invest and take this further’ (Firm 2).
Engineering-based firms (8–15)	During project	Changes in organisational goals that improved the firms’ internal credibility and collaboration: ‘The project led to closer collaboration between [Departments X and Y]’ (Firm 11). ‘We had three factories as a pilot. They helped to develop all these [tools]. There was close collaboration …. Especially, [Plant X] was active and tried out the tools we developed and considered their value. They used [tools] regularly every day’ (Firm 9).	Developed knowledge in several areas: ‘We’ve got a more knowledgeable staff. Through customer dialogue [during the project], we have acquired insights and knowledge, and we have developed new products’ (Firm 8). ‘The [project] contributed to a huge competence-building effect, but we always try to link this effect to concrete technical challenges, where one can demonstrate that it gives results in practice’ (Firm 9).	Improved production process and some patents: ‘During this project, a new concept was developed that more than halved the costs [of the process improvement]’ (Firm 9).
	After project	The changes were manifested after the project: ‘These enabling technologies have matured over time, and were introduced in the marked quite recently [seven years after project end] … But there is still some work that needs to be done to realise the opportunities that were developed in the project … We are now working with the next [product] generation’ (Firm 13). ‘The project developed a consciousness of the importance of R&D. We have invested a lot after the project ended, the understanding and the necessity of these investment was developed in this project’ (Firm 14).	Further knowledge development: ‘The [project] also contributed to knowledge development in the company that has originated new projects and requests from customers about other deliveries’ (Firm 8). ‘The project is therefore a [knowledge] foundation in further development of improving the [production process]’ (Firm 9).	Further development of production processes: ‘Because of the project, the concept has been further developed and the costs have been further reduced significantly as the [production process] was improved’ (Firm 9).	The projects led to growth and cost reductions: ‘The sales figures that can be directly related to this project are estimated to be somewhere between 2 and 3 billion [NOK]’ (Firm 8) ‘The savings for [the firm] can be estimated at millions per year, of which this project has been very important to achieve these savings’ (Firm 9).

Table 5. Additionalities developed after the projects for the science- and engineering-based firms

	Increased R&D activities (Hsu et al., 2009) (behavioural additionality)	The extent of R&D subsidies received after the project ended (Falk, 2007) (input additionality)
Science-based firms (1–7)	Continued with several R&D projects with the same and other research partners: ‘We have collaborated with national and international universities’ (Firm 4). ‘We found a firm in [a European country] that is specialised in [analysis]. They work in [another industry than Firm 3], so it was hard to get them onboard at first, but luckily, they got fired up about the idea and came to Norway to run experiments with us’ (Firm 3).	All firms received R&D subsidies after their subsidised projects mainly from similar R&D programmes but also from larger programmes: ‘We have received EU funds after [the subsidised R&D project]’ (Firm 1). ‘We were granted with support [from the same R&D programme] to continue developing the technology [from the subsidised R&D project’ (Firm 3).
Engineering-based firms (8–15)	Continued with several R&D projects, particularly with the same research partners: ‘[The project] built a lot of expertise also for the external contributors, especially in regard to [one of the university partners], that they have used in other projects afterward’ (Firm 11). ‘After the project ended, we recruited one of the PhD candidates [from the university partner] who worked on the project’ (Firm 11).	All firms (except Firms 12 and 15) received R&D subsidies after their subsidised projects mainly from similar R&D programmes but also from larger programmes: ‘We received grants for two [R&D projects] from the Research Council of Norway’ (Firm 9). ‘From the [subsidised R&D project], we applied for two new projects funded by the Research Council of Norway, which contributed to interesting projects after this [the subsidised] project … and we now participate in a [research centre]’ (Firm 14).

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