Click for next page ( 30


The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement



Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 29
OVERVIEWAND COMPARISON 29 trast, the more comprehensive, institutionalized character of the German AiF ap- pears to facilitate organizational learning among participating industries and con- sortia. SELECTED TECHNOLOGY TRANSFER ISSUES IN A COMPARATIVE CONTEXT Role of Start-Up Companies in Technology Transfer Start-up companies play a critical role in the transfer and commercialization of fast-moving, science-based technologies in the United States via movement, or "spin-out," of researchers and technology from universities, large established companies, and government laboratories. There is no counterpart in Germany to the prominent role that start-up companies perform in the commercialization of new technology in the United States. Many factors have enabled high-tech start-up companies to perform their unique roles in the U.S. innovation system.34 The following are among the most important. The existence of sophisticated financial markets, particularly access to a large volume of venture capital and highly developed public equity mar- kets. The large scale and technological intensity of relatively homogeneous seg- ments of the U.S. domestic market. The large size, high mobility, accessibility, and entrepreneurial orienta- tion of the U.S. technical workforce. The sheer scale and accessibility of U.S. publicly funded nonproprietary research, particularly university-based research. The scale of federal government procurement combined with explicit pref- erences or set-asides for small and medium-sized vendors and suppliers. A history of regulatory and public policy commitments conducive to high- tech start-up companies, including the competition-oriented or technol- ogy-diffusion-oriented enforcement of intellectual property rights and an- titrust law (competition policy), as well as the relatively risk-friendly system of company law, particularly bankruptcy law. A highly individualistic, entrepreneurial culture nurtured in industry and many U.S. research universities by private practices, public policies, and various institutional mechanisms such as technology business incubators and venture capital firms that encourage risk taking. . Many, if not most, of these supporting factors are either muted or nonexistent within the German innovation system. German venture capital markets and pub- lic equity markets are underdeveloped.35 Entrepreneurial activity and career mobility of much of the German technical workforce are circumscribed by civil

OCR for page 29
30 TECHNOLOGY TRANSFER SYSTEMS IN THE UNITED STATES AND GERMANY service regulations and institutional practices (e.g., reward structures, compensa- tion schedules, conflict of interest restrictions) that govern university and other public-sector scientists and engineers. Unlike their counterparts in U.S. universi- ties or federal laboratories, most university- or public-laboratory-based German researchers/entrepreneurs lack access to the institutional resources needed to pur- sue and defend patents.36 German public policies in the areas of company law (including bankruptcy law), taxation, capital markets, and so forth are decisive disincentives to the establishment of high-tech start-up companies and entrepre- neurial risk-taking behavior in general. The U.S. experience shows that many start-up companies fail and only a very few are extremely successful. Therefore, venture capital firms have to invest in a sufficiently large number of start-up companies to produce a "winner" and must count on the few highly profitable outliers to compensate them for losses incurred throughout the rest of their portfolio (Scherer, 1996~. This type of high-risk- high-potential yield strategy is rare in the German business culture. Technology Transfer to Small and Medium-Sized Enterprises in Technologically Mature37 Industries The R&D and technology transfer needs of German small and medium-sized enterprises (SMEs) in more technologically stable manufacturing industries are supported by a dense, comprehensive, and highly institutionalized network of industry-oriented R&D institutes and non-A&D-performing technical organiza- tions. These institutions support the technology transfer, technology commer- cialization, and industrial modernization requirements of many SMEs. By con- trast, the U.S. R&D and technology transfer infrastructure serving SMEs in these industries is relatively piecemeal, fragmented, and weak. German SMEs in technologically mature industries are served by highly net- worked, publicly funded R&D institutions and industry-organized R&D consor- tia that are heavily oriented toward the incremental product and process R&D needs of a national industrial base dominated by technologically mature indus- tries. While many of these publicly funded R&D institutions serve the needs of technologically dynamic industries, the institutes of the Fraunhofer Society, state laboratories, and institutes based at or affiliated with universities also perform near-term, industry-specific, applied contract research for large companies and SMEs in traditional areas of German industrial strength such as mechanical and electrical engineering. Moreover, through participation in robust industrial asso- ciations, which have a significant influence on public R&D policy at the state, federal, and European Commission levels, German SMEs are considerably in- volved in the shape and resource allocation of their national R&D enterprise. A large population of industry-led organizations, including the Chambers of Industry and Commerce, industrial associations, Technical-Scientific Associa- tions (Technisch-wissenschaftliche Vereine und Gesellschaften), the Organiza

OCR for page 29
OVERVIEWAND COMPARISON 31 lion for the Rationalization of German Industry (Rationalisierungskuratorium der Deutschen Wirtschaft), and the Steinbeis Foundation, provide SMEs with a wide range of industry-tailored technology-related services. However, various studies show that SMEs still make insufficient use of these rich opportunities for support (Beise et al., 1995~. At least some of the German institutions that support SMEs have counter- parts in U.S. professional and technical societies. Services provided by the Ameri- can societies include technical and business consulting, technology brokering, workforce training, and apprenticeships, as well as testing and evaluation facili- ties and the establishment of new-business incubators. However, compared with their German counterparts, U.S. SMEs in technologically mature manufacturing industries operate on the periphery of the nation's R&D enterprise. The R&D portfolios of U.S. research universities, federal laboratories, and most nonprofit research institutes do not overlap very much with the process and product R&D needs of U.S. SMEs (or of large U.S. firms, for that matter) in these industries. Factors that have helped disconnect SMEs in many industries from the nation's research enterprise include the high-tech, public-mission orientation of federal R&D funding; the fragmented structure and low levels of industrial self-organi- zation of many technologically mature U.S. industries; and changes in the indus- trial composition of the U.S. economy (i.e., the increasing shares of total U.S. industrial output accounted for by service and high-tech manufacturing indus- tries). Similarly, the technology transfer infrastructure supporting U.S. SMEs in more stable industries appears to be much less well developed than its German counterpart. Indeed, the poor performance of U.S. companies relative to firms (SMEs in particular) based in other advanced industrialized countries in adopting advanced manufacturing technology and production techniques has been widely documented (National Academy of Engineering, 1993; National Research Coun- cil, 1993~. U.S. SMEs in most manufacturing industries have traditionally relied on large industrial customers, vendors of hardware and software, and to a lesser extent on private consultants as primary sources of new technology, technical assistance, and advice. For the most part, U.S. industrial and trade associations and chambers of commerce have provided very little in the way of technical- extension and industrial-modernization services to their memberships. In recent years, several industry-led initiatives, some with limited public funding, have begun to address innovation and technology diffusion challenges, particularly those related to manufacturing, that face SMEs as well as larger firms in a number of technologically mature U.S. industries. For example, in response to new "lean" retailing strategies enabled by advances in information technology, segments of the U.S. textile and apparel industry have orchestrated (through in- creased industry self-organization and support from federal agencies and university- based researchers) a revitalization of their entire design, supply, and marketing chain through effective application of modern information technology (Abernathy

OCR for page 29
32 TECHNOLOGY TRANSFER SYSTEMS IN THE UNITED STATES AND GERMANY et al., 1995~.38 Similarly, many of the manufacturing challenges facing the U.S. automotive industry in the late 1970s and early 1980s have been addressed effec- tively through a combination of firm-specific and industrywide initiatives, often in partnership with federal agencies or academic researchers.39 Other examples of successful or promising industry-led efforts to meet the manufacturing and other technology diffusion needs of SMEs include the National Center for Manu- facturing Sciences and SEMATECH's work with semiconductor equipment and material manufacturers.40 Of the many industry-led initiatives in this area to date, the committee con- siders the technology road mapping exercise of the Semiconductor Industry As- sociation begun in the early 1990s to be a particularly promising instrument for advancing both the development and diffusion of new technology in industries where technological advance is more evolutionary than revolutionary (Rea et al., 1996~. By inventorying the industry's sources of technology and forecasting technological needs throughout the industry's value-added chain, the semicon- ductor industry technology road map has been successful, in the view of U.S. panel members, at focusing the attention and resources of the industry and the federal government on a shared conception of technological challenges and op- portunities. In addition to these industry-specific initiatives, state and federal govern- ments have attempted to strengthen the existing but relatively weak network of private and public service providers with more comprehensive industrial-mod- ernization and technical-extension programs.4i To date, however, the level of public resources dedicated to these programs and their current reach measured in terms of the number of companies they serve remain quite modest (National Acad- emy of Engineering, 1993; Shapira, 1997~. Intellectual Property Rights and Technology Transfer to Industry A wide range of government laws and policies shape the dynamic of technol- ogy transfer in Germany and the United States. These include, among others, R&D and technology transfer policies proper, bankruptcy law, competition policy, intellectual property law, different regulatory environments, labor law, and laws structuring capital markets. The U.S. and German country reports consider how these policies and laws interact in different ways in different sectors. Of the many public policies that affect technology transfer, those concerning intellectual property rights have a particularly important impact. The U.S. and German governments have taken steps since the early 1980s to remove legal and administrative impediments to private-sector commercializa- tion of technology developed with public funds. However, to date, the U.S. government's actions in this regard have been more comprehensive and, argu- ably, more effective than those of its German counterpart. In the judgment of U.S. panel members, the Bayh-Dole Act of 1980, the Technology Transfer Act of

OCR for page 29
OVERVIEWAND COMPARISON 33 1986, and subsequent U.S. legislation affecting the disposition of intellectual property developed with public funds in research universities, federal laborato- ries, and other R&D institutions have removed impediments to and provided an important stimulus for technology transfer and R&D collaboration between U.S. public R&D performers and U.S. companies. In Germany, the initiatives for removing legal and administrative barriers to the transfer of publicly funded R&D results from universities and government labora- tories to private industry have been less aggressive and less consistent. On the one hand, German university professors are allowed to exploit their inventions privately, if the inventions are the result of research financed by base funds. In particular, they can sell their patents or give exclusive licenses to industrial firms. On the other hand, they can grant only nonexclusive licenses if the research was funded by the federal government, especially the BMBF.42 Furthermore, licens- ing income earned on inventions based on research funded by the federal govern- ment must be partly transferred to the original funding agency. The contradictory requirements also apply to Helmholtz Centers, Blue List institutes, and depart- mental research institutes.43 These restrictive policies regarding the transfer of intellectual property rights are obviously not consistent with the explicit focus of many public R&D programs on industrial technology and technology transfer. An important advantage of the U.S. system is the existence of a grace period for patent applications, a particular advantage for researchers, who often publish first and decide to patent later (Becher et al., 1996; Straus, 1997~. As the Euro- pean patent system has no grace period, even U.S. researchers cannot use their national grace period if they intend to file their patents abroad.44 German panel members believe that the absence of a grace period in Germany is a significant barrier to technology transfer from scientific institutions to industry in fields where proprietary rights are considered critical to the subsequent development and commercialization of innovations by private firms. Since the early 1980s, the U.S. government has taken a number of steps both domestically and in international forums to strengthen the legal claims of patent and copyright holders and develop more effective (sui generic) legal protection for new types of intellectual property in areas such as software, biotechnology, and microelectronics. These efforts have been paralleled in Europe by efforts to strengthen intellectual property regimes at the national and European Commis- sion levels. Yet, in some technology fields, most notably software and biotech- nology, significant differences remain in the extent of protection for intellectual property rights in the United States and Europe. There are other general differences between the German/European and U.S. patent systems, such as the U.S. first-to-invent versus the European first-to-file approach, differences in the interpretation of patent claims, and differences in disclosure requirements. Although both the European and American systems provide effective incentives for innovation and technology transfer, their differ- ences create obstacles to transatlantic technology transfer. Because of these dif

OCR for page 29
34 TECHNOLOGY TRANSFER SYSTEMS IN THE UNITED STATES AND GERMANY Prances, inventors who wish to seek intellectual property protection on both sides of the Atlantic are required to accommodate the often conflicting/competing le- gal requirements and standards of the two patent systems. A decisive shortcoming of the European patent system is the fragmented responsibility of national and international authorities. For patent applications at the European Patent Office, only the application and granting procedures are rec- ognized transnationally; the granted patents are valid only in the designated coun- tries. As a result, there are no central European courts with jurisdiction over cases of patent challenges or infringement; national courts are responsible. Fur- thermore, the European Patent Organization is not an organ of the European Union; other non-European Union countries are members. Therefore, the Euro- pean Commission has an advisory, rather than an executive, function and has a limited influence on the development of European patent protection. Legal changes are within the competence of the member countries of the European Patent Organization; however, in many cases, forging consensus among member countries in support of such changes has proved extremely difficult. This frag- mentation of authority leads to administrative barriers, legal uncertainty, and enor- mous costs associated with patent protection, for both European and non-Euro- pean patent applicants (Straus, 1997~. International R&D Collaboration and Technology Transfer Comparative analysis of the technology transfer systems of the United States and Germany has underscored the potential for mutually beneficial transnational collaboration in various areas of R&D and technology transfer. The cooperation between the two countries cannot be viewed in isolation from the general process of internationalization, which was not the focus of the present study. Therefore, this topic will be addressed only briefly. The internationalization of R&D and technology transfer is a trend with con- siderable momentum. There are many past and current examples of successful international technology transfer and R&D collaboration. The recent history of the internationalization of industry through foreign direct investment, trade, and the proliferation of transnational technical alliances is rife with examples of tech- nology transfer and collaborative R&D involving firms based in different coun- tries. Growth of international collaboration among university-based researchers in science and engineering is well documented by the explosion in the number of jointly authored research papers. Government-to-government collaboration is well established in certain areas of basic research such as the human genome project, fusion, and global climate change. Development of international stan- dards and conformity assessment regimes by collaborating public and private standards bodies from different countries also has a long history. There has even been limited international collaboration involving governments and industry in precompetitive research such as the intelligent manufacturing systems initiative.