For computer-related technology, there are two key trends I've noticed since at least circa 2000 with respect to corporate research. One is touched on by the article, the other is missed.
In my own experience, a large part of this is explained by the increasing use of trade secret protections rather than patents for the products of corporate research. This is particularly noticeable around computer science, where the academic literature in many areas is years behind the state-of-the-art in corporate research labs that is never published. The research is still being done, it is just intentionally kept invisible. The declining ability to enforce IP rights globally as a practical matter and the rise of virtualized infrastructures and services, which makes reverse-engineering more difficult, has made this an attractive research monetization strategy.
The other major trend is letting startups drive research activity and taking an equity position in the interesting ones, often as cheaper money than more traditional VCs. It is less expensive for large companies to make a venture capital investment in startups solving a problem they need solved than to do the research themselves. 40% of all venture capital is now corporate VC, which reflects this trend. It reduces R&D risk while also putting those companies much closer to potential acquisition targets.
Basically, this new structure is more efficient and of the corporate research that is being done, much less is being publicly disclosed due to the practical limits on IP protection.
"Finding that European firms display similar reductions in investment in science as American firms is not consistent with the idea that specific regulatory changes in American institutions drive the results of this paper."
This is a clever way to get at what effect SOX and Bayh-Dole have had on private large-enterprise investment in science, but the evidence and argument are a bit opaque. What counts as a "European" vs. "US" firm? Most corporations are global at the scale of interest to this argument. US regulations might still have had an effect, even on "European" firms.
Logically the best they can argue here is that the evidence is consistent with their hypothesis, not that the evidence is inconsistent with an alternative hypothesis that SOX and Bayh-Dole had an effect.
" It may well be that other organizations -- smaller firms and universities -- are making up the shortfall in investment in research. According to this interpretation, what is happening is a reallocation of research from large corporate labs to more efficient cient organizations."
The suggestion that universities might be more efficient than private corporations at anything is almost comic.
But this isn't an error. There is actually something quite profound at work. It is indeed the case that "smaller firms and universities" are more efficient at commercializing new technology than most large corporations. But it's not the smaller firms and universities independently; it's the smaller firms and universities together as one super-entity.
In Silicon Valley, the grad students quit and found a startup. Their advisor joins the Board. The university creates the IP. The startup commercializes it.
The puzzle for me ten years ago was this: Where is the licensing revenue for the universities? If they're creating the IP, then how come they're not getting anything back?
The answer is that they are, but in the form of alumni donations. :-D
"The suggestion that universities might be more efficient than private corporations at anything is almost comic."
It's not a priori implausible to me. Why shouldn't there be things universities do better than corporations? They're different entities with different structures; it makes perfect sense that they'd have different strengths and weaknesses.
Universities are to organizations as cockroaches are to organisms. They're ridiculously inefficient and bureaucratic; but they're also the only form of organization likely to be around in 10,000 years.
That is an absurd and useless analogy. You're essentially just declaring your opinion without anything to support it, which does nothing to further the conversation.
Universities are bureaucratic, yes. in the same time you can encounter "academic" people there, who are genuinely interested in doing research, even for crappy money. That what they are, that's their nature.
In corporations it's more often some a*holes working towards promotions/power not giving a shit about "advancement" or greater good for humanity/society.
All IMHO of course, but based on personal experience in both areas.
The big research universities also absolutely have technology licensing operations. However, in the case of MIT for example, [1] it seems as if the net direct profit they make is fairly modest. (They bring in about $80 million a year but a lot of that seems to either go to costs or paid out royalties, etc.)
Yup. Compare that to MIT endowment's annual return. And guess where (a big chunk of) the MIT endowment gets invested (indirectly through VC funds)? The same startups that their alumni are founding.
That's pretty fascinating actually. Its like the alumni have formed a close-knit network that provides both capital and expertise. I didn't know endowments worked that way...I was suspecting they would be mostly invested in "Safe" stocks and bonds.
Hence the widespread practice of granting preference to the children of alumni at admissions time. Only Caltech (among the Ivies) eschews this practice and admits on academic merit alone, I believe.
In my own experience, a large part of this is explained by the increasing use of trade secret protections rather than patents for the products of corporate research. This is particularly noticeable around computer science, where the academic literature in many areas is years behind the state-of-the-art in corporate research labs that is never published. The research is still being done, it is just intentionally kept invisible. The declining ability to enforce IP rights globally as a practical matter and the rise of virtualized infrastructures and services, which makes reverse-engineering more difficult, has made this an attractive research monetization strategy.
The other major trend is letting startups drive research activity and taking an equity position in the interesting ones, often as cheaper money than more traditional VCs. It is less expensive for large companies to make a venture capital investment in startups solving a problem they need solved than to do the research themselves. 40% of all venture capital is now corporate VC, which reflects this trend. It reduces R&D risk while also putting those companies much closer to potential acquisition targets.
Basically, this new structure is more efficient and of the corporate research that is being done, much less is being publicly disclosed due to the practical limits on IP protection.