Cooperation between industry and university

1. Cooperation between industry and university Harm-Jan Steenhuis Eastern Washington University OAG panel presentation, POMS, April 29 2006, Chicago

2. Content • Some information on I-U partnerships • Cooperation • Cooperation in OM / challenges • Conclusion

3. The OAG-survey and findings • The survey provides a lot of insight into what industry is looking for. • This provides ideas for academia, i.e. what are good topics for research … which enables a better connection with industry • This is the what. This presentation is more about the why and how.

4. Introduction – IU partnerships • There are many benefits for industry and university to cooperate (Tripsas et al., 1995; Mowery, 1998;) • Universities contribute significantly to US industrial innovations (Mansfield and Lee, 1996) • Research partnerships between industry and university are seen as a critical strategic response to global competition (Hall et al., 2001) • At least 1200 industry-university cooperative research centers existed in the US in the mid-1990s (Cohen et al., 1994).

5. Introduction – IU partnerships • There are at least two different types of cooperation: • The type where industry and university cooperate on essentially basic research, for example in centers. • As an example, think of the International Motor Vehicle Program (MIT) that led to insights on lean manufacturing etc. • The type where industry ‘hires’ academia to provide input on a particular project, more like consulting or applied research. • As an example, think of a particular company that wants to move towards lean manufacturing and asks faculty to help with this change • Some of the issues for these different types of cooperation are the same. Some may have different consequences

6. Introduction – IU partnerships Companies that work with universities can be categorized in three groups based on their objectives (Santoro and Chakrabarti, 2001): • Collegial players (22% of firms) • lower levels of interaction and commitment • generate lower levels of tangible outcomes • more network-oriented • predominantly large firms • Aggressive players (46% of firms) • highest level of interactions and commitments • generate highest level of tangible outcomes • equal mix of large and small firms (large are more network oriented) • Targeted players (32% of firms) • high levels of interaction and resource commitments • Smaller firms, with short time-horizon. • more problem-oriented

7. Cooperation – basic research • In general, there is a great incentive to have basic research conducted at universities • Avoids industry duplication • Uses cheaper labor • Some of the cost savings we identified were an average of $192,545 per project • Another major reason for industry to participate: access to students (helps with recruitment)

8. Cooperation – basic research • Industry side: for IUCRCs, member retention seems to be predicted by: • Professional networking • Satisfaction with research relevance • Satisfaction with administrative operations • Academia side (7% of university R&D is sponsored by industry) • Working with industry does not negatively affect student experiences or outcomes • Most striking differences were found between sponsored projects (typically guided by senior faculty) and projects with no external sponsor (typically guided by junior faculty). • Some issues with academic freedom, e.g. patents, timing of publication • Faculty satisfaction and commitment • Some extrinsic rewards such as funding, support for students, leadership • More importantly, intrinsic rewards such as interesting and rewarding work

9. Cooperation – applied/consulting • Use of experts • Use of analytical ‘power’ • Cheaper, in particular if students can be used. • Consultancy projects with students can be more beneficial than internships due to a ‘tighter’ guidance by faculty • A number of these were confirmed in the OAG survey

10. Industry-university and OM • Looking at OM • POM executives and POM academia are dealing with the same topic area. • In the knowledge economy, universities can make important contributors to knowledge (whether basic or applied) • which can help industry

11. Challenges (1) • There are deterrents that involve emotional and cultural rather than economic issues (Mueller, 1985) • Industry more short-term and commercial oriented than universities • Industry typically publishes fewer articles than universities do and typically only after a product has been introduced • In industry, funding is typically on an annual basis and R&D funding is typically linked to sales  contracts for a year

12. Challenges (2) • Type of cooperation • For example, looking at basic research (in a center approach) • or looking at applied research (in a consultancy approach) •  The OAG survey seems to indicate that much of the cooperation has been consultancy oriented (clear goals, timing)

13. Challenges (3) • Timing of cooperation • Industry is, in particular for consultancy oriented project, looking for specific deliverables at a specific point in time. • Universities work with semesters or quarters. • For basic research, academia generally move slow. • Timing is related to for example intellectual property rights and publishing

14. Challenges (4) • “Suitability” of topic • “The models offered by academics did little to provide pragmatic answers for these multiple trade-off situations” (Andrew and Johnson, 1982) • “Operations Management is still being equated with management science/operations research. It seems that this close relationship to theoretically based quantitative modeling has gotten us into trouble with the practitioners in our field” (Saladin, 1985) • “If we do not expand our approaches to research, managers will continue to perceive us as irrelevant academics who address fictitious problems and are not interested in the real world” (Meredith et al., 1989)

15. Challenges (5) • “Suitability” of topic has everything to do with methodologies and publishing • “No apparent shift away from modeling solution methods nor any significant shift toward empirical methodologies” (Pannirselvam et al., 1999) • Highly ranked OM journals (by academics) are still very much oriented on OR and MS. See e.g. (Barman et al., 1991; Vokurka, 1996; Barman et al., 2001) • OAG survey responses indicate that many of these academically ranked journals are not read by industry

16. Challenges (6) • Industry acceptance of academic knowledge? • There are different methodologies that can be applied. For example the Design methodology (van Aken) is specifically aimed at consulting projects • There is the issue of general vs specific knowledge. Company officials are experts on their company and academics are not. However, academia can add more general knowledge. For example, is lean even appropriate for this company? • Note that OAG (US) respondents ranked academic resources lowest for who will work on their problems

17. Challenges (7) • Geography • Relationships between industry and universities are often based on the location • A ‘trust’ needs to be established.

18. Conclusion • There are many benefits for industry-university cooperation. • There are many different types of cooperation with different goals etc. • Overall, there are a number of challenges to overcome.