Impact of US Economic Crises on University Research and Development Investments
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Impact of US Economic Crises on University Research and Development Investments Tugrul U. Daim & Dilek Ozdemir
Received: 17 March 2012 / Accepted: 9 November 2012 # Springer Science+Business Media New York 2012
Abstract Universities are a well-known source of innovation that provides educated human resources, a scientific infrastructure, and their own research and development (R&D) capacity. In this way, they supply considerable and varied input to the economic environment. Yet the impacts of economic crises on university R&D are not discussed in the literature. This paper explores the impacts of the last seven economic crises in the USA on university R&D investments. Changes in industrial, government, and institutional funding during these economic crises are analyzed. Findings show an increase in government investments; however, the rest of the analyses did not show statistically significant results. Keywords University R&D investment . Economic crisis . Autoregressive model
Introduction The world economy experiences an economic crisis with an almost periodic regularity. Each time, an innovation overcomes the crisis. While we have come to rely on innovation as a phenomenon that can rise above such economic difficulties, products and processes are also becoming more complex as technology improves and innovation can no longer be constrained within organizational boundaries. Currently, any organization that desires to be innovative has to collaborate with other organizations (Autio et al. 1996; Buono 1997; Cagliano et al. 2000; Carayannis and Alexander 1999; Chakrabati and Weisenfeld 1991; Fichman 1999; Frenken et al. 2005; Santoro and Gopalakrishnan 2000; Stock and Tatikonda 2004).
T. U. Daim (*) Portland State University, Portland, OR 97207, USA e-mail: [email protected] D. Ozdemir Istanbul Technical University, Istanbul, Turkey
J Knowl Econ
Several sources of external technologies exist (Daim and Kocaoglu 2008a, b), and universities are reported to be one of the most important. Universities can be a source for workforce, knowledge, and sometimes innovation itself. Therefore, universities impact innovation both directly and indirectly (Anselin 1997; Gibson and Smilor 1991; Kim et al. 2008; Nagata 2007; Rebentisch and Ferretti 1995; Siegel et al. 2004; Van den Berghe and Guild 2007). On the other hand, an economic crisis can impact innovative activities in different ways. In some cases, it prompts organizations to be more innovative leading them to increase innovation activities and the subsequent budgets. But it can also cause a decrease in innovation investments (Chipman 2009). Economic crises, R&D collaborations, and universities’ missions concerning innovation activities are thoroughly discussed in the literature. Yet the literature is lacking studies that examine the effects of economic crises on US universities’ R&D funding. With this objective, we propose models to explore the impacts of economic crises on such funding decisions.
Literature Review The world economy shows a long wave pattern, especia
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