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Original Reasons for Participation

Industry representatives were asked to share their views regarding the reasons originally underlying the decisions by their companies to participate in an ERC. Eight out of ten respondents (80.2%) reported that access to new ideas was a very important or extremely important reason for their initial participation (see Table 12). Other reasons for participation rated as very important or extremely important by a majority of the respondents include a match between the technological or research focus at the ERC and the company's interests (73.0%), access to ERC expertise (65.2%), an opportunity to keep abreast of university-based research in the field (57.9%), and access to specific ERC faculty (56.1%). Next in order of importance of initial reasons for participating was the opportunity to conduct joint projects with the ERC, rated as very important or extremely important by 39.1% of respondents.

Somewhat in the mid-range among companies' original reasons for participating in an ERC, with between a fourth and a third of all respondents rating these reasons as very important or extremely important, were prior connections or relationships with individuals at the ERC (32.7%), the ability to leverage research investment with money from other ERC participants (30.8%), access to equipment or facilities at the ERC (28.7%), access to ERC students as prospective new hires (27.6%), the opportunity to interact with other companies affiliated with the ERC (27.5%), and the opportunity for cross-disciplinary research (27.4%). Both the preparedness of ERC students to work in industry and the cross-disciplinarity of ERC research were among the primary objectives of the program from NSF's perspective, although apparently these were not perceived as highly important by most ERC industry sponsors, at least at the time of their initial decision to participate. It is also interesting to note that in the case of these factors, the percentage in our survey who considered these as very important or extremely important in their initial decisions to participate in an ERC was significantly lower than in the 1988 GAO survey of ERC industrial participants (see Table 13 discussed below).

Access to ERC testbed facilities or prototyping capabilities was rated very important or extremely important as an initial reason for participation by just under a fourth of all respondents (24.2%). The ability to license inventions and/or software developed by the ERC, ease of in-person interaction (geographic proximity), and opportunity to support a local institution were generally of considerably less importance in a company's original decision to participate in an ERC: about a third of respondents (34.7%) reported that the ability to license inventions and or software was not at all important in their initial decisions to participate and more than half reported that geographic proximity and opportunity to support a local institution were not at all important (50.3% and 55.0%, respectively).

Table 12

Original Reasons for Participation

Several of the questionnaire items under this topic were designed to correspond with items regarding what motivates a company to participate in an ERC included in the 1988 GAO survey of industrial sponsors of the ERCs. [1] A comparison of the percentage of respondents who rated the corresponding items as very important or extremely important among their initial reasons for participating in an ERC is shown in Table 13. Asterisks indicate those percentages in which t-tests showed that respondents to the SRI survey differ significantly from the earlier GAO survey.

Table 13

Original Reasons for Participation:

Comparison of Respondents Who Rated Factors as Very Important/Extremely Important

in the 1988 GAO Survey and the SRI Survey

  In most cases where there was a statistically significant difference, fewer current ERC industry sponsors considered the factors important in their original decisions to participate in an ERC than had their earlier counterparts. For example, in terms of the opportunity for cross-disciplinary research and access to ERC students as prospective new hires, both relatively important factors among the objectives of the ERC program, more than one-and one-half times as many respondents to the earlier GAO survey as to the current survey considered these as very important or extremely important in their initial motivations for participating. The same is true of the ability to leverage their research investments with money from other ERC participants. Another item on which a significantly lower percentage of respondents to the SRI survey than to the GAO survey considered an important factor underlying their initial decisions to participate was the match between the technological or research focus at the ERC and the interests of their own companies. In both cases, however, more than two-thirds of total respondents rated this factor as very or extremely important: in the case of the GAO survey, it was the item rated highest by industrial participants overall, and in our survey it was second only to "access to new ideas".

  The one case in which a higher percentage of respondents to the SRI survey than to the GAO survey rated the factor as very or extremely important in initially deciding to participate in an ERC was access to equipment and/or facilities at the Center. While only 14.9% of the GAO survey respondents considered this a very or extremely important factor in their motivations to participate, almost twice as many current ERC industrial sponsors (28.%) considered this highly important.

Results and Benefits to the Company from ERC Participation

  Our initial case studies and focus group conducted as part of the study design found that it was important to separate "results" or "outcomes" from "benefits" or "impact", because different industry sponsors might agree that certain results had occurred as a direct result of their participation in an ERC but impute quite different levels of value or benefit to them. Accordingly, the questionnaire asked respondents to indicate, for each of 19 potential outcomes or results, whether their companies had experienced that result and, if so, the degree of benefit derived from it to date on a scale of 1 to 4.

  As shown in Table 14, corresponding with the more than 80% of survey respondents who reported that access to new ideas had been very important in the original decisions of their companies to participate in an ERC, over 80% reported that their interactions with the ERC had in fact resulted in such access to new ideas, know-how, or technologies. In addition, about a fourth (25.7%) of those who had obtained such access reported that they had benefited a great deal from it. More than half of all respondents also reported that among the outcomes they had experienced from their participation in the ERC was direct technical assistance (63.0%), influence on the company's R&D agenda (54.1%), and increased interaction with other firms (50.1%).

  The hiring of ERC students or graduates, the training of whom ranked high among NSF's objectives in the design of the ERC program, was perceived as a particularly beneficial outcome by those companies that had hired such students (despite the relatively small number of participants who had viewed this as a very important reason in their original decisions to participate in an ERC). While only 39.9% of the industry representatives reported that their companies had hired an ERC student or graduate as a direct result of its participation in the ERC, more than half of those who had hired such students (58.8%) reported that their companies had benefited a great deal from this interaction. The mean rating for the degree of benefit received from this result (3.4) was higher than for any other single outcome.

Table 14

Benefits Experienced to Date

  It is interesting to note that most of the other results for which more than a fourth of respondents who had derived them reported that they had benefited a great deal relate to production and intellectual property outcomes. While relatively few respondents reported deriving such outcomes from their ERC participation, between a fourth and a third of those who had experienced these results perceived the benefits as extremely high. For example, whereas only 4.3% of respondents reported that they had commercialized a product/process obtained from the ERC, 33.3% of these had benefited a great deal from this result. Of the 23.6% of respondents who had developed a new product or process as a result of their interactions with an ERC, 26.3% reported that they had derived a great deal of benefit from it. Of the 8.4% of respondents whose companies had patented or copyrighted technology or software developed by the company on the basis of interaction with the ERC, 31.0% benefited a great deal; and of the 11.8% of total respondents whose firms had licensed ERC-developed technology or software, 26.8% benefited a great deal. While not a particularly important reason for companies originally deciding to participate in an ERC, more than a fourth of respondents benefited a great deal from the use of ERC facilities or equipment: of the 40.0% of respondents who had used ERC facilities or equipment, 28.1% reporting benefiting a great deal.

  As anticipated, the results most commonly experienced by companies as a direct result of their ERC participation were not necessarily the results from which they obtained the greatest value or benefit. The six most commonly experienced results from ERC participation were the following: access to new ideas (84.0%), direct technical assistance (63.0%), influence on the company's R&D agenda (54.1%), increased interaction with other firms (50.1%), improved technical information for customers or suppliers (44.1%), and improvement in a product or process (42.5%). The six results from which companies seemed to derive the greatest impact or a great deal of benefit, however, are the following: hiring of ERC students or graduates (58.8%), commercialization of a product or process (33.3%), patent or copyright of a technology or software (31.0%), use of ERC facilities or equipment (28.1%), license of a technology or software (26.8%), and development of a new product or process (26.3%). The importance of distinguishing results from the impact or value of reported interactions or results is clear: none of the six results most commonly experienced are among the six results from which respondents most often benefited a great deal. The most frequently reported results have to do with improved knowledge and information and broader personal contacts and interaction -- and these are certainly not without value to industry. Indeed, on the order of 40-50% of respondents said that these results had been of moderate benefit and in most cases 20-25% said that they had been a great deal of benefit. On the other hand, those results for which the highest percentage of respondents reported deriving a great deal of benefit are generally of a far more tangible, product-related nature. And precisely because of that, it is not at all surprising that these most highly valued results occur far less frequently as a result of the ERC-industry interactions.

Overall Benefits to the Company from ERC Participation

  The initial study design effort noted that the aggregate value of the ERC membership to sponsor firms may be more than the sum of a series of discrete benefits. Our initial interviews led us to hypothesize that firm participation in an ERC may be viewed less as an investment in one or more separable outcomes, such as a specific research finding or a solution to a problem with an expected value that could be compared with the membership fee or other outlay, than it is perceived as an investment in a portfolio of outcomes. Survey respondents were accordingly asked to rate the portfolio of benefits that their company unit or company as a whole had derived over time from its participation in the ERC.

  Figure 1 shows how industry sponsors rated the overall benefits to their companies from ERC participation. Almost nine out of ten respondents indicated that their companies had derived at least some benefit in an overall sense, with 42% indicating a moderate amount of benefit and 20% a great deal. The mean is 2.7 on a scale of 1 to 4 -- lower, somewhat surprisingly to us, at least, than the mean rating of degree of benefit participants perceived from 14 of the 19 more specific results described in the preceding section.

  This result may be an artifact, given the judgmental nature of the survey questions. It is also plausible that the specific benefits questions yield more valid responses than the overall one. Both the overall and specific benefits questions asked the respondent to consider only benefits but not costs. But respondents may be able to do this more accurately at the level of specific benefits, because at the more general level they may incorporate (subconsciously) costs such as red tape, delays, and paperwork that are associated with overall participation in an ERC but not with specific benefits.

Figure 1

  The concept of "competitiveness" is a widely used, but usually loosely defined term, the usage of which may, and probably does, differ from firm to firm. Without attempting to specify what precisely was meant by the term in the context of the survey conducted as part of this study, as another attempt to ascertain the portfolio of benefits to the firm from participation in an ERC, industry representatives were also asked the extent to which, if at all, participation in an ERC had led to an increase in the competitiveness of their company units or their companies as a whole. As shown in Figure 2, about two-thirds of respondents thought that there had been at least some effect, with 31% indicating that the impact on company competitiveness had been moderate and 10% a great deal. The mean rating is 2.2 on a scale of 1 to 4, lower than the value assigned to any single more specific type of result reported in the previous section, perhaps again in part due to reasons speculated on above. Nevertheless, for a program brought about in large part in response to growing concerns about a decline in U.S. industrial competitiveness, it can be said that the program is perceived to have indeed had some such impact on at least two-thirds of those firms that have participated in an ERC.

Figure 2

  While the survey indicated that most companies saw a multiplicity of benefits from their ERC participation, telephone interviews conducted as a follow-up to the survey indicated that few either could or wanted to make an effort to monetize those benefits or develop other measures of the cost-effectiveness of their memberships or other interactions. Instead, they evaluate their participation in ERCs as a dynamic process rather than expecting a fixed set of benefits that can be assessed by present or retrospective scaling of impacts. Some of the comments of ERC industry sponsors when asked if their firms try to assign a dollar value to the benefits from ERC participation are shown below.

Expected Outcomes and Outcomes Actually Derived

  Table 15 shows the extent to which respondents' original reasons for participating in an ERC were met in reality. The first column shows the percentage of respondents who rated each factor as "very important" or "extremely important" among their initial reasons for participating. The second column shows the percentage of those who had considered this outcome as very or extremely important at the time of first supporting the ERC who subsequently actually experienced the result. The third and fourth columns show the degree of perceived benefit from the outcome by those who actually experienced it, having rated it as very or extremely important among their initial reasons for participation.

Table 15

Reasons for Participating and Results and Benefits Derived

  Over 90% of those who rated access to new ideas as very/extremely important in their initial decisions to participate in an ERC in fact experienced this result. Most of them also valued this result rather highly, with 42.9% saying they had benefited a moderate amount and another 26.6% a great deal. Over 80% of those who had initially viewed the opportunity to interact with other companies affiliated with the ERC as a very or extremely important reason for their participation in the ERC also experienced this result. Many of these also valued this outcome highly, with 40.3% rating the degree of benefit as moderate and another 40.3% a great deal.

  Over 70% of respondents whose initial participation in the ERC had been strongly motivated by access to ERC equipment and facilities actually experienced this outcome. Again, the outcome was valued rather highly by this group of individuals, with 34.3% rating the benefit as moderate and another 41.8% a great deal.

  Relatively few of the respondents' companies for whom the ability to license inventions and/or software developed by the ERC was an important reason for their initial participation actually experienced this result: slightly over a third, or 34.0%. Most of those who did experience the result, however, did value it highly, with 41.2% rating the benefit as moderate and an additional 35.3% a great deal.

  Those whose initial reasons for joining an ERC were most highly valued when actually experienced, however, were the companies that had hoped for access to ERC students as prospective new hires. While just under two-thirds (65.6%) of those for which access to students had initially been a very important reason for participating in an ERC actually ended up hiring one or more of these students, close to three-fourths (72.4%) of those that had valued this outcome a great deal.

Examples of Significant Benefits from ERC Participation

  Survey respondents were asked to describe two or three of the most significant benefits their companies had derived from ERC participation. Most of the examples they provided relate especially to access to new ideas, know-how or technologies through ERC interaction; direct technical assistance provided by the ERCs to their companies; the use of ERC facilities or equipment; increased interaction with other firms; and the hiring of ERC students or graduates. With the exception of examples relating to ERC students, which are described in the following chapter which deals exclusively with students, a number of these examples of what ERC industry sponsors considered significant outcomes or benefits are listed below.

Differences in Outcomes by the ERCs in which the Companies Participate

  While the objective of this study has been to examine the impact on industry of the ERC program -- that is, the eighteen ERCs collectively -- this impact does, of course, differ considerably from one ERC to another. Some of these differences in outcomes and benefits are depicted in the charts shown in this section. Because not all ERC's have precisely the same objectives, emphases, or strategies for meeting their objectives, and this study did not include an evaluation of individual ERCs that would help explain the differences noted below, the individual ERCs have not been identified but instead represented, in random order, by a letter of the alphabet. However, to enable comparison across benefit types, each ERC is consistently represented by one letter -- that is, "A" always stands for the same ERC. T-tests were done to ascertain cases in which mean and percentage ratings for individual ERCs differed significantly from means or average percentages for all ERCs combined. Those cases where the difference is statistically significant are indicated with an asterisk. Because of differences in the number of respondents from individual ERCs, those differences that are statistically significant are not always intuitively obvious.

  Figure 3 shows the mean rating of the overall portfolio of benefits from ERC participation by the ERC in which the respondents' companies participate, with the straight line in the middle of the chart showing the mean across all companies. While the mean for all companies was 2.7, the means by ERC in which the companies participate range from a low of 2.4 to a high of 3.3 on a scale of 1 to 4 representing "little or none", "some", "a moderate amount", or "a great deal" (the midpoint is 2.5). Five ERCs (E, G, I, Q, and R), in particular, are noticeably above the mean across all participants in terms of overall benefits the ERC industry sponsors derived from their participation, while three (N, L and H) are noticeably below the total respondent mean; however, only in the case of the ERC labeled Q is the difference statistically significant.

  Figure 4 shows similar information on the perceived effect of ERC participation on overall company competitiveness. Here the mean across all respondents is 2.2, while the mean by individual ERCs in which the companies participate ranges from a high of 2.9 to a low of 1.75. One ERC (I) is significantly above the mean across all participants in terms of the effect of participation on overall company competitiveness, and one (L) is significantly below the total respondent mean.

  Figures 5 through 11 show the percentage of ERC participating companies that have experienced specific types of results from their participation in a particular ERC, compared to participants across all ERCs, illustrated by the solid line through the center of the chart. (Charts were not prepared for those potential outcomes for which one or more ERC had no companies reporting such a result.) For example, a considerably higher percentage of participating companies in the ERCs labeled A and I gained access to new ideas than did all companies on average (see Figure 5). In terms of direct technical assistance from the ERC, the Centers labeled A and J were significantly high, while the Center labeled P was significantly below the cross-Center average (see Figure 6).

  [1] GAO, op. cit. , 1988.