Center for Science, Technology, and Economic Development (CSTED) > Selected Reports

The Impact on Industry of Interaction with Engineering Research Centers

IX. IN-DEPTH INTERVIEWS

In order to deepen understanding of the survey results, especially in cases where respondents had included open-ended written responses of interest, about twenty in-depth follow-up interviews were conducted by telephone. The results of seven of these, selected to highlight a range of issues as well as certain common themes that were explored in all twenty, are reported below. They represent individual company respondents, occasionally augmented by information obtained by a telephone interview with another company with membership in the same ERC. Examples from all twenty of the interviews have been cited previously in the discussion of the survey findings where they served to elaborate on those results.

The individual reports below are organized to follow a similar outline of topics, all of which were derived from the original survey instrument (see the Telephone Interview Protocol, Appendix C), although that order was not necessarily followed in the course of the telephone interview. These topics, in the order presented (if relevant) for each interview, are:

• Character of research-degree of inter- or multidisciplinarity, amount of collaboration, etc. (the success of ERCs in fostering interdisciplinary, collaborative research emerged more strongly in the in-depth interviews than in the survey data);
  
• Issues involving competition and intellectual property rights-competitive relationships among members of the ERC, examples of competitiveness gains derived from ERC membership, and issues concerning intellectual property rights;
  
• The role of ERC students and impact of hiring ERC graduates-(the interviews elaborated considerably on the utility of hiring graduates, but noted the problem presented thereby to companies not in a hiring mode);
  
• The role of company units-benefits derived, modes of company approval of membership and methods or metrics of evaluating the benefit of membership.
  

Within the context of these topics, a number of points showed up as common themes. Reinforcing the results of the survey, one was the importance of active involvement and interaction: "what you get depends on what you put in," with several comments that obstacles were as much, if not more, a company problem than anything derived from the ERC. A second, not strongly emphasized by the survey results, was the general success of the ERCs in achieving an interdisciplinary and industry-sympathetic research culture. A third that reinforced the survey was the importance of the ERC experience for students and the desirability of being able to identify and hire good graduates from the ERC programs. Fourth, while the survey indicated that most companies saw a multiplicity of benefits, few either could or wanted to make an effort to monetize those benefits, or develop other measures of the cost-effectiveness of their membership and interactions. Finally, there were several expressions of concern about the tension between basic and applied research manifested in the ERCs. While there was a desire for an industry-oriented window on the basic research that firms are unable to do, there was concern that the ERCs not be pushed too far toward short-term, applied research: a balance is needed.

Company A

The character of research done at the ERC was the most prominent feature of the comments made during this interview. At the top of these was the fact that the research was both multidisciplinary and truly collaborative in character. Points made concerning this aspect of the ERC's capabilities included the following:

• The number of disciplines that the ERC was able to draw together and have act in an effective, coordinated fashion was "very rare":
  
• Unlike most firms or universities, the ERC was able to combine software writing with experimentalism, where other organizations do one or the other;
  
• The ERC was also able to combine modeling and diagnostics in ways unavailable to them either in-house or from other collaborators;
  
• The integration of disciplines was accompanied by a willingness of the participants to pursue a common goal, rather than the type of "pet projects" that is the common pattern among academics.
  

If there was any ambivalence about these combinations, it appeared that there was some initial concern that the company's use of "enormous" facilities in its production efforts could compromise the reliability of extrapolation from smaller pilot equipment on campus, but a high level of confidence in the reliability of the ERC's efforts at diagnostics, prediction, and validation was achieved, providing a capability that was unattainable within a corporate environment.

The company found the ERC highly collaborative in another manner that was displayed in several ways. First, most of the other ERC members represented competitors, and the ERC recognized and handled this situation well. Generally speaking, the ERC was very good at understanding competitive problems. Second, the ERC displayed a willingness to see software products licensed quickly to the corporate world without clinging to intellectual property rights to the degree that the company expected to find within a university setting. The result was improvement in the software, rapid technology transfer, and an international competitive advantage for another member of the ERC producing and marketing software. The second company benefited from its interaction with customers within the ERC, while being able to penetrate the international market by improving its software and incorporating the different standards and calibrations required abroad.

The firm found itself at a disadvantage with respect to the ERC's belief that technology transfer could best be accomplished through hiring its graduates because it wasn't in the hiring mode, although some of its competitors were. As was the case with other companies in the same situation, some emphasis was placed on the need for alternative modes of human interaction, such as having ERC scientists spend time at the company, when hiring was not possible.

In terms of the approving and benefiting units, the firm highlights the problem of the dynamic character of interactions between industry and the ERCs. Initially, the R&D unit was the source of interest and the unit of greatest benefit. A shift had occurred in which business units in the company came to control the ultimate decision concerning membership. The result has been the necessity of persuading the business units that the ERC can solve their problems more quickly and efficiently than the R&D unit can alone. This complicates the politics of sustaining the relationship, and the ERC probably needs to recognize that their selling job doesn't stop after the initial recruitment of members. Although persuading a business unit to provide $10-20,000 seemed a highly efficient way of using an R&D budget, the company generally found it hard to place a monetary value on the access to information and understanding of new technologies that it gained from interaction with the ERC. This relatively large firm shared the view of a smaller company, another member of the ERC interviewed, that monetary value was hard to assign, but differed, because of its size, in the complexity of identifying places of benefit. The small firm was able to state confidently that "the whole company" benefited from its membership.

Company B

Among those interviewed in-depth, this company was unusual in its multiple ERC memberships. Although the interviewee's involvement was with one ERC, another corporate unit belonged to the same ERC, and still another unit to a different ERC, and the views expressed reflected deep involvement, a high value placed on the ERCs, and some concerns about their role and direction in the U.S. research infrastructure.

The interview displayed a somewhat conflicted view concerning the nature of the research being performed by the ERCs. On the one hand, the ERC was perceived as very industry-oriented and doing a good job of preparing students to work in industry, as well as forcing collaborative research that gave those students a cross-disciplinary background that was hard to get in industry. At the same time, one of the company's motives for joining was that it was unable to perform basic research in the field of interest, and wanted to use the ERC to serve as a window on that type of research. The ERC was seen as falling between the university's basic research role and applied contract research. The interviewee felt that the former role should not be compromised by forcing universities into "unnatural acts" of doing applied research directed toward a market, especially since industry was pulling away from long-range research. One consequence was that the firm provided money to ERC professors in the form of grants rather than contracts. The role of the interviewee's unit undoubtedly affected his perspective, because it was to take an intermediate, three-to-seven year, view in contrast to the more short-term two-year time frame of the company's direct product-development efforts. There was concern that the ERCs were being pushed too far toward taking a short-range view. The more immediate role of testing and access to instrumentation may be more important to small companies than to large ones like this firm.

The philosophical ambivalence was not so present in the firm's perception of benefits derived from the ERC, with the ability to hire students seen as foremost. Not only did they come with a more realistic sense of the effort needed to turn an idea to some form of payback, but they provided an invaluable network back to the ERC and university community. In that sense, they often served as bridges that reflect that the best way of transferring technology is through people. These hires know the people and the research going on in the ERC and are able to bring it to bear on their work within the company. Moreover, one ERC hire was able to facilitate a licensing agreement: the universities must realize exclusive licenses limit companies' ability to build on what they have done and they must come to grips with better ways of handling intellectual property rights.

The company uses no metric to evaluate its memberships, and there is little trouble justifying them: they can't do all the research that they would like to do in-house, and the ERCs are a valuable route to research, with any technology access a collateral benefit. It is the acquisition of good employees that they value most highly, and the systems perspective of ERC students is one of the biggest benefits they see.

One of the most important observations made during the interview was that "The more you get involved, the more you get out of it." They have been fortunate in being able to hire and have these former students sustain the relationship. Companies that can't hire should send their existing staff into the ERCs to network and derive benefits.

Company C

This company was unusual in several respects. It has not been able to undertake formal memberships in the ERCs it has dealt with, initially because it was a foreign government corporation that was only recently privatized, and later due to corporate politics under the new regime. Consequently, its involvement was through contract research only, and the relationship with one ERC particularly satisfying. Generally, the interviewee contrasted the "slack atmosphere" he generally associated with universities with the efficiency and responsiveness of ERCs. The firm's major ERC relationship was highly dependent upon a particular ERC faculty member, and represented a solution to a problem in which full-scale testing in a real world situation had to be done if there was to be the required level of confidence in the results of the research. Small-scale laboratory testing within the university alone would lack credibility. In the event, the ERC proved able to do the necessary work at a far faster rate than it ever could have been done in-house.

The results of the work, although relevant to the interviewee's unit, proved highly beneficial to the company. The high level of confidence in the tests performed on parts of the company's infrastructure enabled it to develop new markets and improved its productivity. The firm was able to calculate a monetary value for the results, which saved it from having to invest $115 million in its infrastructure over fifteen years, improved the productivity of the existing infrastructure, and focused its capital investment on priority areas.

Company D

The company was instrumental in establishing the ERC, which embodies a world-class team in its field. The interviewee was another believer that "what you put into an organization like this is what you get out," and they have invested a great deal, having maintained a close association with the Center from its inception. One of the greatest benefits of being an active and financially supportive member has been the ability to influence the research agenda.

The ERC was viewed as truly representing manufacturing interests in contrast to the interests of academic science that the interviewee perceived to have been NSF's only interest until very recently. Outside the ERC environment he sees little prospect of the sort of cultural change needed to make university-based research responsive to industry's interests. In fact, the ERC had to develop its own staff outside the university's tenure track to be viable. While the university had been helpful in this, he sees the need for far greater recognition of ERCs, such as giving the Director the same status as a department chair, with direct access to the Dean of Engineering.

No single company unit received the most benefits: both major divisions of the company were involved, and information about activities of the ERC is widely distributed through the firm. Most of the barriers to deriving benefit represent the firm's problems. The priorities of floor engineers are such that it is difficult to get the level of interaction that they would like. They don't attempt to monetize or otherwise measure the benefits they derive. The $25,000 membership cost is nothing compared to the millions that the company can save if a single problem gets solved. However, the interviewee regards the eleven-year term of NSF funding for ERCs as unrealistic, since he doubts that such centers can be self-supporting in a university setting.

Company E

For this company, it took at least a year of membership in the ERC to learn how best to exploit the relationship. It is now working well because-again-they learned "that you get out of this what you put in." Membership gave the company access to an array of instrumentation facilities that enabled it to gain expertise that could be converted into efficient investment in instrumentation for the company itself. The interdisciplinary climate in the ERC was very useful, and helped break down barriers within the company, as well. The faculty proved to be more attuned to industrial applications than before, and the relationship is less bounded than the typical consulting arrangement. They help with networking that extends into the university beyond the ERC, while the Center knows about other resources in the field that can be tapped. It is also important that they have been able to draw their suppliers into the network, so that both they and their suppliers are now learning.

The students are a wonderful feature of the Center. They hired one Ph.D. whose range of interests and capabilities resulted in the development of highly useful projects.

The benefits from membership are concentrated in the interviewee's unit, which has responsibility for approving the relationship, but information is widely distributed through the company. His unit does try to estimate value in dollar terms constantly, because they are very project oriented, and cost is a factor in the selection of competing projects. They have developed a protocol of benefits, and when a project is proposed, they try to estimate savings in production time if it works. These are only projections, however: they don't feel that they are very successful in these efforts to measure the return on their investment in the ERC.

The barriers to realizing more from the relationship come from both ends. The ERC people can get ahead of their peoples' understanding or outside their immediate fields of knowledge, but the firm's people have to invest in the relationship to derive the benefits.

Company F

The company is a small, new one that used ERC membership and a contract to collaborate on the proprietary research and the publication of work needed to validate the feasibility and technical parameters of a new product, for which the company already held patents. While the firm is not a spin-off in the usual sense, the interviewee's previous experience at the ERC provided the credibility needed to raise the venture capital to start the company, even though the product addressed a problem different from the area he was involved in at the ERC. The company used some of its initial capital to join the ERC, but a much larger proportion for the research contract. The willingness of different disciplines to collaborate in the research was a critical requirement, and the ERC the only place that they could find it.

Although the company is growing, its focus remains stable on its primary product, while the ERC is shifting its emphasis, at least partly due to the loss of a particular person. They are consequently losing their interest in continuing their membership, and no metric of benefits can really assist in making their decision. The people at the ERC and their interests were as important as the structure that fostered the interdisciplinary research that was essential to them at the time.

Company G

This large company has sought certain specific tests and modeling exercises from the ERC. The interviewee believed that small and large companies associated with this Center have different needs that they want the Center to address. Small firms need the capability to carry research through to a patentable technology. A big company has the infrastructure to do that, and is more concerned with proprietary rights. Since the interviewee's firm can't do enough long-range research in-house, the company is more interested in fundamental research activities at the ERC. They want a center that combines basic and shorter term research, and the ERC puts these together. There is a tension, however, and the Industrial Advisory Board must guard against pushing the Center too far toward their applied interests.

The focus of a variety of faculty on interdisciplinary technology is very important. There is a need for different perspectives on the same problem. Moreover, there is an openness and willingness to apply efforts toward industrial applications: industry is not a dirty word in the ERC environment. Specifically, the ERC offered test facilities and capabilities not readily available in a firm. It enabled the company to do things that would otherwise be unaffordable.

The students at the ERC are being trained for an industrial R&D environment. They are exposed to industry in their work at the ERC and in internships: they are more grounded in the real world. Unfortunately, this firm hasn't been able to do much hiring recently, so access to the ERC's state-of-the-art researchers represents an important substitute. The ability to get together and talk can really bring their people up to speed quickly.

Benefits have primarily accrued to the interviewee's unit thus far, but another unit may be entering the picture. While the firm could do a cost evaluation on specific experiments, they haven't tried-the company probably just wouldn't have done the experiment if the ERC weren't available. The membership is clearly worth more than it has cost, but the information benefits are especially hard to value. The firm could probably get more out of the ERC if they put more in: for example, putting one of their people half-time on a joint project. The constrained financial environment makes this hard to do, however.