University–industry collaboration: the network embeddedness approach

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Science and Public Policy, 34(3), April 2007, pages 158–168 DOI: 10.3152/030234207X206902; http://www.ingentaconnect.com/content/beech/spp

University–industry collaboration: the network embeddedness approach

Taran Thune

This paper explores the micro-dynamics of relationship formation and development in the university–industry context using a social capital perspective. The aim is to explore whether embeddedness in prior established networks influence (1) the formation of collaborative research projects between firms and universities, and (2) the participants’ perception of the success of the research collaboration. Data from a qualitative study of collaborative R&D projects in two academic fields indicates that collaborative relationships are formed in several distinct ways depending on the availability of pre-existing resources and incentives, and that successful collaborations grow out of prior established ties. These findings are discussed in light of recent policies focusing on strengthening relationships between universities and SMEs.

ECENT R&D AND innovation policies in most industrialized countries put strong em-phasis on interaction between universities

and industry, which is seen as a strategy to strengthen innovation in the economy, by increasing the flow of knowledge across sectors and stimulating industrial R&D investments (the level of which is generally seen as too low). Closer interaction should ideally lead to “more relevant research projects, quicker absorption of scientific knowledge in the private sector and better utilization of scientific knowledge” (Norwegian Ministry of Trade and In-dustry, 2003: 30, trans.). This ambition is supported through new policies and laws, programs for in-creasing collaboration and mobility, financial incen-tives and tax regulations. At the same time as a strong belief in the power of interaction is stressed in policy, research on university–industry (UI) interac-tion has dominantly focused on interaction between a few knowledge-intensive industries and techno-logical academic fields where interaction is strong, such as biotechnology, ICT or new materials (Faulkner and Senker, 1995; Rappert et al, 1999; Meyer-Krahmer and Schmoch, 1998).

Based on this sectoral focus, an incentive-oriented explanation for tie formation is often posed in the

literature, where knowledge-intensive firms’ strate-gic needs for new knowledge (Pavitt, 1984; Schart-inger et al, 2002; Meyer-Krahmer and Schmoch, 1998; Faulkner and Senker, 1995) and universities’ need for research funding (Slaughter and Leslie, 1997; Waagø et al, 2001; Santoro and Gopalakrish-nan, 2000; OECD, 1999; Nimtz et al, 1995) creates interdependence (Geisler, 1995), which motivates firms and universities to collaborate. However, the few comparative studies that have been made across different industrial sectors and academic fields sug-gest that interaction is concentrated in, but is not limited to, interaction between knowledge-intensive economic sectors and technological knowledge fields. Rather, university–industry interaction is spread and does not follow obvious and simple pat-terns (Schartinger et al, 2002). This observation does not disqualify the assumption that dependence is a precondition for formation of collaborative relation-ships, but indicates that there might be other factors relevant for understanding the formation of ties across these sectors. The networks individuals and organizations are embedded in, which can give rise to opportunities and resources needed for forming ties, can be seen as an additional explanation to in-centive-oriented frameworks (Ahuja, 2000; Smith et al, 2005).

However, research on university–industry col-laboration has tended to focus on explaining who interacts and why they do it (Miotti and Schwald,

R

Taran Thune is at the Work Research Institute, PO Box 6954, StOlavs Plass, 0130 Oslo, Norway; email: [email protected]

University–industry collaboration

Science and Public Policy April 2007 159

2003; Faulkner and Senker, 1995; Meyer-Krahmer and Schmoch, 1998; Schartinger et al, 2002; Gunasekara, 2006), or describing in broad strokes how interaction is carried out by identifying catego-ries of links (Bonaccorsi and Piccaluga, 1994; Waagø et al, 2001; Santoro, 2000; Vedovello, 1997; Bozeman, 2000; Geisler, 2001; Faulkner and Senker, 1995; Schartinger et al, 2002). There have been few in-depth studies of interaction, and micro-level data is generally scarce (Gulbrandsen, 2003). Likewise, research focusing on processes of forming, develop-ing and coordinating UI collaboration has been fairly absent.

Although some articles touch on some of these issues when identifying barriers and enablers of successful interaction (Carayannis et al, 2000, Mora-Valentin et al, 2004, Barnes et al, 2002), there has been little systematic effort to explore processes in UI relationships. Understanding how ties are formed has not been in focus in prior research on UI relationships. According to Gulbrandsen and Larsen, “It seems like initiation is not a central issue, be-cause collaborative projects most often are created by the use of prior established relationships” (trans., 2000: 42). However, this assumption undermines the idea that understanding the social mechanisms of how ties are formed could give new insight into who form ties, why they do it and the nature of collabora-tive processes. Answers to questions like these are also relevant for understanding under what condi-tions fostering closer interaction between universi-ties and firms, as stressed in current policy, might occur.

With this in mind, this paper investigates the micro-dynamics of relationship formation and development in the university–industry context drawing on a so-cial capital perspective. The aim was to explore whether embeddedness in prior established networks influenced:

1. The formation of collaborative research projects between firms and universities, and

2. The participants’ perception of the success of the research collaboration.

Examining university–industry relationships from a social capital perspective could be useful for under-standing a broader spectrum of the dynamics of uni-versity–industry collaboration than what has been captured in prior research.

This paper represents an attempt to explore some of these dynamics empirically by a qualitative study of R&D collaborations between firms and research groups in two academic fields –– material science and economic/administrative science, focusing on exploring in relative detail how collaborative R&D projects between firms and university scientists emerged and developed. The two academic fields were selected based on differences in relevance for industrial innovation (Cohen et al, 2003) –– and, in this sense, are expected to be characterized by dif-ferent degrees of interdependence with industry. Material science is seen as highly relevant for firms in innovation processes, and economic/ administrative science is perceived as less relevant for industrial innovation. But at the same time both fields have a high degree of interaction (Schartinger et al, 2002). The reason for choosing a comparative design was to explore how collaborative R&D pro-jects were formed in these two different contexts, and whether the experiences researchers had in in-teracting were similar or different.

This paper reports on this study. First, a review of research on social capital research is made. Then, em-pirical data on processes of tie formation between firms and university scientists are described, followed by an analysis of the relationship between network embeddedness and interaction experiences. The last part of the paper discusses the relevance of the find-ings for policies attempting to strengthen the ties be-tween universities and firms, particularly small and medium-sized enterprises (SMEs). The findings indi-cate that successful relationships grow out of prior es-tablished ties. An implication is that even though different go-betweens and brokers attempt to mitigate the distance between SMEs and universities, success-ful collaboration might still be very difficult to achieve. The paper finally discusses how mobility be-tween universities and firms might be a viable strat-egy to overcoming some of these challenges.

Social capital

According to social capital theory, networks of rela-tionships between people and organizations can be seen as resources available for an agent to utilize in the course of action. Resources available through networks of relationships are usually defined in re-search literature as “social capital” (Bourdieu, 1986; Portes, 1998; Coleman, 1990; Nahapiet and Ghosal, 1998). Nahapiet and Ghosal (1998: 243) defines social capital as:

The sum of the actual and potential resources embedded within, available through, and de-rived from the network of relationships pos-sessed by an individual or social unit. Social capital thus comprises both the network and the assets that may be mobilized through that network.

Taran Thune is senior researcher at the Norwegian Work Research Institute in the Department of Enterprise Devel-opment and Innovation. Her doctoral dissertation, ‘Forma-tion of research collaborations between universities and firms’, presents detailed micro-level analyses of collabora-tive R&D projects between firms and universities in two academic fields. She is currently working on process-oriented research on inter-organizational relationships, and has written several papers on higher education and re-search policy in Norway.



Social capital is seen as a form of capital, in the sense that it can be invested in for future benefits and can be used for productive purposes (Coleman, 1990), but it can both facilitate and constrain action. Social capital rests in the relationships between peo-ple, not in the actors themselves. As such, social capital can never be individually owned, as it is de-pendent on the interaction of individuals (Lesser, 2000). Neither can social capital be traded, but it can be shared. This makes social capital different from physical or intellectual capital.

Mutual obligations, trust, access to information, common understanding, opportunities, status and reputation are examples of social capital resources that are available through membership of networks. Nahapiet and Ghosal (1998) cluster three sets of so-cial capital resources –– structural, relational and cognitive resources. The structural dimension fo-cuses on the linkages between actors in a network, and on how position and network structure facilitate or restrict opportunities and flow of information (Granovetter, 1992). The relational dimension fo-cuses on resources that develop when actors interact, particularly when ties are close and recurrent, such as trust, mutual obligations and familiarity (Granovetter, 1992). The cognitive aspect of social capital targets resources such as a common under-standing of a problem domain and common language or codes. This is particularly relevant for relationships focusing on exchange of knowledge (Nahapiet and Ghosal, 1998).

Social capital research has investigated a large number of questions relating to social structure and action, including the question of how collaborative relationships emerge and develop. Social capital re-search explains the formation of collaborative ties endogenously. That is, that the formation of relation-ships rises out of a network in which an organization or agent is embedded (Ahuja, 2000; Gulati, 1995; Gulati and Gargiulo, 1999). A network can be de-fined as a set of direct and indirect social relation-ships centered around a given person, object or event (Meyerson, 2000). Ties between actors or ‘nodes’ in a network can be described as strong or weak, and network structures can be described as dense or sparse. Both weak and strong ties in a network pro-vide organizations with information about potential

partners and opportunities to form new linkages. According to Granovetter (1973: 1361),

the strength of a tie is a (probably linear) com-bination of the amount of time, the emotional intensity, the intimacy (mutual confidence), and the reciprocal services that characterize the tie.

Strong ties are relationships characterized by close and frequent interaction. Typical examples include friendships and familial relationships. Weak ties, on the other hand, are relationships where contact is less frequent and with less investments of time and emotions, for instance acquaintances. Weaker ties have benefit in that they give access to new opportu-nities, carry novel information (Granovetter, 1973) and increase variance (Burt, 2005). Stronger ties have benefits in terms of coordination and resource sharing (Granovetter, 1985; Uzzi, 1996). Links be-tween unconnected clusters in a network are referred to as bridges, and agents that are able to bridge such “structural holes” are called brokers (Burt, 2005). Weak ties and brokers are central for the formation of new ties (Uzzi, 1996; Burt, 2005). Referrals cre-ate new ties by connecting previously unconnected actors and at the same time “equip the new exchange with resources from preexisting embedded ties” (Uzzi, 1996: 679). The broker establishes trust-worthiness between the new actors through using her common link to both of them, thus transferring the behavioral expectations from one tie to another.

Both strong and weak ties and bridges provide re-sources needed to develop ties to potential partners. Relational social capital resources such as trust, obligations, expectations and reputation develop from direct social interaction, especially in strong in-terpersonal ties (Gulati, 1995; Uzzi, 1996; Coleman, 1990). This highlights the importance of interpersonal relations for the formation of inter-organizational re-lationships (Larson, 1992; Uzzi, 1997). Resources that grow out of repeated interactions are seen as beneficial because they achieve coordination, facili-tate exchange and restrict opportunistic behavior (Coleman, 1990; Uzzi, 1997). Larson’s (1992) study of entrepreneurial dyads highlights that governance was achieved by social control focusing on trust and reciprocity norms, and rarely involved the use of formal contracts. Likewise, Bouty (2000) highlights that close interpersonal relationships facilitate in-formal exchange of knowledge across organizational boundaries.

Social capital also has a cognitive aspect (Nahapiet and Ghosal, 1998). Through previous interactions the partners learn about each other’s needs, capabili-ties and competences, and this might also lead to in-ternal capabilities of how to manage the relationship (Larson, 1992; Nahapiet and Ghosal, 1998). These resources are also beneficial for the exchange of knowledge, as access to common cognitive re-sources increases the exchange capabilities of part-ners (Nahapiet and Ghosal, 1998). Having a joint

Mutual obligations, trust, access to information, common understanding, opportunities, status and reputation are examples of social capital resources that are available through membership of networks



cognitive repertoire stemming from education, ex-perience and previous interactions has been seen to enable exchange of knowledge in inter-organizational relationships (Porac et al, 2004; Bouty, 2000). An im-plication of this is that the character of the relationship between agents in collaborative relationships will matter a lot for knowledge exchange processes. The homophily concept (Rogers, 2003) and the absorptive capacity argument by Cohen and Levinthal (1991), in a similar manner to social capital research, propose that transfer of knowledge requires some degree of similarity, while allowing for difference to include novelty, a principle that Nooteboom (1999) refers to as “external economy of cognitive scope”. This also entails that over-embeddedness is counter-productive for collaborative relationships set up to facilitate knowledge exchange (Uzzi, 1996; Burt, 2005; Nooteboom, 1999).

Social capital theory assumes that prior ties will shape experiences in collaborating, by providing a new tie with cognitive and relational resources needed for exchange. The participants’ ability to ex-change knowledge is related to their previous knowledge capability (Nooteboom, 1999, 2002; Cohen and Levinthal, 1991), which is partly a prod-uct of previous social interaction (Nahapiet and Ghosal, 1998). The implication of this viewpoint is that participants who have a common cognitive rep-ertoire are more likely to experience a positive knowledge exchange process. Also, social capital theory suggests that relational social capital re-sources, such as trust and norms of reciprocity, stemming from previous interaction, facilitate posi-tive exchange experiences (Gulati, 1995; Uzzi, 1996; Larson, 1992), and that such relationships tend to persist over time (Larson, 1992; Bouty, 2000).

Based on the above arguments, the following propositions are made concerning the influence of network embeddedness on:

1. Formation of ties between universities and firms, and

2. The success of collaborative relationships between firms and universities: • Proposition 1: Network embeddedness facili-

tates formation of collaborative relationships between firms and universities by providing opportunities and resources needed to form ties.

• Proposition 2: University–industry collabora-tions formed on previously established ties ex-perience the collaboration as more positive and these relationships are more likely to continue.

Alongside developing this theoretical frame, empiri-cal data was collected through interviews with researchers in material science and economic/ administrative science who were involved in collabo-rations with firms. The framework developed through the interaction between data and theory, and the ambi-tion was to develop a theoretically informed and empirically grounded framework for understanding

how researchers form ties and interacts with firms (Ragin, 1994). The main findings from the empirical study are summarized below and the relationships be-tween the central concepts are discussed.

An empirical study

Empirical data was collected through semistructured interviews with 29 researchers and R&D managers in universities and firms involved in particular col-laborative R&D projects. The interviews focused on exploring the details about how particular collabora-tions came into being, who were instrumental in forming the relationships and what kind of resources they drew upon when forming the collaborations. The interviews also included several questions fo-cusing on how the participants experienced the col-laboration, attempting to explore their subjective perception of how successful the collaborations were, what problems and challenges were most prominent in the collaborations, and how the re-spondents saw the future of collaborations they were involved in. The interviews each lasted about 60 minutes and were recorded and transcribed after each interview. The data was subjected to a system-atic qualitative data analysis following a template framework (King, 2004) implemented in the analysis software N6 (Richards, 2005).

Tie formation processes

The large majority of the university–industry col-laborations investigated have been initiated and formed through the use of already established con-tacts. This pattern is found in both academic fields investigated, and this finding is corroborated by other data sources and research publications as well (Gulbrandsen and Larsen, 2000; Schartinger et al, 2002).These contacts are often personal friendships formed in university or through educational/ professional networks or through previous smaller-scale collaboration projects. In the words of one of the respondents: “The short version of it is that it was a personal contact that turned into a project.” However, a small minority of the respondents say that the industry collaboration projects they are or have been involved in were formed without previous contact between the parties. In these cases referral from a third party, brokering by an external agent or reading publications facilitated the establishment of a collaboration project. In terms of the latter, a re-spondent claim that firms have approached them “because they have seen what we publish”. In the cases found where a collaboration project has been formed without prior contact, the collaborations of-ten have a clear goal based on a particular need for new knowledge by the firm.

Collaborations that are founded on previously established contacts can also be based on a mutual interdependence based on particular knowledge



needs. In some of the cases investigated, research carried out in university groups is of high relevance for existing core technologies in the firms. In these cases, the relationships seem to be very tight and the interaction is continuous or recurrent. But in many cases it is not a concrete need for knowledge behind the establishment of a collaboration project: rather it seems to be a common interest for relevant research problems. Since the majority of the firms involved have scientists and other university-educated em-ployees on staff, it seems that in many cases per-sonal interests and contacts between firm employees and university employees are central in establishing collaborative projects, not specific knowledge needs. In these cases, the availability of public funding for collaboration also seems to trigger the formation of new collaborative R&D projects.

Based on the data it is possible to discern different tie formation patterns. Table 1 discerns four modes of tie formation, based on two dimensions –– in-ducement and network embeddedness. Network em-beddedness here means the extent to which the collaboration was formed using pre-established net-work contacts and prior ties to the collaboration partner (strong embeddedness) or if it was an ab-sence of previous links between the parties (weak embeddedness). Inducement here means the extent to which the parties had a particular need for re-sources that induced them to enter into a partnership (strong inducement) or whether the relationship was formed without a clear demand for resources to be obtained through the relationship (weak inducement).

Based on these two dimensions four different tie formation processes can be discerned: created, needs-driven, opportunity-driven and interdependence-driven. This is in line with research on alliance formations more generally (Doz et al, 2000; Smith et al, 2005), that indicate that the formation of inter-organizational relationships tends to follow an engineered or emergent pattern. In line with Smith et al’s 2005 study, this study also indicates that the

formation of inter-organizational relationships tend to be embedded in established network structures.

In the cases where embeddedness is strong and inducement is strong, interdependence-driven col-laborations develop. In these situations the firm is highly knowledge-intensive and the R&D project is related to a core technology for the firm –– giving the firm a strong inducement to collaborate. The research carried out in university groups is highly industry relevant and there is a high density of estab-lished ties between the firms and university existing prior to forming new projects. One of the respon-dents expressed this in the following manner:

Offshore has always been a very critical indus-try with very close ties to the university. At the department for petroleum technology and ap-plied geophysics, people are very accustomed to working with industry. If something happens, they just call. They are very used to working like that and industry fund a lot of what is going on.

At the other extreme, in cases where motivation is weak in that firms are not knowledge-intensive and do not require scientific knowledge as an input, there are likely to be fewer ties between university envi-ronments and firms. This is the focus of recent poli-cies aiming at fostering collaboration between SMEs and universities.

But in the data the majority of the tie formation processes do not fit into either of these categories. And in these processes, the relationship between in-centives, opportunities and tie formation is less clear. In almost all of the economic/administrative science respondents’ accounts, the role of previously established contacts between actors was key to tie formation, while motivation by the firms was not connected to access to critical knowledge. This is also the case for several of the material science re-spondents’ cases. For the economics/administrative science respondents, the projects tend to be on the side of core technologies by the firm; and for the material science respondents, the projects address new and uncertain technologies. In these cases it seems that prior established contacts are particularly central for establishing collaborations between firms and universities, while the availability of public funding triggers the formation of a collaboration. The following quote illustrates this: “We drafted a project proposal and got [the firm’s] support to initi-ate a project. But at the same time we agreed to ap-ply for funding from the research council.” These formation processes are here labeled opportunity-driven.

But in a few cases the collaboration was estab-lished without previous contacts and in those cases there was a strong need for knowledge that triggered the formation. A respondent comments on the moti-vation for establishing a collaborative project: “Our idea was to take this technology which we had a

Table 1. Typology of tie formation processes

Weak embeddedness

Strong embeddedness

Weak inducement

Created collaborations

Relationships that are created by external agents

Opportunity-driven collaborations

Relationships emerge because there is previous relationships and availability of funding

Strong inducement

Needs-driven collaborations

Relationships are formed based on a clear strategic need by the firm but without previous interaction between the parties

Interdependence-driven collaborations

Relationships emerge because the knowledge is a critical input and established ties are close and recurrent



concrete commercial application for, something that we planned to use it for.” Such tie formation pro-cesses are here labeled needs-driven collaborations.

Consistent with Proposition 1, with respect to how ties between firms and universities are formed, the data clearly illustrates the embedded character of collaborative R&D projects between firms and uni-versities. The analysis indicates that, for the large majority of respondents, prior established relation-ships are central for formation of new collabora-tions. Personal relationships, education-based networks and previous small-scale collaboration pro-jects are different types of prior established relation-ships utilized in tie formation processes. Most of the cases explored fit into the opportunity-driven pattern, whereas a small number fit into an interde-pendence-driven pattern of tie formation. However, a few of the respondents’ accounts of how their col-laborative projects with firms came into being do not fit embedded patterns of tie formation. In a few cases the partners had no direct relations prior to forming a tie, and in these cases the partners usually had a clear inducement that motivated them to form a tie. Third-party referrals, publications or brokers are examples of bridges that mediate formation of completely new relationships in situations where at least one of the partners has a clear incentive to ob-tain resources.

Experiences in interacting

The second focus of the analysis is how the re-searchers experience knowledge interaction and if differences in tie formation are associated with differences in collaboration experiences. To explore this potential relationship, interview data was col-lected on the respondents’ interaction experiences –– seen in terms of three dimensions:

1. How the collaboration was carried out, 2. How the respondents perceived the success and

challenges of the interaction process, and 3. How they saw the future of the relationship.

Subjective performance assessment and expectation of continuation have been used as indicators in prior research on success of university–industry relation-ships (Barnes et al, 2002; Geisler, 2001; Mora-Valentin et al, 2004). Table 2 summarizes the data on interaction experiences in the different types of ties.

Table 2 indicates that needs-driven collaborations formed because of a strategic need for resources but with weak embeddedness are often experienced as difficult and not successful. In these cases, perceived cultural differences in terms of depth of focus and differences in time perspectives are seen as large ob-stacles for the collaboration. The lack of experience and the cognitive distance seem to create a gap be-tween expectations –– which are very high –– and how the interaction is carried out and what it deliv-ers. The cases explored that fit best in this category were experienced as failures by the respondents; cul-tural differences were huge obstacles and the rela-tionships “literally died”. The need for new knowledge that was a motivation for forming the tie meant that there was a large difference in cognitive capacities as well as in familiarity and trust. This contributed to making the interaction experience dif-ficult, and there are no plans for continuation of the relationship after a project period ends.

Opportunity-driven collaborations were formed, based on established contacts and prior interaction experience, but where the need for particular re-sources was seen as less central. Access to public funding seems to be central for establishing such col-laborations. In these cases, the success of the collabo-ration is assessed as moderately positive. Opportunity-driven collaborations are also seen as challenging with respect to cultural differences, but such issues are manageable and not destructive. But a central issue in these collaborations is that since they are highly dependent on personal contacts for project initiation, they seem to be particularly vulnerable to

The analysis indicates that, for the large majority of respondents, prior established relationships are central for formation of new collaborations

Table 2. Tie formation processes and interaction experiences

Weak embeddedness

Strong embeddedness

Weak inducement

Created collaborations

No cases, policy emphasis

Opportunity-driven collaborations

• Careful positive assessment of success, but often experienced as challenging

• Very dependent on key contact persons: loss of contact persons a main challenge

• No concrete plans for continuation, but possible if new opportunities rise

Strong inducement

Needs-driven collaborations

• Negative assessment of success

• Cultural differences experienced as a main challenge

• No further collaboration

Interdependence-driven collaborations

• Positive assessment of success

• Do experience cultural differences but have developed ways of tackling such issues

• Expect continuation



external changes and reorganizations. Loss of contact persons is a key challenge for such collaborations, particularly for the economics/administrative science projects that seem to be anchored higher in the or-ganization and are in general more loosely coupled to the firm. The following quote illustrates this:

External factors have changed the collabora-tion, particularly because our contact persons or champions have been moved. Since the rela-tionship is very dependent on key persons and is to a little extent institutionalized, this has a large effect on the interaction process.

When the formal project period ends and the funding stops there are usually no concrete plans for con-tinuation. But the respondents say that if new oppor-tunities rise in terms of funding, new projects can be established. As compared to the needs-driven collaborations, familiarity seems to make the tensions related to cultural differences less difficult to handle. Also since expectations often seem to be less con-crete, the gap between expectations and experience is experienced as less.

In interdependence-driven collaborations, previ-ously established contacts, networks and prior col-laboration are central for forming collaborative projects. Because of previous interaction and, often, common educational and professional backgrounds, the actors involved share understandings of the field, but also of each other. Also, the firms involved have a clear strategic need for the knowledge, as it is of-ten directly relevant to a core technology and the firms are highly knowledge-intensive. Collaborative projects with this combination of preconditions are the ones assessed as the most successful by the re-spondents. In these cases, the researchers perceive the firms to be more actively involved in the process and that the firms’ own experts are involved. It is not that the involved parties do not experience any chal-lenges or problems, but they do not see differences and tensions as only negative. Through previous in-teractions they seem to have developed ways of handling differences, and clarifying expectations and differences is a central part of this, as seen in the fol-lowing quote:

I think that it is important to be clear about the differences: that industry understands that the universities think differently and vice versa. Because then at least it won’t be become a shock. It is important that they have some leni-ence with each other.

The researchers expect interaction to continue when a concrete project ends, and often such collabora-tions are recurrent or continuous.

In terms of Proposition 2, the analysis indicates that network embeddedness and the existence of prior ties between the partners contributes to a posi-tive exchange experience, but only to a certain extent.

The data analysis indicates that collaborative R&D projects that were formed using previous contacts, established in university and reinforced through pre-vious collaboration projects such as small student projects, seem to be experienced as more positive and less difficult. But a few of the collaboration pro-jects were formed without prior contact and they, on the other hand, were experienced as more negative and challenging. Lack of prior experience seems to create a discrepancy between expectations and what the collaboration process delivers.

However, the data also indicate that some of the collaborative projects that were formed using previ-ously established contacts, but where the strategic need for the knowledge by the firm was assessed as less, are also experienced as difficult. They seem to be particularly susceptible to contact loss because of externally imposed changes. It is common for the re-spondents to experience that the firms reorganize, and in several cases this leads to the loss of a contact person for the university group they collaborate with. Since personal contacts are very central for forming ties, the loss of a contact person is experi-enced as negative since it entails a breakdown in the communication. This finding supports the interpreta-tion made in Proposition 2. However, the findings indicate that network embeddedness represents both a strength and a potential challenge. Implications of the embedded character of university–industry rela-tionships are discussed next.

Policies on university–industry interaction

The purpose and rationale for this research project were set in the context of recent innovation and re-search policies aiming at fostering closer collabora-tion between firms and universities in Norway. However, the present understanding of the precondi-tions for tie formation was seen as underdeveloped, as research to a limited extent has addressed precon-ditions for tie formation and has emphasized a few academic fields and large knowledge-intensive firms. Likewise, research has focused on the institu-tional arrangements of UI relationships with little at-tention to the actual collaboration processes, including an insufficient understanding of how ties are formed. In employing a social capital perspec-tive, the aim was to explore the potential relationship between network embeddedness and formation of collaborations, and network embeddedness and col-laboration experience. It was argued that more knowledge about the social character of collabora-tion processes could provide new insight about the micro-dynamics of university–industry relationships. And that this might be particularly relevant since current research and innovation policies focus on how closer collaborations between universities and firms can be fostered. With this in mind, what is the relevance of this analysis and findings for current policies? Particularly, what are the implications for



policies and programs that aim at strengthening the ties between SMEs and university and colleges?

In the last decade, several new policies have been passed and implemented that are directly relevant for university–industry interaction in Norway, including several official Norwegian reports, white papers and law amendments. It has been an active period for policymaking concerning education, research and innovation, signaling an increased focus on knowl-edge and innovation as public policy areas (Remø et al, 2004). The latest white paper on research, Com-mitment to Research, was passed in the spring of 2005, laying down the Norwegian research policy until 2010 (Ministry of Education and Research, 2005). The white paper stated that the government’s vision was that Norway should become an inter-nationally leading research nation, and that this would require further increases in national R&D invest-ments. As compared to the other European and Nordic countries, the national investments in R&D lag be-hind.1 The chief explanation for this is that Norwegian firms are generally small and not very technology-intensive. There are few multinational high tech com-panies that work as ‘R&D locomotives’ in the national economy. Because of this strengthening, the private sector’s share of R&D investments has for years been seen as the most central policy goal and, according to the latest policies, should by 2010 ac-count for two-thirds of R&D investments. The new overall goal is to reach 3% of GDP by 2010, in accor-dance with the EU Lisbon strategy.

To mobilize Norwegian firms to invest more in R&D, fostering collaborations between firms and research institutions was seen as a key strategy. Ac-cording to the latest white paper on research, interac-tions between public research institutions and business and industry “is of great significance for Norway’s innovative capabilities” (Ministry of Edu-cation and Research, 2005). This policy maintained that interaction between industry and universities is fundamental for innovation, and consequently more innovation in Norway would require more interac-tions between firms and universities and colleges.

Several policy measures have been developed with the goal of increasing the interaction between public research institutions and business and indus-try. Several of these measures focus on interaction between SMEs with little prior experience in R&D and research institutions, such as colleges, institutes and universities. The ‘Mobilization for R&D-related Innovation’ program in the Research Council of Norway organizes several such initiatives. This pro-gram has three sub-programs, all intended to stimu-late R&D investments by SMEs: industry-oriented focus on colleges, competence brokering, and pilots in regional innovation systems and clusters. These instruments focus on building up capacity and com-petence, stimulating network development, and competence brokering as ways of getting more firms involved in R&D and strengthening the role of re-search institutions as suppliers of R&D to industry.

But to what extent are these programs able to fulfill these goals?

The competence brokering program aims at stimulating investments in R&D in firms that have little or no prior experience in R&D activities, and at the same time strengthen research institutes’ roles as partners for firms with little R&D experience. Evaluation of this program indicates that the pro-gram is not achieving its goal, because the target group –– firms with little or no R&D experience –– is not involved in the projects. The program has not operationalized what “little or no R&D experience means” and in practice most of the firms involved have previously been involved in similar activities (Hartmark Consulting, 2003; Jakobsen and Døving, 2006).

The industry-oriented focus on colleges program focused on stimulating the colleges to develop strategies to make them more attractive and accessi-ble to industry, by promoting collaboration and mobility. The program was established in 2004 and, by 2005, 25 projects involving 229 firms had been implemented. The main results of the program, with respect to how firms assess results and impacts, are that firms gain more knowledge about the colleges and what they can contribute, that networks are created, and that they can recruit graduates. How-ever, 80% of the firms involved in this program are already involved in other internal and external R&D activities (Research Council of Norway, 2006).

The experiences from the programs that are set up to mobilize firms with little prior engagement in R&D indicate that they have a hard time in reaching the tar-get group. These experiences and the above findings both provide criticism of naïve optimism about the potential for creating UI ties between previously un-connected agents. The analysis indicates that forming and carrying out collaborations is complicated and re-lies heavily on resources available through previously established ties. Moreover, that knowledge interac-tion also benefits from an ‘experienced need’ for the knowledge, as reflected in a demand for knowledge and commitment to the interaction.

This indicates that engineering relationships with-out paying attention to such preconditions is a risky strategy. In particular, strategies that aim at fostering

The industry-oriented focus on colleges program focused on stimulating the colleges to develop strategies to make them more attractive and accessible to industry, by promoting collaboration and mobility



relationships between previously unconnected firms and universities could be vulnerable, if these firms neither have an explicit demand for, nor the re-sources needed to form ties as well as exchange knowledge. The evaluations of the programs that have such firms as a target group show that they are difficult to mobilize. In addition, the data collected on interaction experiences in collaborative R&D projects indicate that even in cases where the parties have prior R&D experience and explicit need for the knowledge, successful interaction is hard to achieve without prior established ties. These data indicate that publicly funded mobilization programs intended to establish ties between unconnected agents, and in this way find more firms to invest in R&D, are not achieving their desired outcomes.

There are now several agencies that fulfill roles for creating and brokering new relationships that do create new connections, but they are not always able to mitigate the distance between firms and universi-ties. By providing needed resources and establishing arenas, the brokers do put firms and universities in contact with each other. But the likelihood that such relationships become successful, and that the rela-tionships are sustainable after public funding is withdrawn, is more questionable. Further research following collaboration projects over time would be needed to investigate the long-term viability of such arrangements.

With this in mind, are there any viable strategies that can be envisioned that will strengthen the poten-tial for developing networks between firms and universities? The data indicate a key role of “bound-ary spanners” for initiating and carrying out univer-sity–firm relationships. Boundary spanners are network entrepreneurs that possess a dense network internally in their organization as well as externally, and who also have a high degree of prior knowledge (Williams, 2002). Several of the respondents inter-viewed both in firms and universities see it as their particular job to move back and forth along the university–industry boundary. These individuals likely play a particularly central role in university–firm relationships, and their actions and experiences are highly relevant topics for further research on university–industry collaboration.

Also the data from the tie formation study indicate that students are a key resource in networks between industry and universities. Students represent a key channel of knowledge transfer but are also the chief way of building and strengthening networks (Slaughter et al, 2002). Data from the formation study indicate that for firms, interacting with students can be part of a broader strategy that enables them to gradually develop relationships without taking much risk initially. Through this step-by-step strategy, they can ‘try out’ and build experiential knowledge and absorptive capacity as well as developing net-works through recruitment and interaction. Data from the evaluation of the industry-oriented focus on colleges program indicate that contact with students

and potential recruitment of graduates is one of the program outcomes that firms value the most. At pre-sent we know that there are several arrangements for stimulating firm–student connections, and these ini-tiatives are valued positively by firms. However, there is no systematic information about these kinds of arrangements in Norway at present, how they are coordinated, how many students are involved in such arrangements and the effects for the firms and the students. Further research is needed to assess the viability of such a network development approach.

Conclusions

This study provides critical input to current policy on university–industry relations. The analysis indi-cates that social capital resources are central both to forming collaborative projects and to carrying out collaborations. An implication of this is that creating new and successful collaborations between previ-ously unconnected firms and research environments is probably difficult; as such relationships lack cen-tral resources for knowledge exchange. Formation of ties and interaction in collaborative relationships re-quire many different resources, such as familiarity, trust, common understanding and language, and a long-term commitment to the collaboration. This implication is particularly relevant for the policy of stimulating SMEs to collaborate with universities, and thereby increasing firms’ investments in R&D. By providing funding for creating arenas and net-works, new collaborative projects might potentially grow. But the data indicate that it is difficult to cre-ate productive interaction processes in cases where there are no prior ties between the partners.

Further, a main finding in this study was to high-light the opportunity-driven character of tie forma-tion in this context, and highlighting the central role of public agencies for triggering UI relations. At the same time, opportunities without real commitment represent a problem for collaboration projects. The issue of organizational commitment seems to be highly relevant for further development of policy measures and programs intended to stimulate UI in-teraction. This is particularly important in this con-text because collaborative R&D projects are based on informal relationships and are usually only loosely anchored to the firms involved. And there-fore reorganizations resulting in loss of contact seem to have a negative effect on interaction processes and potentially on outcomes.

Overall, because of the many tensions and chal-lenges involved in forming and carrying out interac-tions between firms and universities, collaborative R&D projects should be treated and managed as highly ‘tender ties’. And because of this, both resources available through knowledge networks and organizational commitment seem to be necessary preconditions for knowledge interaction between universities and industry. This poses significant



challenges for how ties between previously uncon-nected agents, such as most SMEs, can be stimu-lated. Experience from programs indicates that they are not able to mobilize such firms, but that strategies focusing on boundary spanning and mobility might represent a way for SMEs to become connected to research environments.

This small qualitative study indicates that there is potential for generating new knowledge about university–industry relationships by further micro-level studies focusing on interaction processes. Macro-level data such as funding data and cross-sectional surveys tend to underestimate the degree of interaction because they gloss over the informal and non-institutionalized character of much university–industry interaction. To gain a better understanding of the roles universities play in innovation systems

and the nature of knowledge flows from universities to industry, research needs to take into account the informal nature of ties, and the link between formal collaboration projects and informal networks. To capture the complex and largely informal nature of linkages between industry and universities, further research on the process perspective could yield added insight. To do this, and to extend the process focus beyond the project initiation stage, further research following interactions over time is needed. Collecting longitudinal data, by following concrete R&D collaboration projects over time also after they formally end, can represent a new approach. This approach can provide further knowledge about initiation and coordination of R&D collaboration, and also about how knowledge is created and exchanged in UI collaborations.

Note

1. In 2005, total R&D investments accounted for 1.75% of GDP. The private sector’s share was approximately 60%.

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University–industry collaboration: the network embeddedness approach

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