Buying and Selling Research and Development Services, 1997 to 2002
Julio Miguel Rosa, A. Rose & Pierre Mohnen
#2006-018
Research and development is a crucial activity in the innovation
process. Not every firm is in a position to overcome constraints to R&D,
such as costs. Those that perform R&D must choose between forming a
partnership with other firms, governmental organisations, universities
or doing it themselves internally. Others may sell R&D services or buy
them. This study provides a statistical portrait of the strategies
Canadian companies used in conducting research and development between
1997 and 2002. It is based on data from the Survey of Research and
Development in Canadian Industry. During this time period, the majority
of R&D spending, around 62%, was of internal origin, that is, it was
conducted by the performer. The remaining 38% portion was comprised of
two groups: one group representing 24% performed R&D on behalf of
another organization, that is, they contracted in. The remaining 14% was
conducted by another R&D performer, that is, they contracted out. An
estimated 42% of research and development was conducted with no external
partnerships. Foreign-controlled firms were much more heavily involved
in selling R&D services than their Canadian counterparts. About 22% of
all foreign-controlled firms conducted R&D for outside organizations,
more than twice the proportion of only 9% of domestic performers.
However, Canadian-controlled firms on average spent more on research and
development. As a result, the 9% of Canadian-controlled performers
allocated 23% of their total R&D spending to selling R&D services,
virtually the same proportion as the 25% allocated by foreign-controlled
firms.
Keywords: Research and Development, partnership
JEL classification: O32
UNU-MERIT Working Papers
ISSN 1871-9872