Research Consortia

Research consortia consists of a number of organizations working together on a relatively well specified project. The rationale for joining a research consortium includes sharing the cost and risk of research, pooling scarce expertise and equipment, performing pre-competitive research and setting of standards. They may take many different forms, the most centralized being pooled investment in a common research facility or new venture and the least centralized being co-ordinated research co-located in the various member firms.  Typically, European firms have favoured the former, whereas American firms have tended to adopt the latter type. Japanese firms appear to favour a hybrid form in which shared research facilities are used in parallel to co-ordinated in-house research. These differences in structure are due to technical, competitive and legal reasons.

The idea was to encourage small firms to fund research and the research associations were largely a response to the competitive threat of German manufacturers. They were funded by a combination of government funds and contributions from member firms. Many of the associations have survived and are now commercial contract research organizations.  However, the goals  and structure of the Japanese consortia are very different from those in the UK.

In Japan, the Technology Research Association system provides a structure to bring together firms from a wide range of different industries. Unlike their British counterparts, the Japanese associations tend to be temporary organizations and are disbanded when the project is completed, whereas the British associations have tended to become permanent organizations. Members of the Japanese associations tend to be large firms with extensive in-house R&D capabilities whereas members of British associations tend to be much smaller companies with little in-house R&D. Finally, the Japanese associations tend to be in high technology areas, whereas the British associations originally concentrated on support for mature   industries.

The  early dominance of large firms in many of the leading sectors made it easier for firms to rely on their own resources to conduct research. However, the National Cooperative Research Act was passed in the USA in 1984 in an effort to emulate the apparent success of the Japanese consortia. As a result, the Micro-electronic and Computer Technology Corporation (MCC) and SEMATECH (semiconductor manufacturing technology initiative) were able to be established.

There are significant differences between the Japanese and American research consortia. Almost all members of the Japanese consortia conduct research in member firms, compared to less than a half of the American consortia members. The US consortia favour separate joint facilities and research in universities. Therefore, the Japanese and American consortia face different organizational problems. The biggest problem the Japanese must tackle is how to co-ordinate research in member firms, whereas the biggest problems for the Americans is how to manage technology transfer from the centre to the member firms. In addition, the Japanese consortia are more focused and applied product development and pilot production, whereas the American consortia tend to   concentrate on idea generation and technical feasibility studies.  Therefore, the success of research consortia depends on their motives structure and membership.

Consortia, defined as multi-firm collaborations take two main forms, between competitors or between non-competing firms.  Firms commonly collaborate with competitors in the development of pre-competitive technologies. This form of collaboration is particularly attractive when supported by government or EU funds, as in the case of the Frame work programme for European research and technological development.

Collaboration between firms in different industries appears to evoke much less concern about proprietary positions.  In most cases, they are viewed as an attractive means of leveraging in-house skills by working with organizations possessing complementary technical capabilities. Intra-industry collaborations are more important in non-competitive areas, such as in the areas of health, safety and the environment and in the setting of new standards or influencing legislation. For example, the 1990 US Clean Air  Act placed the onus on automobile  manufacturers and oil companies to provide  the basic science which will act as a realistic  foundation for future  legislation. Competing  oil companies  and auto manufacturers set up the Auto-oil consortium to provide this  science.

Nevertheless, even in consortia involving non-competing firms, it appears that vested interests can sometimes lead to difficulties. For example, in the collaboration between auto manufacturers and oil companies aimed at reducing toxic emissions from car exhausts, there exists serious differences of opinion between these two groups of firms about whether the main thrust of the research should be directed towards improved engine efficiencies, or towards better gasoline formulations.

Therefore, both industry and firm level factors influence the formation of consortia. Industry level factors that increase the formation of and participation in consortia are weak competition including intellectual property.

The technological capability of a firm increases both the opportunity and incentive to participate. Greater technological capability makes a firm more attractive potential member. In addition, technological capability (and market) position should allow it to learn more easily or absorb more knowledge.