Coordinated R&D programmes as trust-compensating external structures

In the quantitative analysis public support schemes providing for industry-academia R&D projects have been identified as the most important KNM instrument assisting the STP res-ident firms’ in forming and carrying out knowledge relations with academia.²²⁴ Due to their

224 Almost 86% of the firms specified as strong knowledge seekers (n=21) evaluated the importance of public support schemes for industry-academia R&D projects strongly. Also, about 67% of the 18 firms in the group of moderate knowledge seekers underlined their significance, whereas only a fraction of ca. 31% in the group of lame knowledge seekers regarded them as very important or important (see Chapter 4.4.1).

geographical alignment on the extra-local scale (i.e. regional, national and European scale), such programmes primarily promote non-local knowledge relations.

To begin with, public support schemes typically define the specialization of the industry-academia R&D projects in terms of industry and technology area, respectively. As a conse-quence, a sufficient cognitive relatedness of the project consortia is ensured. Depending on the R&D projects’ focus, a project consortium of businesses (mostly SMEs) and scientific institutions, which possess specialized similar or complementary knowledge, is formed.

Based on the geographical alignment of the specific public support programme, it compris-es a broad range of regional, national or European knowledge organizations. An interview-ee described the composition of such publicly subsidized project consortia based on specif-ic technologspecif-ical and scientifspecif-ic expertise: “Mostly, the Wachstumskerne [author: name of a public support scheme in Germany] and Förderverbünde [i.e. consortia of organizations]

are project calls of the BMBF, which tender specific topics. (…) The application-oriented actors get together in the consortia. For example, an industrial partner that wants to build lasers for welding. He thinks about the technology needed and looks for [academic] part-ners to complete the research project successfully.” (ADL_9). As a result, the organized cognitive proximity within such industry-academia R&D project consortia does enable ef-fective communication and sets the potential for the successful exchange and combination of know-how in order to generate innovative outcomes. In this sense, the necessary pre-requisite for knowledge interaction and, in turn, interactive learning between firms and aca-demia is fulfilled.²²⁵

Furthermore, to obtain productive outcomes public support programmes apply structuring and coordination mechanisms. These governance mechanisms serve two purposes. Firstly, they help to compensate for often lacking social proximity and trust among mostly previ-ously unconnected project partners. Secondly, they define shared objectives and frame-work conditions despite normally strong institutional dissimilarities between participating firms and scientific institutions.²²⁶ Regarding the former, the interviewees underlined an appointed project leader and a certain hierarchy, as well as exerted control mechanisms that reduce uncertainty and risks of opportunistic behaviour in knowledge sharing. In

225 Publicly subsidized industry-science R&D projects are structurally designed based on technology foresight, tenders, peer review-based selections and specific compositions of project consortia, for example, specific types of academia and firms. Moreover, by specifying the thematic alignment, governments try to ascertain that the public investments will result in the expected outcomes in terms of innovative technological devel-opments (Czarnitzki et al., 2007; Grimaldi & von Tunzelmann, 2002).

226 Czarnitzki et al. (2007) have highlighted that public authorities or project management agencies usually carry out the administration of such funding programmes. Overall, beneficial effects of publicly coordinated industry-academia R&D projects comprise positive knowledge spillovers, R&D subsidies, governance struc-tures, as well as cost and risk sharing.

ticular, the ownership of intellectual property and the confidential treatment of project part-ners’ knowledge are of special importance and clarified beforehand: “The Charité is the project coordinator, and there’s a specific project procedure. (…) At these projects, we al-ways sign a NDA. (…) There’s also a cooperation agreement that defines how to deal with new results and patents. (…) I never had any objections. We always have an open ex-change of thoughts and ideas.” (ADL_10). Thus, the organization of a medium degree of organizational proximity in publicly coordinated R&D projects takes over a critical enabling role, as it facilitates the formation of industry-academia consortia, often linked to new knowledge relations among formerly unconnected actors, and the open exchange of knowledge during the course of the temporary cooperation. In other words, it substitutes for the lack of social proximity, thus, enabling the access to new, potentially more diverse knowledge that sets potential for learning. This coincides with the findings in Chapter 4.5 that have also pointed to the critical enabling role of organizational proximity in knowledge relations and its compensatory function for too much social distance.

Regarding the latter, the interviewees emphasized that the formally defined framework conditions in publicly coordinated R&D projects help to identify shared objectives and work procedures. This relates to clearly defined responsibilities and milestones, for example, in regard to intermediate and final deliverables for each project partner. One interviewee illus-trated this point: “All the R&D projects include a general contract, and there’re special con-tracts with [name of the company] and the specific university. In this contract, the work, the amount of time the university will work on it and the economic conditions are specified. (...) Everything is based on contracts. Everything is regulated.“ (CAR_15).²²⁷ Thus, organiza-tional proximity in terms of strict governance mechanisms can bridge or reduce tradiorganiza-tionally strong institutional discrepancies between industry and academia.²²⁸ Balland et al. (2015) have also pointed out this compensatory mechanism.

In addition, the governance frameworks of such supra-local R&D projects also constitute specific communication regimes in order to ensure the effective exchange, combination and internalization of knowledge among project partners over distance. The interviewees underscored temporary meetings as important integrated communication elements, which

227 Another interviewee underlined the important role of strictly specified responsibilities and effective commu-nication to generate productive outcomes in publicly subsidized cross-institutional R&D programmes: “Eve-rybody has its own project part. There’re different work packages, which are executed by each project part-ner independently, but when you meet and coordinate regularly so that the interfaces are defined. And this works pretty well.” (ADL_26).

228 In regard to the observed enabling role of organizational proximity demonstrated here and in Chapter 4.5.4, Nambisan and Sawhney (2011) have pointed out that formal contracts take over the role of leveraging “the structural embeddedness in the network to minimize undue appropriation of value without sacrificing the in-tensity of knowledge sharing" (Nambisan and Sawhney, 2011: 52) in inter-firm innovation projects.

facilitate personal interaction and, consequently, the creation of a shared understanding and the effective exchange of knowledge: “In terms of working in these kinds of cooperation projects, in most of the cases some really good work can be done with somebody that is situated in Seville and another one that is located in Norway. (…) There’s a system of mediums to maintain this relationship, to do this collaboration as easy as possible.” (CAR_24).²²⁹ On the one hand, this finding reaffirms the notion that organiza-tional proximity is a crucial factor in order to enable knowledge interaction over spatial dis-tance, as multiple scholars have stressed (e.g. Knoben & Oerlemans, 2006; Lagendijk &

Lorentzen, 2007). On the other hand, it implies that temporary co-presence, for example, in scheduled personal meetings, in combination with ICT-based communication technologies (virtual buzz), can substitute for the need for permanent spatial proximity in knowledge re-lations. Kujath (2008) and Bathelt and Turi (2011), among others, have also underlined this aspect.

Finally, many interviewees emphasized that first mutual work experiences and repeated (personal) interaction within such externally coordinated project consortia also encouraged the development of personal relationships and increased multi-dimensional trust (i.e. com-petence and goodwill trust) to scientific project partners. In some cases, newly created weak ties evolved to strong ties over time: “In other cases, the partnership are established by coincidence through projects that involve multiple partners. Out of this, stable relations can evolve. Stable links are created based on first successful cooperation. When there wasn’t an effective cooperation, there won’t be a next mutual project.” (ADL_4). Among others, Mattes (2012) has underlined the positive correlation between organizational proximity and social as well as cognitive closeness.²³⁰

In sum, the strong influence of public support schemes on STP resident firms’ creating and carrying out successful knowledge relations to academia, especially over geographical dis-tance, is predominantly determined by the combined organization of necessary and critical types of proximity: 1) sufficient cognitive overlap, 2) organizational closeness associated

229 According to Harmaakorpi & Melkas (2005), typical formats of interaction and communication in formal cooperation projects include personal meetings, phone conferences, virtual forums, good practice reports and on-site visits, among others. To illustrate, one interviewee explained the different channels of commu-nication: “We have a vivid communication; meetings, phone calls and documentations. We transfer infor-mation using documents in the way that we define what we really want and what we are expecting specifi-cally.” (CAR_9). Grabher and Maintz (2006) have stressed that virtual networking forums and software may enhance the scope and the strategic use of professional contacts. Both personal and virtual interaction can complement each other. However, face-to-face interaction still is more critical to build up reliable and trust-ful relationships.

230 Mattes (2012) has stated that social proximity is strongly interrelated with all other proximities considered, as “it is encouraged by them, occurring as a side-effect and as a result of proximities in the other dimen-sions” (Mattes, 2012: 1090). Kujath (2008) has highlighted that stronger organizational settings facilitate the reduction of cognitive distance due to more frequent communication and interaction.

with reduced uncertainty and 3) adequate institutional similarity. In addition, the rather indi-rect influence of temporary geographical proximity on augmented cognitive and social prox-imity is exploited systematically. Thus, this combined set of proxprox-imity not only facilitates non-local knowledge interaction, but also the formation of new linkages to scientific knowledge sources in particular. In addition, first mutual cooperation projects reinforce the likelihood and ability for follow-up interaction by increasing cognitive and social proximity.

Consequently, publicly coordinated industry-academia R&D programmes can be labelled as trust-compensating external structures.

4.6.2 Local technology networks as compensating and