Stimulation of R&D Collaboration

Stimulation of collaborative R&D relationships among companies, universities, and other research organizations is part of ATP's legislated mission. The objectives are to increase research efficiency and effectiveness, expand capabilities, reduce R&D cycle time, and accelerate commercialization and competitiveness. The level of collaborative activity has indeed been considerable from the beginning of the program. In the first competition, ATP funded five joint venture projects among the first 11 awards. From 1990 through 1997, the ATP has funded 119 joint ventures, involving about 600 participants. Many of these joint ventures involve companies which had never worked together before and were formed explicitly to apply for ATP funding (Silber, 1996, p. 23). Of the approximately 285 organizations in 179 FY 1993-1995 projects for which data are available after one-to-two years of ATP funding, 164 are members of 58 joint ventures. (See Chapter 1, Figure 2.) In addition to the formal joint ventures, the ATP has found that most of the "single company projects" it funds are, in fact, also rich in collaborative relationships. These are implemented through subcontracting arrangements and informal alliances.

As shown in Figure 14, 78 percent of respondents, including a mix of 77 single company awardees (64 percent of the entire single company award group) and 144 joint venture participants (87 percent of the entire joint venture participant group), reported that collaboration has helped them achieve the goals of their ATP project. Of the group indicating this positive effect of collaboration, 55 percent indicated that the ATP was responsible for the collaboration to a great extent. Eighty-five percent indicated ATP was responsible to a moderate or great extent.

Figure 14. Stimulation of Collaborations

As indicated above, many ATP collaborations reach beyond the official, defined joint venture relationship. Both single company award recipients and joint venture members form collaborative relationships through subcontractor arrangements and informal alliances. A total of 436 subcontractor arrangements, for example, have been reported by single company awardees and joint venture awardees filing BRS reports. Nearly one-half of the subcontractors are small companies; the remaining half consists of universities and medium-to-large companies, in near equal numbers; eight others are government or non-profit laboratories.

Collaboration Effects

Figure 15 shows effects most significantly enabled by ATP collaborations of these multiple types. More than 70 percent of respondents indicated that collaboration enabled these effects significantly or moderately. Nearly everyone (99 percent) indicated that collaborations had "stimulated creative thinking;" over 80 percent indicated that collaborations had enabled the company to accelerate entry to the marketplace and to save time in general (corroborating acceleration effects cited in Chapter 3); about 75 percent reported that collaboration had enabled the company to obtain R&D expertise, and to identify customer needs; and 79 percent indicated that their experiences with ATP collaborations had encouragedthem to consider future collaborations.

Figure 15. Effects Most Enabled by Collaboration

Figure 16 shows other effects of ATP collaborations. Among the other effects analyzed, "ensuring a reliable/quality source of supply" was cited as significantly or moderately enabled by 56 percent; "labor cost savings" were cited by 50 percent; "attraction of investment capital," "planning for manufacturing," and "saving equipment costs" were cited as significantly or moderately enabled by 32 percent, 45 percent, and 37 percent, respectively. These effects may be indicative of the relatively early project stage of most of the organizations reporting and may become more important as the companies move closer to commercial deployment.

Figure 16. Other Effects Enabled by Collaboration

There is no doubt that R&D joint ventures/consortia involve some project start-up time and costs, and possibly continuing costs not experienced by single-company awardees. As shown in Figure 17, of the organizations which indicated that collaboration had helped them achieve their project goals, half confirmed that project coordination and management costs had increased significantly or moderately as a result of collaboration. More detailed analysis of this group (not shown) reveals that nearly all reported only a "moderate" cost increase. Only 20 percent indicated that associated delays in starting projects had resulted significantly or moderately as a result of collaboration, and only six percent anticipate a delay of product entry into the marketplace as a result.

Figure 17. Costs Attributed to Collaboration

Anecdotal Comments

Anecdotal information from the BRS provides additional insight into effects of collaboration experienced by ATP-funded organizations and amplifies the statistical analysis. Some comments elaborate on the positive and negative impacts of ATP collaboration; others address issues not covered in specific reporting questions.

Obtaining expertise not otherwise available

"The work with our subcontractors [has] enabled us to utilize their expertise in fields [where we] are not staffed. The interactions with our joint venture partners provide us access to work they are doing in fields [where] we are not active." [Joint venture member]

"Critiques of work conducted independently [have] provided invaluable outside perspective to stimulate creative thinking and exposed several oversights early in the development process." [Single applicant]

"The breadth of experience brought in on these projects is extensive." [Joint venture member]

"Excellent collaborative environment and complementary technical capabilities have improved the quality of technical output and effectiveness of the team. There has been tremendous synergy between the companies that are collaborating on this project. Each company brings a particular expertise that the others don't have and which would be difficult to develop. Each party is an enabler for the others." [Joint venture member]

"Collaboration has provided [us] with access to compounding, conversion, and fabrication resources, complementary ... materials and technical expertise that would not otherwise have been available." [Single applicant]

"In general, [subcontractor] has a wealth of experience and knowledge on ... processing and control. Their insight has been a primary driver on overcoming several technical problems and developing process simplifications." [Single applicant]

"Our collaboration with other partners has helped us to access first hand data for medical vocabularies, and understand size and complexity of that data." [Joint venture member]

"Exposed to new ideas, technologies that would otherwise not have been exposed to. Enabled us to leap forward with newer approaches into our architectural design." [Joint venture member]

"Access to software has been very beneficial in defraying costs which may have been prohibitively high and blocked any attempt to accomplish this work." [Joint venture member]

"Medical expertise and related product requirement insight would not have been possible from within our own organization." [Single applicant]

"Through collaboration we have been able to bring experts in this field to our test facility and work with live systems." [Single applicant]

"Able to evaluate other alternative processes for research and development...that would not have been possible from both cost and time considerations.... Both [companies] have benefitted by mutual exchange of core competencies.... No negative impact." [Joint venture member]

Obtaining assistance from universities

"University students are exposed to industry as summer students so they become acquainted with the needs of industry and the workings of an R&D industrial lab. The resulting collaborations result in joint publications and patents. [Single applicant]

"[Our] collaboration with ... University (as subcontractor) has [led] to the acquisition of some fundamental optimization technology that has been useful." [Single applicant]

"Our collaboration involves working with two universities and an equipment vendor. The universities have done early work to explore ... possibilities. We have then followed up with more results-oriented experiments. This saves us time in helping to identify things that work and provides us with an estimate of the process regime in which decent results can be obtained." [Single applicant]

"1. Significant input on optimized structural shape design from Dr....at [university]. 2. Structural testing facilities and equipment at [university] utilized for testing ATP prototype shape. Could not perform test with in-house laboratory facilities." [Single applicant]

"We have just begun the first phase of a collaboration with the ... center at [university], which involves the use of their clean room facilities. Duplicating those facilities at [our company] would have been completely impossible. In addition, we are being trained in various ... techniques, which speeds up the research phase considerably. The only negative impact has been the time required for setting up the legal structure of this collaboration." [Single applicant]

"There have been a number of positive collaboration effects, particularly with our work with the [university]. He has a group of excellent students, that have helped us to produce ... software, better ... layout technology, and also increase our research standing in the community of international researchers. Our company always had strong people working for it, but we have been able to attract, and keep several very talented people because of the NIST funding and are grateful for this. So I would say that the research collaboration with this university, sponsored through NIST has been very positive." [Single applicant]

"Our ability to use subcontractors from academic medical centers has greatly improved our ability to achieve the goals of our project. These collaborators have given us both a lab for testing and a reality check on what works." [Single applicant]

Learning more about potential markets and customer needs and accelerating entry into the marketplace

"The most significant collaboration has come from securing a contract ... to install a pilot demonstration.... This has facilitated a number of discussions which has identified the real customer needs and therefore accurate functional and performance requirements of the products. In this process the team at ... working on the project have been introduced to domain knowledge that would have otherwise been difficult to obtain." [Single applicant]

"The manpower-multiplying and synergistic creative effects of using subcontractors has accelerated the R&D process to make it possible to plan and begin to initiate business alliances for the technology that capitalize on a fast-approaching market opportunity." [Single applicant]

"Main advantage is to fully understand all criteria for success upfront thereby avoiding the cost and project delays associated with unnecessary re-development." [Single applicant]

"Maximize resource dollars. Expedite new composite applications." [Joint venture member]

"The partnership which was established for this ATP project is a true vertical partnership of suppliers and a manufacturer. Unlike other R&D alliances in which [these companies] have participated, which were horizontal partnerships of manufacturing companies, this project had no inherent conflicts of interest. There is a single motivation in this project: to advance the state-of-the-art of the ... technology ... to allow for broad substitution of composites for traditional materials. And to date the NIST/ATP project has been central to achieving this goal." [Joint venture member]

"The collaboration has allowed us to understand healthcare needs for the technology to which we have been able to focus our R&D. This has greatly increased commercialization chances and technology impact. Collaborator has already started to use our technology and has hired our students as interns and employees, which represents an important form of technology transfer. More collaboration has occurred than originally planned." [University joint venture member]

"In general, the collaboration has allowed us to contact new potential collaborators and markets. Some of these markets are for new equipment using our technology in ways we had not considered. Due to the success of the JV, the various members are investigating projects outside the ATP." [Joint venture member]

"Without the joint venture and collaborations from the other members it would have been almost impossible to assess the market needs and define the customers and requirements." [Joint venture member]

"The vertical structure of our joint venture (2nd tier vendor, 1st tier vendor, OEM) assures that our project direction is kept focused on real customer needs and addresses real customer concerns." "Better coordination of program brainstorming to advanced technology has enhanced the commercial focus. Has accelerated the commercialization effort." [Two members of a joint venture]

"Huge time savings; by vertically integrating the consortium, we can effectively design at all levels of the system simultaneously, rather than the serial design process normally used." [Joint venture member]

"It has created a greater awareness of the complete HDTV product environment. It has allowed [us] to pursue alliances outside of our narrowly defined ... product environment and work towards a greater understanding of new product and services offerings." " Complex system architecture issues are better studied in industry teams. This is made possible by the ATP grant." [Two members of a joint venture]

"There have been no negative impacts. Positively, the collaboration has increased our awareness of our partners' need for advanced materials and the partners' efforts in identifying opportunities in emerging markets which might match our long-term R&D material development work." " Assisted greatly in development of understanding of manufacturing costs and customer requirements, eventually leading to the abandonment of the plastic LCD substrate effort." [Two members of a joint venture]

"The collaboration would have happened, eventually, but ATP has been the catalyst. The program has moved along much faster than anticipated and has been able to obtain managerial support and external assistance which would not have happened without ATP affiliation." " Intercorporate collaboration has fostered business relationships which are likely to continue beyond the ATP into product development and commercialization. This should greatly accelerate the application of the ATP-developed technology." [Two members of a joint venture]

Formation of stronger supplier-customer relationships

"The other joint venture partners are also customers for [company]. General understanding of business practices and other developmental needs have had a positive impact on all parties." [Joint venture member]

"Our collaboration with the equipment vendor has led to a promising new area of development. We hope to build a better _______ using their technology. It may allow us to surpass our original throughput goals." [Single applicant]

"[Collaboration has given us] a broader base of creative ideas for problem solving. Identify potential problems in future manufacturing." [Joint venture member]

"Our subcontractor has a good deal of credibility in the marketplace. We have gone farther with prospects and vendor alliance discussions because of the choice of the subcontractor." [Single applicant]

"Collaboration has helped to align ideas of users and suppliers greatly." [Joint venture member]

"As an end user of the core technology being developed for this program, we would not have early access to the technology without the collaboration. Collaboration at this phase allows us to influence the design to meet our end product needs during the development. We have no intention to manufacture the [component], but to use it in our product; therefore collaboration is essential." [Joint venture member]

"There has been an awakening to the advantages of networking with our suppliers on an informal basis. This has resulted in leveraging research within [our] supply chains." "The collaboration with [lead company] has given us much insight and understanding as to the interests, needs, values, and talents of one of our largest international customers." "Without collaboration on this project with a major customer, this project probably would not exist. Collaboration provides us an unusual opportunity to work together." [Three members of a joint venture]

Strengthening credibility within the organization and with other organizations

"The joint venture with [partner] has focussed our R&D effort to a specific application and our price performance objective.... We anticipate the most significant impact will come in the near future when [partner] can assist us in gaining the capital investment for the transition to manufacturing and in the well-established market share [partner] currently enjoys." [Joint venture member]

"There is heightened credibility obtained from the concurrence of our competitors that we are doing the right things; i.e., if we tried to get this project approved in house alone, it might be perceived to not be as big a problem." [Joint venture member]

"Provided visibility into automotive market segment which we wouldn't normally have had access to." [Joint venture member]

"The fact [our company] has an ATP award has added credibility to our commercialization effort and in fact it has attracted some of our early collaborators and has been a major source of interest for our partners." [Single applicant]

"The mere fact of having won an ATP project has opened many doors to potential beta test partners, OEMs, and/or Resellers." [Single applicant]

"Expanded awareness within the Products Group for need for more resources devoted to product R&D." [Single applicant]

Elaboration of the "benefits and costs" of collaboration

"The main positive of collaboration is the sharing of expertise, and the stimulation of new approaches to the problem. The main negative has been that one of the companies was not really committed to provide sufficient resources to execute tasks on schedule and this slowed down all tasks in the critical path. Another negative (not major) has been the added approvals to change program directions, and the slow down in schedule due to co-ordination of tasks (technical and administrative)." [Joint venture member]

"This vertical teaming has enabled a free flow of ideas between the two companies and has made this collaboration a positive experience to date. The only negative of the collaboration, which is a result of the "large company syndrome," is that while large companies such as ... offer tremendous manufacturing resources, scheduling these resources can be difficult at times." [Joint venture member]

"Positive: Reduction of "not invented here syndrome"; reduction of capital cost on equipment available from JV partner; positive factor in negotiating other contract research with outside company that involves complementary technologies of both JV partners. Negative: Difficulties experienced in initial collaboration with JV partner revolving around issue of trust (viewing the other company as a potential competitor)." [Joint venture member]

"Some negative impact results when a participant does not contribute to the extent expected and others have to fill the void." [Joint venture member]

"Positive Impacts: Elevated awareness of Healthcare marketplace. Understanding the healthcare information technology requirements. Negative Impacts: Very difficult to settle the intellectual property rights between multiple collaborators." [Joint venture member]

"On the positive side, there was a great exposure to other technologies and transfer of technical knowledge between large multinational companies and research institutions. On the negative side, the research has been delayed because of the effort required to establish collaborative agreements and work through conflict resolutions." [Single applicant]

"On the positive side, the collaboration has allowed a group of companies to come together that otherwise wouldn't have and work jointly through a leveraged investment of R&D efforts. On the negative side, not all of the business models of the participating companies were compatible which resulted in some serious business negotiation problems relative to intellectual property." [Joint venture member]

Formation of Strategic Alliances Outside the ATP Project for Commercialization of ATP-funded Technologies

The numerous ATP joint ventures represent concrete evidence of ATP's ability to stimulate strategic alliances. Some are largely horizontal R&D collaborations attacking problems of mutual interest across an entire industry. Most involve complex R&D and commercialization collaboration across the supply chain. For example, in the area of data storage, one project is using a "virtual corporation" approach to develop and integrate multiple technologies--spanning laser optoelectronics, media materials chemistry, lens optics, motors and mechanisms, and software algorithms--needed for affordable mass data storage using optical tape. The joint venture participants (Terabank Systems, Polaroid, Science Applications International, Energy Conversion Devices, Xerox, and Motorola, with technical assistance from University of Arizona and Carnegie-Mellon University) are developing the individual component technologies. Several of the companies plan to form a new company (outside the ATP project) to commercialize the resulting low-cost tape library storage product capable of holding many hundreds of gigabytes of data. At the same time, the ATP-funded joint venture members are making plans to take advantage of the new technical capabilities in their existing, distinctly different product areas.

Many other strategic alliances have been formed outside the ATP research project to commercialize ATP-funded technologies. Following announcement of the ATP award and capitalizing on technical accomplishments that occurred early in their projects, a number of ATP-funded small companies have formed one or more commercialization partnerships. Although information concerning negotiations with potential commercialization partners, and the resulting alliances, is provided to ATP on a confidential basis, articles published by the industry and trade press sometimes provide public substantiation. Public sources confirm that partnering between ATP-funded small businesses developing DNA diagnostics technologies and pharmaceutical and medical instrumentation companies has been particularly active. Among the publicized alliances, GeneTrace (a 2-person start-up when it received an ATP award in the 1994 Tools for DNA Diagnostics Focused Program competition) has negotiated a licensing agreement with Incyte Pharmaceuticals which will generate cash payments in exchange for gene sequencing services utilizing the unprecedented speed of GeneTrace's time-of-flight (TOF) mass spectrometry technology. A key to this and future GeneTrace alliances is the coupling and synergy between their TOF mass spectrometry and proprietary DNA sequencing and sizing reactions controlled by pharmaceutical companies (Sedlak, 1996, p. 23). Affymetrix, also a 1994 award recipient in the Tools for DNA Diagnostics Focused Program competition, has recently entered into agreements with OncorMed to collaborate in development of clinical validation of genetic testing services utilizing their GeneChip^TM for analysis of genes associated with cancer. Under a separate distribution and instrumentation alliance between Affymetrix and Hewlett-Packard, Hewlett-Packard is developing and supplying a next-generation scanner to read the GeneChip^TM (Regalado, 1996, p. 22). Affymetrix has other collaborations with Genetics Institute, Roche Molecular Systems, Incyte Pharmaceuticals, and Glaxo Wellcome (Regalado, 1996, p. 18). All of these partnerships are outside the ATP projects, but they occurred relatively early in the R&D phase as a means of accelerating commercialization of the ATP-funded technology and raising capital for continuing R&D.

Table 3 summarizes strategic alliance activity focused on commercialization of technologies funded by the ATP during 1993 to 1995. The data reveal that a substantial amount of negotiation and discussion activity is underway. Seventy-six alliances had been formed by December 31, 1996: 27 with suppliers; 24 with customers; 17 for joint production; and 8 with distributors. Fifteen license agreements had been signed by that time.

Source: Business Progress Reports for 778 applications being pursued by 375 companies in 207 ATP projects funded 1993-1995.

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Go to Chapter 5: IMPACT ON INDUSTRY R&D

Date created: December 1997
Last updated: August 3, 2005

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