

Killing the Golden Goose? The changing nature of corporate research, 1980-2007 [pdf] - cossatot
https://faculty.fuqua.duke.edu/~sb135/bio/Science%201%2091%2015.pdf

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jandrewrogers
For computer-related technology, there are two key trends I've noticed since
at least circa 2000 with respect to corporate research. One is touched on by
the article, the other is missed.

In my own experience, a large part of this is explained by the increasing use
of trade secret protections rather than patents for the products of corporate
research. This is particularly noticeable around computer science, where the
academic literature in many areas is years behind the state-of-the-art in
corporate research labs that is never published. The research is still being
done, it is just intentionally kept invisible. The declining ability to
enforce IP rights globally as a practical matter and the rise of virtualized
infrastructures and services, which makes reverse-engineering more difficult,
has made this an attractive research monetization strategy.

The other major trend is letting startups drive research activity and taking
an equity position in the interesting ones, often as cheaper money than more
traditional VCs. It is less expensive for large companies to make a venture
capital investment in startups solving a problem they need solved than to do
the research themselves. 40% of all venture capital is now corporate VC, which
reflects this trend. It reduces R&D risk while also putting those companies
much closer to potential acquisition targets.

Basically, this new structure is more efficient and of the corporate research
that is being done, much less is being publicly disclosed due to the practical
limits on IP protection.

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riemannzeta
Breaking from page 17 to 18:

"Finding that European firms display similar reductions in investment in
science as American firms is not consistent with the idea that specific
regulatory changes in American institutions drive the results of this paper."

This is a clever way to get at what effect SOX and Bayh-Dole have had on
private large-enterprise investment in science, but the evidence and argument
are a bit opaque. What counts as a "European" vs. "US" firm? Most corporations
are global at the scale of interest to this argument. US regulations might
still have had an effect, even on "European" firms.

Logically the best they can argue here is that the evidence is consistent with
their hypothesis, not that the evidence is inconsistent with an alternative
hypothesis that SOX and Bayh-Dole had an effect.

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riemannzeta
Irony alert! Note their conclusion:

" It may well be that other organizations -- smaller firms and universities --
are making up the shortfall in investment in research. According to this
interpretation, what is happening is a reallocation of research from large
corporate labs to more efficient cient organizations."

The suggestion that universities might be more efficient than private
corporations at anything is almost comic.

But this isn't an error. There is actually something quite profound at work.
It is indeed the case that "smaller firms and universities" are more efficient
at commercializing new technology than most large corporations. But it's not
the smaller firms and universities independently; it's the smaller firms and
universities together as one super-entity.

In Silicon Valley, the grad students quit and found a startup. Their advisor
joins the Board. The university creates the IP. The startup commercializes it.

The puzzle for me ten years ago was this: Where is the licensing revenue for
the universities? If they're creating the IP, then how come they're not
getting anything back?

The answer is that they are, but in the form of alumni donations. :-D

~~~
Chinjut
"The suggestion that universities might be more efficient than private
corporations at anything is almost comic."

It's not a priori implausible to me. Why shouldn't there be things
universities do better than corporations? They're different entities with
different structures; it makes perfect sense that they'd have different
strengths and weaknesses.

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riemannzeta
Universities are to organizations as cockroaches are to organisms. They're
ridiculously inefficient and bureaucratic; but they're also the only form of
organization likely to be around in 10,000 years.

~~~
pound
Universities are bureaucratic, yes. in the same time you can encounter
"academic" people there, who are genuinely interested in doing research, even
for crappy money. That what they are, that's their nature. In corporations
it's more often some a*holes working towards promotions/power not giving a
shit about "advancement" or greater good for humanity/society.

All IMHO of course, but based on personal experience in both areas.

