About research networks

What are research networks?
Why do companies need research networks?
What do I mean by 'value' in research networks?
How will this research project examine and assess value?

What are research networks?

A research network is a web of collaborative partnerships set up between companies and universities for the purposes of research and innovation. Partnerships may be exclusive, involving just two partners, or encompass groups of organisations contributing to a joint project. They can range from informal relationships (existing between employees but not formally specified) to tightly prescribed alliances and joint ventures between potential customers and suppliers.

Here is a simplified illustration of a research network:

Joint development agreements (JDAs) or Joint Ventures (JVs) between customers and suppliers are usually undertaken at the point where a technology or product has passed the 'proof-of-concept' and is ready to be tested for 'proof-of-product' and process scale-up. (For more information about these stages, see our Competence Matrix for Plastic Electronics). These are illustrated in the figure above using thick lines.

Exploratory projects. During proof-of-concept stages, partnerships are often formed for exploratory purposes, such as to explore new markets for existing technologies, or to generate new materials, processes or designs. These are illustrated using thin solid lines in the figure above. Often they are partly subsidised by governments in order to make the economics of speculative innovation more attractive.

Employees within companies often have informal connections which are shown as dotted lines in the figure above. These can be very useful for keeping abreast with wider developments in a scientific field, technology or market.

It can be helpful to think about two different types of research network (whilst recognising that in practice the two overlap)

Emergent networks - defined by the links formed between companies and universities, as illustrated above. Such networks do not have a identifiable centre or source of formal arrangements, although it is often the case that central ‘nodes’ in the network act as hubs of information for peripheral members.

Organised networks - groups of organisations or individuals that have a formal centre or hub, as illustrated below. Governments, universities and private organisations often invest in initiatives to create and foster networks, to the intended benefit of participants and the wider economy. Here is a simplified illustration of an organised network, with a central organiser arranging events and brokering relationships:

In the UK, the Knowledge Transfer Networks (KTNs) provide this organising role. There are 22 KTNs in the UK, which have been in operation for up to 2-3 years. These facilitate information flow to and from government departments, broker connections between individual players in a given technology area, and bring partnerships and consortia together to bid for government funds for collaborative R&D projects.

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Why do companies need research networks?

Research networks increase the economic feasibility of innovation. By joining forces with other companies or with universities, companies can be part of exploratory projects that would not make financial sense if undertaken on a solo basis. They can also increase the economic attractiveness of innovating with members of the supply chain or industry ecosystem. For example, working on the development of new materials, processes or products with a key customer might be more attractive if the costs can be shared and/or subsequent sources of revenue are anticipated from other members of the research network.

Exploratory projects subsidised by government can reduce the risk of undertaking major innovation by securing the participation of a potential customer or customers within the value chain. For example, DuPont Teijin Films' partnership with Plastic Logic, facilitated by work under the Technology Programme, encouraged DTF to invest in the development of a substrate suitable for inclusion in Plastic Logic’s e-reader displays. However, partnerships subsidised by national governments or the EU are not always beneficial. They can involve huge administration costs (i.e. large investments of time are required) which outweigh the benefits, especially for small and early-stage companies.

Research networks are also sources of information. Through emergent networks, individuals can sometimes learn from their direct contacts about developments in universities or other companies they are not directly involved with. By being part of an organised network, they can access information about novel technologies or funding opportunities. Formal networks are conduits of information back to governments as well as in the other direction.

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What do I mean by 'value' in research networks?

In this project, I'm interested in when and why collaborative projects are deemed to offer value to potential participants.

In simple terms, the value captured from a collaborative project equals the benefits of the project (expressed in realised or anticipated revenue streams) less the costs of undertaking it. Value is relevant at many levels of analysis.

For national governments and organisations such as the EU, subsidised collaborative projects ideally generate value by producing products or technologies with market potential. To this end, subsidies for collaboration are intended to make exploratory projects sufficiently attractive in terms of risks and returns to the participants. Investments in organised networks such as KTNs need to pay off by enabling the formation of better quality - or different - collaborative relationships than would otherwise be formed.

For companies, value depends on whether the time, resources and money invested will help serve customers better and/or satisfy investors. Ultimately, the benefits should be expected to generate future sources of revenue, or at least to generate benefits that focus further research efforts towards future sources of revenue. Where lots of time is required to manage relationships (such as large EU projects) the costs are often perceived as outweighing the benefits. This is especially the case for early stage/small companies, and those with few spare resources to invest in exploratory projects.

For universities, value depends on the nature of the interaction chosen by the participants (consultancy, contract research, collaborative project subsidised by government or the EU). Universities capture little direct value from private consultancy undertaken by academic staff, for example, but are increasingly attempting to capture more value from collaborative R&D projects through Full Economic Costing and by asserting greater ownership over any intellectual property generated.

For individuals within companies and universities, the personal investments of knowledge, time, reputation and energy in collaborative R&D need a payoff in terms of intrinsic or extrinsic benefits. The marginal value of being involved with a collaborative R&D project must be superior to time spent on other activities. For academics, these other activities might include doing research on a solo basis, or teaching. For engineers and scientists in companies, these other activities might include projects with other customers or suppliers.

We might expect individuals to be reluctant to invest time exploratory projects where these have lower benefits in career terms than more pressing obligations to projects with existing or potential customers. However, the benefits can be intrinsic as well as extrinsic. People might enjoy collaborative R&D projects because they get to work on novel areas of research, solve certain types of problems, work with particular partners, or feel good about making a contribution to the development of an industry or market.

In a previous project on collaboration in the life sciences, I identified the following sources of benefit in collaboration:

Intellectual - benefits derived from the knowledge and intellectual insights gained from a relationship
Relational - benefits derived from career-related and social aspects of a relationship
Operational - benefits derived from access to funding, equipment, capacity or resources

Any relationship also involves costs on each of these dimensions. I found that people accept net costs (i.e. costs being greater than benefits) on one or more dimensions, but they sought out balance between the dimensions by building up networks of collaborators. Click here for a draft paper on this topic.

This project will examine how individuals and organisations capture value from research networks in Plastic Electronics.

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How will this research project examine and assess value?

This project will endeavour to answer the following questions in the context of exploratory projects in Plastic Electronics:

At the organisation level, what technology and research needs are most pressing? What kinds of collaborative partnerships (formal or informal, subsidised or not) are perceived to be most valuable once costs and benefits have been taken into account?

At the individual level, what characteristics of a collaboration most directly affect value? What tradeoffs between these characteristics will people accept in considering whether to undertake a collaborative partnership? For example, in what circumstances will people collaborate at a net operational cost because they anticipate relational or intellectual benefits. And to what extent can subsidies compensate for net relational or intellectual costs?

The project will also offer insights into the value of being part of a KTN.

At the organisation level, does being part of a KTN increase the chances of finding partners efficiently, and leveraging benefits within other business relationships?

At the individual level, given that such networks require investments of time, what makes them worthwhile for individual members? Do members who are central and highly connected gain more from their investment than peripheral members, or vice versa?

The UK Displays and Lighting KTN has generously agreed to collaborate with this project.

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Capturing value from research networks in emerging technologies