An analysis of factors influencing the utilization of contract research in a developing country, Korea

The u tihza tion of contract research results in a developing country was analyzed according to the stages(Dftechnological innovation and transfer. Three innovation stages such as project con tract (proposal success),project solution (technical success)‘ and project implementation (commercial success)are employed in this study, focusing on the identification of significant factors affecting the successin each stage. The fat tors influencing the successes in the project contract and implementation stages are mostly similar while the factors important in the technical successare somewhat difken t. The data analysesindic4ate that on1.ya few factors seemed to significantly affect the successful project contract while more than a score of variables were considered to be important for the succlessful impkmen tation of the con tract research results. This implies that even though the successof :he early stage of innovation can be relatively easily accomplished, the successof the finals tagecannot be so easily accomplished. According to the findings of the study, there are at least two unique environmental factors for the successful innovation and transfer of indigenous technology in a developing coun try,

Korea:

(I) the vul’nerabihty of

domestic techno!qgy to the foreign technology from advanced countries, and (2) the strong in ftuences

of govern-

men t intervention, whether they are advantageous to the success of innovation. Some methodological as well as theoretical issues for the improved understanding of innovation and technology transfer are discussed.

Research Policy 9 (1980) I 74 - 196

North-Holland

lysis of factors iinfl ervcingjthe utilization of contract researlch in a evehpilng count:ry,, korea* by Jinjoo

I

LEE

Departmr~n

t

of

hdustriad Science, Karea Advarxed Institute of’ &enr:e,

Seoul’ Korea and

Albert Ii. RUBENSTEIN Department ot hdustrial Er@neering and Management Sciences, Nort.9western University, Evanston, lllinok, U.S.A.

1. INTRODUCTION The general purpose of this study was to explore the role of a contract research mstitute in the interorganizational transfer of technology in a developing country, Korea. The specific focus of the study was on tracing the actual process of technology tran~ifer from the Korea Institute of Science and Technology (MST) in order to identify the significant factors ,which influence the process. Some of those factors found to be significant to the successful transfer of technology could be manipulated by KIST or government policy makers. Therefare, the study emphasized the aspect of the utilization of research results of KIST by industrial clients as a final stage of technology transfer and as a measure of success. The largest flows of technology into the industrral firms in developing countries generally occur through international technology transfer such as direct

*

U’otk in this area was partially supported by the National Science Foundation through its grants to the Program of Research on th!: Management of Research and Developnmentat Northwestern University and by the Korea Institute of Science and Technology.

Research Policy 9 (I 980) I 74 - / 96

North-Hollar:d

J. Lee and A. H. Rtr?wnstein

176

know-how, purchase of equipment, te&nical consulting, documents and journals, etc. A number of minor sources and flows of technology include applied research institutes, sponsored mostly by governments, and research conducted in universities and industrial firms in the local settir‘g. Even though the quantitative amount of technology transferred through the domestic channels would probably account for only a few percent of the total flow elf technology, their qualitative importance is increasi,rg, especially in the advanced group of developing countries. Among the various domestic channels of technology transfer, the role of research institutes has been a focus of attention by governments and industries. However, one of the crucial issues concerning research institutes is how SKcessfu!ly their research results are utilized [24]. One criticism of research institutc s in developing countries is that they are ‘cosmetic’ establishments for science ar!d technology because almost none of their research results are ever applied to industrial development. Therefore, MST, one of the first examples of contract research institutes in developing countries [ 1 I], was considerefdto be a new type of social experiment to enhance the successful utilization of research results*. Contract research operations, because they tend to sork towards technical targets within the confines of time and costs and with an intended carry-through to industrial applications, are likely to bt more effective than operations not working under the constraints of contracts. To have a better understanding and recognition of the process of technology transfer and innovation from contract research institutes, these three questions were posed :

acquisition

0I’

of technological

What arx the factors that significantly affect the successful transfer of

technology from KIST to its clients? I’:;!) What is the relative importance of those factors? (3) What is the difference in the relative importance of factors according to the stages of technology trilnsfer?

,) An additional factor in the establishment of KIST has bt:en the supply of scientists and engineers. Kore; has not yet experienced shortage of skilled labor such as low grade technicians, assembly line workers, etc. The supply of engineers was also abundant until the late 1960s but the situation chansed in the 197Os, owing to the sharp growth of industry. Moreever, the supply of researchers or scientists (above the master level) for R&D has never met the demand, especially for Ph. D. level researchers experienced in ‘industria! application instead of ‘academic research’. Korea is now experiencing 3 severe shcrtage oi‘ Ph. D. level reseav :hers, both in quantity and quality.

Con tro c i rmv, rch in Korea

177

The abtJve questions were analyzed through the data collected in a field study in Korfba. Tire remaining part of this paper is a description of basic models of techno!ogy transfer and innovation fundamental to this study (Section 2) methods ‘of research (Section 3), proposition testing and analysis (Sectiton 4) and cc>ncluding remarks (Sectior 5). 2. THE MODELS 0F TECHNOLOGICAL INNII)VATION AND TRANSFER The proct,ss of innovatio 3 and the phenomenon of technology transfer contain many abpects and ha\ e been studied by a number of resealrchers from different fields. Different models of innovation and technology transfer have been developed by r’x~_rsingon different levels or units of analysis, such as: an individual, a group c31 individuals, an organization, a community, an industry as a whole, and a n&tion. As the reM Jf a comparative study of the literature on the dissemination and utilizasion of scientific knowledge based on 4,000 studies, Havelock [7] has described this emerging discipline as the ‘science of knowledge utilization .’ The study of this area is not only multi-disciplinary

but also multi-methodological. The utilization of contract research results can be analyzed by two different approaLhes. It might be interpreted as a series of innovation events when we take each project of contract research as a unit of innovation. Or it might be illustrated as an interorganizational transfer of technology, because the flows of technology xcur from the contract research institute to its clients. The phenomena of technological innovation and technology transfer should not be considered as either a single event or a single decision, even though the fiial resui”rs of innovation and technology transfer may be assessed by a single evahlatiora: success or failure in the light of final utilization of the technology in the user s operating system, The phenomena are better viewed as a process., occurring over a period of time and consisting of a series of activities, de&iorlzl, and events. Zaltman, et al. 1291 Ithus distinguish the process aproach from the result or the final event approach. In the process approach innovation o:: technoloa/ transfer is composed of a set of stages or phases ordered. along the tempcral dimensions of their sequence. On the other hand, many rese:archers have criticized the result approach because it trt:ats innovation as a single event rather tharl a continually changing proces:. They contend innovation is viewed as an tinfclding process consisting of stages in which cl-xacteristic factors not only appear in greater or smaller degree, but also in a certain order of occurrence. Another criticism is that the ‘final event’ approach often treats independent variables influencing innovation a;ld technology transfer under the assumption that they are constant over time in the situation Iof the study. We

J. Lee and A. H. Rubemtein

178

have found it is useful to subdivide the process of innovation and technology transfer. Among the various proposed models of innovation stages 19, l&25,29], we have used a three-stage model which was developed by Myers and Marquis [ 161 and later elaborated by Utterback [25]. According to them, technological inwovation is treated as occurring in three overlapping steps or phases, which are (1) idea generation, (2) problem solving, and (3) implementation and diffusion. In contract research by Korea Institute of Science and Technolc!gy (KIST), there are also three events/points to be observed clearly by the users and source of technology. mey are: (I) formal/legitimate contract of research, (2) the end of project execution and final report, and (3) utilization of the project results or not. The three stages of COritraCt rescarch have been termed here as: (1) project fonrrulation (from idea conception to contract with KIST) (2) project solution (from contract to the submission of report by HST) (3) project implententation (from the report to the use or not by clients). For the ajlalysis of interorganizational transfer of technology from KIST to its clients, the push-pull model of linkage by Rubenstein et al. [21] was used as the basic model of technology transfer as shown in fig. 1. Source

[ VI, . . ., Vi] ES

Vl,. . ., Vi b’/‘,. . ., Vn

PUSH CP

-

interaction between ?ou-ze and User

PULL CP

Es Eu

= characteristics and behavior of the source = characteristics and behavior of the user = environment of the source = environment of the user

CP

= channels of the push and pull

User [ vj, . . .( V11]

Eu

Fig. 1. Push-pull linkage between souxe and user (source: Rubenstein et al., [ 211).

This study was concerned with technological innovation and tranfer, QC rather successful technology transfer and innovation in the form of utilization of contract research results. Central questions involved the necessary, sufficient, and necessary and sufficient conditions of successful technology transfer and innovation, especially at each stage of innovation and technology transfer. In this study we used a simple model of technology transfer. We looked at only bivanizte relations between the dependent variables of each stage of innovation and technology transfer process (such as project formulation, project solution, and project implementation) and one specific independent

Carltract research in Kore&o

179

variable, because we could not overcome some methodolo~jcal pro’blems invoked in this particular study. A general simple functional model of technology transfer and innovation might be expressed as shown below. In this study a set of specific bivariate propositions will be presented in later sections of this report.

Where: p = the dependent variable at stage f (1, 2,3); Xif = the ith independent variable at stage t; Pjt = tt e jt;l pammeter at stage t. 3, THE RFSEARCH SAMI’LLSAND DATA COLLECTION METHODS 3.1.

Research

sample

The specific field sites of the study included Korea Institute of Science and Technology (KIST) and its industrial clients in a d,eveloping country, Korea. The unit of data analysis is a ‘project’ of contract research which represents

Table la Classification of research samples ---

-_-_--

Innovation Industrial classification

classification -----

Product and component innovation (N = 122)

.?rocess innova.tion (N = 31) ------L------l

Ia

1

2

3

4

5

-p-p Metallurgy ceramics Mechanical engineering Hcctrical and electronics Food and fishery Petroc!temical and pharmaceutical

204

Subtotal

38

-

----

2 3 _____-

4

4

30

0

10

1

25

3

21

0

4

67

3

12

1030100

616540101 s40

9

4

2

4

0

2

16

7

9

2

14

35

18

22

3

6

__~-__

11

7

5 ---

438421121 41

Subtotal

_--___----__

a Numbers indicate the degree of su wss Cfrom 1: failure to 5 : success).

;;a;53 -Y--U

180

J. Lee and A. H. Rubensteilt

a

specific industrial technology developed by MIST. KIST was established in 1966 with the support of both the Korean and U.S. governments. It is a contract research institute concerned with industrial technology, especially focusing on six areas: metallurgy, mechanical engineering, electronics, food technology, petrochemical and pharmaceuticals, and techno-economic analysis (refer to table la). The clients of KIST are industrial firms, government and others. The quantitative contributions of KIST to the Korean society and economy have not been systematically measured yet (the first author is attempting to do this)but there is a general view that it has been an important factor in the growth and development of Korean science and technology in its first ten years. The process of technology transfer from KIST to potential users c,tartswhen the researchers in KIST or the potential users are interested in a specific technology and make contact with each other through the various channels of communication. The number of technologies for which the KIST . ssearchers and the potential users make contact and communicate would be a small portion of all feasible technologies. Among these ‘communicated’ group of technologies for the possible transfer of technology, only a fraction will result in contract research projects as a ‘successful group’ in the stage of project formulation. The rest will remain as an unsuccessful group. It is quite easy and clear to identify the successful group of project formulation because the research contracts arc formalized by legal documents in KIST records. ?“hen this study was carried out, KIST had contracted 768 projects with these nine different types of sponsorship, according to the sources of funds: government project, industrial project, endowment project, computer project, small project, foreign project, in-house project of KIST, joint project and technical service project. After considering some requirements for the sample projects, 648 projects were deleted* and only a total of 120 projects was selected for the study. These projects are, however, only from the successfully contracted group in the project formulation stage. Thus, this group consists only of successful projects in the first stage of te&nology transfer project formulation - but becomes the total set of proi@cts in the project solution and implementation stages. For the identific;rtion and selection of unsuccessful groups of projects in the stage of project formulation, we used the KJST formal records of contacts and communication with potential users *

Those deleted were all ‘paper studies’ such as: feasibibt> studies. computerization reports, troubleshooting. or government contract research \Nhich were not connected to hardware innovati0r.s or to end-users. Therefore, they were not related to specific technological innovations.

CoWact

research

in Korea

1.IS1

for possible contract research with respect to a specific :cchnology. /USa result, approximately 150 total unsucceszful cases were fourlii in KIST ret xds and 49 unsuccessful cases in the stage of project formulaGo were identified and selected for the study after the deletion of ‘paper st*udf:’type of c;Ises. Among the 49 unsuccessful cases of project formulation, data on 41 (‘ases were collected. Also, data1on only *I12 cases were obtained&mong the 120 successful cases of oroject formulation, Data on the other 8 were not obtainable. 13e breakdown of the research sample is shown in table 1b.

__.-

Table Ib Breakdown of research samples --_--_-_

_ ---

-_______

Stage of iuiovation _---____ ---

Project formulation --~--

Project solution ___-

Total number of projects sampled

.V= 153

N= II2

Project implementation ---_ N= 112 .

-_________~-

--

Breakdown of sample

Successtul group N= 112 Unsuccessful group ,V= 41

- _- ______-_ __I______

--_

Degree 1, N (failure) Degree 2, N Degree 3,N Degree 4, N Degree&R (very good)

= 15 = = = -

16 18 32 31

IVot inlplemented, N = 5:? Ongoing or halted N = 21 Implemented, I\‘= 34

-_--

I~

3.2. Data collection procedure The collection of data for the study followed the procedure b&w: (1) Data collection through unobtmsive meawres. The first source of unob-

trusive data was the files of each project history in the Project Gcveliopment Department. All the volumes of the MST Annual Report were reviewed (from 1968-1972). The newspaper clipping files by the Public Rclati~ns Department were checked including the first author’s personal clippings? ‘The report of the Techno-Economics Group with respect to the preliminary ‘follow-up study on the utilization of contracted research. results was referred to. KIST reports to the sponso:s were also utilized.

*’ He was employed

at KIST for 3 years.

182 (2) Herviews

J. Lee and A. H. Rubenstein with KIST researchers. The key personnel of each project at

KIST and the potential user organization were easily identified in the project history files. KIST researchers involved in specific projects were interviewed first. Also, the project leaders and coordinators were visited and interviewed whenever necessary. More than 50 KIST people were interviewed, some of whom were involved in multiple projects. (3) Interviews with potential users. In addition to the interviews with KIST personnel, project leaders and/or managers were intervietied in all client organizations involved in the 153 saEnpleprojects. These were done by personal visits for all but 26 of the 112 successful cases (the rest were interviewed by telephone). Most of the potential user organizations were located in the same areas as KIST - Metropolitan area of Seoul - because of the concentration of industry in Korea. The field interviews were conducted through (1) openended interv
Cm trac t research in h70rea

I 83;

study were mostly selected from innovation studies in the advanced countries because of the dearth of LDC cases. Therefore, this might not be representative of the real LDC situation. As Kelly and Kranzberg [lo] summarized, most of innovation studies failed to distingursh the interactive and/or synergistic effects of krdependent variables on the dependent variables of innovations. Thk stuldy was also uns;uccessful in specifying such effects in a systematk way. Tl-us, in this research a three-stage model was proposed to study the significant factors influ ?ncing the dependent variables of each stage: project formulation, project solcltion, and project implementation. The strategy in dzvelaping testa%> propositions was to include as many variables as we could

identify,sine: the :jtoposition testing in this study was regarded as exploratory. Some factcrs influsnce he entire process of technology transfer, while othelr factors influence only p)ne specific stage., The presentation of the testable propositions, OperationaJized scales of their variables, as well as the results of proposition tes:ing is given in accordance with the order of the stal:e of technology transfer.

The end of the project formulation stage can be verified easily in the situation c T contract research because the decisioln point of a contract is generally formalized through the legal documents between the sponsors and the research institute. The beginning of project formulation, however, is not so clear even ;hough the conceptualization of such a beginning is quite possible. At the individual decision level, Zaltman et al. [29/l divided the project formulation (illitiation) stage into three substages: (1) knowledge-awareness substage, (2) attitude formation substage, and (3) decision sub5tage. Simiiarly, but emphasizing the organizational context, Hetzner [o] has had three corresi3onding substages: information availability., information entry, and adoption decision. The dependent variable of the first stage, project formulation, was dichotcmized into* a research cm tract (adoptiondiecision) with Korea Institute of Science and Technology (K IST) and a rzorl-cotltract (non-adoption) de&on by the potential users. Therefore, the early substages (of the first stage such as the knowledge-awareness an? attitude formation substages were not focused cm in this study. The focus was on the factors influencing the overall decsion on adoption/rejection in the stage of project formulation. These independent variables are almost similar to the independent variables of the third stage.

-_ __. _ _

-~

.__ ______

: a

a

a a a a a a a a a a a

-_-__

-. . -

__--

-___----

Measurement scale

------a a

--

--

-_--.-

Zaltman et al. [ 29) Mottur [ 14) Rogers [ 20 1 Baker et al. [ 32 Mansfield [ 12 ] Radnor et al. [ lrlj Rogers [ 201 Bruno [4] Havelock [ 7 1 Rogers [ 20) Hetzner [ 9 1 Evan and Black (5 1 Rubcnstcin ct al. [ 221 Baker et al. [ 2 J n,+-9rc ..upr.u I?f-)l , L”, ---_____- ____ --- .-

RadIIor et al. [ 181 Stewart [ 23 J

--~--

Source of hypotheses

a 5 point, ordinal scale*. -r .4onse of project manager in client organization. b 2 point, nominal scale. c Sipnifisant at P 5 0.01. d St:?tistically significant, but opposite effects were hypotheslzcd in the propositions.

R&D sapdbility Initiative of the project idea Compatibility of the project ---_ -_ -- --._..__-._

Communicilticiii

Support of top management Relative cost of contract resedrsh project Organizational climate Financial availability Interest Urgency Size of client organization Support of middle management Relative advantage of the project Previous analysis Complexity Trialability Availability of technical pf rconnel

--__ -.-.- --

Name of factor

- ----

n.s. n.s. n.s. n.s. n.s. n.s. n.s. n.s. -0.1849d -0.1 509d + 4.

+

+ +

-

-

+ +

3.S.

+

0.1 393c 0.1 371C not significant (ns.) n.s.

0.3629* -0.3066’

Results of study, rank correlation Kendall’s Tau

+

+

+

+ +

+

--------

Hype thesized effects on dependent variable

Table 2 Factors affecting the degree of successful project formulation ___~__ ._____-

-

185

project implementation because the decision-making process and decision makers of the two stages are within thle client organizations and often the same people. On the other hand, the factvrs affecting the second stage, project solution are d’fferent because the phenomena as well as the decision r-nakers of the stage arc within KIST and entirely different from the other stages. In the follG.ving section, we discuss the specific factors related to the first stage, project formulation. We hypothesized that about a score of factors, shiown in 1:able ‘:, would significantly affect the degree of successful project contract. As she $vn implicitly in table 1b, the measurement scale of the dependent variable - the degree of successful project formulation - was dichotomized: ccbntract v-ith KIST 0.. no contract. TIM, a se, of propositions in the first stage, project formulation is: The degree of sww~s~l~ pl,,ject forml?ation will be affected by a set of factors such #as: (1) top management support, (2) relative cost of contract research for the project, (3) organizational climate related to the project, ;4) availability of Cnancial resources, (5) interest in the project, (6) degree of urgency, (7) size of potential user organization, (8) support of middle management, (9) relative advantage of the project, (10) the extent of prt:vious analysis, (I 1) complexity of the project, (12) trialability of the project;, (13) availabiility of technical personnel, (14) intra-organizationJ cc mmunications related to the project, (15) degree of R&D capability of user organizations, (16) initiative of the project idea, (17) compatibility of the project, and other parametric factors. iMost of the variables were measured by a §-point ordinal scale which was checked off b:y the project managers of’ the client organizations. There are NO exceptions. One is the scale of dependent variables - degree of successful project formulation - measured by 2-point attribute scale - contract or no r,lJntract. The other one is the nominal scale of an independent variable, initiative of the project idea, which was classified into two categories. i.e., initiative by KIST researchers or initiative by client organizations. Operation;llizcd indicators of the variables are selr”-explanatory, except a few. For instance, the size of potential client organization was measured by the nunlber of employees in the organization on a five-point scale. The variable, R&D capability , was measured by the ratio of R&D expenditure to the annual sales volume. The indicator of trialability is the extent a technology can be experimented with on a limited basis in terms of resources committed. The compatibility me:in s the relationship of the technology to the on-going operations of the llotential user organization. The organiza tidnal climate was measured by a blelavioral response of the project manager with respect to the

J. Lee amI A. H. Rubenslt?irz

186

existing conflict related to the project. The term, previous analysis, indicated the background work WI the project especially in terms of a feasibility study. Other variables are more or less self-evident. The results for Phase I, as shown in table 2, using rank correlation (Kendall’s tau), support the hypothesized effects of only four variables: top management support for the project, subjectively recognized relati,ve cost of the project. organizational climate related to the project, and financial availability for the project. On the other hand, two factors turned out to be significant variables in the opposite direction of the hypothesized effects. They are: the initiative of the project idea and the compatibility of the project to the client’s operation. However, the statistical results of hypotheses testing in the first stage, project contract, should be regarded as tenuous. Our observations indicated that there was some threat to external validity for the possible generalization of the results in the first stage. Because the concept of contract research was new and because most industrial firms were not ready or willing to ilave contract research with KIST, the Korean government exercised strong iafluence on industrial clients to contract with KIST in. the years immediately after its establishment. Therefore, some of the industrial firms made contracts with KIST without much interest in the projects as such. In an extreme case, the client regarded the reserach contract as a ‘give-away’ and never checked or asked for the results of contract research This group of projects seemed to confound the hypothesized effects of some factors on the project contract. Considering the confounding effects, we might conclude that the effects of four statistically significant factors (top management support, relative cost, organizational climate, financial availability) are really important for the succeslsful project contract. However, as we would see in the later stage of project implementation,

none of the coercively contracted projects were successfully utilized. This implies that even though the success of project contract could be coercively influenced, the success of project implementation can hardly be manipulated by government intervention without active involvement of clients. We will discuss this issue later in more detail. 3.2. Fat ton

ii$!ue~i~~g

the

sccorld stage:

Teclirricalsuccess

Many of the studies of ‘downstream’ phases of technology transfer have paid little attention to the aspect of technical solution and problem-solving perspective, because they have usually assumed the innovation as given or technologically successful. On the other hand. some researchers 1221 have found two distinctive criteria of innovations: technical success and commercial success. It is obvious that technical success is a condition for the final

outcome of innovation --- technology transt’er, cc_mmercial success. or ,actu;jI utilizatioLim.,Although the process of technic al solution can be viewed a.s part of the whole process of innovation, its dkmctef and underlying factors v~oulcl be quite diiferent from The generai process of innovation. The performance and productivi::v. of scientists ;ind engineers could be understood as part of the general performance and productivity of human beings, but we are Ieloncerned in studies (of the innovation process with a special caseuproductivity in R&D. In this study, we arr: concerned about technical success of a project aside from the produztivit 1 and creativity of individual scientists and researchers. The personal factors of individual researchers, .would be treated as om set of determinants a“ft cting the technical project success. The depender?: variable of the second stage, the degre,: of successful project solution (teAnica1 success), as prc posed by hn.;rph~l et al. [ 151, was measured by the perceived success of technical solution by the KIST researchers with a five-point scale. There was no attempt to calculate the reliability of the measurement. However, some KIW researchers were interviewed again to check the reliability oi tlhz responses for technical success when, in about a dozen cases, clients expressed overt discontent with the results of a technical solution by MST. Most studies which investigated the factors afffecting technical project success to&; their sample in adv(anced countries. In those cases, it is assumed that some fund&mental resources for scientific research are always available with little variance. These parametric conditions elf advanced countries are, how;ver 3 not very applicable to developing countries. The scientists and researchers in developing countries often experience severe economic and technical constraints on their research work. Therefore, the set of hypotheses in the second stage, technical solution, in this study included some fundamental factor;, which are usually excluded in the study of R&D in developed countries. The propositions in the second stage are (see table 3): The deqee of technical success o/a project will be affected by a set of factors such as: (1) availability of scien’iific and technical information., (2) availability of technical personnel, (3) availability of research equipment, (4) communication, (5) project team climate, (6) time avaiLability, (7) degree of preparedness, (8) middle management support, (9) complexity, (10) compatability betueen researcher’s major area and the project problem, (11) top managernen[ support, (12) the degree of trialability of the project, (13) perceived advantage of the projk:ct, (14) urgency, (15) impact on production process., (15) initiative of the project idea, and other parametric factors. All the variables but one were measured by a 5-point ordinal scale which EYES checked off by researchers in Korea Institute of Science and Technology

” 5-point,

ordinal scale; response of KIST wwrr+w ‘- L-pomt, nominal sclilc. ’ SigWcant at f, 5 0.01. cl Significant at p 5 0.05. ’ Opposite cfkws wcrc hypothesized in the propositions.

Table 3 List of factm in project solution stage and their cffccts on dependent variable, technical success - -_---- --_- ~-. __ _ _. _ ____-______.-________ _ _--..-w __-__ Name of factor Measurement Hypothesized Source of scale hypotheses effect on technical success - - -- -. --.--_ ___ ___ -- -_ -. ____~ -- -.-. - -_-- - -_ __ -._ -_--____ -_~_-_-P a Infmma;iun avaiiabrbty + Hctzner [ 91 a + Availability of technial personnel Hetzncr (9) a + Availability of research equipment Hctzner [9] a + Communication Allen [l] a Project team climate t Zaltman et al. 129) cl + Time availability Marquis et al. [I 3 J a Dcgrcc of preparedness + Bruno 141 a + Support of middle management Radnor et al. [ 18 J a Complcstty Havelock [ 7 J a + Compatibility Rogers [ 20 ] a Top maw:emcnt support + Radnor et al. ( 18 1 a Trialability Rogers 120) a t Perceived advantage of piojcct Rogers [ 20 ] a Urgency + Baker et al. { 31 a + Impact on production process Wright [ 27 1 b lnitiativc of the project idea Baker ct al. [ 2) _-. -_-.-___ .~- _. .__ ______-_-- -P-- -. .-.______-_ _- __.__ --0.6390’ 0.6145’ 0.525 TC 0.5 129” 0.4621’ 0.4122’ o.3943c 0.3603’ -0.337F 0.5363’ 0.2217c -0.22 74’ 0.1255d not significant not significant 0.2517e

----

Results of data, rank correlation Kendall’s t au

---

-

5 2 r= R s:’

a

P 3

z

.5 b aa Q

E

Y

Cm tract research if1 Korea

189

(KIST). One variable, initiative of the project idea, was classified by a 2-point nominal scale the same as in the first stage. As in the first stage, most operationalized indicators of the variables are self-explanatory. Some of the factors are similar to those in the first stage. But their effects are quite different because the respondents of the second stage are not project managers in the client organizations but project researchers in MST. For exanple, support Jf top and middle management for the project solution is the support of the president and project coordinator (or some functional department) in KIST. The variable, coml?lexity, is the degree of perceived complexity by KIST researchers instead +-f a project manager in a client organization. The indicator of compatibility is tht degree of congruence between the researcher’s major area and the project problem. The results in the sarond stage, as s?rown in table 3, support most of the hypothesized effects of the factors 3:. *he technical success of the project. Of 16 factors, 12 va. iables turned OJI :a be statistically significant at the level of 0.0 1 and one variable was significant at the level of 0.05. Two variables were not statistically significant. The variable, initiative of the project idea, showed the opposite direction of the hypothesized effect. As expected for the cases of developing countries (LDCs) fundamental constraints on technical work, such as technical information, technical personnel and research equipment, were most important for technical success. Although this might be attributed. to a researcher’s excuse for some poor performance on the technical and scientific work, some ICIST researchers had really serious proLilems with research facilities in the beginning period of its service. Compared with KIST, many other LDC research units struggle to secure minimal research support in terms of financial resources,equipment ,information, personnel. and so forth. Because KIST is a contract research institute, it does not suffer as much from financial constraints once a project has been contracted, even though it is sometimes necessary to renegotiate the budget after a project has been funded. That is why we did not become concerned with the factor, availability of financial resources. The rate of technical success seems to be hi@, exc::pt for the projects during the first period of establishment. Of 112 projects, 63 (56%) of the projects were rated ‘good’ or ‘very good’ (degree of success 4 and 5) while 3 1 (28%j of projects were evaluated ‘failure’ and ‘poor’ (Jcgree 1 and 2). This ‘score was thought to be fairly positive, under the tight constraints of time and resources of contract .research. Nevertheless, we must consider that the research work in KIST co~ll not be regarded as a genuinely creative activity or original achievement 1.nmost cases. Many parts of their work would be an adaptive transf,:: of technology from advanced countries as an intermediary. Therefore, the study of contract resear:h work

190

J.Lee artsi A. H. Rubenstein

to identif!y important factors affecting technical success could give only a partial explanation because of the restricted and exogerruously imposed nature of contract work. 4.3. Factors influencing the third stagtg:boject implententati& Presumably, the stage of project implementation begins from the point when a contract research institute submits a final report of a project to the sponsozing clients. The stage of project implementation can be divided into a few substages. Z&man et al. [29] proposed: initial im;Gmentation substages and continued-sustained implementation substages. Similarly, Hetzner [9] utilized two substages: implementation ; nd regular utilization. ‘I’leit substagcs Ire ccnceptual abstracts of real pher omena which can include all the possible different cases. For example, the implementation of process technology is much simpler than that of product technology. To reach the final stage of regular utilization, the implementation of product technology might go through pilot demonstration, plant construction, marketing test, regular production, and so forth. The dependent variable of the third stage, project implementation, was measured by three categories: success (fully utilized) on-going or halted (partially utilized), and failure (not implemented). In the long run, t ‘on-going’cases would be divided into either success or failure. As pointed out before, most of the prior innovation studies concentrated on the successful cases. The conclusion drawn from the successful innovations, however, would give us only a partial view of the whole process. In the first and second stages, market factors did not play any direct role in affecting the stage success. However, as project SAPPHO [19] and other studies [22) revealed, they art: most important in the stage of commercialization. Also technical success seems to be a prerequisite of commercial success or project implementation [22]. other factors as well as the decision makers are similar to those in the first stage of project contr;ict, especially for small client firms (approximately 90% of the project clients). Thus, a set of propositions in the third stage - project implementation - is shown in table 4. The &flee of successful project implementation will be affected by a set of factors, such as: (1) technical success, (2) communication, (3) support of middle management, (4) top management support, (5) the extent of previous analysis, (6) availability of technical personnel, (7) complexity of the project, (8) marketing ability, (9) initiative of the project idea, (10) relative advantage of the project, (11) compatability , (12) organizational climate related to the project, (13) relative cost of the project, (14) R&D capability of the clients,

_.-

.______

___.- . -.----_

source

b b b b b b b b b b b b ;>

C

_----I_____-________

Measurement scale

31grAkar;i ai 5 O.iil . e Opposite et’t’ects were hypothesized

(f F*

in the propositions.

a S-paint, ordinal scale; response o?’ KIST researcher. i_ ” 5-point, ordinai sde; response of project manager of clients. c 2-pr!intt ncminal crn!r.

-._---_-

Relative cost of the project R&D capability Financial availability Urgency Marketing trialability Involvement of TcchnoIogy Triaiahilitc _.-LIYCJ Size of client organization Impact on process Competition

Technical success Communication Middle management support Top management support Extent of previous analysis Availability of technical personnel Complexity Marketing ability Initiative of project idea Relative advantage of the project Compatibility Org ar,~za!:o,,u, * - r.01 1;mntn CLllllaLcI

Name of factor

-F-m

List of factors in project implementation ---~_-

HG.lth [8]

Wright [ 27 J

Rclrgers [ 201 Mansfield [ 121

Rubenstein et al. [ 22) Evan and Black [ 5) Radnor et al. [ 181 Radnor et ~1. [ 18 J Bruno ]4 ] Hetzner [9 ] H ,.velock [ 7 ] Young [28] Baker et al. [ 2 ] Rogers [ 201 Rogers [ 201 Zaltman et al. 123 j Stewart [23] Rubenstein et al. [22] Mottur [ 141 fiaker et al. [ 31 Young 1281 Nayudama [ 17 ]

Source of hypotheses

Table 4 and their effects on dzpcndent ~ -

+ + +

+ -

-

+

+

+

-

-I-

+ + + +

-_-

Hypothesized effect on implementation SUC~%S

variable, implementation

0.574 Id 0.S650d 0.5s59d 0.5 127d 0.431 gLi -0.3903d 0.375 ld 0.3320d 0.328gd 0.31 8Jd n 3r30d u.3130 -o.3054d 0.281 3d 0.2281d 0.2272d -0.1981d 0.J 728d -0.1 648d o.1503d not significant -0.1 346e

0.5637d

Results of study, rank correlation Kendall’s tau

success

Y \o c-r

2 P

B 2 2‘) h 2 $ % -.

192

J. Lee arld A. H. Ruberwtcin

(15) financial availability, (16) urgency, (17) trialability of marketing, (18) the degree of involvement of the source of technology. (19) technical trialability of the project, (20) size of client organization, (21) degree of competition in client’s industry, (22) impact on process, and other parametric factors. The operationalized indicators of the independent variables are similar to those of the first stage. The indicator of technical success is the same as the dependent variable of the second stage. Although most of the operational definitions of the factors in the project implementation stage were the same as those in the project contract stage, the measurement of their actual indicators was somewhat different. For instance. the degree of complexity of the project was measured by the ‘perceived’ complexity of the project in the ‘specific stage ,’ - project contract or project implementation - through the response of the project manager in the client organizations. Therefore. the scores of measurement for the complexity could be different according +O the stage, while the respondents in the project contract and implemcntatibn stages are the same. The new variables in the project implementation phase are marketing ability of the client organizations, involvement of KIST research.ers in the implementation. and marketing trialability. The indicators of the variables were also S-point ordinal scales checked by the project managers of the client organizations. The results in the project implementation stage. as presented in table 4, indicate that most of the factors are significant. Of 22 variables, 20 factors were :itatistically significant at the level of 0.01, one was rejected. and one WJSaccepted in the opposite direction of hypothesized effect. As other studies found, technical success turned out to be one of the most important factors for the successful project implementation. Other important variabl :s are the degree of effective communication and the support uf both top and middle management . The high repor Ted relevance of effect i re communication might +e attributed to the retrospective nature of the responses, i.e., whenever the respondems had successful project implementation, they might think they flad good communication. The level of marketing ability was also highly important. Client-initiated projects tended to be more successftilly implemented, according to previocls studies. The interpretation of the research results of other variables in this stage seems to be straightforward as it was in the previous stages. There are some speculative findings about the overall process of technological innoviltion and transfer through contract research in developing countries. One of the important findings is that as technological tr;tnsfer and innovation ]JiDgress toward later stages. more factors seem to influence the dependent

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193

variables of the stage, i.e., the success of each stage. This might be 2-1 anticipated observation both from the literature and empirical world, That is: it is relatively easy to start a technological transfer and :innovation, but it becomes much harder to see the eventual success of the project such as the incorporation of the technolow into the user’s operating system. As the data of thi ; ssudy (tables 2,3, and 4) indicate, only a few factors seemed to significantly t ffect the sllc’cess of a project car-ztruct with MIST while more than a score of variables were considered to be important for t’,l,esucces~fill i~qdermvttatiort arid lltikation of the contract research results. This implies th.at even though the success cjf the early stage can be relatfvely easily manipulated, the success of the final ,tage cannot be easily maninulated. Actually, according to the field observation of this study, many of tiiz successful projects in the first stage (prr\jt& contract stag-) were attributed tc the governmental coercive efforts tc: l:elp MST durin; its early period of institution building. However, none of these governn:ei,: -Influenced * contracted projects was ever successful in th;= final stage. project implementation. Another speculative finding is related TVthe role of management support. The results suggest that: (1) top management support is important in the first stage, project
194

J. Lee

md A. H. Ruherlsteirl

5. CQNCLUDINGREMARKS To increase the understanding of the phenomena of technological transfer and innovatiofi, we have attempted to analyze the successful and unsuccessful projects of contract research along the whole process including many factors which previous studies showed influencing the piocess. Despite our effort to control major threats to validity, some of them were beyond our control, and became limitations of the study. First of all, we did not control for the effects of other independent variables in the bivariate proposition testing which. was used in the data analysis. Also, no formal efforts to check the: reliability of measurement of the variables were employed. In addition to the methodological limitatiolx mentioned above, some theoretical issues should be resolved for the better understanding uf the phenomena of technological innovation and transfer. One of the fundamental steps toward the zeal is to develop a ‘grand’ theory or model which can envisage al’ the! facets of the phenomena in a simple manner. Or we might be interested iu the! ‘middle range’ theory suggested by Glaser and Strauss [6]: substantive and formal theories, which fall between the ‘minor workin ypotheses’ of everyday life and the ‘all inclusive’ grand theories. Probably, development of the grand theory would be too ambitious to build easily. 0ne important task is to analyze the multi-dimensional characteristics of the criteria ot success and failure for innovation and technoloa. transfer. Most innovation studies have focused on the final results, success and failiure oi innovation, which were subjectively evaluated by the project leadtifs. However, cttiier kinds of evaluation criteria such as speed of innovlrtion, efficiency of techrrology transfer, benefit and impact of technological innovation and tran>fer on the economy and society might be and should be cons&:ed in future studies. Moreover, one might argue the usefulness of the results of this study because they could be anticipated in general form from the literature. Building and testing theories of innovation and technolosj/ transfer, however. :x+;irc confirmatory studies for relevance to a wide variety of settings, including LDCs. To state it differently, we have found many factors influencing KIST’s technological transfer and innovation. Many of these factors have similar connotations and might be integrated into ‘super’ variables which have unidimensional scales. To do so: we have to specify the interactive effects and/or combined effects of the independent variables. Also the integration of similar variables into a super variable should be based on consideration of theoretical similarity of the variables. After we categorize the indepes dent variables and integrate them into a smaller number of super variables, at would be much easier for us to build a more generalizable theory of technctlo and transfer.

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Another step in elaborating a multivariate model of technological innovation and transfer would be to identify and distinguish two different dimensions of the vanaoles: (1) ‘primary’ factors which affect the de:pendent variables directlv and ‘secondary’ (or intervening) factors which affect the Idependent variables izdirectly through their influence on other primary variables; (2) variables or sets of variables which are ‘necessary’, ‘sufficient’ or ‘necessary and &ufficient conditions for success. A mo,re detailed discussion of these conditions is presented in tile dissertation from which this paper arises [ 111. REFERENCES [ 1) Allen, Thomas J., Communications in the Research and IDevelopment Laboratory, Technologal Rcr -erlp,Vol. 70, No. 1 , Oct./Nov,, 1967. [2] Baker, Norman R ., J. siegman, andfl A. H. R:Jbenstein, The Effects of Perceived Needs and Me ‘rIs of the GeneratinY of Ideas fG>r Industrial Rpjearch and De\&Vol. EM-1 4, Yo. 4, opmen t Projects, /E&Y Tranhacfi;-)r~.,u Eng~nei’r,:.‘ZgillgarnagemP:rf. Dec., 1967. f3] Baker, Norman R., J. Siegman, and J. Learson, The Relationship Between Certain Characteritiics of Industrial Research ~‘ropos~1s and Their Subseqluent Dispositiwn, &X’E Trarxu-tiords on Evgineerirlg Management, Vol. EM-1 8, No. 4, November 5971. (4 J Bruno. ,+%lver V., New Product Decision Makinp il; High Technology Firms, Resea/?cr? Jla~lryt~rflenb.Vol. 16, No. 5, September 19731 (5) Evr;n, Willi2.m M. bnd Guy Black, Hnnovaticns in BusiP!ess Organizations: Some Factors Associated with Su-xss or Failure ot Staff Propomls, Journal of Business.

Vol. 40, No. 4, October 1967. [6] Glaser, Barney G. and A. L. Strauss, lZrk!?Dds~ovc~ of Grounded Theory: Strategies for QuzliifativeResear& Chicago: Ai: Lke Publishing Co., !7] Havelock,

Ii

967.

Ronald G., Plannirlg fbr Irdzovation, Ann Arbor, Michigan: Institute for

Social Research, University of Michigan, Ju.ly, : 969. [ 81 Heati, j. B., The Politics and Economics qf Techno&ical

Change: Technical Change and Innovation, Techn&ogy and Sock !y, Proceedings of First Bath &?.w ferencc, Bath, England: Bath University Press, 196% 191 Hetzntrr. WilliamA., An Analysis of Factors Influencing the Trmsfer of Tecl:noloJgj from DOD Laboratories to State znd Local Agencies, Ph_ D. Dissertation, Department of Industrial Engineering and Mznagement Sciences, Northwestern Univer:;;ty, Evanston, Aufiust, 1973. [ 101 Kelly, Patrick and M. Kranzberg, Technologkal Innlov,ztilon:A Critical Review,!of Cirrrent Knowledge, Advanced Technology and Science Studies Group, Georgia Institute of Technology, February, 1915. [ 111 Lee, Jinjoo, Contwt Research and 11:sUtl!.zation in a Developing Country: .dn Analysis of Factors influencing the Transfer of Industrial Technology from Ko:/*ea Institute of Science and Technology (KIST) to its Clients, Ph. D. Dir,stlrtaticn, Northviestern University, Evanston, II!incris, Department of Industrial Engineering and ManaqTment Sciences, 1975. [ 121 Mansfield, &win, industrial Research and Technical Pnnnvatzbn: An Ecc rlomic Anal’psis, New 12, ic: W. W. Norton & Compar:y, 1968.

196 [ f 31 Marquis,

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Donald G. and D. M. Straight, Jr., Organizational Factors in Project Performance, Research Program Effectiveness, Yovits et. al. (eds.), New York: Gordon and Breach, 1966. [ 141 Mottur, Ellis, Tile Processes of Technological innovation: A Conceptual System ModeZ, George Washington University, Program of Policy Studies in Science and Techno!ogy, Washington, D.C., January, 1968. [ I5 J Murphy, David C., B. N. Baker and D. Fisher, Determinants $ Project Success, Chestnut Hill, Mass: Management Institute, Boston College, 1974. Industrial hnol*ations, Washington, [ 161 Myers, 5mmer and D. G. Marquis, Successfirl D.C.: National Science Foundation, NSF 69-17,1969. [ 17 ] Nayudamma, Y ., Promoting the Industrial Application of Research in an Underdeveloped Country, Minerva, Vol. 5, No. 3, Spring, 1967. [ 181 Radnor, Michael, A. H. Rubenstein, and D. A. Tansik, Implementation in Operations Research and R&D in Government and Business Organization, Operations Research, Vol. 18, No. 6, Nov.-Dec., 1970. [ 191 Robartson, A. B., B. Achilladelis, and P. Jervis, Success and Faifure in Industrial Immolation: Report on Project SAPPHO, London: renter for the Study of Industrial lnnov&tion, February, 1972. [ 201 Rogers, Everett M., Diffirsion of Innovations, New York: The Free Press, 1962. [ 211 Rubenstein, A. H., et al., Explorations on the Information Seeking Style of Researchers, In C. E. Nelson & D. K. Pollock (eds.) Communication among Scientists and E@neers, Lexington, Mass.: D.C. Heath & Company, 1970. [22] Rubensteil, A. H., A. K. Chalcrabarti, R. D. O’Keefe, Final Techical Report on Field Studies of the Tr)chnicc=lInnovation Process, Dept. of K/MS, Northwestern University, September 15, 1974. [ 231 Stewart, John M., Techniques for Technology Transfer within the Business Firm, 1EEE Transactiorls on Eqineering Management, Vol. EM-1 6, No. 3, August, 1969. 1241 Trussel. Paul C., Priority of Needs of Industrial Research hstitutes in Developing Countries. Vancouver, Canada: Wor1.l Association of Industrial and Technological Research Organization, 197 2. [25] Utterback, James M., The Process of Innovation: A study of the origination and Development of Ideas for New Scientific Instruments, IEEE Transilctions on Engirreerin8 Alanagernent, Vol. EM-i 8, No. 4, November, 197 1. 1261 Utterback, James M., T. J. Allen, J. H. Halloman, and M. A. Sirbu, Jr., The Process of Innovation in Five Industries in Europe and Japan, IEEE Transactions on Engineering Mautagernent,Voi EM-23, No, I, Feb., 1976. [ 27 j Wright, Philip, Government Efforts to l.acilitate Technology Transfer: The NASA Experience, Factors in the 7kmfer of Technology, Gruber rend Marquis (eds.), Cambridge, Mass: MIT Press, 1969. 1281 Young, Cliff H., Some Effects of the Product Development Setting, Information Exchange and Marketing R & D Coupling on Product Dcvciopn:cnt, Ph. D. Dissertation, Graduate School of Management, Northwestern Unisversit),, Evanston, Illinois, June, 1973. [29] Zaltman, G., R. Duncan and J llolbek, fnrrovations and Organfzations, New York: Wiley, 1973.