Knowledge creation and diffusion of Taiwan's universities: Knowledge trajectory from patent data

Technology in Society 35 (2013) 172–181

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Knowledge creation and diffusion of Taiwan’s universities: Knowledge trajectory from patent data David W.L. Hsu*, Benjamin J.C. Yuan Graduate Institute of Management of Technology, National Chiao Tung University 1001 Ta-Hsueh Road, Hsinchu 300, Taiwan

a r t i c l e i n f o

a b s t r a c t

Article history: Received 2 January 2013 Received in revised form 12 May 2013 Accepted 15 May 2013

The university sector, receiving government funding to perform basic research, is designated to produce and widely disseminate innovative knowledge to industry in many countries, particularly in latecomer countries such as Taiwan. Knowledge flows occurring in university research can be traced with patent data. This exploratory study aims to investigate knowledge creation and diffusion of Taiwan’s universities by using university patents as the proxy. The empirical analysis finds a dramatic increase in the number of university patents after 2002. Some implications are derived based on this empirical analysis. Moreover, the cross-national citation behavior of university research would be worthwhile for conceptualizing transnational innovation networks in future studies. Ó 2013 Elsevier Ltd. All rights reserved.

Keywords: Knowledge flows Patent analysis University research

1. Introduction Knowledge spillovers are regarded as an important source for economic growth [59,60]. In many countries, universities receive government funding to generate basic knowledge that intends to be widely disseminated. As a large number of studies have suggested, universities play a unique and important role in the national innovation system [10,51,58–61]. For such latecomer countries as Taiwan, an important strategy to catch up is enhancing the role of universities in building national innovative capacity since universities are, in general, seen as a source of knowledge [43]. During Taiwan’s evolution of catching up with advanced countries, the domestic research-oriented universities are designated to create and diffuse knowledge to contribute to economic growth. Knowledge flows come from various channels, such as foreign direct investments, technology transfer, cooperative research, and movement of professionals [7,20,52,70]. Among these channels, patents, as legal documents, are

* Corresponding author. Tel.:þ 886 52732877. E-mail addresses: [email protected] [email protected] (B.J.C. Yuan).

(D.W.L.

Hsu),

0160-791X/$ – see front matter Ó 2013 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.techsoc.2013.05.002

codified knowledge containing reliable and traceable records of knowledge flows because of citations made by patents referring to previous patents [32,36]. Patent backward citation refers to citations that a patent cites prior arts in the patent document. Therefore, backward citation provides valuable information regarding the trajectory of technology development. In contrast, patent forward citation occurs when a focal patent is cited by subsequent patent applications [32,73]. Many studies have used patent citation to analyze knowledge flows within or across regions, countries, or sectors [30–32,36,61,69]. Numerous studies have focused on the university’s role in the national innovation system based on institutional perspective or systemic features, while the knowledge flows that occur between universities and other sectors have received less attention [14,27,47,75]. However, knowledge flows occurring in universities are worthwhile investigating to learn the universities’ role in the innovation system and the impacts of higher education and innovation policies. Additionally, studies adopting the patent citation approach to explore the knowledge flows of university, in accordance with authors’ current recognition, are rare. This study investigates the knowledge inflows and outflows of Taiwan’s research-oriented universities through patent backward and forward citation. In other words, this study evaluates how the

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knowledge acquisition and diffusion in these universities has influenced the innovation system in Taiwan. This remainder of this study is organized as follows. Section 2 reviews related literature, while the data collection and methodology used here are described in Section 3. Section 4 presents the empirical analysis for achieving the research goal. Finally, Section 5 provides the conclusions and implications based on this analysis. 2. Theoretical background According to many leading scholars such as [23,44]; innovation is the key to long-term economic growth. NeoSchumpeterian economic theory argues that economic recovery after periods of recession and depression, such as that during the 1980s and early 1990s, is driven by new innovations [67]. Since the importance of innovation in economic growth was appreciated by Refs. [65]; theorists have devoted to draw the determinants of innovation on national level. Based on endogenous growth theory, technological change that stimulates economic growth is treated endogenously [4,68]. Ref. [60] further separates the rate of technological progress into two drivers, including the total human capital employed in research and the total existing stock of ideas or innovations [39]. First, the economic segment devoted to the ideas sector is a function of the research and development (R&D) labor market, which determines the number of ideas workers employed in this sector. Allocation of human resources to the ideas sector depends on R&D productivity and the private economic return to new ideas. Second, the productivity of generating new ideas is triggered by the existing stock of previously discovered ideas [24]. These studies suggest that knowledge creation and production are critical to innovation. Universities play a central role in the innovation process, not only as traditional providers of teaching and basic research, but also by creating human capital in the form of highly-skilled labor [6]. Since universities are traditionally regarded as the sources of basic science and research knowledge for industrial and technological innovation, many scholars adopt the perspective of regional innovation systems to explore the innovation between clusters and universities within given geographic areas [3,8,11,24,46,53,57]. Several studies point out that the knowledge spillover of university research favors the improvement of technological and innovative capability from empirical evidence [2,5,6,21,56]. To enhance the academic knowledge spillover, universityindustry collaboration is seen as one of effective measures for improving national innovation capacity to reach the eventual goal of stimulating economic growth. A number of studies emphasizing university-industry collaboration not only depict the importance of university research in facilitating industrial innovation [35,40,41,56] but also point to the effectiveness of knowledge spillover through the channel of collaboration. For example, this is seen in regard to different types of employment by industry of university graduates, joint research programs, licensing of university patents, or joint publications [1,16,17,26,54–56,64]. Therefore, in many catching-up countries, universities are thought to help accelerate industrial innovation on

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account of the knowledge spillover there [12,15,42,43]. Due to the fact that patents are legal documents with codified knowledge providing reliable records to trace bibliographic information, patent data is exploited by many empirical studies to conduct the issues regarding innovation and knowledge creation and spillover within the innovation process [24,31,32,45]. Several scholars use university patents as a proxy for assessing the spillover effect of university research [2,5,6,21] and the quality of university patents [9,25,62,66]. Thus, this study intends to investigate the knowledge inflow and outflow in Taiwan’s universities with the bibliographic information embedded in university patents to learn about the circumstances of technology trajectory in Taiwan’s universities. 3. Methodology The purpose of this study is to investigate the knowledge inflows and outflows of Taiwan’s universities in order to learn the role of university research in Taiwan’s innovation system. To achieve this research purpose, this study employs patent data to examine the knowledge flows of Taiwan’s universities since Refs. [28,36,37] have demonstrated and suggested that patents could serve as a potential information source for examining knowledge flows by measuring and tracing the citation of prior arts recorded in patent documents. Therefore, this study builds on this approach to explore how university research in Taiwan intermediates knowledge creation and diffusion in Taiwan’s innovation system and global knowledge flows. To trace the knowledge sources of Taiwan’s universities and how the knowledge created within universities is diffused, this study utilizes the patent data acquired from the United States Patent and Trademark Office’s (USPTO) database, due to the fact that the American market is important for technology transfer and international trade. For the purpose of investigating knowledge creation and diffusion in Taiwan’s universities, simple patent counts do not fully disclose the necessary information. Alternatively, quality-based patent indicators, such as science linkage or backward and forward citations suggested by Refs. [31,32]; could serve as proxies reflecting the knowledge flows in organizations. These indicators are described as follows.

(1) Backward citation: the number of citations of a university’s patents citing prior patents. This indicator helps trace the knowledge source and development trajectory of innovation in an organization [32]. (2) Forward citation: the number of citations of a university’s patents made by subsequent patents. This indicator helps evaluate the technological impact of patents. High forward citation counts usually represent key technologies that are fundamental to future inventions [32]. (3) Science linkage: the number of citations of a university’s patents citing scientific literature. The linkage

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350

250 200 150 100 50 0

NCHU

CGU

CYCU

NSYSU

NCKU

NCU

NTHU

NCTU

NTU

Others

NTUST

Fig. 1. Patent counts by universities in Taiwan.

to scientific literature indicates that an invention has a scientific basis. (4) Technological classification: the classification of patents helps track a university’s R&D trajectory for further analysis. This study adopts the 2-digit International Patent Classification (IPC) as the patent classification system for investigating the universities’ R&D trends. 4. Empirical analysis 3.1. Descriptive statistics This study is based on Taiwan’s universities’ patent data from 1992 through the end of August, 2011 (Fig. 1). During this period, the universities in Taiwan have granted 1334 patents in USPTO, with top 10 universities receiving 77.11% of the total patents. As illustrated in Fig. 1, National Taiwan University (NTU) ranks first in Taiwan’s university patenting, followed by National Chiao Tung University (NCTU), National Tsing Hua University (NTHU), National Central University (NCU), National Taiwan University of Science and Technology (NTUST), National Cheng Kung University (NCKU), National Sun Yat-Sen University (NSYSU), Chung Yuan Christian University (CYCU), Chung Gung University (CGU), and National Chung Hsing University (NCHU). Excluding CYCU, the remaining nine are identified as elite universities subsidized by the “Aim for the Top University and Elite Research Center Development Plan (MoE ATU plan).” Funded by Taiwan’s Ministry of Education, this plan supports key universities and makes them the world’s

3.23

Scieitific citation counts

600

2.65

500

3

2.63

2.23

2.16

2.08 1.84

400

2.5 2

1.58

1.54

300

1.5

1.12

200

1

100

0.5 635

403

571

3.2. Knowledge inflows and outflows The previous subsection presents the knowledge flows in Taiwan’s top 10 patenting universities in terms of backward and forward citation counts. As mentioned in the

3.5 2.67

110

103

143

152

87

137

68

638

Average scientific citation counts

700

leading education and research centers [71]. Among the 11 key universities supported by the MoE ATU plan, only National Yang-Ming University and National Chengchi University do not rank in the top 10 patenting universities in Taiwan. This phenomenon wherein Taiwan’s university patenting strongly concentrates on elite universities suggests that research resources are similarly concentrated. As a result, Taiwan’s elite universities are more capable of commercial technological development. In terms of overall and average scientific linkages, NTU leads with 635 scientific citation counts. NTHU takes the lead in pursuing advanced knowledge by linking to published scientific literature with 3.23 average scientific citation counts (Fig. 2). The greater scientific linkage of NTU, NCTU, and NTHU reflects that these three elite universities grant 45.04% of Taiwan’s university patent total. It is worth noting that each patent granted by the top 10 patenting universities cites 2.33 scientific papers, more than other universities’ average scientific counts. To some degree, this phenomenon reveals that Taiwan’s researchoriented universities are more capable of utilizing scientific research output for technological development due to their higher emphasis on basic scientific research [50]. Patents granted by Taiwan’s universities are classified according to a 2-digit IPC. As shown in Fig. 3, Taiwan’s universities received 256 patents in class H01 (basic electrical elements), followed by 137 patents in class H03 (basic electronic circuitry), 122 patents in class G01 (measuring; testing), 100 patents in class G06 (computing; calculating; counting), 82 patents in class A61 (medical or veterinary science; hygiene), 62 patents in class H04 (electronic communication techniques), 60 patents in class G02 (optics), 56 patents in class C07 (organic chemistry), 43 patents in class C12 (biochemistry; beer; spirits; wine; vinegar; microbiology; enzymology; mutation or genetic engineering), and 38 patents in class C08 (organic macromolecular compounds, their preparation or chemical working-up; compositions based thereon). More than 70% of these patents concentrate on fields related to the electronics and biology industries.

0

0

400

378

350 300 Number of patents

Number of Patents

300

256 250 200 137

150

122 100

100

82 62

60

56

50

Scientific citation count

Average scientific citation count

38

C12

C08

0 H01

Fig. 2. Scientific linkages and average scientific linkages by universities in Taiwan.

43

H03

G01

G06

A61

H04

G02

C07

Fig. 3. Patent counts by 2-digit IPC.

Other

Table 1 Backward and forward citation counts of the top 10 universities in Taiwan. Top 5 backward citation assignees

Top 5 backward citation fields

Top 5 forward citation assignee countries

Top 5 forward citation assignees

Top 5 forward citation fields

National Taiwan University US (468)

IBM (25)

H01 (209)

US (59)

H01 (32)

NEC (22) Samsung (18) Matsushita (18) Motorola (18) Total backward citations (896) Share of total backward citations (11.27%)

H03 (145) G01 (93) H04 (77) G02 (47) Total backward citations (861) Share of total backward citations (66.32%)

TW (18) JP (9) KR (8) IL (6) Total forward citations (122) Share of total forward citations (81.97%)

National Taiwan University (7) Cadent (5) Samsung (5) ForteBio (4) 3M (3) Total forward citations (124) Share of total forward citations (19.35%)

Siemens (83)

H01 (399)

US (86)

HP (69) Nichia (48) Cree (43) IBM (31) Total backward citations (1202) Share of total backward citations (22.80%)

H03 (115) H04 (106) G06 (89) G02 (83) Total backward citations (1137) Share of total backward citations (69.66%)

TW (30) JP (21) KR (18) BM (2) Total forward citations (172) Share of total forward citations (91.28%)

IBM (30) National Tsing Hua University (16) Micron (13) GP Medical (11)

G06 (85) H01 (65)

US (80) TW (17)

Advanced Liquid Logic (12) KLA-Tencor (10)

G01 (27) C12 (10)

G01 (62) A61 (50)

JP (14) CA (6)

H01 (10) B01 (9)

Sun Microsystems (9) Total backward citations (563) Share of total backward citations (14.03%)

G02 (29) Total backward citations (534) Share of total backward citations (54.49%)

DE (6) Total forward citations (138) Share of total forward citations (89.13%)

Duke University (9) National Tsing Hua University (8) GE (7) Total forward citations (149)

Sony (7)

H01 (61)

US (49)

National Central University (7) Lucent (7) Motorola (6) Xerox (6) Total backward citations (333)

G01 (54)

TW (16)

H03 (32) H04 (30) G06 (19) Total backward citations (318)

JP (7) FR (3) AN (1) Total forward citations (78)

JP (179) DE (40) TW (39) KR (34) Total backward citations (867) Share of total backward citations (87.66%) National Chiao Tung University US (630) JP (222) DE (83) TW (62) KR (32) Total backward citations (1144) Share of total backward citations (89.95%) National Tsing Hua University US (319) JP (114) TW (36) KR (14) GB (10) Total backward citations (543) Share of total backward citations (90.79%) National Central University US (181) JP (79) DE (15) TW (13) KR (8) Total backward citations (325)

Halliburton Energy Services (9) Samsung (7) LG (6) UMC (6) Fairchild Semiconductor (5) Total forward citations (176) Share of total forward citations (18.75%)

Share of total forward citations (30.87%)

G01 (20) H03 (14) G02 (9) H04 (8) Total forward citations (118) Share of total forward citations (70.34%) H01 (37) H03 (25) G06 (19) H04 (19) G01 (17) Total forward citations (170) Share of total forward citations (68.82%)

G06 (8) Total forward citations (132) Share of total forward citations (48.48%)

Harman International Industries (7) National Central University (7)

H01 (24)

Texas Instruments (6) Pitney Bowes (5) Intel (5) Total forward citations (80)

G06 (8) H03 (8) B01 (4) Total forward citations (78)

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Top 5 backward citation assignee countries

H04 (9)

(continued on next page) 175

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Table 1 (continued) Top 5 backward citation Top 5 backward assignee countries citation assignees Share of total Share of total backward backward citations (91.08%) citations (9.90%) National Taiwan University of Science and Technology US (137) National Taiwan University of Science and Technology (7) JP (37) Micron (6) TW (19) Intel (5) DE (7) California Institute of Technology (5) KR (6) GE (5) Total backward Total backward citations (232) citations (236) Share of total Share of total backward citations (88.79%) backward citations (9.90%) National Cheng Kung University US (153) IBM (9) JP (78) Matsushita (8) TW (13) NEC (8)

Top 5 backward citation fields Share of total backward citations (61.64%)

Top 5 forward citation assignee countries Share of total forward citations (97.44%)

Top 5 forward citation assignees Share of total forward citations (37.50%)

Top 5 forward citation fields Share of total forward citations (67.95%)

H01 (27)

US (13)

H05 (7)

H03 (25) G01 (23) H02 (21)

TW (8) KR (3) BM (1)

National Taiwan University of Science and Technology (5) Flextronics (4) GE (2) Samsung (2)

G06 (20) Total backward citations (230) Share of total backward citations (50.43%)

IL (1) Total forward citations (29) Share of total forward citations (89.66%)

Visa (2) Total forward citations (29) Share of total forward citations (51.72%)

G02 (2) Total forward citations (29) Share of total forward citations (79.31%)

G06 (59) H01 (31) G10 (28)

US (25) JP (16) TW (11)

G06 (18) H01 (6) H04 (6)

DE (6) KR (6)

Tokyo Electron (7) Canon (5)

H03 (16) H04 (15)

KR (7) DE (1)

Total backward citations (290) Share of total backward citations (88.28%)

Total backward citations (293) Share of total backward citations (12.63%)

Total backward citations (286) Share of total backward citations (52.10%)

Total forward citations (61) Share of total forward citations (98.36%)

3D Systems (7) Sony (7) National Cheng Kung University (4) Mitsubishi (3) Industrial Technology Research Institute (2) Total forward citations (57) Share of total forward citations (40.35%)

National Sun Yat-Sen University US (123) JP (33)

Motorola (6) Corning (6)

H01 (78) H03 (57)

US (29) TW (8)

G02 (15) H01 (13)

TW (19)

Hitachi (5)

G02 (21)

KR (2)

DE (9) KR (9) Total backward citations (216) Share of total backward citations (89.35%) Chung Yuan Christian University US (115)

Intel (5) ATI (4) Total backward citations (218) Share of total backward citations (11.93%)

H04 (10) C08 (9) Total backward citations (216) Share of total backward citations (81.02%)

AU (1) FR (1) Total forward citations (43) Share of total forward citations (95.35%)

Donnelly (22) Cheng Uei Precision Industry (3) National Sun Yat-Sen University (2) VeruTEK Technologies (2) AUO (1) Total forward citations (45) Share of total forward citations (66.67%)

Chung Yuan Christian University (4) LSI Logic (4) Rigel Pharmaceuticals (4)

G01 (38)

US (11)

B01 (20) H03 (20)

TW (5) JP (4)

B29 (5) C02 (3) Total forward citations (56) Share of total forward citations (67.86%)

B60 (5) B09 (3) G01 (2) Total forward citations (41) Share of total forward citations (92.68%) G01 (5) H03 (4) H01 (3)

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JP (32) TW (12)

Chung Yuan Christian University (4) CoreLED Systems (3) Okuma (2)

H03 (6) G06 (4) H02 (4)

DE (11) NL (5) Total backward citations (199) Share of total backward citations (87.94%) Chang Gung University US (126) JP (19)

TW (14) JP (12) BE (1) CA (1) Total backward citations (63) Share of total backward citations (95.24%)

G06 (15)

DE (2)

Analog Devices (1)

G05 (2)

B23 (13) Total backward citations (199) Share of total backward citations (53.27%)

IT (1) Total forward citations (23) Share of total forward citations (100.00%)

AUO (1) Total forward citations (23) Share of total forward citations (47.83%)

G06 (2) Total forward citations (20) Share of total forward citations (80.00%)

IBM (8) Cadence Design Systems (7) William L. Puskas (7) Lucent (5) AT&T (4) Total backward citations (178) Share of total backward citations (17.42%)

G06 (54) H01 (34)

US (23) JP (6)

IBM (3) Scott Pitkethly (2)

G06 (15) A61 (4)

A61 (18) G05 (9) H05 (9) Total backward citations (175) Share of total backward citations (70.86%)

CA (1) KR (1) TW (1) Total forward citations (32) Share of total forward citations (100.00%)

Renesas Electronics (2) P&G (2) HP (2) Total forward citations (32) Share of total forward citations (34.38%)

A46 (3) H03 (2) A62 (1) Total forward citations (30) Share of total forward citations (83.33%)

National Chung Hsing University (5) AMCOL International (3)

H01 (18)

US (15)

Cree (10)

H01 (34)

C08 (13)

TW (15)

C08 (5)

Hitachi (2) Electric Mobility (2) Gomei Kaisha Nakamura Sangyo (2) Total backward citations (68) Share of total backward citations (20.59%)

C12 (10) B60 (5) C01 (4)

JP (6) KR (5) DE (2)

National Chung Hsing University (6) Samsung (3) Sharp (3) Sony (2)

Total backward citations (63) Share of total backward citations (79.37%)

Total forward citations (45) Share of total forward citations (95.56%)

Total forward citations (47) Share of total forward citations (51.06%)

Total forward citations (45) Share of total forward citations (95.56%)

Number in brackets represents patent counts and the share of total patent citation counts.

C07 (2) A01 (1) B62 (1)

D.W.L. Hsu, B.J.C. Yuan / Technology in Society 35 (2013) 172–181

TW (7) DE (4) CA (3) Total backward citations (175) Share of total backward citations (90.86%) National Chung Hsing University US (32)

Design and Manufacturing Solutions (3) Lunar (3) Total backward citations (205) Share of total backward citations (8.78%)

177

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previous section, backward citation is defined as the citation to prior arts; therefore, backward citation counts are regarded as the proxy for tracing the knowledge source. Similarly, forward citation indicates the trajectory of knowledge outflows due to the fact that it occurs when a patent was made in a subsequent patent. Therefore, this study adopts backward and forward citation as indicators for tracing knowledge inflows and outflows in Taiwan’s universities. Regarding knowledge inflows, the United States is without doubt the primary knowledge source and greatest knowledge recipient of technological development in Taiwan’s top 10 universities over the last two decades (Table 1). Japan is the second essential knowledge source contributing to technological development in these universities, except for NCHU. It should be noted that these universities can to some degree convert the inflow knowledge into usable technology for indigenous industry, with Taiwan listed as one of the primary forward citation assignees, as demonstrated in Table 1. In regard to knowledge flows at the individual university level, NTU’s patent knowledge source is diverse, with the top five backward citation assignees sharing 11.27% of total citations. The famous American, Korean, and Japanese electronics companies, including IBM, NEC, Samsung, Matsushita, and Motorola, are NTU’s top five essential knowledge sources. It is noticeable that the forward selfcitations of NTU represent its internalization and leverage of various knowledge sources to establish its innovation capability. The knowledge drawn by NTU concentrates on H01, H03, G01, H04, and G02 and is converted into these same fields related to the electronics industry. This corresponds to the fact that NTU emphasizes its research in fields related to electrical engineering and optoelectronics. The second top patenting university, NCTU, derives its knowledge from Siemens, HP, Nichia, Cree, and IBM. Among these assignees, Nichia and Cree are two leading companies specializing in light emitting diode (LED) technology. Additionally, the patents in H01 and G02 cited by NCTU are related to LED technology. This reflects that the LED industry has emerged quickly in Taiwan and that basic, academic scientific research is responding to the needs of industrial development [32]. Furthermore, NCTU is also capable of converting external knowledge into innovation for Taiwan’s high technology industry to some degree. This is evident in UMC, the second largest semiconductor company in Taiwan, acting as one of the top five forward citation assignees of NCTU’s patents. NTHU relies on IBM, Micron, GP Medical, Sun Microsystems, and itself as primary sources for accumulating patent knowledge. It is clear that this elite university located in the renowned Hsinchu innovation region also seeks its innovation from the patent classifications of G06, H01, G01, and G02 that correlate with the information and communication technology (ICT) industry. However, it should be noted that NTHU endeavors to acquire knowledge in the classification of A61 (medical or veterinary science; hygiene) and diffuses its scientific research to the field of biochemistry in terms of C12. This corresponds to the primary academic fields of scientific research at NTHU [34]. Moreover, NTHU’s self-citations demonstrate its

attempts to internalize external knowledge to establish its endogenous innovation capability [32]. NCU relies on Sony, Lucent, Motorola, and Xerox as its primary innovation sources for accumulating patent knowledge. Like other elite patenting universities, NCU derives its innovative knowledge from the classifications of H01, G01, H03, H04, and G06. In regard to the ICT industry, it responds to industrial needs by diffusing knowledge to the classifications of H01, H04, G06, H03, and B01. With the high self-citation ratio as shown in Table 1, NCU intends to establish its own innovative capability through the internalization of external innovation. As shown in Table 1, NTUST also depends on the international technology-based corporations of Micron, Intel, and GE as its primary knowledge sources. Clearly, NTUST acquires its innovative knowledge from the classifications of H01, H03, G01, H02, and G06 concerning the ICT industry. NTUST’s innovative knowledge outflows to the technology classifications H05 (electric techniques not otherwise provided for), H03, G06, H02, and G02. However, it seems that NTUST endeavors more than four other leading patenting universities to establish its own technology capability, since NTUST ranks as both the first backward and forward citation assignees. Similarly, five other elite patenting universities contribute to industrial innovation through seeking innovative knowledge from international technology-based corporations and fields related to the ICT industry such as H01, H03, H04, G01, and G06. It is worth noting that these universities are dedicated to different technological fields based on their academic research. The application of NCKU’s innovative knowledge in B29 (working of plastics; working of substances in a plastic state in general) and C02 (treatment of water; waste water; sewage; or sludge) reflects that it ranks as one of the top three universities in Taiwan in the fields of chemistry and environmental engineering [33]. The forward citation field B09 (disposal of solid waste; reclamation of contaminated soil) contributed by NSYSU ranks it one of the top five universities in the field of environmental engineering [29]. The classification B23 (machine tools; metal-working not otherwise provided for) is an essential knowledge source for CYCU, demonstrating that it is dedicated to basic mechanical engineering research and ranks as one of the top 10 universities in this field [29]. CGU accumulates its knowledge from A61 (medical or veterinary science; hygiene) and impacts this field and A46 (brushware), which shows its reputation as one of the top three universities in Taiwan in the fields of medical science and instruments [33]. NCHU is famous for its academic work in agricultural science [29]. Thus, NCHU’s innovative knowledge is diffused to the technology field of A01 (agriculture; forestry; animal husbandry; hunting; trapping; fishing), as presented in Table 1. 3.3. Discussion Fig. 1 presents the dramatic growth in university patenting starting in 2002. It should be noted that this study extracts university patents granted from 1992 through the end of August 2011. The total number of patents in 2011 is expected to outnumber that from 2010. There are several explanations for this dramatic increase in Taiwan’s university patenting

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behavior. Ref. [28] suggests three possible factors: changes in laws, increased industry funding of university research, and an increase in organized university “technology” offices. Because all three factors occurred more or less simultaneously in Taiwan, their different effects cannot be easily separated, but it is plausible that these three changes affected the number of university patents [28]. Inspired by the Bayh-Dole Act of 1980 in the United States, Taiwan has sought an approach to enhance its national innovative capacity by encouraging domestic universities and public research institutes’ inventions to be used for public purposes. The Fundamental Science and Technology Act legislated in 1999 established the intellectual property rights of academic research funded by the government to universities or research institutes that was not to be regulated by the National Property Act. With the authorization of the Fundamental Science and Technology Act, the researchers are encouraged to commercialize their academic research outcome due to the motivation of royalties, licensing income, and equity participation for their institutes [13]. After the passage of this Act in 1999, the number of patents granted in the USPTO to Taiwan universities has gradually increased, as illustrated in Fig. 1. Ref. [28] noted that the second change affecting the number of university patents is the increase in university technology offices. A similar mechanism is also found in the context of Taiwan’s universities. Under the encouragement of Taiwan’s National Science Council, more than 60 universities have established relevant technology transfer units to facilitate the patent application process in universities since 2001, following passage of the Fundamental Science and Technology Act [38,72]. As a result, not only do universities grant more patents, but the technology licensing performance in terms of number and royalties also increases. According to the National Science Council, Taiwan’s universities receive royalties totaling 50.4 million NT dollars on 588 licensing agreements [49]. Before the passage of the Fundamental Science and Technology Act, the royalties earned by Taiwan’s universities totaled only 15.6 million NT dollars in 1999 [22]. Another factor possibly related to the increase in university patenting is additional industry funding of university research. Ref. [28] suggested that this growth in funding is a partial response to universities’ interest in applied research, which results in more resources for such research activities and thereby supports increased university patenting. According to the National Science Council, the percentage of industry funding in university research increased from 4.8% in 1999 to 6.7% in 2010 [48,50]. As a result, the university patenting in Taiwan’s universities grew during the same period. Fig. 3 demonstrates that basic research activities in Taiwan’s universities are related to developments in the ICT industry and emerging biotechnology industry. In Taiwan, the electronics industry is the largest manufacturing sector and also forms the largest export industry [63]. The biotechnology industry has been cultivated by Taiwan’s government for almost three decades [19]. The university patenting activity reflects the vigorous development of the electronics and biotechnology industries and their demands for advanced technology.

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As a latecomer country, Taiwan relies on advanced countries like the United States and Japan to introduce emerging technologies in many sectors such as the biotechnology industry [19], solar photovoltaic industry [74], thin film transistor-liquid crystal display industry [31], and other high technology industries [18,32]. Taiwan’s university sector shows a similar pattern to these universities intending to source their innovation knowledge from advanced countries such as the United States and Japan, as shown in Table 1. This phenomenon suggests that Taiwan’s university sector is destined to catch up to developed countries through basic scientific research and by commercializing the research output in Taiwan’s innovation system. In addition, the high self-citation ratio of the top 10 patenting universities suggests that Taiwan’s universities attempt to establish their own innovative capability through internalizing external knowledge [32]. Moreover, the technology classifications that these universities derive and disseminate for their innovation reveal their focused technological fields and the scientific research that intend to respond industrial demands, particularly in the ICT industry.

4. Conclusions Since knowledge spillovers are regarded as an effective approach to facilitating industrial innovation, universities in many countries are designated to create and diffuse innovation knowledge for industry. As a latecomer country, Taiwan seeks to enhance the university’s importance in building its national innovative capacity. This empirical study adopts patent citation as the proxy to investigate the knowledge inflows and outflows due to the fact that patent is codified knowledge carrying traceable records. Implications of this study’s results include the following:

(1) Taiwan’s Fundamental Science and Technology Act and more industry funding might be two factors leading to the dramatic increase in the number of university patents after 2002. The Fundamental Science and Technology Act, inspired by the Bayh-Dole Act in the United States, was legislated in 1999 and authorized the property rights of academic research that was funded by the government to universities and research institutes. With the incentive authorized by this act, the number of relevant technology transfer units and patents granted to universities grew substantially. It seems that Taiwan’s Fundamental Science and Technology Act has been a key factor behind the number of patents granted to universities. (2) Under the implementation of the Fundamental Science and Technology Act, Taiwan’s universities are designated to support technological development for industry. Therefore, university research intends to respond to the needs of industry, especially the technological fields of ICT and biotechnology. (3) Moreover, Taiwan’s universities plan to introduce innovative knowledge from developed countries and

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then establish their own innovation capability. This phenomenon indicates that Taiwan’s universities not only rely on advanced countries to acquire innovative knowledge but attempt to absorb and internalize this external knowledge in the context of an innovation system facilitated by the Fundamental Science and Technology Act. Despite this investigation presenting the patterns that Taiwan’s university research is encouraged by the Fundamental Science and Technology Act, some research limitations need to be addressed by future studies. This study utilizes forward and backward patent citations to trace the knowledge inflows and outflows; however, it is difficult to measure the social impact of knowledge that is intermediated by universities due to the restriction of patent indicators adopted in this study. In addition, this study does not compare the quality of Taiwan’s university patents with industrial patents, despite the rapid growth of university patents after the passing of the Fundamental Science and Technology Act. Therefore, several questions need to be answered. For example, following the passing of the Fundamental Science and Technology Act, is the quality of Taiwan’s academic patents better than industrial patents as measured by the number of times they are cited by subsequent patents? What is the relative propensity of Taiwan’s university patents to cite prior scientific literature? What is the relative propensity of Taiwan’s university patents cited by indigenous industry? These questions are worth further investigation to recognize the pattern of university research in Taiwan’s national innovation system. Moreover, this study demonstrates a cross-national backward and forward citation behavior existing in the university sector. In future research, it is also worth examining the impact of international knowledge flows towards the conceptualization of transnational innovation networks.

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