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The evolution of industrial research in Italy: characteristics and perspectives
Technovation 21 (2001) 585–594 www.elsevier.com/locate/technovation
The evolution of industrial research in Italy: characteristics and perspectives Giorgio Petroni a, Chiara Verbano a
b,*
Dipartimento di Economia e Tecnologia, Universita` degli Studi della Repubblica di San Marino, Strada della Bandirola 44, Montegiardino, 47898 San Marino b Dipartimento di innovazione meccanica e gestionale, Universita` degli Studi di Padova, Via Venezia 1, 35131 Padova, Italy Received 7 July 2000; accepted 24 October 2000
Abstract The main purpose of this study is to investigate and understand the evolutionary characteristics of industrial research in Italy in recent years. There is a vast amount of literature which discusses factors and areas of change in industrial research, based on empirical analysis conducted in the most industrialized countries. Nevertheless, to date, there are no empirical studies to evaluate the recent changes which have occurred in the specific Italian context. Using a sample of 80 Italian companies, this work aims to investigate the elements which have characterized the evolution of R&D in recent years; finally, the main changes in term of programmes, content, organization and management can be derived. 2001 Elsevier Science Ltd. All rights reserved. Keywords: R&D evolution; R&D management; Italian industrial research
1. Introduction The current phase of development that industrial companies are going through seems to be characterized by significant changes in the production organization, seen above all in the more industrially developed countries. This development is obviously due to changes in company structure and dynamics where new approaches to innovation and, therefore, different attitudes to research and development activities take on a particular importance. There is a vast amount of literature providing an accurate analysis of important changes, often supported by documents based on empirical analysis. These studies, however, referred to industrial contexts which are not the same as that found in Italy. The results concerning the Italian situation are shown in the report that follows, and it is possible to have a sufficiently complete and up-to-date overview of the changes, often profound, seen in the approach to industrial research in Italy. As was the case with the most important industrialized
* Corresponding author. Tel.: +39-49-8276757; fax: +39-498276716. E-mail address: [email protected] (C. Verbano).
nations, in Italy the significant changes in research and development activity are also linked to four basic factors: 앫 the new order which characterizes company competition became, on the one hand, global, and, at the same time, was conditioned by ever more rapid and unpredictable market dynamics (Prahalad, 1998). As is well known, this led specifically to an increased emphasis on the importance of time-to-market, a significant reduction in the market-life of products, also in high intensity technology sectors, and the competitive value of services linked to the product (technical assistance, the complementary and functional nature of the product, etc.) which have an ever greater influence on demand; 앫 the significant increase in the costs of industrial research which, in recent years, has been linked to the overall reduction in investments (see Table 1) made by the most important industrial nations, with the exclusion of South-East Asia, and their decreasing productivity. This has been particularly clear in highintensity technology sectors, such as the space industry and the pharmaceutical sector. This phenomenon has led to the concentration of companies with large-
0166-4972/01/$ - see front matter 2001 Elsevier Science Ltd. All rights reserved. PII: S 0 1 6 6 - 4 9 7 2 ( 0 0 ) 0 0 0 8 0 - 8
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Table 1 Overall investment in research and development made in the principal industrialized nations (percentage of gross domestic product)
USA Canada Japan Australia Europe Denmark Finland France Germany Ireland Italy Holland Norway Spain Switzerland UK North America Pacifico Area European Union Total OECD
1981
1985
1990
1991
1992
1993
1994
1995
1996
2.4 1.3 2.1 1.0
2.9 1.5 2.6 1.3
2.8 1.5 2.9 1.4
2.8 1.5 2.8 –
2.8 1.6 2.8 1.6
2.6 1.6 2.7 –
2.5 1.6 2.6 1.6
2.6 1.6 2.8 –
2.5 1.6 – –
1.1 1.2 2.0 2.4 0.7 0.9 1.9 1.2 0.4 2.3 2.4 2.3 2.0 1.7 2.0
1.3 1.6 2.3 2.7 0.8 1.1 2.1 1.5 0.6 2.9 2.2 2.8 2.4 1.9 2.3
1.6 1.9 2.4 2.8 0.9 1.3 2.2 1.7 0.9 2.9 2.2 2.7 2.7 2.0 2.4
1.6 1.9 2.4 2.8 0.9 1.3 2.2 1.7 0.9 2.9 2.2 2.7 2.7 2.0 2.4
1.7 2.2 2.4 2.4 1.1 1.3 2.0 – 0.9 – 2.1 2.5 2.6 1.9 2.3
1.8 2.2 2.5 2.4 1.2 1.3 2.0 1.7 0.9 3.3 2.2 2.4 2.5 1.9 2.2
– 2.3 2.4 2.3 1.4 1.2 2.0 – 0.9 – 2.1 2.3 2.5 1.9 2.1
1.8 2.3 2.3 2.3 1.4 1.1 – 1.6 0.8 3.0 2.1 2.3 2.6 1.8 2.2
– – – 2.3 – 1.1 – – 0.8 – – – – – –
Source: OECD, 1997.
scale economic aims (which inevitably led to the internationalization of the offer) and a concentration and specialization of the research and development structures (Gupta and Wilemon, 1996); 앫 the research into environmentally friendly production systems and products; here, for example, one thinks of the restrictions placed on the production and transformation of polymers, the production and transformation of heavy metals, and the increasing restrictions placed on the treatment of solid and liquid waste substances produced in many industrial processes. For these reasons, many companies have had to invest increasingly in so-called “defensive” research (Giget, 1997); 앫 finally, the development of technologies to support industrial research activity (Little, 1997); in particular, the development of information technology knowledge and applications which has made it increasingly possible to use simulation techniques when developing research projects (the so-called “virtual research” field); to this one can add not only the increased versatility but also the increase in the costs of scientific support equipment (Di Fiore and Gazzani, 1998). The combination of these elements of change has had an important influence on the organization of the methods used to manage research and development activity. Repercussions were seen in research and development planning. Interest in a more efficient management of investments in innovative activities led, in the first place,
to a reduction (and therefore a concentration) of the areas which saw the involvement of research personnel. Generally speaking, the projects which were eliminated were those which required certain levels of competence, which the company did not believe that it possessed (or which could not be acquired rapidly), in order to have a reasonable hope of success. Priority was given, at the strategic level, to the identification and use of the particular knowledge and competences already possessed by the company (Coombs, 1996). A “cone-shaped” approach to research (see Fig. 1) was therefore developed which often brought together more thorough knowledge and the development of new applications or the acquisition, to the advantage of the company, of innovations from fields that are adjacent to that nucleus of technical–scientific knowledge and competences (Petroni, 1997). The investigation brought to light numerous examples of a similar process which, in recent years, has led to important changes in production. These include; the obtaining of a new and extremely versatile construction
Fig. 1. The new “cone-shaped” structure of research and development activity.
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material derived from the incorporation of nanopolymers in concrete, the use of milk enzymes in the conservation of ensiled products, in animal feedstuffs and in the improvement of some food transformation processes (Petroni and Verbano, 2000). The company’s identification of its areas of knowledge and competence has led to the use, possibly of a flexible nature, of other sources of knowledge and competence (Rogers, 1996; Wood, 1998). This has often produced research networks (usually at the international level) and, with the same objective of acquiring competence and flexibility, numerous research contracts have been made with specialized structures such as universities and other research institutes in the public and private sectors. There were numerous organizational consequences for this type of programmed approach (and this is the second area of investigation that was looked into in this study). It has already been stated that, at the level of overall organizational design of the “Research and Development” function, where a concentration of companies was seen, there was often a parallel specialization of research centres in keeping with the levels of acquired knowledge, on the one hand, and with the innovation objectives of the company, on the other (Gupta and Wilemon, 1996; Giget, 1997). The achievement of the critical dimension, in terms of knowledge and competences, has often led to similar restructuring processes. A significant development was also seen in the interfunctional approach, typically characterized by closer connections between research, marketing and production, as was the case of greater emphasis often being placed on the functions found in the final phases of the innovative process (Cooper, 1994), such as applications development, products development, technical assistance, etc. This is clearly due to the need to develop a precise link between the research activity and the market (Rothwell, 1992; AIRI, 2000). The factors mentioned above then had an important effect also on the research and development management systems (Little, 1997). This was seen, for example, in the methods and techniques used when selecting the projects, their management and the evaluation of their results. Significant changes were also seen in the management of researchers and technicians where new motivation-based systems were activated (the dual ladder system, for example, the creation of an academic group within the company, etc.). The profound changes over the past 20 years which have characterized industrial research have been analysed by many authors, often using debatable categorizing systems (Roussel et al., 1991); as many as five generations have been identified in this evolution. Such systems will not be taken up in this paper because the elements and methods used for their construction appear weak. Using a more simple and, perhaps, more effective methodological approach, the objectives of the study in
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question exclude the empirical investigation of temporary and organizational elements and interludes, the scope being limited to the detection of the “in continuum” development seen in Italian industrial research.
2. Research aims
The main purpose of this study is to investigate and understand the evolutionary characteristics of the industrial research in Italy in recent years. There is a vast amount of literature which discusses factors and areas of change in the industrial research, based on empirical analysis conducted in the most industrialized countries. Nevertheless, to date, there are no empirical studies to evaluate the recent changes which have occurred in the specific Italian context. This research study aims to:
(a) use a sample of 80 Italian (or Italy-based) companies which have a research and development structure to investigate the elements which have characterized the development of research activity in recent years; (b) to clarify the level of importance of the changes made in the companies found in the various sectors; (c) to recognize specific characteristics in the evolution of these companies, within the general trends investigated in point (a); and (d) to identify and verify the reasons for these changes with reference to economic theories and to what is reported in the literature for the other industrialized countries.
The sample which is described in detail below includes companies of various size and from different industrial sectors (chemical and pharmaceutical, aerospace, electronics and telecommunications, mechanical and food). The data requested in the questionnaire concern (for obvious reasons of availability) only the last five accounting periods, even if the phenomenon that they describe has been in existence for much longer. The specific areas of investigation are those of the relationship between company strategy and research and development activities (definition of the resources available, choice of lines of research, levels of investment made, etc.), the organizational area (design and organization of structures, operational and decision-making circuits, processes, interfunctional relationships, etc.), the area of management systems (programming and control of research activities with particular reference to project management) and, finally, the area of human resources management.
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2. 3. 4. 5. 6.
strategies and investments; R&D projects and programmes; management systems adopted; organizational set-up and personnel management; provisional indications (concerning R&D changes).
The themes of the study subdivided by section are shown in Table 2. Fig. 2. The sample of companies subdivided in the industrial sector.
3.3. The framework of the analysis
3. Research methodology
The analysis of the data can be subdivided into three parts, in relation to the specific research objectives:
3.1. The sample of the analysis Once the population to be used for the analysis had been defined (that is the set of the Italian companies which institutionally perform R&D activity in Italy), we contacted the 153 firms recorded in the AIRI (Italian Industrial Research Association) statistical year-book. In this way we brought together a sample of 80 firms from various industrial sectors, who agreed to collaborate (see Fig. 2). In addition, these companies make up a heterogeneous sample when it comes to R&D, as measured by the number of employees recorded in 1998 (see Fig. 3) and the average annual investment over the past 5 years. 3.2. The data collection The data were collected via a postal questionnaire which, after suitable tests, was sent to each of the R&D managers of the companies recorded in the AIRI statistical year-book. Each question posed had a pre-structured scale of replies with numerical values. Full agreement with the pre-structured replies received a value of 5 and total disagreement was given a value of 1. In some questions, on the other hand, the participant was asked to evaluate changes in a certain variable (for example investments trend) using a scale from 1 (large decreases) to 5 (large increases). In this way approximately 70 ordinal variables subdivided into six survey sections were produced: 1. general information concerning the company and the R&D unit;
Fig. 3. The sample of companies by the number of research and development personnel.
1. In order to identify the general lines of development of Italian industrial research, an analysis of the sample distribution of each variable was developed. A statistical approach was then used to extend the sample results to the population as a whole (see Table 3). 2. In addition, a structure to interpret the results was produced which makes it easy to identify the statistically valid results for the entire population and those of greater uncertainty. Statistically significant consensus was termed “convergence”, weaker consensus was named “tendency”, and if it was not possible to define a consensus in either direction (agreement or disagreement) the word “divergence” was used. Statistically, the three categories are defined in Table 4. 3. For the themes characterized, in particular, by the greater variability of the results obtained at the general level, contingency tables were produced to make clear the differences in the behaviour of the companies belonging to different industrial sectors, and, more generally, to be able to understand and interpret the more uncertain results. The most used contingency factors included the following: the level of R& D development, the average number of employees, the industrial sector, the type of organizational unit (central, business, functional, etc.) and the intensity of the technological sector. 4. Finally, in order to highlight specific behaviours of particular groups of companies, a cluster analysis was elaborated with particular reference to the “Management system” and “Personnel organization and management” questionnaire sections which were notable, in the general development trends, for the low levels of homogeneity of the behaviours detected. The method of cluster analysis adopted was the hierarchical one,1 using the “Ward Linkage technique”, to combine groups together, and the “Squared Euclidean distance”, to measure similarity between cases. Three 1 This groups of that starts until only
procedure attempts to identify relatively homogeneous cases based on selected characteristics, using an algorithm with each case in a separate cluster, and combines clusters one is left (Fabbris, 1997).
Trend of investments
Basic research vs. applied research Public financing
Outsourcing
Industrial sector
Number of R&D personnel
Average level of investments
Organizational unit respondenta Project management
Selection of project managers Economic incentives Evaluation of project results Dual ladder (professional development) Intelligence Scouting for new competences
Defensive researchb Technical assistance
Economic–organizational training for researchers Core competencesc
Matrix structures
Centralization vs. decentralization Project management and IT
Organization and personnel management
Interfunctional integration
Costs
Quality of the R&D
R&D productivity
Management systems
Applications development
Product vs. process innovation Concentration on the core business Areas of competence
Programmes and projects
Outsourcing
Projects in new fields of research Development of already owned knowledge Research into greater productivity More effective management Interfunctional integration
Investments in basic research
Total investment in R&D
Provisional indications
a The organizational respondent unit could be an independent research company, a controlled research company, a central or a business research unit. Defensive research is the R&D activity conducted with respect to governmental regulations about, for example, health protection, environment defense, and so on. c Prahalad and Hamel (1990).
Strategies and investments
General information
Table 2 The questionnaire: sections and areas of investigation G. Petroni, C. Verbano / Technovation 21 (2001) 585–594 589
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Table 3 Statistical definition of the probability of agreement, uncertainty and disagreement in relation to question “x” of the questionnairea Probability of agreement
Probability of uncertainty
Probability of disagreement
Probability (x⬎3.5)
Probability (2.5⬍x⬍3.5)
Probability (x⬍2.5)
a For the variables that measure a phenomenon trend on a scale ranging from 1 (large decrease) to 5 (large increase), the probability of increase=probability (x⬎3.5) and the probability of decrease=probability (x⬍2.5) have been estimated.
Table 4 Definition of convergence, tendency and divergence of a variable at the universal level Convergence
Agreement Disagreement
Tendency
Agreement Disagreement
Divergence
–
Probability (x⬎3.5)ⱖ60% probability (x⬍2.5)ⱕ10% Probability (x⬎3.5)ⱕ10% probability (x⬍2.5)ⱖ60% Probability (x⬎3.5)ⱖ45% probability (x⬍2.5)ⱕ15% Probability (x⬎3.5)ⱕ15% probability (x⬍2.5)ⱖ45% In all other cases
and and and and
groups of companies (selected analysing the resulting dendrogram) emerged from this final analysis with significantly different development characteristics, but homogeneous among the companies belonging to the same cluster.
4. The results of the analysis 4.1. The evolutionary trends of industrial research in italy 앫 With reference to the section “Strategies and investments in R&D”, two clear areas of convergence can be seen: the shift towards basic research and the greater attention given to improving existing products and processes. Unlike the situation seen in the most important industrialized nations, the results of the investigation highlight little variation from the traditional practice of R&D outsourcing, while the acquisition of know-how is becoming more important at least in the electronics industry and in the chemical–pharmaceutical sector. The trend in R&D investments, which is difficult to interpret at a general level, becomes clearer if analysed at the level of industrial sectors: an increasing investments trend is seen only in the food and electronics sectors, whereas a decrease in available resources is seen in the mechanical sector; the aerospace sector also shows an increasing investments trend, but in this case it is to be linked to the public financing obtained. 앫 In the area of “R&D programmes and projects” there is agreement concerning the increasing importance of
product innovation and applications development activities; significant consensus was also found for the merits of concentrating research forces on the “core business” and in maintaining and extending the areas of competence already achieved. Finally, the questionnaire hypothesis of a reduction in the areas of competence does not appear to be confirmed. Further information can be gained by observing the contingencies analysis that indicate a direct relation between the average annual investments in R&D with attention on patenting and with the importance given to defensive research. 앫 With regard to “Management systems” it is possible to detect a wide consensus concerning the increase in importance of R&D management systems (control of costs, development of interfunctional integration, programming); this orientation, however, is not in keeping with a similar consensus concerning the use of suitable management instruments. In particular, methods for evaluating R&D productivity are not yet widespread, and neither are those for checking the results of planning activities, nor those concerning the selection of the projects. In any case, productivity and the quality of research and development have clearly improved in the past 5 years (agreement convergence). The contingency analysis would seem to indicate that only companies with significant investments in R&D are able to use the advanced methods of management. 앫 The section on “Organization and personnel management” appears to be characterized by an almost total absence of consensus (with the exception of the lack of use of the “dual ladder”) and by tendencies which are sometimes favourable concerning the more advanced organizational and management systems for personnel. Almost all of the variables, however, appear to be significantly influenced by the size of the R&D unit (based on the number of assigned personnel and the levels of investments). Again here only the companies with research laboratories of larger dimensions proved to have a well-developed personnel management and organizational system. More detailed analysis reveals that the importance given to the scouting for new competences is dependent not only on the resources available but also on the industrial sector. The chemical–pharmaceutical and electronic companies are particularly sensitive to this theme.
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Finally, it can be concluded that the majority of companies in all industrial sectors do not show a tendency towards decentralization. The food and electronics sectors have experienced a move towards a more centralized form of R&D activity. 앫 In the last section concerning “Forecasts on R&D developments” it is clear that there is widespread need for greater productivity over the medium to long term, greater managerial control, and a greater interfunctional integration. As regards the R&D strategies, one can forecast particular attention being given to the development of knowledge which is already available and to core competences. On the other hand, there is a widespread disinterest in basic research. With regard to medium- to long-term investments, an increase in funding is also forecast. Finally, contingencies analysis indicates that in almost all sectors (except the food industry) more outsourcing of R&D is expected.
4.2. The analysis of the development stages of Italian industrial research An analysis of the lines of development of Italian industrial research highlights the difficulty in interpreting, at a general level, the areas of inquiry concerning organizational and management systems. Very few trends were found among the majority of companies analysed, and the data collected are characterized by high levels of variability. For this reason it was necessary to look for groups of companies with similar behaviour with regard to the above-mentioned subdivisions. The results obtained can be represented in a diagram showing the grouping variables considered along the abscissa and, where necessary, some contextual variables (in Fig. 4 the contextual variable is the average annual “Level of investments” in R&D in the last five accounting periods), and the average values for each group along the ordinate. By joining the points obtained, we have a graphic representation of the profile of the groups. Since the variables used for clustering measure the level of accordance with the elements that characterize an advanced management system, the three profiles of Fig. 4 outline the three development stages of the organizational–management system of industrial research in Italy. 앫 One can therefore observe that the highest profile, described as “advanced”, is the most evolved in that it is in accordance with all of the proposed areas of investigation, with the exception of the “development of the intelligence function”; for this variable the average result is that of “uncertainty”. Agreement is particularly marked, on the other hand, when it comes to themes concerning attention to the costs of R&D,
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interfunctional integration, the use of information technology for the management of projects and the use of economic incentives for researchers and technologists. 앫 On the other hand, the companies with the lowest profile in the diagram are not in accordance with the majority of themes proposed, and therefore appear to belong to a less-developed stage. Despite this, it appears that they have noted the importance of attention to costs and to the integration of R&D with other company functions, and are uncertain as regards the selection of the leaders for projects, the planning and control of the research projects, the scouting for new competences and the holders of particular competences. 앫 The third profile represents the behaviour of the companies in an intermediate stage of development. These companies have, at least partly, understood the importance of the majority of the most advanced organizational and management systems, but nevertheless have not yet developed an intelligence function within their organizations and do not use either economic incentives for the R&D personnel or methods for evaluating the distinctive competences of researchers and technologists. The profile of the clusters also makes it possible to identify three areas of general accordance (but with different characteristics) for all of the companies: attention to the costs of R&D, the importance of the selection of the leaders for projects and planning and their control, and the poor development of the intelligence function. These results had also already emerged from the analysis of the general development trends in industrial research. A further contingency has made it possible to characterize the three clusters on the basis of industrial sectors, the trend in invested resources and the R&D activities reported by the companies under examination. Whereas the companies in the food and mechanical sectors are equally distributed in the three stages of development (the three clusters), it can be seen that aerospace and electronics–telecommunications companies are mainly to be found in the intermediate development group and, finally, it is only in the chemical–pharmaceutical sector that there is a distribution with greater frequency in the most advanced cluster. This last sector therefore seems to be under greater pressure to improve the management and organization of the R&D element; an affirmation which also finds agreement in the relevant literature concerning other industrialized nations. It seems clear that in the sectors where research is increasingly important and where greater investments are required, the more advanced organizational and management systems are adopted in order to produce greater efficiency and effectiveness for the high levels of resources invested.
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Fig. 4.
The profile of clusters.
5. Some lines of interpretation and concluding remarks The purpose of this research was to bring together the lines of progress in the development of Italian industrial research. There have been many empirical studies performed in the most important industrialized countries, whereas the Italian situation does not appear to have been studied in depth. In addition, the peculiarities of the Italian industrial system are well known and this would seem to justify the need for a specific study. 5.1. The peculiarities of the Italian industrial research situation 앫 The industrial structure. The last available ISTAT report states that, on the basis of the census performed in 1996, 95% of the total of 3.5 million companies have less than 10 employees, whereas only 0.075% of the total (approximately 2600 companies) has more than 250 employees. In particular, when it comes to industrial companies, of a total of almost one million business organizations, only 1600 employ more than 250 workers, whereas 880,000 give work to less than 10. This situation, with so many small companies, is not seen to the same extent in other industrialized nations. 앫 A second element that characterizes the Italian industrial set-up is the dominant type of industrial company. Here we can see a predominance in the sectors with low and medium-low technological levels, such as textiles and clothing, food, simple metal-working, etc. High-technology companies are almost non-exi-
stent (with the exception of the automation and aerospace sectors and some specialist areas) with respect to other countries. 앫 It is clear from these initial observations that the structure of Italian industrial research is weak. It does not have the back-up of a centralized training system (considered to be an ideal environment by many economists) which, in theory, would have a greater quantity of resources to dedicate to R&D. In addition to the low levels of investment in R&D activities (when compared with the levels in the other industrialized nations), in Italy there is also a traditional separation between scientific–academic institutions and the industrial system and this is the reason for the inability of the overall company system to receive resources from the representative institutions to generate technical–scientific know-how. 앫 Signs of weakness are also to be found in science and technology policy (i.e. public intervention) due, above all, to the poor coordination of government interventions aimed at public research (CNR, ENEA, University, etc.) and industrial research. In particular, from the comparison with the policies adopted with success in some of the more advanced countries, the Italian government’s lack of strategic choice as to which sectors should be concentrated on in order to reach suitable levels of industrial innovation development emerges. 앫 In Italy the intervention mechanisms for the promotion of industrial research have been modified recently. These changes brought in by the recent law (Legal Decree no. 297, dated 27 July 1999) concern, for example, the system used to select who will receive financing, which will now be based on pro-
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jects, and not on who is proposing the project, and the introduction of a system of evaluation and monitoring for the management of complex projects. This reform also considers mechanisms for integrating public research with the industrial system, promoting the mobility of those involved in research and the transfer of technology. As early as 1995, in the “Green Paper on Innovation” of the European Commission, the “European paradox” was underlined, on the basis of which, when faced with scientific performances of excellence, with respect to outside competition, the European Community was host to a decline in technological, industrial and business performances in recent years. This paradox highlights the difficulty, which is also noted in Italy, of transforming scientific and technological potential into innovations and competitive advantage. It is not surprising that the empirical study performed underlined a delay in the use of outsourcing in Italian research. This aspect reflects, on the one hand, the difficulty in communication and collaboration between the industrial world and the scientific–academic environment and, on the other hand, the relatively new Italian industrial culture. 5.2. Concluding remarks based on the research results In Italy where, for the above-mentioned instrumental reasons, the levels of investment in R&D are low, and lower still in the high-technology sectors, it is only recently that the modifications seen in other industrial nations have come to the fore. The first areas of change, due to the decreasing resources available for R&D, concern strategies and content, and are mainly to be seen in an emphasis on research over the medium to short term. The move towards an increase in efforts to satisfy the needs of the market and the need to obtain short-term results have recently pushed companies to perform more basis applied research and development. And it is in this change of direction that one sees a “conical” research pattern, which aims to strengthen the available “knowhow” and abilities in order to obtain new developments that can be applied. From this point of view, distinctive competences (a valuable asset for a company) take on major importance. A second area of change concerns the organization and management of the R&D. In Italy, as in other developed nations, the dominant type of research appears to be aimed at greater productivity and efficiency, in keeping with the modifications indicated in the strategies and contents. Such objectives appear as a more careful planning and control of R&D, a greater attention to the costs and integration of R&D with other functions (in particular planning, production and marketing). On the
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other hand, the companies do not appear to be interested in tackling development plans and initiatives for researchers and technological experts. There are still very few companies that adopt, for example, the dual ladder, which tries to bring to the fore in a correct manner, in the company context, the scientifically qualified personnel (IDD, 1997). And this is the case even if, both in the public research bodies and in industrial companies, one can see greater attention given to the awardgiving system and to the motivation of researchers and technical experts. The cluster analysis has highlighted three types of behaviour, concerning the adoption of the most advanced organizational and managerial systems found in other industrial situations. Italy experiences a heterogeneous situation with a group of companies at the same level as those of the most advanced nations, a smaller group of companies that appear to be “behind the times” with their management systems, and a third group of significant dimensions at an intermediate stage of development. In brief, in Italy changes in industrial research are taking place, and the trends are basically in line with other developed countries. Some failure to keep up with the others is also found, such as in the areas of outsourcing and some elements of the organization and system, which seems to be due to structural failures in the Italian industrial and political system.
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Prahalad, C.K., 1998. Managing discontinuities: the emerging challenges. Research Technology Management May–June, 14–22. Prahalad, K., Hamel, G., 1990. The core competencies of the corporation. Harvard Business Review May–June, 79–91. Rogers, D., 1996. The challenge of fifth generation R&D. Research Technology Management July–August, 33–41. Rothwell, R., 1992. Successful industrial innovation: critical success factors for the 1990s. R&D Management 22 (3), 221–239. Roussel, P., Saad, K., Erickson, T., 1991. Third Generation R&D: Managing the Link to Corporate Strategy. Harvard Business School Press, Boston. Wood, R., 1998. IRIs R&D trends forecast for 1998. Research Technology Management January–February, 16–20.
Giorgio Petroni is a Professor of Economics and Innovation at the Department of Economics and Technology, University of San Marino. He has been member of the Board of Directors of the Italian Space Agency and is currently a counsellor at the Italian National Research Council and senior advisor of the AREA Science Park of Trieste in the field of the development of technology transfer programs. His research interests are in the area of R&D organization and technology transfer to SMEs.
Chiara Verbano is a Research Fellow at the Department of Mechanical Innovation of the University of Padua. She has received her PhD in Engineering Management and Economics from the University of Padua. Her major research interests are in the areas of R&D management and technology transfer.
The evolution of industrial research in Italy: characteristics and perspectives Giorgio Petroni a, Chiara Verbano a
b,*
Dipartimento di Economia e Tecnologia, Universita` degli Studi della Repubblica di San Marino, Strada della Bandirola 44, Montegiardino, 47898 San Marino b Dipartimento di innovazione meccanica e gestionale, Universita` degli Studi di Padova, Via Venezia 1, 35131 Padova, Italy Received 7 July 2000; accepted 24 October 2000
Abstract The main purpose of this study is to investigate and understand the evolutionary characteristics of industrial research in Italy in recent years. There is a vast amount of literature which discusses factors and areas of change in industrial research, based on empirical analysis conducted in the most industrialized countries. Nevertheless, to date, there are no empirical studies to evaluate the recent changes which have occurred in the specific Italian context. Using a sample of 80 Italian companies, this work aims to investigate the elements which have characterized the evolution of R&D in recent years; finally, the main changes in term of programmes, content, organization and management can be derived. 2001 Elsevier Science Ltd. All rights reserved. Keywords: R&D evolution; R&D management; Italian industrial research
1. Introduction The current phase of development that industrial companies are going through seems to be characterized by significant changes in the production organization, seen above all in the more industrially developed countries. This development is obviously due to changes in company structure and dynamics where new approaches to innovation and, therefore, different attitudes to research and development activities take on a particular importance. There is a vast amount of literature providing an accurate analysis of important changes, often supported by documents based on empirical analysis. These studies, however, referred to industrial contexts which are not the same as that found in Italy. The results concerning the Italian situation are shown in the report that follows, and it is possible to have a sufficiently complete and up-to-date overview of the changes, often profound, seen in the approach to industrial research in Italy. As was the case with the most important industrialized
* Corresponding author. Tel.: +39-49-8276757; fax: +39-498276716. E-mail address: [email protected] (C. Verbano).
nations, in Italy the significant changes in research and development activity are also linked to four basic factors: 앫 the new order which characterizes company competition became, on the one hand, global, and, at the same time, was conditioned by ever more rapid and unpredictable market dynamics (Prahalad, 1998). As is well known, this led specifically to an increased emphasis on the importance of time-to-market, a significant reduction in the market-life of products, also in high intensity technology sectors, and the competitive value of services linked to the product (technical assistance, the complementary and functional nature of the product, etc.) which have an ever greater influence on demand; 앫 the significant increase in the costs of industrial research which, in recent years, has been linked to the overall reduction in investments (see Table 1) made by the most important industrial nations, with the exclusion of South-East Asia, and their decreasing productivity. This has been particularly clear in highintensity technology sectors, such as the space industry and the pharmaceutical sector. This phenomenon has led to the concentration of companies with large-
0166-4972/01/$ - see front matter 2001 Elsevier Science Ltd. All rights reserved. PII: S 0 1 6 6 - 4 9 7 2 ( 0 0 ) 0 0 0 8 0 - 8
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Table 1 Overall investment in research and development made in the principal industrialized nations (percentage of gross domestic product)
USA Canada Japan Australia Europe Denmark Finland France Germany Ireland Italy Holland Norway Spain Switzerland UK North America Pacifico Area European Union Total OECD
1981
1985
1990
1991
1992
1993
1994
1995
1996
2.4 1.3 2.1 1.0
2.9 1.5 2.6 1.3
2.8 1.5 2.9 1.4
2.8 1.5 2.8 –
2.8 1.6 2.8 1.6
2.6 1.6 2.7 –
2.5 1.6 2.6 1.6
2.6 1.6 2.8 –
2.5 1.6 – –
1.1 1.2 2.0 2.4 0.7 0.9 1.9 1.2 0.4 2.3 2.4 2.3 2.0 1.7 2.0
1.3 1.6 2.3 2.7 0.8 1.1 2.1 1.5 0.6 2.9 2.2 2.8 2.4 1.9 2.3
1.6 1.9 2.4 2.8 0.9 1.3 2.2 1.7 0.9 2.9 2.2 2.7 2.7 2.0 2.4
1.6 1.9 2.4 2.8 0.9 1.3 2.2 1.7 0.9 2.9 2.2 2.7 2.7 2.0 2.4
1.7 2.2 2.4 2.4 1.1 1.3 2.0 – 0.9 – 2.1 2.5 2.6 1.9 2.3
1.8 2.2 2.5 2.4 1.2 1.3 2.0 1.7 0.9 3.3 2.2 2.4 2.5 1.9 2.2
– 2.3 2.4 2.3 1.4 1.2 2.0 – 0.9 – 2.1 2.3 2.5 1.9 2.1
1.8 2.3 2.3 2.3 1.4 1.1 – 1.6 0.8 3.0 2.1 2.3 2.6 1.8 2.2
– – – 2.3 – 1.1 – – 0.8 – – – – – –
Source: OECD, 1997.
scale economic aims (which inevitably led to the internationalization of the offer) and a concentration and specialization of the research and development structures (Gupta and Wilemon, 1996); 앫 the research into environmentally friendly production systems and products; here, for example, one thinks of the restrictions placed on the production and transformation of polymers, the production and transformation of heavy metals, and the increasing restrictions placed on the treatment of solid and liquid waste substances produced in many industrial processes. For these reasons, many companies have had to invest increasingly in so-called “defensive” research (Giget, 1997); 앫 finally, the development of technologies to support industrial research activity (Little, 1997); in particular, the development of information technology knowledge and applications which has made it increasingly possible to use simulation techniques when developing research projects (the so-called “virtual research” field); to this one can add not only the increased versatility but also the increase in the costs of scientific support equipment (Di Fiore and Gazzani, 1998). The combination of these elements of change has had an important influence on the organization of the methods used to manage research and development activity. Repercussions were seen in research and development planning. Interest in a more efficient management of investments in innovative activities led, in the first place,
to a reduction (and therefore a concentration) of the areas which saw the involvement of research personnel. Generally speaking, the projects which were eliminated were those which required certain levels of competence, which the company did not believe that it possessed (or which could not be acquired rapidly), in order to have a reasonable hope of success. Priority was given, at the strategic level, to the identification and use of the particular knowledge and competences already possessed by the company (Coombs, 1996). A “cone-shaped” approach to research (see Fig. 1) was therefore developed which often brought together more thorough knowledge and the development of new applications or the acquisition, to the advantage of the company, of innovations from fields that are adjacent to that nucleus of technical–scientific knowledge and competences (Petroni, 1997). The investigation brought to light numerous examples of a similar process which, in recent years, has led to important changes in production. These include; the obtaining of a new and extremely versatile construction
Fig. 1. The new “cone-shaped” structure of research and development activity.
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material derived from the incorporation of nanopolymers in concrete, the use of milk enzymes in the conservation of ensiled products, in animal feedstuffs and in the improvement of some food transformation processes (Petroni and Verbano, 2000). The company’s identification of its areas of knowledge and competence has led to the use, possibly of a flexible nature, of other sources of knowledge and competence (Rogers, 1996; Wood, 1998). This has often produced research networks (usually at the international level) and, with the same objective of acquiring competence and flexibility, numerous research contracts have been made with specialized structures such as universities and other research institutes in the public and private sectors. There were numerous organizational consequences for this type of programmed approach (and this is the second area of investigation that was looked into in this study). It has already been stated that, at the level of overall organizational design of the “Research and Development” function, where a concentration of companies was seen, there was often a parallel specialization of research centres in keeping with the levels of acquired knowledge, on the one hand, and with the innovation objectives of the company, on the other (Gupta and Wilemon, 1996; Giget, 1997). The achievement of the critical dimension, in terms of knowledge and competences, has often led to similar restructuring processes. A significant development was also seen in the interfunctional approach, typically characterized by closer connections between research, marketing and production, as was the case of greater emphasis often being placed on the functions found in the final phases of the innovative process (Cooper, 1994), such as applications development, products development, technical assistance, etc. This is clearly due to the need to develop a precise link between the research activity and the market (Rothwell, 1992; AIRI, 2000). The factors mentioned above then had an important effect also on the research and development management systems (Little, 1997). This was seen, for example, in the methods and techniques used when selecting the projects, their management and the evaluation of their results. Significant changes were also seen in the management of researchers and technicians where new motivation-based systems were activated (the dual ladder system, for example, the creation of an academic group within the company, etc.). The profound changes over the past 20 years which have characterized industrial research have been analysed by many authors, often using debatable categorizing systems (Roussel et al., 1991); as many as five generations have been identified in this evolution. Such systems will not be taken up in this paper because the elements and methods used for their construction appear weak. Using a more simple and, perhaps, more effective methodological approach, the objectives of the study in
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question exclude the empirical investigation of temporary and organizational elements and interludes, the scope being limited to the detection of the “in continuum” development seen in Italian industrial research.
2. Research aims
The main purpose of this study is to investigate and understand the evolutionary characteristics of the industrial research in Italy in recent years. There is a vast amount of literature which discusses factors and areas of change in the industrial research, based on empirical analysis conducted in the most industrialized countries. Nevertheless, to date, there are no empirical studies to evaluate the recent changes which have occurred in the specific Italian context. This research study aims to:
(a) use a sample of 80 Italian (or Italy-based) companies which have a research and development structure to investigate the elements which have characterized the development of research activity in recent years; (b) to clarify the level of importance of the changes made in the companies found in the various sectors; (c) to recognize specific characteristics in the evolution of these companies, within the general trends investigated in point (a); and (d) to identify and verify the reasons for these changes with reference to economic theories and to what is reported in the literature for the other industrialized countries.
The sample which is described in detail below includes companies of various size and from different industrial sectors (chemical and pharmaceutical, aerospace, electronics and telecommunications, mechanical and food). The data requested in the questionnaire concern (for obvious reasons of availability) only the last five accounting periods, even if the phenomenon that they describe has been in existence for much longer. The specific areas of investigation are those of the relationship between company strategy and research and development activities (definition of the resources available, choice of lines of research, levels of investment made, etc.), the organizational area (design and organization of structures, operational and decision-making circuits, processes, interfunctional relationships, etc.), the area of management systems (programming and control of research activities with particular reference to project management) and, finally, the area of human resources management.
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2. 3. 4. 5. 6.
strategies and investments; R&D projects and programmes; management systems adopted; organizational set-up and personnel management; provisional indications (concerning R&D changes).
The themes of the study subdivided by section are shown in Table 2. Fig. 2. The sample of companies subdivided in the industrial sector.
3.3. The framework of the analysis
3. Research methodology
The analysis of the data can be subdivided into three parts, in relation to the specific research objectives:
3.1. The sample of the analysis Once the population to be used for the analysis had been defined (that is the set of the Italian companies which institutionally perform R&D activity in Italy), we contacted the 153 firms recorded in the AIRI (Italian Industrial Research Association) statistical year-book. In this way we brought together a sample of 80 firms from various industrial sectors, who agreed to collaborate (see Fig. 2). In addition, these companies make up a heterogeneous sample when it comes to R&D, as measured by the number of employees recorded in 1998 (see Fig. 3) and the average annual investment over the past 5 years. 3.2. The data collection The data were collected via a postal questionnaire which, after suitable tests, was sent to each of the R&D managers of the companies recorded in the AIRI statistical year-book. Each question posed had a pre-structured scale of replies with numerical values. Full agreement with the pre-structured replies received a value of 5 and total disagreement was given a value of 1. In some questions, on the other hand, the participant was asked to evaluate changes in a certain variable (for example investments trend) using a scale from 1 (large decreases) to 5 (large increases). In this way approximately 70 ordinal variables subdivided into six survey sections were produced: 1. general information concerning the company and the R&D unit;
Fig. 3. The sample of companies by the number of research and development personnel.
1. In order to identify the general lines of development of Italian industrial research, an analysis of the sample distribution of each variable was developed. A statistical approach was then used to extend the sample results to the population as a whole (see Table 3). 2. In addition, a structure to interpret the results was produced which makes it easy to identify the statistically valid results for the entire population and those of greater uncertainty. Statistically significant consensus was termed “convergence”, weaker consensus was named “tendency”, and if it was not possible to define a consensus in either direction (agreement or disagreement) the word “divergence” was used. Statistically, the three categories are defined in Table 4. 3. For the themes characterized, in particular, by the greater variability of the results obtained at the general level, contingency tables were produced to make clear the differences in the behaviour of the companies belonging to different industrial sectors, and, more generally, to be able to understand and interpret the more uncertain results. The most used contingency factors included the following: the level of R& D development, the average number of employees, the industrial sector, the type of organizational unit (central, business, functional, etc.) and the intensity of the technological sector. 4. Finally, in order to highlight specific behaviours of particular groups of companies, a cluster analysis was elaborated with particular reference to the “Management system” and “Personnel organization and management” questionnaire sections which were notable, in the general development trends, for the low levels of homogeneity of the behaviours detected. The method of cluster analysis adopted was the hierarchical one,1 using the “Ward Linkage technique”, to combine groups together, and the “Squared Euclidean distance”, to measure similarity between cases. Three 1 This groups of that starts until only
procedure attempts to identify relatively homogeneous cases based on selected characteristics, using an algorithm with each case in a separate cluster, and combines clusters one is left (Fabbris, 1997).
Trend of investments
Basic research vs. applied research Public financing
Outsourcing
Industrial sector
Number of R&D personnel
Average level of investments
Organizational unit respondenta Project management
Selection of project managers Economic incentives Evaluation of project results Dual ladder (professional development) Intelligence Scouting for new competences
Defensive researchb Technical assistance
Economic–organizational training for researchers Core competencesc
Matrix structures
Centralization vs. decentralization Project management and IT
Organization and personnel management
Interfunctional integration
Costs
Quality of the R&D
R&D productivity
Management systems
Applications development
Product vs. process innovation Concentration on the core business Areas of competence
Programmes and projects
Outsourcing
Projects in new fields of research Development of already owned knowledge Research into greater productivity More effective management Interfunctional integration
Investments in basic research
Total investment in R&D
Provisional indications
a The organizational respondent unit could be an independent research company, a controlled research company, a central or a business research unit. Defensive research is the R&D activity conducted with respect to governmental regulations about, for example, health protection, environment defense, and so on. c Prahalad and Hamel (1990).
Strategies and investments
General information
Table 2 The questionnaire: sections and areas of investigation G. Petroni, C. Verbano / Technovation 21 (2001) 585–594 589
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Table 3 Statistical definition of the probability of agreement, uncertainty and disagreement in relation to question “x” of the questionnairea Probability of agreement
Probability of uncertainty
Probability of disagreement
Probability (x⬎3.5)
Probability (2.5⬍x⬍3.5)
Probability (x⬍2.5)
a For the variables that measure a phenomenon trend on a scale ranging from 1 (large decrease) to 5 (large increase), the probability of increase=probability (x⬎3.5) and the probability of decrease=probability (x⬍2.5) have been estimated.
Table 4 Definition of convergence, tendency and divergence of a variable at the universal level Convergence
Agreement Disagreement
Tendency
Agreement Disagreement
Divergence
–
Probability (x⬎3.5)ⱖ60% probability (x⬍2.5)ⱕ10% Probability (x⬎3.5)ⱕ10% probability (x⬍2.5)ⱖ60% Probability (x⬎3.5)ⱖ45% probability (x⬍2.5)ⱕ15% Probability (x⬎3.5)ⱕ15% probability (x⬍2.5)ⱖ45% In all other cases
and and and and
groups of companies (selected analysing the resulting dendrogram) emerged from this final analysis with significantly different development characteristics, but homogeneous among the companies belonging to the same cluster.
4. The results of the analysis 4.1. The evolutionary trends of industrial research in italy 앫 With reference to the section “Strategies and investments in R&D”, two clear areas of convergence can be seen: the shift towards basic research and the greater attention given to improving existing products and processes. Unlike the situation seen in the most important industrialized nations, the results of the investigation highlight little variation from the traditional practice of R&D outsourcing, while the acquisition of know-how is becoming more important at least in the electronics industry and in the chemical–pharmaceutical sector. The trend in R&D investments, which is difficult to interpret at a general level, becomes clearer if analysed at the level of industrial sectors: an increasing investments trend is seen only in the food and electronics sectors, whereas a decrease in available resources is seen in the mechanical sector; the aerospace sector also shows an increasing investments trend, but in this case it is to be linked to the public financing obtained. 앫 In the area of “R&D programmes and projects” there is agreement concerning the increasing importance of
product innovation and applications development activities; significant consensus was also found for the merits of concentrating research forces on the “core business” and in maintaining and extending the areas of competence already achieved. Finally, the questionnaire hypothesis of a reduction in the areas of competence does not appear to be confirmed. Further information can be gained by observing the contingencies analysis that indicate a direct relation between the average annual investments in R&D with attention on patenting and with the importance given to defensive research. 앫 With regard to “Management systems” it is possible to detect a wide consensus concerning the increase in importance of R&D management systems (control of costs, development of interfunctional integration, programming); this orientation, however, is not in keeping with a similar consensus concerning the use of suitable management instruments. In particular, methods for evaluating R&D productivity are not yet widespread, and neither are those for checking the results of planning activities, nor those concerning the selection of the projects. In any case, productivity and the quality of research and development have clearly improved in the past 5 years (agreement convergence). The contingency analysis would seem to indicate that only companies with significant investments in R&D are able to use the advanced methods of management. 앫 The section on “Organization and personnel management” appears to be characterized by an almost total absence of consensus (with the exception of the lack of use of the “dual ladder”) and by tendencies which are sometimes favourable concerning the more advanced organizational and management systems for personnel. Almost all of the variables, however, appear to be significantly influenced by the size of the R&D unit (based on the number of assigned personnel and the levels of investments). Again here only the companies with research laboratories of larger dimensions proved to have a well-developed personnel management and organizational system. More detailed analysis reveals that the importance given to the scouting for new competences is dependent not only on the resources available but also on the industrial sector. The chemical–pharmaceutical and electronic companies are particularly sensitive to this theme.
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Finally, it can be concluded that the majority of companies in all industrial sectors do not show a tendency towards decentralization. The food and electronics sectors have experienced a move towards a more centralized form of R&D activity. 앫 In the last section concerning “Forecasts on R&D developments” it is clear that there is widespread need for greater productivity over the medium to long term, greater managerial control, and a greater interfunctional integration. As regards the R&D strategies, one can forecast particular attention being given to the development of knowledge which is already available and to core competences. On the other hand, there is a widespread disinterest in basic research. With regard to medium- to long-term investments, an increase in funding is also forecast. Finally, contingencies analysis indicates that in almost all sectors (except the food industry) more outsourcing of R&D is expected.
4.2. The analysis of the development stages of Italian industrial research An analysis of the lines of development of Italian industrial research highlights the difficulty in interpreting, at a general level, the areas of inquiry concerning organizational and management systems. Very few trends were found among the majority of companies analysed, and the data collected are characterized by high levels of variability. For this reason it was necessary to look for groups of companies with similar behaviour with regard to the above-mentioned subdivisions. The results obtained can be represented in a diagram showing the grouping variables considered along the abscissa and, where necessary, some contextual variables (in Fig. 4 the contextual variable is the average annual “Level of investments” in R&D in the last five accounting periods), and the average values for each group along the ordinate. By joining the points obtained, we have a graphic representation of the profile of the groups. Since the variables used for clustering measure the level of accordance with the elements that characterize an advanced management system, the three profiles of Fig. 4 outline the three development stages of the organizational–management system of industrial research in Italy. 앫 One can therefore observe that the highest profile, described as “advanced”, is the most evolved in that it is in accordance with all of the proposed areas of investigation, with the exception of the “development of the intelligence function”; for this variable the average result is that of “uncertainty”. Agreement is particularly marked, on the other hand, when it comes to themes concerning attention to the costs of R&D,
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interfunctional integration, the use of information technology for the management of projects and the use of economic incentives for researchers and technologists. 앫 On the other hand, the companies with the lowest profile in the diagram are not in accordance with the majority of themes proposed, and therefore appear to belong to a less-developed stage. Despite this, it appears that they have noted the importance of attention to costs and to the integration of R&D with other company functions, and are uncertain as regards the selection of the leaders for projects, the planning and control of the research projects, the scouting for new competences and the holders of particular competences. 앫 The third profile represents the behaviour of the companies in an intermediate stage of development. These companies have, at least partly, understood the importance of the majority of the most advanced organizational and management systems, but nevertheless have not yet developed an intelligence function within their organizations and do not use either economic incentives for the R&D personnel or methods for evaluating the distinctive competences of researchers and technologists. The profile of the clusters also makes it possible to identify three areas of general accordance (but with different characteristics) for all of the companies: attention to the costs of R&D, the importance of the selection of the leaders for projects and planning and their control, and the poor development of the intelligence function. These results had also already emerged from the analysis of the general development trends in industrial research. A further contingency has made it possible to characterize the three clusters on the basis of industrial sectors, the trend in invested resources and the R&D activities reported by the companies under examination. Whereas the companies in the food and mechanical sectors are equally distributed in the three stages of development (the three clusters), it can be seen that aerospace and electronics–telecommunications companies are mainly to be found in the intermediate development group and, finally, it is only in the chemical–pharmaceutical sector that there is a distribution with greater frequency in the most advanced cluster. This last sector therefore seems to be under greater pressure to improve the management and organization of the R&D element; an affirmation which also finds agreement in the relevant literature concerning other industrialized nations. It seems clear that in the sectors where research is increasingly important and where greater investments are required, the more advanced organizational and management systems are adopted in order to produce greater efficiency and effectiveness for the high levels of resources invested.
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Fig. 4.
The profile of clusters.
5. Some lines of interpretation and concluding remarks The purpose of this research was to bring together the lines of progress in the development of Italian industrial research. There have been many empirical studies performed in the most important industrialized countries, whereas the Italian situation does not appear to have been studied in depth. In addition, the peculiarities of the Italian industrial system are well known and this would seem to justify the need for a specific study. 5.1. The peculiarities of the Italian industrial research situation 앫 The industrial structure. The last available ISTAT report states that, on the basis of the census performed in 1996, 95% of the total of 3.5 million companies have less than 10 employees, whereas only 0.075% of the total (approximately 2600 companies) has more than 250 employees. In particular, when it comes to industrial companies, of a total of almost one million business organizations, only 1600 employ more than 250 workers, whereas 880,000 give work to less than 10. This situation, with so many small companies, is not seen to the same extent in other industrialized nations. 앫 A second element that characterizes the Italian industrial set-up is the dominant type of industrial company. Here we can see a predominance in the sectors with low and medium-low technological levels, such as textiles and clothing, food, simple metal-working, etc. High-technology companies are almost non-exi-
stent (with the exception of the automation and aerospace sectors and some specialist areas) with respect to other countries. 앫 It is clear from these initial observations that the structure of Italian industrial research is weak. It does not have the back-up of a centralized training system (considered to be an ideal environment by many economists) which, in theory, would have a greater quantity of resources to dedicate to R&D. In addition to the low levels of investment in R&D activities (when compared with the levels in the other industrialized nations), in Italy there is also a traditional separation between scientific–academic institutions and the industrial system and this is the reason for the inability of the overall company system to receive resources from the representative institutions to generate technical–scientific know-how. 앫 Signs of weakness are also to be found in science and technology policy (i.e. public intervention) due, above all, to the poor coordination of government interventions aimed at public research (CNR, ENEA, University, etc.) and industrial research. In particular, from the comparison with the policies adopted with success in some of the more advanced countries, the Italian government’s lack of strategic choice as to which sectors should be concentrated on in order to reach suitable levels of industrial innovation development emerges. 앫 In Italy the intervention mechanisms for the promotion of industrial research have been modified recently. These changes brought in by the recent law (Legal Decree no. 297, dated 27 July 1999) concern, for example, the system used to select who will receive financing, which will now be based on pro-
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jects, and not on who is proposing the project, and the introduction of a system of evaluation and monitoring for the management of complex projects. This reform also considers mechanisms for integrating public research with the industrial system, promoting the mobility of those involved in research and the transfer of technology. As early as 1995, in the “Green Paper on Innovation” of the European Commission, the “European paradox” was underlined, on the basis of which, when faced with scientific performances of excellence, with respect to outside competition, the European Community was host to a decline in technological, industrial and business performances in recent years. This paradox highlights the difficulty, which is also noted in Italy, of transforming scientific and technological potential into innovations and competitive advantage. It is not surprising that the empirical study performed underlined a delay in the use of outsourcing in Italian research. This aspect reflects, on the one hand, the difficulty in communication and collaboration between the industrial world and the scientific–academic environment and, on the other hand, the relatively new Italian industrial culture. 5.2. Concluding remarks based on the research results In Italy where, for the above-mentioned instrumental reasons, the levels of investment in R&D are low, and lower still in the high-technology sectors, it is only recently that the modifications seen in other industrial nations have come to the fore. The first areas of change, due to the decreasing resources available for R&D, concern strategies and content, and are mainly to be seen in an emphasis on research over the medium to short term. The move towards an increase in efforts to satisfy the needs of the market and the need to obtain short-term results have recently pushed companies to perform more basis applied research and development. And it is in this change of direction that one sees a “conical” research pattern, which aims to strengthen the available “knowhow” and abilities in order to obtain new developments that can be applied. From this point of view, distinctive competences (a valuable asset for a company) take on major importance. A second area of change concerns the organization and management of the R&D. In Italy, as in other developed nations, the dominant type of research appears to be aimed at greater productivity and efficiency, in keeping with the modifications indicated in the strategies and contents. Such objectives appear as a more careful planning and control of R&D, a greater attention to the costs and integration of R&D with other functions (in particular planning, production and marketing). On the
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other hand, the companies do not appear to be interested in tackling development plans and initiatives for researchers and technological experts. There are still very few companies that adopt, for example, the dual ladder, which tries to bring to the fore in a correct manner, in the company context, the scientifically qualified personnel (IDD, 1997). And this is the case even if, both in the public research bodies and in industrial companies, one can see greater attention given to the awardgiving system and to the motivation of researchers and technical experts. The cluster analysis has highlighted three types of behaviour, concerning the adoption of the most advanced organizational and managerial systems found in other industrial situations. Italy experiences a heterogeneous situation with a group of companies at the same level as those of the most advanced nations, a smaller group of companies that appear to be “behind the times” with their management systems, and a third group of significant dimensions at an intermediate stage of development. In brief, in Italy changes in industrial research are taking place, and the trends are basically in line with other developed countries. Some failure to keep up with the others is also found, such as in the areas of outsourcing and some elements of the organization and system, which seems to be due to structural failures in the Italian industrial and political system.
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Giorgio Petroni is a Professor of Economics and Innovation at the Department of Economics and Technology, University of San Marino. He has been member of the Board of Directors of the Italian Space Agency and is currently a counsellor at the Italian National Research Council and senior advisor of the AREA Science Park of Trieste in the field of the development of technology transfer programs. His research interests are in the area of R&D organization and technology transfer to SMEs.
Chiara Verbano is a Research Fellow at the Department of Mechanical Innovation of the University of Padua. She has received her PhD in Engineering Management and Economics from the University of Padua. Her major research interests are in the areas of R&D management and technology transfer.