Interactive Relations Between Universities and

Firms: Empirical Evidence for Austria

Doris Schartinger
1
Andreas Schibany
2
Helmut Gassler
3
ABSTRACT. In recent years interaction between universities
and the business sector and the role of these collaborations in
fostering innovation has received greater attention. This paper
analyzes different types of interactions between the two sectors
from the perspectives of universities and rms. The three major
research questions address the frequency of different types of
interactions, the benets that companies derive from interac-
tion with universities and determinants of interaction for both
sectors.
Two different surveys form the empirical base for this paper:
One among innovative rms in Austria, one among all Austrian
university departments. The methodologies we use are analyses
of variance and logistic regressions. Our results demonstrate
that the main channel of knowledge transfer from universities
to the business sector still occurs through the mobility of
human capital. The major barriers of interaction lie in the
differences between cultures of the two spheres as well as
lack of information at the side of rms.
JEL Classication: O31, O32
1. Introduction
The accumulation of knowledge and its spillover
into new products, new technologies, and produc-
tive capacity is considered as the primary engine
of economic development in the new growth
theories.
1
This results in the full recognition of
1
Austrian Research Centers Seibersdorf
Division Systems Research Technology-Economy-Environment
A-2444 Seibersdorf, Austria
E-mail: doris.schartinger@arcs.ac.at
2
Joanneum Research
Institute for Technology and Regional Policy
Wiedner Hauptstrae 76
A-1040 Vienna
E-mail: andreas.schibany@joanneum.ac.at
3
Joanneum Research
Institute for Technology and Regional Policy
Wiedner Hauptstrae 76
A-1040 Vienna
E-mail: helmut.gassler@joanneum.ac.at
the role of knowledge and technology in eco-
nomic growth.
2
In the rst instance, the accumu-
lation of knowledge (i.e. learning) takes place at
the level of the single individual
3
through indi-
vidual experientialism
4
(experienced-based learn-
ing, searching, exploring and organized research)
or through interpersonal co-operation (learning-
by observing or learning-by-interacting).
5
Whereas
individual experientialism restricts the acquisition
of knowledge to one single individual, interper-
sonal co-operation enables not only the individual
acquisition of external knowledge, but leads also
to the amplication of knowledge through pro-
cesses of communication (multiple processes of
individual learning).
The focus on the accumulation of knowledge
through dynamic and interactive processes of
knowledge production and diffusion, and thereby
promoting technological change, is the core of
the innovation systems approach.
6
Within this
approach, the focal interest is the innovation per-
formance of rms and all relevant determinants of
innovations. It is not only rms that are involved
in the process of innovation, but also a set of
other actors of various kinds. The interactions
among them build the backbone of a system of
innovation. The proposition that rms rarely inno-
vate on their own but involve interactions with
market and non-market institutions is evidenced
by several surveys.
7
Pivotal for all innovation ori-
ented interactions between rms and other actors
is the associated ow of knowledge.
In this context universities as producers of new
knowledge may play a crucial role. Universities
contribute to the production of knowledge and
knowledge inputs in the business sector in three
major ways. First, the bussiness sector receives
inputs from universities in the form of highly edu-
cated human capital. Although these individuals
Journal of Technology Transfer, 26, 255268, 2001
2001 Kluwer Academic Publishers. Manufactured in The Netherlands.
256 Schartinger, Schibany and Gassler
may require further training, university education
provides the foundation for subsequent special-
ized industrial training. Nevertheless, this inux of
fresh trained graduates will lead to an inow of
new knowledge to the rm. Second, by developing
and providing new knowledge through research
which is disseminated through publications and
presentations. Third, by developing and providing
new knowledge through research which is dissem-
inated through co-operative research projects or
consultancy for the business sector.
Moreover, the university systems of highly in-
dustrialized countries are going through a period
of profound change due to a rise in soci-
etys expectations for economic returns of basic
research. This has led to counteracting pressures
on the institutional organization and roles played
by universities within many EU countries: (1) the
different impacts of private and public nanc-
ing, (2) conicts between the free advancement
of basic knowledge and the research frontier and
applied research driven by the needs of industrial
rms. From the early 1980s onwards, policies and
priorities of universities have been increasingly
inuenced both by the quest for relevance of
university research to national needs and by the
pressure of accountability and cost reduction.
8
One of the most pertinent indications of the
ongoing change can be found in the increased
interactions between university and the business
sector in the European Union. During the 1980s
the share of higher education expenditure on
research and development (HERD) nanced by
business enterprises showed positive growth rates
Table I
HERD by form of nancing in the aggregate for 7 EU countries [in %]
Total public
share
General university
funds (OUP)
Direct
government
funds Foreign Business
Other
income NPO
a
1983 94.0 68.3 25.7 0.6 2.9 1.1 1.5
1985 92.7 65.2 27.5 0.7 3.7 1.3 1.7
1989 89.9 60.2 29.7 1.4 5.4 1.2 2.1
1991 89.4 61.7 27.7 1.6 5.5 1.2 2.3
1993 87.7 60.1 27.6 2.5 5.8 1.4 2.7
1995 85.6 57.2 28.4 3.2 5.7 1.8 3.7
Austria (1993)
b
97.1 82.7 14.4 0.4 1.9 0 0.4
Source: OECD (1998). The seven countries are: Denmark, France, Germany, Italy, Ireland, The
Netherlands, UK.
a
Non-prot organisation.
b
For Austria only data for 1993 are available.
in all the EU countries. Although industrial fund-
ing of university research showed an indication of
stabilization during the rst part of the 1990s, its
share of total HERD was about 6% in 1995.
9
However, in Austria during the last two
decades, there has been no structural change in
the nancing of university research. Table I dis-
plays the development of nancing by share of
contributor and as part of total university research
creating an aggregate sample of the seven EU
countries between 1983 and 1995. These seven
countries account for 80% of the total university
research in the EU.
Austria shows a very specic picture of the
allocation of nancial resources for university
research, and this picture is very different from the
aggregate of EU-7. The share of business nanc-
ing of university R&D showed positive growth
rates during the 1980s in the European Union.
At the beginning of the 1990s, this share on an
aggregate scale, remained constant. As a mere
2% of university R&D in Austria was nanced
by the business sector, Austria remained well
below the EU-7 average. To enhance the nan-
cial contribution by the business sector to uni-
versity R&D is now a stated goal of technology
policy in Austria. Hence, it is of specic interest
to analyze the nature of the interaction process
between universities and rms in Austria.
Firms in recent years, the focus of most of
the studies
10
on universityrm interactions was
laid on detailed analysis of universityrm link-
ages in narrowly dened elds of research and
Interactive Relations Between Universities and Firms 257
technology (so-called high-tech industries),
11
on
the aggregate effect of university research on
knowledge production in rms,
12
or on certain
types of interactions such as citations of university
research in rm patents,
13
personnel mobility,
14
joint publications
15
and spin-off formations of new
rms by university members.
16
The aim of this paper is to analyze some of
the ways knowledge transfer between universities
and rms may take place. While there is a
large number of different channels of knowledge
transfer,
17
this paper restricts to four types of
interactions between universities and the business
sector:

joint research projects,

contract research,

joint supervision of Ph.D.s and Masters Theses

by university and rm members,

the mobility of university researchers into

private rms.
Based on two different surveys one directed
at innovative rms, the other one at university
departments the paper highlights complemen-
tary aspects of universityrm interactions. The
following sets of research questions are to be
analyzed:

What is the frequency of different types of

interactions between universities and rms on
the part of industrial rms and on the part of
university departments?

What are the benets that rms derive from

universities?

What factors determine the intensity of

universityrminteractions on part of industrial
rms and on part of university departments?
The structure of the paper is organized as
follows: rst, we briey discuss the various data
sources used an how we proceeded to collect the
data. In Section 3 we give a descriptive overview of
how rms value the potential benets gained from
collaboration with universities. Section 4 discusses
various types of interactions between universities
and rms and their frequencies. In Section 5 we
use multivariate logistic regression modeling to
analyze interactions between rms and universities
from both points of view, the viewpoint of the rm
as well as from the university department. The
paper ends with a synthesis and main conclusions
in Section 6.
2. Data sources
Data on the various forms of interactions between
universities and rms were collected by distinct
surveys. The rst survey aimed at the assessment
of universityrm linkages from the view of rms.
The purpose was to ask innovative rms about
their collaboration behavior with the university
sector. Firms were dened as innovative if they
had developed at least one product innovation
within the last two years.
18
To identify innova-
tive rms we proceeded as follows:
19
Using a
data base from a private consulting rm (with
about 40,000 rms listed) we selected 3026 rms
belonging to the manufacturing sector (NACE
20
codes 1536) and with more than 10 employees.
From this sample space 1006 rms were selected
randomly. Using a CATI-approach (Computer
Aided Telephone Interview) we then identied
443 innovative rms.
These 443 rms were our nal sample for a
postal survey. The questionnaire for this survey
was designed to get a broader view of the modes
of interaction between the university and the busi-
ness sector, of the motivations and barriers of
co-operation as well as to provide insight in how
rms value academic knowledge. The question-
naire was lled out by the R&D managers of
the rms and included questions on the general
characteristics of the rm (employment, found-
ing year, R&D activities, patenting activities) on
the nature of the collaboration with the univer-
sity sector (if any) and on perceived barriers to
collaborate with universities.
21
99 rms returned
the questionnaire which results in a response rate
of 22.3%. On the side of the university depart-
ments, a postal survey was sent to all 834 univer-
sity departments in Austria (regardless of faculty
membership) in Spring 1999.
22
For large depart-
ments that are divided into sub-departments, and
the questionnaire was sent to the sub-departments
in order to gather more differentiated and reli-
able information. The key questions included per-
sonnel mobility from universities to the business
sector, spin-off formations of new enterprises, lec-
tures by rm members held at universities, train-
ing of rm employees by university members,
scholarships, postgraduate links and joint publi-
cations. 421 questionnaires were returned by 350
departments which is a response rate of 37.2%.
23
Information on structural characteristics of all
258 Schartinger, Schibany and Gassler
Austrian university departments is provided by the
Federal Ministry for Science and Transport. These
data are collected on a biennial basis. Our study
covers the time period 199095.
3. General estimation of the benets
from universities
Firms can benet from universities in various
ways. In order to get a more differentiated picture
on how universities contribute to the innovative
capacities of rms, R&D managers of innovative
rms were asked to indicate the importance of
different types of potential benets from univer-
sities. Table II summarizes the results. The sec-
ond column of Table II gives the percentage of
rms which value the different types of poten-
tial benets with 3 (important) or 4 (very impor-
tant). The second part of Table II relates rm size
(three size categories) to the mean value of the
valuation of potential benets. Using analysis of
variance we test, if there exist signicant differ-
ences between the three size categories concern-
ing their mean values. (The null hypothesis is that
there is no difference of the mean values between
the size categories.) The third part of Table I gives
information on the valuation of rms with own
R&D departments (labeled as yes) versus those
rms without own R&D departments (labeled as
no). Again we use an analysis of variance to test
for signicance.
Table II
General benets from universities
Mean values on a 14 scale
(1 = not important, 4 = very important)
% of rms Own R&D-
answering 3 or 4 By rm size (number of employees) department
Potential types of benets n =99 150 51200 201 and more Yes No
Highly skilled personnel 63.7 2.22

2.52

3.26

3.05

2.18

(university graduates)
Ideas for new products 47.2 2.53 2.40 2.04 2.19 2.50
and processes
General and useful information 42.7 2.32 2.24 2.33 2.29 2.31
Direct support in development 41.1 2.08

2.28

2.67

2.37 2.25
process
New instruments and techniques 37.9 2.22 2.20 2.42 2.39 2.17
Results of basic research 33.3 2.19 2.04 1.96 2.18 1.98
Consulting services 32.8 1.86

1.96

2.33

2.02 2.04
Source: Survey of innovative rms, tip.

level of signicance ( - 0.01),

level of signicance ( - 0.05).
It can be obtained from Table II that the
following four main channels are the most impor-
tant types of benet from universities (in order
of their importance): the employment of edu-
cated and highly skilled personnel (university
graduates), ideas for new products and processes,
the provision of general and useful information
and direct support in the development process.
Sixty four percent of all rms indicate that the
employment of high skilled, university educated
personnel is important or very important for the
innovation process. This result corresponds with
most other studies on this issue
24
and conrms the
widely acknowledged importance of availability of
human resources for the innovation process and
the role universities are playing in the production
of high-qualied labor.
For almost two thirds of the surveyed rms,
highly skilled personnel is either important or
very important. Furthermore, Table II reveals
that rms with an own R&D department value
the benets from high-skilled personnel signi-
cantly higher than rms without an own R&D
department (a mean value of 3.05 versus 2.18).
The staff at R&D departments is generally dom-
inated by employees with university education.
Hence, rms have to rely on people with such
qualications much more extensively than rms
without own R&D departments. Also there is a
clear relationship between rm size and the valua-
tion of high-skilled, university educated personnel.
Interactive Relations Between Universities and Firms 259
Large rms have a signicant higher mean value
(3.26) than their smaller counterparts (small rms
have a mean value of only 2.22). Apparently the
demand for qualied R&D-personnel increases
with rm size. This may be the result of large
rms being more likely to have an R&D depart-
ment. There are two other types of benets that
signicantly increase with rm size: Large rms
value the benet of universities directly support-
ing the development process higher than small
rms. In addition, large rms value the bene-
t of consulting services by universities higher
than small ones. Somewhat surprising is the fact,
that rm size seems to have no signicant impact
on how important rms perceive the results of
basic research to their work. For the majority
(66%) of respondents results of basic research are
of little or no relevance. Still, about one third
of the rms nd results of basic research rele-
vant to their innovative activities. This is quite
remarkable as in the sample large science based
rms (e.g. pharmaceutical) seem to be somewhat
underrepresented.
Almost one half of the answering rms indicate
that universities are a signicant source of new
ideas for new products and processes. Concern-
ing the other types of benets no signicant
differences between rm with and without R&D
departments can be reported.
4. Types of interactions between universities and
rms and their frequency
Table III shows the prevalence of different types
of interactions according to the two surveys
carried out by the authors. Four questions were
common to both surveys. These relate to the
joint supervision/nancing of Ph.D.s and Masters
Theses, contract research, joint research projects
and the employment of university researchers in
the business sector. For these four types of inter-
actions (printed in bold letters) respondents from
each group indicate the same ranking based upon
the percentage of respondents that engage at least
once in the corresponding type of interaction.
Variation of percentages across surveys are due
to different sample sizes. (421 in the case of uni-
versity departments and 99 in the case of rms.)
Variations of percentages within one survey may
provide insight in the perceived roles of the two
actorsuniversities and rms. The most frequent
types of interactions are the employment of uni-
versity graduates on the part of rms and the
joint supervision of Ph.D.s and Masters Theses on
the part of the universities. These two types of
interactions are very related: To educate students
and prepare them for later employment in the
economy has always been one of the main func-
tions of universities. The supervision of Ph.D.s and
Masters Theses is part of this function. Therefore,
the most frequent type of interaction in each of
the surveys allows both actors to behave according
to their predened roles: A university supervisor
has to ensure the scientic quality of a Ph.D. or
a Masters Thesis whether or not he or she super-
vises it jointly with rms. If a university graduates
educational background corresponds to the needs
of a rm, the probability for employment is higher.
Hence, there are little individual or institutional
barriers against these types of interactions. In con-
trast, the commercialization of university research
results and knowledge in the form of university
spin offs or license agreements require a reshape
in the role of universities traditionally perceived
by rms and by universities themselves. Therefore,
these types of interactions seem to be much less
accepted and less frequently made use of.
In the survey of university departments, the top
is dominated by types of interactions that do not
necessarily include a recurring face-to-face con-
tact between university members and rms. In the
joint supervision of Ph.D.s and Masters theses the
face-to-face contact is maintained by a third party,
the graduate or post-graduate student. Lectures
by rm members at universities may involve any
intensity of interaction between universities and
rms from none at all to regular contacts. Con-
tract research in many cases includes face-to-face
contacts at the beginning and the end of the con-
tract, but does not have to involve face-to-face
contacts in between.
25
Some of the interactions
that involve a very intensive contact between uni-
versities and rms are performed by about 30%
of university departmentsjoint research projects,
the permanent mobility of university members to
the business sector, joint publications and the
training of rm members. Two further types of
interactions that are associated with a very inten-
sive ow of knowledge are carried out by only
a minority of university departmentsacademic
260 Schartinger, Schibany and Gassler
Table III
Types of interactions between universities and rms in Austria 199598
SURVEY OF UNIVERSITY DEPARTMENTS SURVEY OF INNOVATIVE FIRMS
Percentage of Percentage of
responding university responding innovative
Type of interaction departments Type of interaction rms
Supervision/nancing of Ph.D.s and 38 Employment of graduates 67
Masters theses
Lectures by rm members at universities 35 Supervision/nancing of Ph.D.s and 42
Contract research 32 Masters theses
Joint research 31 Contract research 32
Employment of university 30 Joint research 23
researchers in the business sector International research networks 30
Joint Publications 28 Employment of university 7
researchers in the business sector
Training of rm members 27 License agreements 7
Spin-off formations of new rms 14
Temporary movement of university 9
members to the business sector
n =421 n =99
Source: Surveys 1998/99. Percentage of respondents that mentioned to engage at least once in the corresponding type of interaction.
spin-off formations of new enterprises and the
temporary appointment of university members to
the business sector.
The view that the most frequent types of
interactions are also the ones that involve only
minor amounts of knowledge ows has to be mod-
ied considering the results of the rm survey.
Here, most common knowledge ow is derived
from the employment of university graduates. This
may be rated a very intensive ow of knowl-
edge as graduates entering the business sector
are equipped with advanced levels of training and
expertise. They bring with them tacit skills, have
experiences of tackling complex problems and are
often part of networks of researchers.
26
The comparison of the two surveys reveals that
the transfer of human resources in the form of
university graduates seems to be the most favorite
type of interaction. On the part of the rms
employment of graduates is the most pervasive
channel of knowledge transfer. On the part of
the universities joint supervision of Ph.D.s and
Masters theses is the most pervasive one, which
is likely to prepare university graduates for future
employment in the co-supervising rm or the
business sector of this rm.
5. Determinants of knowledge transfer
between universities and rms
The following section aims at the identication
of factors that enhance the establishment of
universityrm interactions and those that inhibit
the establishment of universityrm interactions.
Various explanatory models are estimated in order
to account for the decision of rms and university
departments to engage in interactions with each
other. First, we look on the determinants for inter-
action from the rm side and thereafter from the
university side. The data used are the same as was
reported in Section 2.
The rm perspective
The following determinants are expected to play
a crucial role in affecting the probability for rms
to interact with universities:
Size of the rm. It seems to be a robust
empirical pattern that R&D increases with rm
size and therefore enables rms to plug into
external sources of scientic and technological
expertise.
27
This becomes possible because the
rm is equipped with a stock of knowledge in
a particular domain that conditions its ability to
Interactive Relations Between Universities and Firms 261
evaluate and exploit external sources of knowl-
edge, i.e. its absorption capacity.
28
Thus we expect
rm size to have a positive effect on the propensity
to interact with universities.
Age of the rm. The possible effect of age
is a priori somewhat unclear. New technology ori-
ented start ups (or more generally young rms)
are playing an important role in the process of
technological change.
29
These rms are particu-
larly dependent on technological innovations and
scientic progress and therefore more than others
inclined to engage in interactions with universi-
ties. Instead, old rms were able to accumulate a
stock of knowledge within the rm and thus have
incorporated a vast number of elds of knowl-
edge throughout their life cycle. Hence, it can be
expected that these rms are less dependent on
external knowledge generated at universities. Nev-
ertheless older rms may have established a set of
links to universities during their life cycle and thus
have more experience in co-operation which may
lead to a higher propensity to interact.
Motivations of interactions. Firms pursue objec-
tives that motivate the establishment of interac-
tions with universities. Possible motivations are
the access to problem solving capacities of univer-
sities, access to the state of the art science and to
complementary know-how, outsourcing of R&D
and cost reduction, as well as access to research
networks or building up new research areas.
Among the barriers of interactions the lack of
resources on both sides, various measures of cul-
tural differences, lack of information, lack of
secrecy, spatial distance between interaction part-
ners are likely to play a major role.
The description of variables used in the logistic
regression model are given in Table IV, the results
of logistic regression in Table V. The dependent
variable was dichotomous and calculated as fol-
lows: if any type of interaction activities occurred
in the rm within the last two years than its
value was 1, otherwise 0. The different types of
interaction activities were contract research, joint
research, joint supervision of Ph.D.s and Masters
Theses, employment of university researchers.
The independent variables of Table IV are
dened as follows: Size of rm is measured as
number of employees, age of rm as 1999 minus
year of foundation. All other variables of Table V
are measured on a ranking scale.
Table V reveals that the probability to interact
with university departments is growing signi-
cantly with the rm size as was expected.
30
One
may argue that this relationship varies over dif-
ferent business sectors. However, we tried some
models including a dummy for high-tech sectors
(based upon the well known OECD high-tech de-
nition). This variable turned out to be insignicant
in all model variants.
31
The age of the rm plays a signicant role
for determining interaction with universities.
Younger rms tend to rely on external sources
of knowledge to a greater extent than their older
counterparts.
The crucial motivation for rms to interact with
universities is to get direct support in the innova-
tion process. During the innovation process rms
are confronted with a wide range of possible prob-
lems and difculties which may be beyond the
rms own problem solving capacity. Hence, they
rely on external sources and are demanding con-
crete support from universities for their innovative
activities. This goes hand in hand with the fact that
the basic research capabilities of universities do
not play a signicant role in enhancing the inter-
actions between rms and universities (the respec-
tive variable was insignicant in all types of models
calculated).
On the other hand, from Table V some distinct
barriers can be obtained. Firms which consider
common projects with universities as difcult to
manage have a signicant lower probability to
interact with universities. This points to the fact,
that there exist somewhat different cultures
between the two spheres. The main goal of univer-
sities (beside teaching) is to produce knowledge in
the form of public goods and thus to enhance the
stock of knowledge open to the society as a whole.
On the contrary, prot maximizing rms seek to
appropriate the results of the innovation process
and often try to keep the results secret.
32
Addi-
tionally, university research often is more long
term oriented while rms are mostly looking for
direct and short run effects.
Lack of information or poor communication
about what universities actually do (and what
might be the benets for the rm) is also reduc-
ing the probability for cooperation signicantly.
To acquire relevant information about universi-
ties is associated with high search costs for rms.
262 Schartinger, Schibany and Gassler
Table IV
Description of variables used in logistic regression analysis
Variable Question in survey
Direct support in development process What renders universities useful for your rm? Direct support in the development
process: not relevant, . . . , very relevant (four categories)
Results of basic research What renders universities useful for your rm? Results of basic research: not
relevant, . . . , very relevant (four categories)
Lack of information on university research Barriers of research cooperation. Lack on information on relevant research at
universities: high barrier, . . . , low barrier (ve categories)
Cultural differences Barriers of research cooperation. Cooperation with universities is difcult to
manage: high barrier, . . . , low barrier (ve categories)
Table V
Logistic regression results:
determinants of interactions on the level of rms
Dependent variable
Independent variables sum interactions
a, c
Structural variables
Size of the rm 0.003

Age of the rm 0.052

Motivations and Barriers

Direct support in 1.586

development process
Results of basic research 0.227
Lack of information on 0.393

university research
Cultural differences 0.923

Constant 1.328
Number of observations
b
76
Cox & Snell R
2
0.47
Nagelkerke R
2
0.63
Prediction success 84.2
a
If (sum(contract research, joint research, joint supervision
of Ph.D.s and Masters Theses, employment of university
researchers) > 0;1; otherwise 0).
b
Due to missing values only 76 out of original sample (n =99)
were selected.
c
Signicant at 0.1,

. . . at 0.05,

at 0.01 level, respectively.

Since the output of this search process is by no
means clear and quite uncertain, rms may have
no incentive to undertake this process at all.
33
The university perspective
The following variables are assumed to play a sig-
nicant role in determining various types of uni-
versity rm interactions:
The size of a university department may strongly
affect the resources available for R&D projects.
Large departments are expected to own a larger
stock of transfer resources (personnel, physical
capital and technical equipment, knowledge, expe-
rience), which enables them to engage in interac-
tions with the business sector and at the same time
handle all the other tasks of a university depart-
ment. (teaching, publishing etc.) Small depart-
ments are likely to be more exible and special-
ized on a narrowly demarcated eld of research,
which may render them attractive partners for pri-
vate rms. Medium-sized departments are viewed
as being less exible than small ones while provid-
ing less infrastructure. Thus, a U-shaped curve of
size effects interactions is expected. In the logistic
regression model this variable is measured by the
logarithmic number of academic researchers.
Personnel structure. A high share of senior
researchers (measured as researchers having a so
called Habilitation
34
) signals the predominance
of more experienced researchers with an estab-
lished university career over young researchers
at the beginning of a university career. Senior
researchers are assumed to be socialized accord-
ing to the traditional role of universities which
comprises the education of students and the com-
munication of research results through scientic
publications. The cultivation of universityrm
interactions is not traditionally part of the role.
These different types of researchers may there-
fore show differences in their interaction behav-
ior and in their previous experiences in differ-
ent types of interactions. This independent vari-
able is measured by the relation of researchers
with habilitation to researchers without habili-
tation. The hypothesis is that a relatively high
share of researchers with habilitation decreases
universityrm interactions.
Interactive Relations Between Universities and Firms 263
International publications. Collaboration with
departments that provide high quality of research
results and reputation may reduce risks of collab-
oration and therefore reduce costs. As university
departments tend to communicate their research
results through publications, a critical indicator
for the quality of output may be the number
of publications per researcher published in inter-
national top-level scholarly journals (Quality
output factor). We thereby assume a positive
relationship between the number of publications
and universityrm interactions. The variable is
measured by the number of international publica-
tions per researcher at the university department.
Experience in contract research projects with the
business sector. If a university department has
already gathered experiences in carrying out var-
ious kinds of research projects with rms, institu-
tional and individual barriers are likely to be less
important than in the case of a department with-
out any relevant experience so far. This variable
is introduced into the logistic regression model
as a dummy variable, taking one if the university
department has already gathered experiences in
contract research with the business sector.
Experience in contract research projects with
public authorities. University departments with
contract research projects with public authorities
do also show experience in the competitive acqui-
sition of external funds, i.e. experience in mar-
keting competencies and knowledge available at
the university department. We therefore assume
that the number of contract research projects with
public authorities per researcher has a positive
impact on a university departments interactions
with the business sector.
A high intensity of supervising Ph.D. and Masters
students, measured in terms of a high number
of supervised Ph.D.s and Masters Theses per
researcher, indicates a high teaching orientation.
This is likely to detract resources from other activ-
ities of a university department, such as research
and research cooperation. We therefore assume a
negative relationship between a university depart-
ments intensity of supervising Ph.D. and Masters
students and its decision to establish interactions
with private rms.
Frequency of public presence. Lengthy pro-
cesses of search for an adequate interaction part-
ner tend to be omitted because of opportunity
costs. It seems likely that every way of inform-
ing a broader public of research activities and
results is conducive in order for interactions to be
established. University departments are publicly
present, whenever they present research results in
all kinds of mass media. The amount of presenta-
tions of a university department in mass media is
introduced into the logistic regression models as a
categorial variable with four categories.
Table VI summarizes the variables dened in
the logistic regression models.
The model results in Table VII suggest uni-
formly that it is university departments in tech-
nical sciences that interact with industrial rms.
This is no surprise considering the sector-specic
R&D intensities in Austria. It is mostly tech-
nical and engineering sciences that have the
highest R&D intensities in Austria, particularly
electronics and telecommunications, pharmaceuti-
cal industry, ofce machinery and computers and
transport technologies.
35
University departments
in humanities apparently tend not to interact with
the business sector, dummy variables for other
university elds of research are mostly insignif-
icant. The structural variables included in the
logistic regression models partly show the impacts
on the dependent variables according to the pre-
vious assumptions. The size of a university depart-
ment has a signicantly positive impact in four of
the ve models. Instead, a high share of experi-
enced researchers with an established university
career, does not have any signicant inuence on
the dependent variables.
In contrast to our previous assumptions, the
public presence in the form of presentations in
mass media has a signicantly negative impact
on the extent of interactions between universi-
ties and rms in almost all of the models. Appar-
ently, university departments and industrial rms
establish their contacts via occasions other than
the signaling of university departments via presen-
tations for a broader public on TV, radio or in
print media. A possible explanation may be that
university researchers in mass media usually com-
ment on issues on a more aggregate level than the
rm level (for example National economic devel-
opment, genetics, BSE crisis etc.). Another expla-
nation may be that university researchers that
264 Schartinger, Schibany and Gassler
Table VI
Description of variables used in logistic regression analysis
Names of variables Denition of variables
Dependent variables
Ph.D.s/M.M. If (joint supervision of Ph.D.s and Masters Theses between rms and
university departments) > 0; 1; otherwise 0)
Researcher mobility If (employment of university researchers in the business sector) >0; 1;
otherwise 0)
Joint research If (joint research of rms and university departments) > 0; 1; other-
wise 0).
Contract research If (contract research of university departments for rms) > 0; 1;
otherwise 0).
Sum interactions If (sum(contract research, joint research, joint supervision of Ph.D.s
and Masters Theses, employment of university researchers) > 0;1;
otherwise 0).
Independent variables
log (Size) log (number of researchers (full professors, associate professors,
research assistants).
Percentage of researchers with Habilitation (Full professors + associate professors)/research assistants without
habilitation.
International publications number of publications in foreign scholarly journals per researcher at
university department.
Contract research with the business sector If (contract research projects with the business sector > 0;1;
otherwise 0).
Contract research with public authorities Number of contract research projects with public authorities per
researcher at university department.
Public presence Categorial variable for the amount of presentations in mass media
(4 categories: 0, 15, 620, more than 21).
Intensity of supervision of Ph.D.s/M.M.s Number of supervised Ph.D.s and Masters Theses per researcher.
appear in mass media more frequently than aver-
age do not behave as it is expected from university
researchers and therefore seem less trustworthy as
cooperation partners.
36
As for the determinants of the individual types
of interactions, Table VII demonstrates clearly
that different types of interactions are determined
by different factors. If a university department has
already gathered experience in contract research
with the business sector and at the same time
supervises a high overall number of Ph.D.s and
Masters Theses per researcher, it is more likely
to co-supervise Ph.D.s and Masters Theses jointly
with private rms. This indicates that university
researchers initiate jointly with employees (or the
management) of the rm the interaction via suc-
cessful past contacts, rather than the graduate
student himself. In all other logistic regression
models the intensity of supervisions of Ph.D.s and
Masters Theses has no signicant impact.
In the contrast, it seems that the vast majority
of university researchers getting employed by
industrial rms are graduates and experts coming
from big departments in technical sciences. The
only variables that exert a signicantly positive
inuence on the mobility of university researchers
are the size of a university department and its
being a technical science. This conrms ear-
lier ndings that private rms rely on university
knowledge in order to increase their technologi-
cal problem solving capacities. The recruitment of
university researchers from technical sciences may
be considered as one such strategy. As for the size,
it may be an explanation that in big departments it
is unlikely that every researcher is able to pursue
the career he/she would like to, whereas a change
to another employer might increase the chances
of the desired career.
A university departments propensity to carry
out joint research projects is to some extent
determined by a high number of publications
in international scholarly journals per researcher.
This indicates that a high quality of research
Interactive Relations Between Universities and Firms 265
Table VII
Determinants of interactions on the level of university departments: parameter estimates of logistic regressions
Ph.D.s/M.M.
Researchers
mobility
Joint
research
Contract
research
Sum
interactions
Structural variables
log (Size) 1.079

1.224

1.638

0.438 1.176

Percentage of researchers with Habilitation 0.183 0.123 0.018 0.090 0.016

Research characteristics
International publications 0.131 0.019 0.405

0.195 0.042
Contract research with the business sector 0.946

0.564 0.519 0.886

0.832

Contract research with public authorities 0.710 0.260 0.853

0.202 0.321
Public presence 0.525

0.623

0.590

0.261 0.447

Intensity of supervision of Ph.D.s/ M.M.s 0.058

0.012 0.011 0.009 0.024

Dummy variables for elds of research
Technical sciences 1.664

2.091

1.268

1.982

2.591

Natural sciences 0.453 0.045 0.859

0.332 0.015
Human medicine 0.068 0.915 0.764 0.523 0.041
Humanities 1.226

1.830

3.164

2.869

1.830

Constant 1.735

0.987

2.050

1.930

0.844
Number of observations 309 309 309 309 309
Prediction Success 75.1 75.7 73.1 74.1 75.1
Log-Likelihood at constant 422.362 406.893 390.535 402.384 424.834
Log-Likelihood at maximum 322.832 298.613 294.239 303.039 311.390
Chi-Square 99.530 108.269 96.296 99.324 113.444
Signicance level of coefcients: 0, 01:

0, 05:

0, 1:

results close to the scientic frontier of the dis-
cipline. It is striking that the type of interac-
tion joint research projects is the only one where
the quality of a university departments research
results seems to matter. In order for indus-
trial researchers to be worth to invest time and
resources in joint research activities, the university
department has to be at the edge of the respective
discipline. But it is not only quality that deter-
mines joint research projects between university
departments and rms, it is also experience in con-
tract research. Past contract research with pub-
lic authorities signicantly inuences a university
departments propensity to carry out joint research
projects with private rms.
The only variable among the characteristics
of a university department which has a statis-
tically signicant effect upon the propensity to
carry out contract research with the business sec-
tor is a university departments experience in con-
tract research with the business sector in the past.
Excellence of research results at the edge of the
discipline and international research networks do
not play a signicant role. If private rms look
for the technological problem solving capacity of
university departments, it is not the quality of
research that matters but the quality of past inter-
action. If interaction has been successful on a
technological as well as on a personal level, future
contract research with the business sector is more
likely to take place.
37
A logistic regression model where all presented
types of interaction are combined (i.e. summed
up, and dependent variable equals one, if the
sum is greater than zero) conrms what seem to
be the main determinants of interaction on part
of the university departments: It is mainly size,
past experience in contract research with the busi-
ness sector and the dummy variable for technical
sciences that have a signicantly positive effect the
propensity of university departments to interact
with the business sector.
6. Synthesis and conclusion
The main transfer of knowledge between the
industrial and the university sector still occurs
through the mobility of people equipped with sci-
entic knowledge. Asked for the general bene-
ts from universities, a vast majority of the rms
values highly skilled personnel as the main output
266 Schartinger, Schibany and Gassler
from universities and considers the employment of
graduates as important access to academic knowl-
edge. Furthermore, the joint supervision of Ph.D.s
and Masters Theses which results in graduates
being not only equipped with scientic knowledge
but also acquainted with the needs of the rm or
the business sector of the rmis one of the most
frequent types of interaction between universities
and the business sector.
Past experience in interaction with the business
sector are crucial for university departments to get
involved in interactive relations with the business
sector. Satisfaction with past interactions on a per-
sonal, technological and on a research level lowers
individual and institutional barriers and renders
universityrm interactions more likely. Appar-
ently, the quality of research does not count as
much as the quality of the past relationship.
For all types of interaction, apart from human
capital mobility, direct support in the innova-
tion process forms the main motivation on part
of the rms. Path-dependence and the localized
nature of rm-specic knowledge result in con-
strained technological capabilities of rms. These
constraints of technological capabilities entail that
rms attempting to innovate are very likely to run
into problems which lie outside their existing capa-
bilities and knowledge base. This implies a need to
import externally-developed technological knowl-
edge in order to nd a solution for innovation
problems which crucially motivates universityrm
interaction on the part of the rms. As for the
main barriers to universityrm interaction, this
application-orientation of rms is in strong con-
trast with university objectives, pace and methods
of validation and reward. Universities as well as
private rms follow their individual rationality in
deciding whether to establish inter-organizational
relationships. Hence, cultural differences seem
to be the main barriers in the creation of
universityrm links.
Furthermore, the lack of information is a
barrier for universityrm interactions. Hence,
one bottleneck for improving the interaction
between universities and the business sector is
poor communication about what universities actu-
ally do and what might be relevant for rms.
Marketing instruments as public presence in mass
media do not seem to be an appropriate strat-
egy to decrease the informational mismatch. Obvi-
ously, the results presented by university members
in mass media apply for aggregated levels of the
economy and do not seem useful for problem-
solving on the level of the individual rm.
However, the question if this informational mis-
match between universities and the business sector
should be interpreted as an obligation for deliv-
ery on part of the universities or an obligation for
collection on part of the rms, could not be solved.
Acknowledgments
The authors would like to thank Christian
Rammer and Wolfgang Polt for valuable com-
ments on earlier version of this paper. In addi-
tion we have greatly beneted from the comments
by Jerry Thursby and Albert Link. However, the
usual caveats apply.
Notes
1. Romer (1986, 1990, 1994), Grossman and Helpman (1991,
1994).
2. OECD (1996).
3. Fischer (2000).
4. Lundvall (1988).
5. Lundvall (1988).
6. Freeman (1987), Lundvall (1992), Nelson (1993), Edquist
(1997).
7. For example the so called Community Innovation Surveys
(CIS-I and CIS-II) performed by the member states of the
European Union or the survey carried out by the OECD
focus group on Innovative Firm Networks (Christensen et al.,
1999).
8. See Geuna (1999) for a discussion of this empirical trend
as well as for a critical assessment of the changing rationale
for European university research funding.
9. OECD (1998).
10. See Varga (2000) for an overview.
11. Bania et al. (1993), Acs et al. (1994).
12. Jaffe (1989), Varga (2000) and Anselin et al. (1997).
13. Jaffe et al. (1993), Almeida and Kogut (1995).
14. Bania et al. (1992), Almeida and Kogut (1995).
15. Hicks et al. (1993).
16. Parker and Zilberman (1993), Kelly et al. (1992).
17. Acs et al. (1994), Schartinger et al. (2000).
18. We based our denition on innovation rather than on
the existence of an own R&D department because in Austria
there are many rms which are highly innovative but do not
have a formal R&D department. This denition was also used
by the European Commission in dening the concept of the
Community Innovation Survey.
19. Schibany (1998).
20. Classication of business sectors by the European Union.
21. The detailed questionnaire is available from the authors
on request. However it is in German only.
Interactive Relations Between Universities and Firms 267
22. This survey was nanced by the Austrian Science Fund
(FWF).
23. Schartinger et al. (2000).
24. Martin et al. (1996).
25. Schmoch (1999).
26. Martin and Salter (1996).
27. Cohen (1995)
28. Cohen and Levinthal (1989).
29. Storey and Tether (1998).
30. Some of the above mentioned independent variables
(for example, spatial distance between the actors) have been
omitted during the modeling steps because they proved to be
insignicant throughout the various modeling steps.
31. This might be due to the small sample size.
32. Hall et al. (2000).
33. Interestingly, lack of interest from the university is not
considered as a barrier of interaction. This variable proved to
be insignicant in various model variants.
34. The so called Habiliation is required to gain the
position of an associate professor. It consists of original
scientic research (usually published as a book or as collected
papers) and a public lecture which is evaluated by a scientic
commission. The Habilitation is a specic requirement in
German speaking countries.
35. Statistics Austria (ISIS data base).
36. Comment by Jason Owen Smith at the Purdue University
Workshop on Organizational Issues in University-Industry
Technology Transfer.
37. Comment by Elaine Brock at the Purdue University
Workshop on Organizational Issues in University-Industry
Technology Transfer.
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