Title: Effects of government funding on R&D performance leading to commercialisation

Authors: Yaichi Aoshima; Kazunari Matsushima; Manabu Eto

Addresses: Institute of Innovation Research, Hitotsubashi University, 2-1 Naka Kunitachi, Tokyo 186-8603, Japan ' Institute of Socio-Arts and Sciences, The University of Tokushima, 1-1 Minami-Josanjima, Tokushima 770-8502, Japan ' Geneva Office, JETRO, Rue de Lausanne 80 1202, Geneva, Switzerland

Abstract: This paper draws on data obtained from a questionnaire survey conducted for the 242 private R&D projects supported by NEDO (New Energy and Industrial Technology Development Organisation), Japan's public management organisation promoting R&D, to explore how dependence on government support affects processes of private R&D projects and, in turn, the performance and commercialisation of developed technologies. Our analyses show that projects receiving more than a half of their entire R&D expenditures from NEDO tend to be isolated from in-house departments. Such isolation, derived mainly from the projects' unique positions in 'double dependence' structures, negatively affects project performance, especially those related to commercialisation, in two ways. First, high dependence on government resources prevents project members from interacting with people outside the project within the company. This inhibits project members from effectively leveraging internal resources - both technological and human - to overcome technological problems. Secondly, such high dependence weakens internal controls over project activities. This causes delayed development of marketable technologies and makes it difficult for projects to achieve justification for further investment required for commercialisation. Our findings suggest that for successful R&D leading to commercialisation, both companies and public funding agencies should encourage projects to maintain close relationships with other internal departments.

Keywords: government funding; R&D performance; double dependence structures; commercialisation; private R&D projects; research and development; government support; Japan; internal controls; investment justification; internal departments.

DOI: 10.1504/IJESD.2013.051689

International Journal of Environment and Sustainable Development, 2013 Vol.12 No.1, pp.22 - 43

Received: 03 Jan 2012
Accepted: 10 Jun 2012
Published online: 28 Jan 2014 *

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