Funda16 Flashcards
(16 cards)
What scientific solutions are being developed to combat climate change?
Renewable Energy: Developing and expanding the use of solar, wind, and other renewable energy sources to reduce dependence on fossil fuels.
Carbon Capture Technologies: Innovations aimed at capturing and storing carbon dioxide emissions from industrial processes to mitigate global warming.
Sustainable Agricultural Practices: Implementing methods to increase food production while minimizing environmental impacts, such as reducing greenhouse gas emissions from farming.
Climate Modeling and Adaptation: Researching climate patterns and devising strategies to adapt to unavoidable changes, ensuring resilience in ecosystems and communities.
next 3: summary of the pp the DECLINE OF SCIENCE IN CORPORATE R&D
Decline: Large corporations have significantly reduced their investment in scientific research between 1980 and 2007. This is evidenced by a decline in publications by company scientists.
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The market value premium for scientific publications has fallen, while the value of patents has remained stable or increased.
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This trend is observed across various industries, except for biotechnology.
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Firms appear to value the “golden eggs” of science (patents) but not the “golden goose” itself (scientific capabilities).
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There is a greater emphasis on the ‘D’ (development) of R&D, and short-term, incremental innovation.
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Post-acquisition publication activity by target-firm scientists declines
1.2 Driving forces
Globalization and increased competition, especially from China, have contributed to the decline in corporate science.
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Firms are narrowing their scope, focusing on core competencies and reducing diversification, making basic research less valuable.
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The decline is not due to changes in publication practices; firms are not just keeping discoveries secret. The drop is more pronounced in basic research journals.
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The decline is not because science is less relevant to innovation. Patents continue to cite scientific publications.
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Firms’ ability to absorb external scientific knowledge has not decreased.
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Similar trends in Europe suggest that U.S.-specific regulatory changes are not the main cause
1.3 Implications
There is a growing division of innovative labor, with large firms focusing on development and commercialization, while universities and small firms generate new ideas.
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Reduced investment in science by large firms may negatively impact the overall production of new knowledge.
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Startups must now focus on commercial applications of their research, not just basic science, due to diminished rewards for scientific capabilities.
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Public funding for scientific research becomes even more critical to compensate for the decline in corporate investment.
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The long-term effects of these shifts on technical progress and productivity growth need further evaluation
1.4 Reasons for the Decline in funding
Globalization and Competition:
◦Increased competition from low-wage countries, especially China, has led to reduced investments in science and a focus on commercializing existing knowledge.
◦Firms prioritize incremental, patentable research over long-term basic research.
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Narrowing Firm Scope:
◦Companies with a narrower product base tend to decrease their investments in science.
◦Basic research is more valuable for diversified firms.
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Shift in R&D Focus:
◦Firms are emphasizing the “D” (development) in R&D and short-term innovations.
◦There is a prioritization of the “golden eggs” (patents) over the “golden goose” (scientific capabilities).
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Not Changes in Publication Practices:
◦The decline is not just due to firms keeping discoveries secret. It is most pronounced in basic research journals, not applied ones.
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Not Reduced Usefulness of Science:
◦Patents continue to cite science, indicating its ongoing relevance to innovation.
◦The age of cited publications has not changed, suggesting that new science is still important.
*Not U.S. Specific Regulations: * Similar trends in Europe suggest that the decline is not due to specific U.S. regulatory changes
Risks of Relying Mostly on Public Funding for Science
*Public funding prioritizes fundamental knowledge and societal challenges, which may not align with immediate market needs.
*Basic research funded by public institutions often takes years or decades to translate into practical applications.
*There is a risk of research remaining confined to academia, often referred to as the Ivory Tower Effect.
*The European Paradox highlights Europe’s strength in academic research but its relative weakness in commercialization.
Crowdfunding as an Alternative for Science
*Platforms like Experiment.com enable researchers to directly seek public funding for scientific projects.
*Crowdfunded projects are usually smaller in scale, with students and junior researchers having higher success rates than senior scientists.
*Women outperform men in crowdfunding success rates.
*Traditional academic indicators, such as prior publications, have little relevance in crowdfunding, as the “crowd” evaluates differently than conventional agencies.
Decline in Science within Corporate R&D
Reduced Benefits:
*Growth of technology markets allows firms to acquire science externally rather than invest in internal research.
*Increased competition and globalization have shifted focus toward short-term gains over long-term research investments.
Increased Costs:
*Higher salaries and equipment costs make internal science expensive.
*Declining productivity in corporate research reduces its appeal.
Changes in Corporate Publication Practices
Companies increasingly focus on patents and proprietary innovations rather than publishing their scientific findings.
*This shift reduces the visibility of corporate contributions to the scientific community and limits collaborative progress.
The Role of Startups in the Innovation Ecosystem
*Startups often specialize in inventive activities, leveraging their agility to drive innovation.
*Large firms acquire startups to commercialize their innovations, utilizing their expertise in marketing, scaling, and distribution.
*This division of labor enables startups to innovate while large firms handle commercialization.
Venture Capital (VC) Industry’s Role in Innovation
*The venture capital industry fuels the startup ecosystem by providing funding for early-stage ventures.
*VC-backed startups often exit through acquisitions, creating a cycle of innovation and commercialization.
*In 2016, 82% of US VC-backed exits were acquisitions, underscoring the role of VCs in the innovation ecosystem.
Division of Innovative Labor
*Startups focus on inventive activities, leveraging university-based scientific breakthroughs.
*Incumbents specialize in commercialization, utilizing assets like design, manufacturing, marketing, and distribution.
*This creates efficiency through gains from trade, where each player focuses on their strengths.
Imbalance in the Innovation Ecosystem
*IT and biotech startups receive abundant VC funding.
*Deep tech startups (materials, energy, and environmental technologies) face funding challenges.
*These sectors are critical for addressing humanity’s challenges, yet innovation in these fields suffers from a lack of investment.
Challenges for Deep Tech Startups
*Long timelines: Development cycles are longer compared to IT or biotech.
*Uncertainty and risks:
High technology and market risks due to the need for full-scale prototypes.
Traditional VC stage-investing models are ill-suited for such high uncertainty.
*Weak bargaining power: Dependence on large incumbents reduces deep tech startups’ negotiating strength.
*Commercialization barriers: Scientists often lack business acumen, and VCs may lack the technical expertise needed for deep tech evaluation.
Potential Solutions to Support Deep Tech Startups
*Government Subsidies: Provide financial support to de-risk ventures, although often insufficient for scaling.
*Incubators and Accelerators: Offer mentorship, resources, and early-stage funding to startups.
*Government Procurement: Reduce market risks by acting as early buyers and ensuring financial inflows.
*Government Venture Capital (GVC): Initiatives like the European Innovation Council (EIC) help bridge funding gaps in high-risk sectors.
Incentive Alignment for Collaboration
*Scientists’ limitations: Many lack the skills or inclination for commercialization (Dalla Fontana & Nanda, 2022).
*VC challenges: Venture capitalists often lack the technical skills to fully support deep tech innovations.
*Proposed solutions: Align incentives between scientists and VCs, ensuring more effective collaboration and better commercialization of scientific breakthroughs (Fosfuri & Nagar, 2023).
