Abstract
Research shows that there are important institutional underpinnings for building university–industry linkages. This paper aims to understand how China is developing the relevant organizational structures and incentives in its universities. What academic institutions shape the scope and channels of university–industry linkages? What incentives do universities provide to encourage and facilitate faculty engagement with industry? My analysis is accomplished through content analysis of university documents and in-depth interviews with personnel in two top institutions—Fudan University and Shanghai Jiaotong University, supplemented by official statistics. It shows that the hybrid organizational structure to manage technology transfer is a product of historical legacy and institutional learning—parts uniquely Chinese and parts adapted from the West. Faculty incentives also have varied effects. In spite of being enticed to disclose inventions and pursue commercialization, faculty remains keener on scholarly publications.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
The respondents include the director or deputy director of the enterprise office, division chief at the S&T division or managing staff at the technology transfer center, directors of select research centers, and select faculty at both universities. A total of 12 in-depth interviews were conducted during the summers of 2005–2007, each taking 1–2 hours to complete. Because of the explorative nature of these interviews and open-endedness of the questions, the responses are not examined systematically. Instead, they provide illustrative narratives and complement the content analysis of university documents.
These included Beijing University, Fudan University, Xiamen University, Jilin University and Nankai University in semiconductor research; Beijing Aeronautic College in aircraft design; Beijing University of Technology in missile design; Harbin College of Defense Technology in computer design; and Tsinghua University in space research. See Zhang (2003).
“Project 211” provided significant funding for capital construction on university campuses and for developing new academic programs (Hsiung 2002). The “985” program aims at nurturing China’s top universities into world-class research universities. Its first phase, which began in 1999, funded only nine universities: Beijing University, Chinese Science and Technology University, Fudan, Harbin Institute of Technology, Nanjing University, Tsinghua University, STJU, Xi’an Jiaotong University, and Zhejiang University. In 2004, the second phase included 34 universities (Ma 2004).
The six universities are Central China University of Science and Technology, East China University of Science and Technology, Tsinghua University, Sichuan University, SJTU, and Xi’an Jiaotong University (Xinhuanet 2001, retrieved on 13 August 2006 from http://www.edu.cn/20011122/3011306.shtml).
Officially, the accounting of university R&D revenues includes the following main sources: central government budgetary allocation (primarily from the Ministry of Science and Technology or MOST and MOE), National Natural Science Foundation, local government budgetary allocation, contract funding from the enterprise sector, bank loans, and research grants/contracts with overseas entities (see Wu 2007).
University patents are a good indicator, because patents are a unique and visible method of technology transfer and their public nature allows for more comprehensive analysis than surveys or case studies (Henderson et al. 1998). By official definitions, patents in China are divided into three groups: inventions, new utility models, and new exterior designs. Inventions “refer to new technical proposals [on] products, methods, or both.” New utility models “refer to new technical proposals on shape, structure of a product or the combination of both.” New exterior designs “refer to aesthetics and industry-applicable new designs for shape, design or color of a product, or their combination” (Sun 2000, p. 443). Inventions, and to a lesser degree new utility models, are the most fundamental and beneficial paths for technology development in the long run.
This level, however, is not too far off from those in U.S. universities. For instance, in 2007, licensing income accounted for 5.1% of research expenditures in Massachusetts Institute of Technology, 7.2% in Stanford University, 2.4% in the University of California System, and 1.4% in the University of Texas at Austin (calculated based on AUTM 2007).
Broadly, they refer to enterprises invested in and owned wholly by universities, operated and owned jointly with outside entities, or invested in partially by universities (Ma 2004; Zhang 2003). Their tradition dates back to the late 1950s, when they served as sites for student experiential learning, as generators of employment, and as a source of supplemental funding for universities.
One of the more successful such enterprises is Angli Ltd., specializing in health supplements and created as wholly university-owned in 1990 (Yang and Xu 2004). Its products target the domestic mass market but have quickly established a brand name, leading to steady rise in sales revenue and making the company the most profitable enterprise for SJTU. The company’s rapid expansion also has necessitated the public offering, listed on the Shanghai Stock Exchange since 2001. SJTU now holds a 25% share (Wu 2007).
Among those who have interacted with academia (52.4%), the large majority resorts to technology contracts (27.5%) and a much smaller number of them conducts joint R&D with universities (13.8%). The rest uses more informal forms of collaboration such as sharing equipment and labs, and developing joint training programs. See Shanghai Chamber of Commerce (2006).
This low level of TTO staffing is not uncommon even in U.S. universities. In 2007, about 20% of U.S. universities had three or fewer TTO staff, while only 20% had 15 or more staff (a level comparable to that in SJTU). See AUTM (2007).
SJTU’s collaboration with General Motors is comprehensive, including five research centers GM has established in SJTU, targeted training (undergrad go through 3 years of basic training and then specialized training in the fourth year), thesis research by graduate students, and reciprocal appointment of R&D staff.
Zhejing Province requires local governments to set aside 1 million yuan each year for R&D collaboration with universities (personal interview with a NTTC staff at SJTU).
Fudan has even gone a step further in reforming the management and ownership structure of older university enterprises since 2000. In a matter of 2 years, all business entities formerly owned by Fudan and its subordinate schools/departments were closed, merged or transformed into free-standing enterprises and moved out of the campus (Chinese University Technology Transfer October 2002, p. 19).
In the case of equity investment, shares held by the university and department are managed by the University Investment Management Co. Ltd. (Nanjing University 2005).
There are four broad categories widely used in China for classifying disciplinary scope: basic sciences (li ke), engineering (gong ke), humanities and social sciences (wen ke), and medical sciences (yi ke). This classification dates back to the pre-reform period when more universities specialized in one scope, modeled after the Soviet system. Part of the higher education reform program has been an effort by many research universities to acquire a wider range of disciplines. But most of them continue to show strength in disciplines that they used to specialize in.
According to a McKinsey report (Farrell and Grant 2005), despite an apparently vast supply, multinational companies are finding that few college graduates have the necessary skills for service occupations. According to interviews with 83 human-resources professionals involved with hiring local graduates in low-wage countries, fewer than 10% of Chinese job candidates, on average, would be suitable for work in a foreign company in the nine occupations studied: engineers, finance workers, accountants, quantitative analysts, generalists, life science researchers, doctors, nurses, and support staff.
References
Agrawal, A., & Henderson, R. (2002). Putting patents in context: Exploring knowledge transfer from MIT. Management Science, 48(1), 44–60.
Association of University Technology Managers (AUTM). (2007). FY 2007 Licensing Activity Survey. Retrieved February 16, 2009 from http://www.autm.net/.
Blumenthal, D. (2003). Academic–industrial relationship in the life sciences. The New England Journal of Medicine, 349(25), 2452–2457. doi:10.1056/NEJMhpr035460.
Cambridge-MIT Institute. (2005). Measuring university–industry linkages. Retrieved July 30, 2006 from www.cambridge-mit.org/downloads/InnovationBenchmarking8-17.pdf.
Chen, K., & Kenney, M. (2007). Universities/research institutes and regional innovation systems: The cases of Beijing and Shenzhen. World Development, 35(6), 1056–1074.
Cohen, W. M., Nelson, R. R., & Walsh, J. P. (2002). Links and impacts: The influence of public research on industrial R&D. Management Science, 48(1), 1–23.
Debackere, K., & Veugelers, R. (2005). The role of academic technology transfer organizations in improving industry science links. Research Policy, 34(3), 321–342.
D’Este, P., & Patel, P. (2007). University–industry linkages in the UK: What are the factors underlying the variety of interactions with industry? Research Policy, 36(9), 1295–1313.
Di Gregorio, D., & Shane, S. (2003). Why do some universities generate more start-ups than others? Research Policy, 32(2), 209–227.
Euna, J.-H., Lee, K., & Wu, G. (2006). Explaining the ‘university-run enterprises’ in China: A theoretical framework for university–industry relationship in developing countries and its application to China. Research Policy, 35, 1329–1346. doi:10.1016/j.respol.2006.05.008.
Farrell, D., & Grant, A. J. (2005). China’s looming talent shortage. McKinsey Global Institute. Retrieved October 27, 2006 from http://www.mckinsey.com/mgi/publications/Chinatalent.asp.
Feller, I. (1999). The American university system as a performer of basic and applied research. In L. M. Branscomb, F. Kodama, & R. Florida (Eds.), Industrializing knowledge: University–industry linkages in Japan and the United States (pp. 65–101). Cambridge, MA and London: MIT Press.
Fudan University. (various years). Fudan Science and Technology (S&T) yearbook. Shanghai: Fudan University.
Gassol, J. H. (2007). The effect of university culture and stakeholders’ perceptions on university–business linking activities. The Journal of Technology Transfer, 32(5), 489–507.
Guan, J. C., Yam, R. C., & Mok, C. K. (2005). Collaboration between industry and research institutes/universities on industrial innovation in Beijing. Technology Analysis & Strategic Management, 17(3), 339–353.
Hane, G. (1999). Comparing university–industry linkages in the United States and Japan. In L. M. Branscomb, F. Kodama, & R. Florida (Eds.), Industrializing knowledge: University–industry linkages in Japan and the United States (pp. 20–61). Cambridge, MA and London: MIT Press.
Henderson, R., Jaffe, A. B., & Trajtenberg, M. (1998). Universities as a source of commercial technology: A detailed analysis of university patenting, 1965–1988. Review of Economics and Statistics, 80(1), 119–127.
Hershberg, E., Nabeshima, K., & Yusuf, S. (2007). Opening the Ivory Tower to business: University–industry linkages and the development of knowledge-intensive clusters in Asian cities. World Development, 35(6), 931–940.
Hsiung, D.-I. (2002). An evaluation of China’s science & technology system and its impact on the research community. A Special Report for the Environment, Science & Technology Section of U.S. Embassy, Beijing, China.
Hu, A. G. Z., & Jefferson, G. H. (2004, November 5–7). Science and technology in China. Paper presented at Conference 2—China’s Economic Transition: Origins, Mechanisms, and Consequences, Pittsburgh.
Institute of Scientific and Technical Information of China (ISTIC). (2004, 2005, 2006). China S&T paper and citation report, 2003, 2004, 2005. Retrieved October 12, 2008 from http://www.istic.ac.cn.
Jackson, S., & Audretsch, D. B. (2004). The Indiana University Advanced Research and Technology Institute: A case study. The Journal of Technology Transfer, 29, 119–124. doi:10.1023/B:JOTT.0000019534.32207.2c.
Jensen, R., & Thursby, M. (2001). Proofs and prototypes for sale: The licensing of university inventions. The American Economic Review, 91(1), 240–259.
Kneller, R. (2007). The beginning of university entrepreneurship in Japan: TLOs and bioventures lead the way. The Journal of Technology Transfer, 32(4), 435–456.
Kodama, F., & Branscomb, L. M. (1999). University research as an engine for growth: How realistic is the vision? In M. B. Lewis, F. Kodama, & R. Florida (Eds.), Industrializing knowledge: University–industry linkages in Japan and the United States (pp. 3–19). Cambridge, MA and London: MIT Press.
Kroll, H., & Liefner, I. (2008). Spin-off enterprises as a means of technology commercialisation in a transforming economy—evidence from three universities in China. Technovation, 28(5), 298–313.
Link, A. N., & Scott, J. T. (2003). U.S. Science Parks: The diffusion of an innovation and its effects on the academic missions of universities. International Journal of Industrial Organization, 21(9), 1323–1356. doi:10.1016/S0167-7187(03)00085-7.
Link, A. N., & Siegel, D. S. (2007). Innovation, entrepreneurship, and technological change. Oxford, UK: Oxford University Press.
Liu, H., & Jiang, Y. (2001). Technology transfer from higher education institutions to industry in China: Nature and implications. Technovation, 21(3), 175–188.
Liu, X., & Lundin, N. (2007). Toward a market-based open innovation system of China. Retrieved October 3, 2008 from http://www.globelicsacademy.net/2007/papers/Xielin%20Liu%20Paper%201.pdf.
Liu, X., & White, S. (2000). China's national innovation system in transition: An activity-based analysis. Paper presented at the Sino-U.S. Conference on Technological Innovation, Beijing, April 24–26.
Ma, W. (2004). From Berkeley to Beida and Tsinghua: The development and governance of public research universities in the US and China (cong Berkeley dao beida qinghua: zhong mei gongli yanjiuxing daxue jianshe yu yunxing). Beijing: Educational Science Press.
Mei, M. (2004, September 7–8). Innovation feedback: Interactive development in research universities and their science parks. Paper presented at the symposium on University, Research Institute and Industry Relations in the U.S., Taiwan and Mainland China, Stanford Project on Regions of Innovation and Entrepreneurship, Palo Alto, CA.
Ministry of Education (MOE). (various years). China University Science and Technology annual report. Beijing, China: Higher Education Press; Retrieved November 15, 2007 from http://www.cutech.edu.cn.
Ministry of Science and Technology (MOST). (various years). China S&T statistical databook. Retrieved June 19, 2008 from http://www.most.gov.cn.
Motohashi, K. (2006). China’s national innovation system reform and growing science industry linkage. Asian Journal of Technology Innovation, 14(2), 49–65.
Mowery, D. C., Nelson, R. R., Sampat, B. N., & Ziedonis, A. A. (2004). ‘Ivory Tower’ and industrial innovation: University–industry technology transfer before and after the Bayh-Dole Act. Stanford: Stanford University Press.
Nanjing University. (2005). Nanjing University Science and Technology (S&T) yearbook. Nanjing: Nanjing University.
National Academy of Engineering. (2003). The impact off academic research on industrial performance. Washington, DC: The National Academies Press.
National Science Foundation (NSF)—Tokyo Regional Office. (2000). R&D and the knowledge-based society. In Proceedings of the October 1999 Sino-U.S. Science Policy Seminar, Beijing, People’s Republic of China, October 24–26, 1999.
O’Shea, R. P., Chugh, H., & Allen, T. J. (2008). Determinants and consequences of university spinoff activity: A conceptual framework. The Journal of Technology Transfer, 33(6), 653–666.
Owen-Smith, J., Riccaboni, M., Pammolli, F., & Powell, W. W. (2002). A comparison of U.S. and European university–industry relations in the life sciences. Management Science, 48(1), 24–43.
Ponomariov, B. L. (2008). Effects of university characteristics on scientists’ interactions with the private sector: An exploratory assessment. The Journal of Technology Transfer, 33(5), 485–503.
Poyago-Theotoky, J., Beath, J., & Siegel, D. S. (2002). Universities and fundamental research: Reflections on the growth of university–industry partnerships. Oxford Review of Economic Policy, 18(1), 10–21. doi:10.1093/oxrep/18.1.10.
Renault, C. S. (2006). Academic capitalism and university incentives for faculty entrepreneurship. The Journal of Technology Transfer, 31(2), 227–239.
Shane, S. A. (2004). Academic entrepreneurship: University spinoffs and wealth creation. Cheltenham, UK; Northampton, MA: Edward Elgar.
Shanghai Chamber of Commerce. (2006). The private economy in Shanghai. Shanghai: Shanghai University of Finance Press.
Shanghai Jiaotong University (SJTU). (various years). Shanghai Jiaotong University yearbook. Shanghai: Shanghai Jiaotong University.
Sigurdson, J., Jiang, J., Kong, X., Wang, Y., & Tang, Y. (2005). Technological superpower China. Cheltenham, UK, Northampton, MA: Edward Elgar Publishing.
Song, J. (2004, September 7–8). How Tsinghua manages its companies. Paper presented at the symposium on University, Research Institute and Industry Relations in the U.S., Taiwan and Mainland China, Stanford Project on Regions of Innovation and Entrepreneurship, Palo Alto, CA.
Sun, Y. (2000). Spatial distribution of patents in China. Regional Studies, 34(5), 441–454.
Suttmeier, R. P., & Cao, C. (1999). China faces the new industrial revolution: Achievement and uncertainty in the search for research and innovation strategies. Asian Perspective, 23, 3.
Swamidass, P. M., & Vulasa, V. (2008). Why university inventions rarely produce income? Bottlenecks in university technology transfer. The Journal of Technology Transfer, Published online: December 4.
Tang, M.-F. (2006, October 4–7). A comparative study on the role of National Technology Transfer Centers in different Chinese universities. Presented at the GLOBELICS 2006 (Global Network for Economics of Learning, Innovation, and Competence Building Systems), Thiruvanathapuram, India.
Thursby, J. G., & Thursby, M. C. (2000). Who is selling the Ivory Tower? Sources of growth in university licensing. NBER Working Paper 7718. Cambridge, MA: National Bureau of Economic Research.
Thursby, J. G., & Thursby, M. C. (2004). Are faculty critical? Their role in university–industry licensing. Contemporary Economic Policy, 22(2), 162–178.
Walcott, S. (2003). Chinese science and technology industrial parks. Burlington, VT: Ashgate Publishing Limited.
Wolson, R. A. (2007). The role of technology transfer offices in building the South African biotechnology sector: An assessment of policies, practices and impact. The Journal of Technology Transfer, 32(4), 343–365.
Woolgar, L. (2007). New institutional policies for university–industry links in Japan. Research Policy, 36(8), 1261–1274.
Wright, M., Clarysse, B., Lockett, A., & Knockaert, M. (2008). Mid-range universities’ linkages with industry: Knowledge types and the role of intermediaries. Research Policy, 37(8), 1205–1223.
Wu, W. (2007). Cultivating research universities and industrial linkages: The case of Shanghai, China. World Development, 35(6), 1075–1093.
Xue, L. (2004, September 7–8). University–market linkages in China: The case of university-affiliated enterprises. Paper presented at the symposium on University, Research Institute and Industry Relations in the U.S., Taiwan and Mainland China, Stanford Project on Regions of Innovation and Entrepreneurship, Palo Alto, CA.
Yang, J., & Xu, X. (2004). The theory and practice of university enterprise security (gaoxiao chanye anquan de lilun yu yanjiu). Beijing: China Economics Press.
Yoshihara, M., & Tamai, K. (1999). Lack of incentive and persisting constraints: Factors hindering technology transfer at Japanese universities. In L. M. Branscomb, F. Kodama, & R. Florida (Eds.), Industrializing knowledge: University–industry linkages in Japan and the United States (pp. 348–364). Cambridge, MA and London: MIT Press.
Yusuf, S., & Nabeshima, K. (Eds.). (2007). How universities promote growth. World Bank directions in development series. Washington, DC: The World Bank.
Zhang, J. (2003). The development of high-tech enterprises in China’s universities (zhongguo gaixiao gaoxin jishu chanye de fazhan yanjiu). Wuhan: Huazhong Science and Technology University Press.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Wu, W. Managing and incentivizing research commercialization in Chinese Universities. J Technol Transf 35, 203–224 (2010). https://doi.org/10.1007/s10961-009-9116-4
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10961-009-9116-4