| Session Title: Bridging Gaps between basic and applied Research and Development and the 'Valley of Death' |
| Multipaper Session 286 to be held in Room 112 in the Convention Center on Thursday, Nov 6, 10:55 AM to 12:25 PM |
| Sponsored by the Research, Technology, and Development Evaluation TIG |
| Chair(s): |
| Yongsuk Jang, Science and Technology Policy Institute, jang@stepi.re.kr |
| Abstract: There is a big gap in applying knowledge produced by basic research to innovative products and services. This gap is often referred to as 'Valley of Death.' Due to many reasons including insufficient financial availability to small and medium enterprises, major actors converting basic knowledge to specific innovations, bridging this 'valley of death' increasingly becomes one of primary foci of science, technology, and innovation policies in almost all countries. Each country however adopts quite different policy measures to bridge the basic and applied research and development. This session first examines the theoretical background of 'valley of death' mainly from the economic perspective to identify various factors that cause this gap. Then it is followed by three country studies that focus on country conditions in terms of 'valley of death' and policy measures to bridge the gap. The selected countries for case studies are Korea, Japan, and Mexico. |
| A Valley of Death in the Innovation Sequence: An Economic Investigation |
| George S Ford, Phoenix Center for Advanced Legal and Economic Public Policy Studies, george.ford@phoenix-center.org |
| Thomas M Koutsky, Phoenix Center for Advanced Legal and Economic Public Policy Studies, tom@koutsky.com |
| Lawrewnce J Spiwak, Phoenix Center for Advanced Legal and Economic Public Policy Studies, lspiwak@phoenix-center.org |
| Innovators and investors alike routinely claim that a 'Valley of Death' exists at intermediate stages of the innovation sequence. Rationalization of this valley is typically limited to the standard explanations for underinvestment in research. But the image of a valley suggests that funding is more readily available for 'early-stage' and 'late stage' research (the 'peaks') than the intermediate stages (the 'valley'). Our economic model implies that this nonlinearity occurs only in the presence of 'noneconomic' investments (such as government expenditures) at early stages, where insufficient attention is given to decisions at later stages. We argue the standard explanations for reduced investment in research cannot produce a valley. We also consider the effect of noneconomic investments on the location of lenders and the risk premium. Our research suggests technology policymakers should study the optimal mix of government support for early-stage and intermediate-stage R&D projects. |
| Organizational Barrier in Bridging the 'Valley of Death' in Korea |
| Yongsuk Jang, Science and Technology Policy Institute, jang@stepi.re.kr |
| During the past few decades, Korea has been quite successful in commercializing the imported technologies primarily through Chaebol companies. As its technological capability has ripened into the advanced level, Korea has invested more resources in basic sciences for endogenous technologies. This progress has introduced the deepening gaps between basic and applied R&D - difficulties in linking university researches to industrial developments especially through SMEs. This paper overviews the Korean 'valley of death' through various statistics and major policy measures to bridge this gap. With emphasis, it also introduces the recent governmental reform - grouping several innovation-related agencies into two major ministries - that has taken place under the new administration and discusses its impact on policy efforts for various innovators to overcome such 'valley of death.' |
| 'Full Research' to Overcome 'Valley of Death' in National Institute of Advanced Industrial Science and Technology (AIST) |
| Osamu Nakamura, National Institute of Advanced Industrial Science and Technology, osamu.nakamura@aist.go.jp |
| In 1990s, the Japanese industries had lost its competitiveness and Japanese economy was in slump in spite of the increased funding in R&D both in private and in public sectors. To overcome these situations, METI has been publishing the 'Strategic Technology Roadmap'. This is designated to show strategies formulated to develop new industries and measures to stimulate demand for a variety of products and services. The missions of AIST are contribution to 1) a sustainable society, 2) industrial competitiveness, 3) local industrial development, and 4) industrial technology policies. For these missions, AIST advances 'Full Research' which is a unique and original research methodology developed by AIST to cover basic researches through applied researches to overcome 'Valley of Death' by creating the multilayered network among industry, academia, and government. Under this concept, selection, integration, and application of knowledge accumulated by discovery and invention have been undertaken to promote product realization. |
| From S&T to Innovation: A Challenge to Mexico |
| Enrique Campos Lopez, Center of Investigation and Assistance in Technology and Design Diseno del Estado de Jalisco, enriquecampos@mac.com |
| Mexico’s Science and Technology policy was established in 1971. Its main objective and policies were to improve human capital, geographical decentralization and physical infrastructure. During the first three decades efforts to bring private sector participation were weak and generally unsuccessful. Mexican S&T remain fragmented with weak links between innovation actors. Indicators such as R&D investment are the lowest within the OECD’s countries. From the eighties Mexico started to open its traditionally closed and protected economy, and to face the competitiveness challenge. To move from a S&T conglomerate to an innovation system became explicit and urgent. The first steps came in 2002, with a new Law of Science and Technology several policies and reinforcing mechanisms (as in tax incentives) appeared to induce private sector participation and creating new mechanisms for innovation at a regional perspective. This paper discuss challenges to transit to an innovation system and the role that regional policies could play. |