Release date: Dec. 12, 2006

University Quality Key to Saving Corporate R&D from Offshoring

Elaine Justice: 404-727-0643, elaine.justice@emory.edu
Brad Dixon: 404-894-3943. brad.dixon@mgt.gatech.edu

"Excellence and accessibility of research universities" is a central factor for the United States and other developed economies that wish to maintain their cutting edge in corporate research, according to a new study published in the journal Science by economists Jerry Thursby of Emory University and Marie Thursby of Georgia Tech College of Management.

And although corporate research and development operations are increasingly moving to emerging economies such as those in India and China, companies continue to keep the majority of their cutting-edge research and development (R&D) in developed nations, the study found.

The researchers surveyed 249 R&D-intensive companies headquartered in the United States and Western Europe, finding that 49.6 percent of the R&D effort in developed nations is for new science while the proportion in emerging countries is 22 percent. The researchers distinguish “new science” R&D from the application of “familiar” sciences already in use by a company and/or its competitors.

In a similar study that the researchers conducted earlier this year of 249 R&D intensive companies, "lower R&D cost in emerging economies was not the main reason" that companies are taking R&D abroad, they said. The reasons are more complex; "market factors, collaboration with university scientists, and quality of R&D personnel were all at least as important as cost," they said.

The economists said these studies were spurred by recent concerns over "the decline in U.S. share of patents and the growth of corporate spending on research and development (R&D) in emerging countries like China and India." They wanted to examine more closely what is driving American companies to conduct R&D in these countries "and the implications for future competitiveness."

In their latest study released today, the economists argue that "appropriate policies in the face of globalization should focus, not only on the factors affecting location, but also on the type or R&D conducted." They showed that "the type of industrial R&D differs substantially in developed versus emerging country sites"

Their most striking finding is that the "presence of university faculty with special expertise and ease of collaboration with universities" ultimately "had the strongest impact on the type of science conducted."

The researchers warned, however, that the ease of collaboration with universities in the U.S. and other developed economies is open to change: "U.S. universities have become more aggressive in negotiating IP terms," they said, which could change corporate sentiment to favor emerging economies.

For more information, contact Jerry Thursday at 404-712-8688, jthursb@emory.edu, or Marie Thursby at 404-894-6249,

Emory University is one of the nation’s leading private research universities and a member of the Association of American Universities. Emory is known for its demanding academics, outstanding undergraduate college of arts and sciences, highly ranked professional schools and state-of-the-art research facilities. Emory is ranked as one of the country's top 20 national universities by U.S. News & World Report. In addition to its nine schools, the university encompasses The Carter Center, Yerkes National Primate Research Center and Emory Healthcare, the state's largest and most comprehensive health care system.

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