Competition may encourage collaborative research
A recently released report by Battelle Laboratories and R&D Magazine notes that, while the federal government is holding its research expenditures steady, private industry is increasing its commitment to R&D. At the same time, because of increasing pressure on their bottom lines, many companies in highly competitive industries are outsourcing their research to consortia to spread the risks. The use of research consortia has been common practice in regulated industries such as electric, gas and phone utilities, and many assumed the practice would end as competition replaces regulation. Several prominent industry participants question this assumption.
According to the Battelle-R&D Magazine study, Federal government spending for R&D will be about $62.2 billion in 1997, an increase of only one-half percent over 1996. The same forecast estimates industry R&D expenditures to be $120.5 billion in 1997, or 6 percent more than in 1996. Thus, industry is expected to outspend the government in research by nearly 2-to-1. The study also identifies as a Omajor trendO the finding that Oindustry will continue to emphasize various forms of partnering and collaborations, including relationships with other industry, federal laboratories, and both captive and free-standing offshore facilities.O
In a recent Electric Power Research Institute (EPRI) Journal article, Ric Rudman, EPRI?s chief operating officer, echoes the Battelle findings. Rudman said, OIf you look at industries where competition is very robust, you see many examples of productive collaboration. Consider the race to develop flat-panel displays?one of the most competitive areas you can find … the collaborative development work went very well, and all five companies are now selling new, platform-compliant products.O According to Rudman, Ocollaborative R&D is narrowing its focus to what are being called generic or enabling technologies?core concepts (like superconductivity and power electronics) that will create numerous new opportunities for products and services.O
Some utilities find opportunities for collaboration beyond their traditional participation in EPRI. In the IEEE Spectrum for January, Bob Bell, Consolidated Edison Co. vice president for R&D, suggested that the industry should make better use of the federal government?s resources. Dr. Edward Beardsworth is helping utilities do just that. Beardsworth, a Palo Alto, Calif.-based consultant and former EPRI staff member, conducts what he calls a OUtility Federal Technology OpportunitiesO study on behalf of his 14 utility clients, including one European company.
Beardsworth visits the national laboratories to identify the knowledge and capabilities his clients can utilize, briefs his clients on the opportunities for collaborative research and on technologies that can be licensed for commercial development, and acts as a liaison to solve problems and facilitate joint projects. Beardsworth has found that in these days of shrinking federal research expenditures, the national labs welcome such opportunities to share their expertise.
Companies? needs to establish a competitive advantage will drive their research, but that does not sound the death knell for collaborative R&D in the utility business. According to Rudman, Othere are still the traditional benefits of collaborative R&D. Spreading risks, pooling resources, leveraging R&D funds, shortening production cycles and speeding innovation?all of these become even more valuable when companies are under pressure to innovate and still keep costs down.O