The Influence of Federal Laboratory R&D on Industrial Research

Although federal laboratory research accounts for 14percent of United States research and development, few investigators haveconsidered the influence of federal laboratory R&D on industrialresearch.The literature on endogenous R&D spillovers suggests thatCooperative Research and Development Agreements (CRADAs), which are legalcontracts that enable federal laboratories to conduct joint research withfirms, are the principal means by which federal labs influence the patentingand company-financed R&D of industrial labs. Data was drawn from a 1996 survey of 220 industrial R&D laboratories andfrom a 1998 survey of 97% of the non-Department of Defense federal andfederally-funded government laboratories.Results indicated that theinfluence of federal laboratories on industrial patenting and R&D dependson the degree of interaction between the two types of labs.CRADAsrequired intensive interaction between firms and federal labs and significantlyincreased patents, as well as the company-financed and publicly funded labbudget. Government contractor interactions, by contrast, had littleeffect on patents and no effect on industrial R&D, although federallyfunded R&D did increase.These findings suggested that governmentlaboratories had an effect only when there is significant interaction among theparties.Because CRADAs required effort and active participation from bothfirms and federal labs, they were beneficial to firms in both theory andpractice.(SAA)