How to build succesful partnerships between companies and research institutes

Dries Faems: October 31, 2019

Companies are increasingly collaborating with knowledge institutes to gain access to new inventions that can help the company to innovate successfully. This is not only the case for large technology giants, but also for many SMEs. Current innovation policy also sees cooperation between companies and research institutes as the foundation for creating innovative added value. Around the globe, instruments have therefore been created by policy makers to stimulate collaboration between companies and research institutes for innovation purposes

However, such collaboration remains risky. The collaboration between the SME company Secureview and the Dutch research institute TNO is an illustrative example. This collaboration started as a promising fairy tale to jointly realize new breakthroughs in camera technology. Two years later, however, the collaboration had resulted into a relational nightmare, where a judge ultimately had to decide whether the involved partners had executed their agreed upon obligations.

Based on my own case study research into various high-tech partnerships between companies and research institutes, I point to three important points that can prevent such a debacle. First and foremost, it is essential to make very clear agreements at the start about how the cooperation deals with intellectual property. What knowledge do partners bring to the collaboration and what is the value of this? Who becomes the owner of knowledge developed during the collaboration? How and to what extent can the parties involved make use of this knowledge after the collaboration? When and how can knowledge institutes publish about the results of the collaboration? At the start of the collaboration, it is essential to formulate a clear answer to these questions. Unclear agreements on intellectual property often give rise to conflicts that can quickly turn a trustful relationship into a conflict-laden divorce.

Second, it is important that there is real cooperation in the partnership. This advice may seem trivial, but I often notice how little cooperation there is in partnerships. However, it is the face-to-face interaction in the laboratory or behind the machine that really allows collaborating parties to jointly develop creative solutions. Without this kind of interaction, the possibility of misunderstandings and delays is extensive, which is likely to trigger conflict.

Third, I want to point out the importance of relational bridge builders. Although high-tech projects require a great deal of technical knowledge, there is also a need for relational skills to manage the inherent cultural differences between the company and the research institute. Within companies, several employees might have a professional history in a research institute or university. These employees are often good bridge builders because they can understand and translate the logic and behavior of both partners.

In short, cooperation between companies and knowledge institutes can generate enormous  added value for the development and commercialization of new technologies and products. However, such partnerships require a well-thought-out management approach, in which intellectual property is properly considered, where there is genuine cooperation and where the necessary relational skills are available to avoid potential conflicts.

Prof. Dr. Dries Faems holds the Chair of Entrepreneurship, Innovation, and Technological Transformation at the WHU Otto Beisheim School of Management. He also coordinates the WHU Innovation Ecosystem Hub.