Commercialization of government funded R&D: Follow-up research survey on NEDO research projects

This paper draws on data obtained from a questionnaire survey conducted for the 242 private R&D projects supported by NEDO (New Energy and Industrial Technology Development Organization), Japan's public management organization promoting R&D, to explore how dependence on government support affects processes of private R&D projects and, in turn, the performance and commercialization of developed technologies. Our analyses show that projects receiving more than a half of their entire R&D expenditures from NEDO tend to be isolated from in-house departments. Such isolation, derived mainly from the projects' unique positions in "double dependence" structures, negatively affects project performance, especially those related to commercialization, in two ways. First, high dependence on government resources prevents project members from interacting with people outside the project within the company. This inhibits project members from effectively leveraging internal resources both technological and human to overcome technological problems. Secondly, such high dependence weakens internal controls over project activities. This causes delayed development of marketable technologies and makes it difficult for projects to achieve justification for further investment required for commercialization. Our findings suggest that for successful R&D leading to commercialization, both companies and public funding agencies should encourage projects to maintain close relationships with other internal departments.