How do Influences of Funding and Funded Organizations Affect Performance of Publicly-Supported Private R&D Projects?

Abstract

This paper explores the factors leading to the success of publicly-funded private R&D projects by analyzing survey data obtained from 506 projects supported by NEDO (New Energy and Industrial Technology Development Organization), Japan's public funding organization under Mistry of Economy, Trade and Industry (METI). We examined how involvement of both the funded firm and the funding organization in the project affects the project's commercialization performance. Our analyses showed that the project with higher strategic importance and stronger executive involvement was beneficial since it enabled the project to effectively leverage the company's internal resources. On the other hand, the funding organization's involvement had positive effects on performance only when the company showed low commitment to and weak involvement in the project; it had no or negative effect on performance with higher commitment and involvement from the company side. Our findings suggest that the success or failure of the publicly-funded private R&D is greatly related to the strategic position of the project within the company. This implies that assessing the company's in-house factors in addition to the potential of a technology is important in selecting funding projects, and that the funding organization should find an appropriate way of managing the project depending on project's strategic position.