Study: More Pushing Outsourcing Than Saving CostsStudy: More Pushing Outsourcing Than Saving Costs

MANHASSET, N.Y. — Contrary to popular belief, intellectual capital and university collaboration, not just lower costs, are driving companies to locate R&D activities outside their home country, according to a study sponsored by the Ewing Marion Kauffman Foundation.

The study, released at a meeting of the Government-University-Industry Research Roundtable of the National Academies, was conducted by Marie Thursby, Professor of Strategic Management, Georgia Tech College of Management, and Jerry Thursby, chairman of the Dept. of Economics, Emory University.

Based on a survey of 229 respondents, the study found that university collaboration was a key factor influencing decisions on locating R&D facilities. Collaboration with universities was a particularly prevalent factor for expanding to emerging countries, even though these countries provide less IP protection.

"The study underscores the critical role universities play in a country’s national innovation system, not just in the training of new scientists and access to the best talent, but in the ease of developing and licensing technology," said Carl Schramm, president and chief executive of the Kauffman Foundation.

More than half of the corporate respondents identifying the U.S. as their home country report they have already or will locate R&D facilities in China and India instead of other developed countries. Of 63 Western European companies responding, 13 plan to expand or locate new R&D facilities in the U.S.

In perhaps a bit of good news for the U.S. and other developed nations, the study indicated that companies will continue to maintain a tight rein around their most cutting-edge research where IP protection is strongest. Only 22 percent of R&D effort in emerging countries is for new science, the study said.