Decouple, graphically

A few days ago I wrote a brief post about decoupling academic research from industrial development. A few people have asked me about it; it seems that I didn’t make it clear enough.

Look at this picture:

My R&D Model

My R&D Model


This picture corresponds to an ideal world, not to our reality. In the diagram, circles represent activities and rectangles represent entities. The three large coloured rectangles represent the dynamics of individuals (blue), academic research (green) and industrial development (red). Solid arrows depict the sequence of activities, and dashed arrows depict contents (such as information or things) being deposited into or taken from entities.

For example, look at the top third of the diagram. Individuals earn money according to their socioeconomic context, and employ this money to buy products from the market and pay taxes that contribute to the available public research funds.

Similarly, the middle third of the diagram shows how academia designs research proposals according to the socioeconomic context and any available outcomes of prior research efforts, obtain funds from public sources, perform their research, and finally disseminate the outcomes back to the research outcome pool.

Industry works as shown by the bottom third of the diagram. Market needs are determined first, according (again) to the socioeconomic context and the current characteristics of the market. Then, products are specified, and the research outcome pool is examined in search of potentially useful items that could help develop the specified product. Whether or not research outcomes are selected, the product is developed and marketed.

Notice how academia and industry operate in separate, loosely-coupled loops. This is the key point in my argument: decoupling. Inputs to the academic loop are the socioeconomic context, the research outcome pool and the public funds. No market needs whatsoever. Inputs to the industry development loop are the socioeconomic context, the markets and the research outcome pool. No public funds whatsoever.

The loose coupling between the two loops occurs via the research outcome pool, which is maintained by academia and exploited by academia and industry. In this scenario, R&D departments of industry would re-focus on technological surveilance and research outcome exploitation rather than performing “real” research.

The major consequences of this model are two. First, no public funds flow directly into industry, which, from my point of view, is fair; companies should pay for their own work. Second, research outcomes belong to the public domain and can be exploited by anybody; the best products will be developed by the most competent companies, not by those who manage to obtain better public funding.

Should we keep dreaming?


2 Responses to “Decouple, graphically”

  1. 1 oldnil 21 July 2008 at 19:27

    Your post caught my eye. As a firm believer in economics, I think it’s a little naive for you to think that “the best products will be developed by the most competent companies.” Firms are in the business of making profits, and as such will seek the most profitable way to develop products. Free money in the form of public funding will certainly aid them in that cause. Also, research outcomes do not “belong to the public domain.” The US Patent office defends the rights of an individual’s intellectual property. Between the lines it sounds like you’re saying that publicly funded research projects yield results that are somehow more noble than those developed by profit-seekers. But what was more special about the invention of the telephone, Bell’s bringing it into existence, or the corporation who made if affordable to put one in every household worldwide? Public funding, whether it funds small labs or larger corporations is available to the public for the purpose of innovation.

    Keep dreaming.

  2. 2 cesargon 21 July 2008 at 19:54

    We need to differentiate between two things: the world in which we live, and the ideal world in which I would like to live. I am aware they are different things. Also, I fully acknowledge the value and need for private companies; I don’t mean to say that they are not important in our society. I myself have started two of them, and I firmly believe in private entrepreneurship as a mechanism of advancing the economy.
    I will try to answer your points now.
    First of all, my statement that “the best products will be developed by the most competent companies” is made in the context of the ideal world where I would like to live, rather than in the world where we live; therefore, I don’t think it’s naive to think like that. Since companies would not have access to public funding at all, and assuming that they would operate within legality, then only competence would determine who wins and who loses. Fair, isn’t it?
    Regarding the US Patents Office, well… It’s just the USA. Just one country. The US Patents Office has no jurisdiction over most of the world. In my ideal world, which I am proposing, which I am dreaming of, research outcomes would not be patentable. Commercial designs would be, but not research outcomes.
    Then you say that I seem to imply that publicly funded research projects yield results that are somehow more noble than those developed by profit-seekers. No, I didn not mean that. However, I do believe that publicly funded research projects yield better and more consistent results than those developed by profit-seekers, since the latter are, by definition, oriented towards seekinf profit rather than research outcomes. These two things (profits and research outcomes) are most often than not irreconcilable in the short term. Maybe in the 1950s and 1960s some companies in the USA used to do real research; nowadays, it’s all oriented to seeking profit: the solution space is poorly explored, only short-term benefit is sought, and no long-term investments are ever made.
    And regarding your question about Bell and the telephone, I think that both Bell himself and the company need recognition. Bell was a genius for coming up with the idea. The company was crucial to its commercial success. But don’t forget that Bell and this company existed in the real world. And I am talking in this post about an ideal world that I am dreaming of.
    So, yes, I keep dreaming 🙂

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