Shaping Policy Environments: The Tale of Two Open Research Networks

Collaborative research networks comprised of heterogeneous entities (firms of different sizes, university and national research institutes) for knowledge exploration represent one network form of open innovation (OI). Such... [ view full abstract ]

Collaborative research networks comprised of heterogeneous entities (firms of different sizes, university and national research institutes) for knowledge exploration represent one network form of open innovation (OI). Such collaborations can have enormous economic and social benefits because they open up innovation and can create positive externalities that can extend beyond the organizations involved in any specific innovation (Roper et al., 2014). But the viability of such OI forms is influenced by the favorable and unfavorable evaluations of their activities by public and private funding sources. There have been calls for the national innovation system to establish policies to support such new kinds of multiparty collaborations (de Jong et al., 2010; Wang et al., 2012). However evaluation of such new kinds of polices and their effect is challenging as there are few benchmarks. Favorable evaluation is also based on how the new collaborative forms develop their activities and the legitimacy they gain.

In this research, we set out to explore the question of how a newly formed open collaborative research network can shape the policy environment to its advantage. In the literature, shaping practices are focused on how firms influence their environment including regulations and policy actors in their favor (Navis and Glynn, 2011; Santos and Eisenhardt, 2011; Lawton et al., 2016). When the organization’s existence is partly due to policy influence such as tax, grants, subsidies, or regulatory reliefs, the focus is on influencing policy actors’ interpretations of why public funding should be spent on the organizational activities. A number of overt and covert influence and manipulation tactics by firms in regards to institutional environment have been discussed (e.g., Lawton et al., 2013); Kingley et al., 2013; Ahuja and Yayavaram, 2011).

Research Context

Our study involved a qualitative longitudinal field study of two research networks ranging from the start of their founding in late 2008 and early 2009 until 2014. The two research networks were the Metals and Engineering Strategic Network (ME) and the Energy and Environment Cluster (CT). ME brought together the large industry and university members of an established industry in Finland. CT was a cross-industry research network that focused on the energy and environment industry sectors. Many of the same firms and research institutes participated in both research networks and both were under the same high-level (national) governance. 50% of the funding for research programs was to come from firms and 50% from public funding agency.

The new networks were formed as part of a major shift in national innovation policy from government to industry led research. The research networks were given freedom to organize themselves in what they considered best.

Data Collection

The data collection included interviews with over sixty individuals (executive level, board level, research program management at the public funding agency, as well as ME and CT), archival records, observations in annual meetings and strategy meetings. Because of the concurrent (as opposed to retrospective) longitudinal nature of our study, we were able to shed insight to the practices that the networks used to respond to policies as well as to shape them. We expect to complete the analysis of all the data by the end of June 2016.

Preliminary Findings

The shift of stewardship from government to industry-led research created much ambiguity regarding the goals and priorities such as how ambitious and how long term the research should be. It also created ambiguity with regards to the role of the public funding agency in controlling these new research networks. During the six years of our study, there were shifts in public funding rules and their interpretations.. For example, a major shift occurred in terms of expectations of research outputs and their diffusion and commercialization. Another shift involved the research networks’ autonomy in terms of the research agenda. Any earned legitimacy was on vulnerable grounds requiring practices that continuously projected legitimacy to key stakeholders. But it was far from clear what practices would be confirming versus dissenting policy.

One of the networks (ME) was able to deploy practices to accommodate to unstable policy environment and was viewed favorably by policy actors. The other (CT) was less successful. CT was merged into another network in 2015.

ME garned influence with policy actors early on. This influence as well as its pragmatic approach helped it to get an early favorable assessment. The ME practices juxtaposed both openness and legitimacy. ME governance was heavily reliant on transparency practices. These transparency practices were heavily relational. ME was able to be understood by policy makers, which helped it to gain cognitive legitimacy. As the policy makers began to take some control back, ME accommodated by involving the policy makers in decision making and emphasizing academic involvement and other spillover effects. The juxtaposing of participative governance with pragmatic moves helped the network align with policy. As the network was able to secure public resources, the network increased its heterogeneity and extended its activities in anticipation of the shifts in policy. Also, placement of key individuals in assessment committees helped it to gain moral legitimacy in the pursuit of national competitiveness.

The other network focused much less on transparency and relational mechanisms. Instead CT from its inception and over the course focused on establishing structural practices, such as formalized processes for preparing and setting up programs, formalized evaluation practices with outside external committees. With the focusing on structural practices CT failed to gain pragmatic, cognitive, and moral legitimacy with the policy makers.

Our cases exposes how the industry actors used different shaping practices and with differing success. Relational mechanisms were much more influential than structural mechanisms. There was a short window to establish the influence and then continuously to reinforce and signal it to maintain the endorsement and support from policy makers particularly under highly competitive and undefined policy environments.

The data analysis is in final stages and will be completed by the end of June 2016. Hence, the findings will be ready to be presented by August 1.