An Investigation of Innovation Capability and University-Industry Collaboration on Innovation Performance: A Case Study of Thailand

Takron Opassuwan
University of Southampton

Vadim Grinevich
University of Southampton

Pelin Demirel
Imperial College London

Katia Pina


Abstract
The literature on University-Industry Collaboration (UIC) has highlighted the importance of firm’s innovation capability on firm’s innovation performance (Choonwoo et al. 2001; Santoro and Bierly 2006; Bierly et al. 2009; Su et al. 2009; Chen et al. 2016; Kobarg et al. 2017). However, despite the prior research on this topic, two main issues remain unexplored. First, prior research has heavily focused on the technological aspect of innovation capability but overlooked the importance of non-technological innovation capability. Hence, focusing on only technological aspect of innovation capability is insufficient to understand the whole picture of how innovation capability plays a role in UIC. Second, the majority of studies tend to overlook the influence of various UIC channels. Failure to address the importance of collaboration governance does not paint a complete picture of UIC practice, since the outcomes of UIC depend on different types of collaboration (Perkmann and Walsh 2009; Arza 2010; Cassiman et al. 2010). This study aims to close the aforementioned research gaps by investigating the influence of UIC and firm’s innovation capability on firm’s innovation performance. This study also examines how innovation capability moderates the relationship between UIC and on innovation performance.
Based on the existing literature on UIC, this study introduces five unique UIC channels namely (1) research partnership, (2) research service, (3) technology transfer, (4) testing and using university facilities and (5) human resource transfer. This research also introduces four types of innovation capability (IC): product IC, process IC, organizational IC and marketing IC, and measures them by adopting factor analysis technique. In addition, innovation performance is measured as sales of new product. For the analysis, the Tobit estimation model is adopted.
For the analysis, this study uses Thailand Community Innovation Survey (CIS) dataset during 2015-2017. Based on a sample of 2,818 innovative firms in manufacturing sector, it is found that all types of innovation capability enhance innovation performance regardless of collaboration with universities. However, among five UIC channels, only human resource transfer facilitates firms in generating new product sales. This result is unique for Thailand and other developing countries that have similar national innovation system to Thailand. Thai university’s policy as well as intellectual property regime makes UIC become less attractive especially through research partnership, research service and technology transfer. In addition, when taking UIC into consideration, different types of innovation capability play different roles on innovation performance. In other words, in a particular UIC channel, not all types of innovation capability are important for achieving better innovation performance.
For the policy implications, policy makers should implement policies in ways that matches firm’s innovation capability and collaboration channels as well as academic researchers’ capabilities. Government should also reconstruct the university bureaucracies and the funding conditions to attract more firms to collaboration with universities. As the findings reveal a positive influence of human resource transfer, the policy should be attentive to promote the collaboration through this channel. Thailand Talent Mobility programme and cooperative education are good examples of effective policy for promoting human resource transfer channel. For managerial implications, managers are suggested to actively build firm innovation capability even though not all types of innovation capability are needed when collaborating with universities since innovation capability is still a major determinant internal capability for in-house R&D to achieve superior performance. In addition, managers are advised to steer innovation capability to collaborate with the universities through the right channel by considering collaboration objectives. Especially for less innovative and SMEs, managers might adopt human resource transfer since this it helps achieve better performance as revealed in this study.
This study contributes to the existing literature on innovation capability and university-industry collaboration in several ways. First, this research investigates the influence of innovation capability from both technological and non-technology perspectives while prior research focuses mainly on technological-based capability (Su et al. 2009; Chen et al. 2016; Garcia-Perez-de-Lema et al. 2017; Kobarg et al. 2017). Second, this study challenges the view that universities in developing countries might be less important for external R&D collaboration. This study shades the light on the circumstances under which collaboration channels and types of innovation capability that help firms increase innovation performance. Lastly, this study extends the literature on UIC in developing countries especially those which university-industry links are weak, and most of firms are small-and-medium and less innovative like Thai firms.