Annual World Bank Conference on Development Economics 2009, Global

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models. It can be instructive to extend and reframe these points through a brief discussion of such collaborations from the perspective of cultural barriers and issues, not only across geographic borders, but also across the cultural borders of the government, academic, and private sectors.

Support for Higher Education One could argue that a key to understanding what drives culture and motivation within higher education is a grasp of the support mechanisms for an institute’s research and education mission. In general, many U.S. universities are recognized as having built strong industrial relations through research and education programs, and so it is sensible to study the U.S. system as a baseline for understanding the broader global environment for the effect of universities on high-technology industries across borders. As illustrated in figure 1 and discussed by Hatakenaka, U.S. university research has grown substantially since World War II, primarily in response to new government funding programs established to advance the technological and manufacturing capabilities of U.S. industry. Beginning with relatively minuscule funding levels in the 1950s, federal support of U.S. university research today spans myriad government agencies providing more than US$40 billion (in constant 2000 dollars) to assist virtually every field of scientific advancement. U.S. research-intensive universities have grown reliant on federal support, which typically funds more than 60 percent of a university’s research base (NSF 2008). Government funding agencies have their individual funding profiles; for example, whereas the Defense Advanced Research Projects Agency (DARPA) tends to fund later stages of research and is, not surprisingly, oriented toward defense applications, the National Institutes of Health (NIH) emphasizes the discovery phase. Nevertheless, the greatest part of government support for university research is targeted toward basic research, which is focused on knowledge discovery rather than on specific, predetermined market applications. The government typically seeds next-generation discoveries, some of which industry can ultimately take to market. This prevalence of government basic research funding dovetails well with university researchers’ quest for basic knowledge. The result is that 75 percent of U.S. university research is defined as basic. There is a stark contrast with the profile of high-technology industry research, only 4 percent of which is categorized as basic (NSF 2008). High-technology industry is driven by market economics to direct its internal resources toward applied research and development; it is focused on meeting a specific market need through development of a product or service and its underlying technology. As Hatakenaka rightly notes, the U.S. government funds basic research at higher education institutions to provide the foundation for fundamental technology breakthroughs for next-generation corporate products—thus establishing a key role for U.S. universities in the overall advancement of technology today and in the future. Universities in several other countries draw a much greater proportion of their funding from industry. For instance, Hatakenaka observes that industry supports more than


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