STRETCHING THE KNOWLEDGE-BASE OF THE ENTERPRISE THROUGH CONTRACT RESEARCH

Global competition is forcing companies to become more effective in developing new products or processes. One of industry's responses to this challenge is to more extensively tap external sources of technical expertise. As one of the modes of gaining access to external technological knowledge, contract research is discussed. First, the offer and demand in this area are documented. Contract research represents a small, but growing, fraction of companies' R&D efforts. Exceptions are 'young' sectors, such as biotechnology, which require a strong connection with University research. The characteristics of contract research are then presented and illustrated, considering in particular the factors for which it is most effectively utilised. A major advantage is to provide the client company with an extension of its internal R&D for the duration of the contract. It also offers an effective antenna for capturing business as well as technical intelligence. This is especially the case when the company contracts out work far removed from its location or technical base. Finally, the role of contract research in co-generating technology is discussed.