Analysis on some factors that affect cooperation between universities and business organizations (developing nation case: Mongolia)

At defining what affects businesses' and universities' innovative cooperation. In order for the research paper to be conclusive, businesses that work with universities and within those businessess, ones that have been successful have been chosen.

Рубрика Педагогика
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Analysis on some factors that affect cooperation between universities and business organizations (developing nation case: Mongolia)

Enkh-Otgon Dorjgotov1, Oyunjargal Norovsambuu2, Battsetseg Dalkhjav3, Bolor Banzragch4

1Enkh-Otgon Dorjgotov - Dr, Associate Professor;

2Oyunjargal Norovsambuu - Dr, Senior Lecturer;

3Battsetseg Dalkhjav - MBA, University Lecturer;

4Bolor Banzragch - Dr, Associate Professor,

DEPARTMENT OF MANAGEMENT, SCHOOL OF BUSINESS, NATIONAL UNIVERSITY OF MONGOLIA, ULAANBAATAR, MONGOLIA

Abstract

There is a demand for businesses to increase the amount of cooperation and synergy they have with universities especially if such businesses wish to implement the products and and research outcomes in the industrial market in order to increase their revenues, as well as adding strength to their position on the market.

Businesses are able to develop their technological advancements, product quality and economic outcome immensely by working with universities. This helps businesses add to their competitive advantages. Therefore, this research paper aims at defining what affects businesses' and universities' innovative cooperation. In order for the research paper to be conclusive, businesses that work with universities and within those businesses, ones that have been successful have been chosen. The authors took questionnaires and focus group interviews from these businesses. The main research methods are descriptive analysis on today's situation on business-university innovative cooperation and the correlation between the factors that affect the situation. The authors have come to conclusion by how smallmedium businesses are involved with innovative cooperation, the interior and exterior factors affecting them and calculated correlation between these factors.

Keywords: business-university cooperation, ability to implement cooperation, government support, innovation.

Introduction

A tendency for nations to develop knowledge and methods of utilizing it has become the global norm. Nations are more prone to creating economies based on innovation and knowledge. Therefore, most nations' source of development have become knowledge-based technological advances such as highly developed laboratories, well-trained researchers and teachers, as well as university and research company-based implementations.

Business-university (BU) cooperation has become a vital part in a nation's development and on top of this, such activities help both businesses and universities to be able to compete at a new level. Universities are able to utilize their own products in a practical scenery where business use their products. In doing so, universities are able to get funding and financial support. Businesses, on the other hand, are able to increase their ability to compete by implementing the latest technological advancements and knowledge produced by the universities they are in cooperation with. In order to implement and utilize this cooperation between businesses and universities, active willingness to work together from both sides, as well as support from the government are most important. The government assists in the endeavor by financing and supporting the environment in which both parties could work.

Previous researches

Most previous research papers concerning the topic of BU cooperation take both parties as the objects of the paper. Also, many of the papers have looked at the results of innovative cooperation, industrial profits, effects on local economies and society. In the work 'Entrepreneurial activity and regional competitiveness: evidence from European entrepreneurial universities' by Maribel Guerrero, David Urbano and Alain Fayolle, the authors stated 'For a society's economy, BU cooperation has the role of creating new knowledge, but not just that, this action has the effect of instilling business-minds, business institutions and activities. BU cooperation also has the tendency to effect on local competition.' The research paper proved innovative BU cooperation has a main role in affecting local competition. In the Entrepreneurial Universities and Technology Transfer: A Conceptual Framework for Understanding Knowledge-Based Economic Development paper, authors Janet Bercovitz and Maryann Feldmann recommended a way for universities to be more involved in BU cooperation. The theoretical method was based on how newly founded knowledge, knowledge-based economic development are being affected by such cooperation. The main goal for this paper is to define how the outcomes of BU cooperation could be maximized, as well as to find out the role of innovation structure in this matter. Samuel Ankrah and OmarAL-Tabbaa's 'Universities-industry collaboration: A systematic review' paper looks at what affects knowledge-based economies, BU cooperation in particular. The paper defines the 5 principles of BU cooperation. MuHsuanHuang and Dar- ZenChen's 'How can academic innovation performance in university-industry collaboration be improved' explores the methods and principles of the management mechanisms concerning BU cooperation and the factors affecting it.

Research methods

cooperation university business

In this research, 48 businesses were chosen out of the top 100 businesses that were in constant cooperation with universities. The main goal of this paper is to explore today's environment in which BU cooperation is being implement and what factors affect them, as well how these points affect the outcomes of BU cooperation. In figure 1, in accordance with the goal of this paper, we have designed a model. Firstly, concerning the interior situation, businesses' size, business sector, investment in R&D and technological strength are being looked at. From the exterior look, competition on the market, support from the government and their correlation have been focused on. Secondly, how the businesses' interior and exterior situations affect the companies' technological advancement levels, as well as their R&D development steps and life cycle. Thirdly, how the afore mentioned factors affect businesses' willingness to cooperate with universities. Fourthly, how businesses' willingness and initiation affects the cooperation's results. The cooperation results have been classified as technological results, qualitative results and economical results. The results of the technological advancements have been regarded by the average variable and the number of the patents created during the length of the cooperation. This average variable showcases the invisible intangible assets which in turn creates qualitative results. These results are more immediate effects of qualitative results rather than numerical data. This was overlooked by the OECD's paper 'Directorate General for Research and Innovation', shown in the fourth criterion: The researcher is in charge of gathering the workforce, the researcher must work to improve the workers' knowledge and skills, must create a network with partners, must store know-how abilities within the corporation. The economical results have been measured by the amount of increase in sales and revenues during the cooperation.

Fig. 1 Model of Factors Affecting BU Cooperation

Chapter 1. Analysis Exterior and Interior Factors Affecting Businesses' Innovation and Cooperation Tendencies

As businesses grow and develop, they have are more likely to cooperate with universities and research firms, and also increase the amount of investment put into development researches in order to attain the latest technology, gain the upper hand in the product/service competition on the market and increase employee productivity. In accordance with the research model, businesses' size, sector, amount of investment put into R&D and professional workforce reserves have been looked at as potential factors affecting innovative effort, so they have been descriptive analyzed and have been crosstab analyzed.

1.1. Business size: In Mongolia, if a business has 1-9 employee, it is considered to be a mini business, 10-49 employees - small, 50-199 employees - medium and if more than 200 employees - large. Out of the 48 companies mentioned in our paper, 9 are small, 19 are medium and 20 are large companies. During the process of the research, we have noticed that larger the company, the more investment is put into R&D /Table 1/.

Table 1. Business Size and R&D Investment

Business Size

Expenditure on Cooperation with University /1 year/

Total

Per

10-30 mil

30-60 mil

60-90 mil

More than 90 mil

10-49

8

1

0

0

9

18.5%

50-199

15

1

3

0

19

39.5%

Over 200

18

4

5

3

20

42.0%

Total

31

6

8

3

48

1.2. Business Sector: From the companies involved in this research, the ones that are active in two or more sectors, 56.5% were in the industrial sector, 43.5% were in the retail sector, 34.8% were in the service sector. Judging from the results below, companies in the industrial sector, within that sector; food-related businesses, cashmere, textile businesses, hide, leather-related businesses and wooden sculpture businesses were investing more in R&D than rest of the sectors.

Table 2. Business Sectors and Investment in R&D

Business Sector

Expenditure on Cooperation with University /1 year/

Total

Per

10-30 mil

30-60 mil

60-90 mil

More than

90 mil

Industrial

15

3

6

3

27

56.0%

Service

9

2

1

0

12

25.0%

Retail

7

1

1

0

9

19.0%

Total

31

6

8

3

48

1.3 Professional Workforce Reserves: On average per year, 64.7% of the businesses involved in this research paper spend 10-30 mil, 11.8% spent 30-60 mil, 17.6% spent 60-90 mil, 5.9% spend more than 90 mil tugriks on cooperative research projects. Although, we had proposed the possibility of businesses having more professional workforce if they spent more on cooperative research projects, the idea was nullified by the findings, where only 10% of the total workforce was professional.

Table 3. Professional Workforce Amount and R&D Investment

Workforce

Per

Expenditure on Cooperation with University /1 year/

Total

Per

10-30 mil

30-60 mil

60-90 mil

More than 90 mil

1-3%

31.8

9

0

2

0

11

23.0%

3-5%

4.5

5

2

0

0

7

15.0%

6-10%

22.7

9

0

2

0

11

23.0%

11-15%

13.6

4

2

4

1

11

23.0%

20-25%

9.1

0

2

0

0

2

4.0%

25-30%

9.1

0

0

0

2

2

4.0%

More than 30%

9.1

4

0

0

0

4

8.0%

Total

31

6

8

3

48

1.4 Competition on the Market: Competition increases the tendency for a business to develop its competitive edge, new products, new technology, entrepreneurial culture and the amount of investment put into R&D. Although, as companies increased in size, the amount of competition increased, and the correlation between the two were relatively weak. /table 4/

Table 4. Competition on the Market and R&D Investment

Size of Competitor

Business Size

Expenditure on Cooperation with University /1 year/

10-49

50-199

More than 200

10-30 mil

30-60 mil

60-90 mil

More than 90 mil

Monopoly

0

0

2

1

0

0

1

1-3 competitors

1

4

2

3

1

4

0

4-6 competitors

0

5

8

0

12

9

1

7-9 competitors

1

6

3

2

4

3

1

More than 10 competitors

2

4

5

4

2

3

0

Total

9

19

20

9

19

20

3

1.5 Government Support: In order for BU cooperation to develop, the government has a big role. Through close cooperation between universities, businesses and the government, new information, knowledge, technology and intellectual properties are created. New highly technological companies are also created in the process which help the local development and resources to prosper further. This in turn supports the society and economy. Therefore, the authors of this paper have proposed a method of evaluating governments' support with 5 criteria. The businesses involved in the research used the method, and the average results varied from 1.59 to 2.22. From this data, we are able to see that in Mongolia, the government's support for BU cooperation development is not sufficient. The results are visible in table 5.

Table 5. Government Support

Support Methods

N

Mean

Std.

Deviation

1

Financial Support for Implementing Technological R&D

48

1.59

.854

2

Training Engineers and Technological Professionals

48

2.22

1.02

3

Seminars and Conferences on Cooperation

48

2.18

.906

4

System to Connect the Parties Involved in the Innovative Cooperation

48

2.09

.889

5

Creating a Favorable Legal Environment for Cooperation

48

2.04

.973

Chapter 2. Businesses' Technological Uniqueness

Depending on a business' technologies and their developments vary due to the engineers' abilities and the amount of investment put into R&D. Therefore, the company's technology's life cycle varies, as well. In some cases, technology survives for a long time while in some other cases, the life cycle is relatively short. In addition, companies are categorized depending on the level technology that they own; high technology companies that are able to create new products immediately from their own technology; mid-level technology companies that use technology that are being widely used, especially in developed nations; mainstream technology companies that use mainstream products and technology to do business and low technology companies that have little tendency to improve their industrial technology and rely solely on others' technology.

Fig. 1. Graph 1. Level of Industrial Technology

In the life cycle of technologies, the entrance level consists of industries utilizing brand new technology to create a completely new set of products. During this time, the cost of the products may be high and the companies would most certainly not sell their own technology to outsiders. During the rising level, the new technology eventually becomes known and gets used across different companies, so the prices of the products decrease. In order to decrease the costs, industries tend to increase the number of production. When the development level comes around, the products are fully demanded and supplied on the market, so the industries tend to create and produce new products, as well as technology.

Fig. 2. Graph 2. Life Cycle of Technology

Chapter 3. Cooperation Involvement

One of the most important factors that affect the outcome of innovative cooperation is the willingness to cooperate voluntarily. Businesses make a pre-assumption about the outcome of the cooperation and tend to initiate plans concerning the cooperation. Initiating activities concerning the cooperation showcases the business' willingness to be active. Also, it displays whether if the business is in the cooperation for just the name or actually some outcome. Therefore, it is important to look at the factors that affect willingness to volunteer and initiate. Voluntarily initiating activities and plans create positive outcome in most cases. Due to this, it is most advisable to set up a program to let parties be willing to volunteer and initiate. Defining the factors that affect initiation /shown in table 6/, erasing factors that make companies to want to bear only the name of cooperation will be one of the positive outcomes, as well as making accurate decisions. In order to further add more reliability to our research, we have designed a questionnaire to evaluate willingness to volunteer for the companies. Judging from the results, 8.7% very unsatisfactory, 17.4% unsatisfactory, 30.4% somewhat satisfactory, 30.4% satisfactory and 8.7% very satisfactory.

Chapter 4. Factors Affecting the Results of Cooperation and Their Correlation

According to the research conducted, the exterior and interior factors affect companies' technological advances. The authors have proposed a hypothesis stating that in turn these factors will affect the willingness to cooperate, so correlation was calculated between the statements. Results show that depending on the amount of governmental support, companies tend to be very willing and volunteering to cooperate (correlation 0.538 - 0.811). On top of this, the companies' technological advances also increase with the help from the government. Professional workforce's number incensement has almost direct correlation with the life cycle of technology and the competition on the market (0.783 and 0.972 respectively). The amount of investment made for R&D has a correlation of 0.655 with competition on the market, and 0.600 correlation with governmental support, and 0.606 correlation with technology life cycle, 0.702 correlation with innovative initiatives. Governmental support had a direct correlation with companies' technological levels and life cycle. In conclusion, a company's size, R&D investment amount, technology level, life cycle are all strongly correlated with willingness to cooperate and initiate. All of the afore mentioned qualitative and economical outcomes have, for company size 0.693 correlation, for R&D investment 0.656 correlation, government support 0.662 correlation, initiative tendency 0.842 correlation. For the economical outcome, the company size has 0.525 correlation, R&D investment 0.967 correlation, technology life cycle 0.713 correlation, initiative tendency 0.516 correlation and qualitative outcome 0.795 correlation. /table 6/

Table 6. Correlation between Factors

Factors

CS

WF

RDI

MC

GS

TL

TLC

I

QO

EO

Interior

Company Size

1

Workforce

.107

1

R&D Investment

.207

.415

1

Exterior

Market Competition

.460

.972

.655

1

Government Support

.587

.001

.600

.590

1

Technological Uniqueness

Technology Level

.538

.456

.200

.432

.520

1

Technology Life Cycle

.527

.783

.606

.446

.792

.031

1

Cooperation

Willingness

Initiative

.811

.455

.702

.340

.428

.619

.612

1

Results

Qualitative Outcome

.693

.656

.365

.218

.662

.365

.468

.842

1

Economic Outcome

.525

.415

.967

.093

.404

.073

.713

.516

.795

1

Conclusion, recommendation

In the aftermath of the research, our estimations and hypothesis have been proven. Today, businesses are not only ready to cooperate with universities, as we can see from the research paper, depending on the company's size and industrial sector, companies tend invest 30-90 million tugriks into R&D. Even so, the levels of satisfaction in cooperation have been observed to be low. Also, we have come to the following conclusions:

* Businesses not only bring in and utilize new technology as they develop and become bigger companies, they also tend to cooperate with universities and other corporations. In doing so, these businesses are able to get out more profits and revenue (qualitative and economic).

* The government has a big role and a huge effect on how technology develops depending on how much they support this sector. Therefore, the government must create sudden and decisive change concerning this topic.

* In cooperative activities, the parties involved must be willing to volunteer and initiate things in order to create the most amount of profit and open the way for development in the future.

The act of conducting this research opens the path for future researches to learn more about this sector.

References

1. Ganzorig Ch. Results of research University - Industry cooperation in Mongolia, Ch Ganzorig, Ulaanbaatar, 2012. 5-15 p.

2. Davaasuren B. Results of research Business Environment of Mongolia / B. Davaasuren. Ulaanbaatar, 2018. 12-20p.

3. Ministry of Education and Science / Development program of research-based university, 2018.

4. Government of Mongolia, / Development Program of Mongolian National Innovation System 2008-2015”, 2008.

5. Sonintamir N., Oyunjargal N., Batdelger N., Batkhuyag D. Study on innovation and legal environment / N. Sonintamir, N. Oyunjargal. N. Batdelger, D Batkhuyag. Business and Innovation magazine, NUM - Business School, 2018/06 (12). Р. 3-8.

6. Jon Sog Kyu. Industry-University Cooperation for the Creation of Local Government R&D / Jon Sog Kyu, Balanced development, 2014. 45-57 p.

7. Status and Improvement of Industry-University Cooperation / Federation of Korean Industries, 2010. 15-20 p.

8. Industry-University- Cooperation and Policy Tasks, / Science and Technology Policy Institute, Ministry of Strategy and Finance, 2015. 112-119.

9. R & D cooperation status and major issues, / Korea Science and Technology Planning Agency, 2012-225-253 p.

10. Promotion of enterprise cooperation between industry and academia / Korea Industrial Technology Foundation, 2008.

11. Jun De Ky. The impact of the increase in university-industry cooperation research on the development of university, / Jun De Ky, Paper, 2013. 45-55 p.

12. Kang In-Seon. Effective University-Industry Cooperation. / Kang In-Seon, Korean Business Association Fall Conference, 2005.

13. Industry-Academia Collaboration Policy, / Industry Research Report, 2016. 15-24 p.

14. Riccardo Crescenzi, Andrea Filippetti, Simona lammarino. Academic inventors: collaboration and proximity with industry, 2017.

15. Enrico Guzzini1, Donato Iacobucci. Project failures and innovation performance in university-firm collaborations”, 2017.

16. Business Innovation, Mapping Australian Science and Innovation, 2003.

17. New concept of Innovation, The keys to a Growing Australia, 2008.

18. Young Bu Kim. Impact of Industrial University cooperation adherency degree and cooperation degree configuration variable on satisfaction, / Young Bu Kim. [Electronic Resource]. URL: http://dx.doi.org/10.5762/KAIS.2016.17.9.359/ (date of access: 04.12.2019).

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