The economics of knowledge interaction and the changing role of universities

Within advanced economies, based upon the production and use of services, the organization and implementation of interactions between a variety of business partners and institutions becomes a central issue in the generation and dissemination of knowledge. The new understanding of the dynamics of knowledge generation parallels major institutional and organizational changes in the universities’ characteristics and modes of operation. University-industry relationships gain relevance in the economics of innovation as an interesting case where the market provision of knowledge-based services and the sharing of localized competence and idiosyncratic expertise among heterogeneous agents with distinct and limited competencies provide the foundations for the generation of further new knowledge. Elaborating upon data for Italian regions, we provide evidence of a positive relationship between scientific production in universities and private R&D performed by firms. Our argument supports the increasing emphasis given to university-industry collaborations as appropriate strategies aiming at the exploitation of the positive feedbacks between academic research and industrial R&D.