Hand in hand to Nowhereland? How the resource dependence of research institutes influences their co-evolution with industry

Abstract The linkages between science and industry have long been of interest to scholars studying technological change. Recent studies demonstrate that resource exchange between science and industry may lead to patterns of co-evolution, with major implications for the rate and direction of innovation. However, we currently know very little about how the dynamics of co-evolution between research institutes and industry are influenced by organizational characteristics. To address this shortcoming, in this paper we draw on a comparative case study of the world's two largest research institutes for solar photovoltaic power and study how differences in their financial resource dependence influence patterns of co-evolution. We demonstrate that when a research institute is heavily reliant on industry funding, it leads to close co-evolution of science and industry, thereby raising the risk of a mutual lock-in into specific technologies. A heavy reliance on public funding, on the other hand, contributes to the decoupling of science and industry evolution, which entails the risk of research having limited impact on practice. By developing a framework that shows how co-evolution between science and industry is affected by resource dependence, our study contributes to the literature on science-industry collaboration, co-evolution, and technological paradigms. Moreover, our study bears important implications for policy makers and managers of research institutes interested in spurring technological change.