Fact of the Week: Start-ups That Utilize Public Research Institutes are 5.3 Percentage Points More Likely to Innovate

Source: Albert Link, Cody Morris, and Martijn van Hasselt, “The Impact of the Third Sector of R&D on the Innovative Performance of Entrepreneurial Firms,” UNCG Economics Working Papers No 20-2, April 2020, University of North Carolina at Greensboro.

Commentary: Public research institutes (PRIs) are government-owned non-academic centers designed to collaborate with other research groups. They are a key complement to firms’ own R&D investments, although they are often overshadowed. A recent study sought to rectify that, examining the research behaviors of more than 4,000 European start-ups in knowledge-intensive industries. Controlling for industry, firm size, and R&D intensity, it found that firms that cite PRIs as an important source of knowledge are 5.3 percentage points more likely to introduce new or significantly improved goods or services over a three-year period.