As the probability that basic scientific discoveries yield industrial applications declines, firm-based basic research becomes increasingly difficult to sustain. 

This paper develops a theory of university-firm collaboration that explains how outsourcing early-stage R&D can extend the private viability of innovation by allowing efficiency gains from leveraging organizational differences to be realized, provided that the appropriate intellectual property institutions are in place. 

The key mechanism is appropriative complementarity: firms appropriate value through exclusive industrial use and follow-on technological development, whereas universities appropriate value through the public disclosure of discoveries that signal faculty knowledge and support instructional revenues. Because these appropriative channels are distinct, neither disclosure nor exclusivity alone is sufficient to make university-firm collaboration privately efficient. We argue that the Bayh-Dole Act of 1980 – which extended patent rights to universities, allowing disclosure and exclusivity to coexist – can therefore be interpreted as a response to declining R&D productivity that relaxed the private viability constraint on innovation by enabling university-firm collaborations to jointly realize returns from both appropriative channels.

Public funding of academic science has long been premised on the idea that scientists are best left to govern and direct themselves.

There is growing unease with this idea, and mission-driven research—a broad set of policy ideas for funding this science, each imposing “direction” on the scientific enterprise—has become increasingly popular. Based on a comprehensive review of the literature on mission-driven research and its cognates, we offer an analysis of the role it might play in Canada as well as a stricter definition that we hope will be more useful to scientists, policymakers, and society in figuring out how Canadian science can move forward. 

Mission Driven Research is planned from its inception to develop a specific technology or capability, that will meet an urgent, emergent and specific social need, for a functionally specifiable end- or first-user. These technologies or capabilities will be socially beneficial if realized, and temporally and productively unlikely under scientific serendipity. They thus require institutional coordination, strategic direction and new resource assembly.

Our conclusions are broadly supportive of missions as precision, targeted tools but not as a panacea for all the challenges we face.