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University-Industry Research Partnerships in the United States

The recent U.S. experience with the various types of university-industry research relationships is reviewed: the reasons they have increased, the evidence on their performance, and the tensions that have emerged. I argue that the tradeoff between providing incentives for the production of new ideas and information and ensuring that spillovers from that research flow to others leads to different methods of organizing research efforts in different spheres depending on the relative importance of "appropriability" versus the benefits of full and costless knowledge diffusion and that problems may ensue when these spheres collide. The paper reviews the evidence that this is the case and then discusses the case of cumulative innovation, where the IP problem is particularly important.