Collaborative Research: Government Responses to Network Failures: The Case of the Manufacturing Extension Partnerships

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While inter-firm networks provide an increasingly important alternative to arm's length transactions in knowledge-intensive industries, they are notoriously difficult to build and maintain. Various hypotheses have been advanced for the sources of such collaboration, suggesting that they derive from cultural, organizational and institutional factors. This research attempts to quantify the relative importance of the factors contributing to the success of collaboration projects by developing and analyzing survey and interview-based indicators of public inputs to network production among small and mid-sized firms -- with a particular focus on their provision through the Manufacturing Extension Partnerships sponsored by the Federal Government.Intellectual Merit: This research contributes to the literature about the rationale for government intervention to foster innovation in the United States. Government intervention is typically justified as a response to market failure, and represents an effort to make markets more competitive. However, a growing body of literature argues that innovation tends to occur in "collaborative spaces" that are sheltered from market competition. The focus of the research is to examine whether there is a mismatch between the process of innovation and the rationale for innovation policy. The research examines the relative importance of public inputs to network production among small and medium-sized firms in a study of the Manufacturing Extension Partnerships (MEPs) sponsored by the National Institute of Standards and Technology. Broader Impact: The research produces a publicly available data set that can be used to examine the relationship between government inputs and network production. The results inform a variety of different disciplines, such as economics, sociology and political science. The study also engages and trains graduate students in the research processes.