Chasing Two Hares at Once? Effect of Joint Institutional Change for Promoting Commercial Use of University Knowledge and Scientific Research

Stimulating the university's scientific research while encouraging the commercial use of the resulting knowledge is one of the foremost missions of science policymakers. The present research examines the short-term impact of joint institutional changes for facilitating the commercial use of university knowledge and stimulating scientific research activities through the introduction of a research performance evaluation system on university scientists' research outcomes. Our empirical analysis is based on Japan's national university reform in 2004, which introduced institutional measures to support the income-generating activities of academic staff while implementing a regular evaluation of their performance. Our analysis of over 5000 scientists in Japan's national and private universities finds that this joint institutional change increased the research productivity of national university scientists without significant change in research quality. Also, we find evidence showing that the reform encouraged more of them to engage in research that serves as a knowledge input for developing technological applications. These short-term effects are specific to the scientists who were in the Life Science domain and those who were inactive in developing technical applications before the reform. Contributions to the literature on how an institutional change to encourage commercial use of university knowledge affects science and implications for science policy are discussed.