Measuring Net Benefits Resulting From University-Industry Collaboration: An Example From The New Mexico Chile Task Force

As universities face increasingly tight operating budgets, their need to justify expenditures on both basic and applied research is increasing (Oehmke, van Ee, and Ledebuhr 2000; Boyle 1997). At the same time, businesses face increasingly competitive business environments. For many, innovation is the key to productivity and survival. Universities and industries are joining forces to meet their respective needs, forming formal and informal collaborations (Scott et al. 2002). Analysts and policy-makers are becoming more interested in examining and understanding the relationships between academic research and economic activity. One area of growing interest is the measurement of net benefits generated through these relationships. To accurately measure the return to industry-university collaboration, researchers must consider all associated returns and costs (both direct and indirect). Benefits that may accrue from collaborative efforts include: (1) new scientific information, (2) increased educational opportunities for students, (3) new networks and stimulating interactions, (4) expanded problem-solving capacity, (5) new methodologies and technologies, (6) new firms and (7) expanded social knowledge (Scott et al. 2002). Valuing all direct and indirect benefits and costs associated with collaborative efforts is difficult, if not impossible. This paper outlines a methodology that can be used to measure one source of economic benefits -- the development of a new technology. The paper uses as an example a mechanical vegetable thinner developed through the collaborative efforts of the Southwestern chile pepper industry and New Mexico State University (NMSU).