Ivory Tower Universities and Competitive Business Firms

TL;DR

This paper compares the growth dynamics of university research activities with business firms, revealing universal patterns in growth rate distributions that suggest common underlying mechanisms across complex organizations.

Contribution

It provides a quantitative analysis showing that university research growth dynamics follow universal patterns similar to those of business firms, indicating shared governing mechanisms.

Findings

Growth rate distribution is universal across universities and firms.

Distribution width decreases with size following a power law.

Universality suggests common underlying growth mechanisms.

Abstract

There is nowadays considerable interest on ways to quantify the dynamics of research activities, in part due to recent changes in research and development (R&D) funding. Here, we seek to quantify and analyze university research activities, and compare their growth dynamics with those of business firms. Specifically, we analyze five distinct databases, the largest of which is a National Science Foundation database of the R&D expenditures for science and engineering of 719 United States (US) universities for the 17-year period 1979--1995. We find that the distribution of growth rates displays a ``universal'' form that does not depend on the size of the university or on the measure of size used, and that the width of this distribution decays with size as a power law. Our findings are quantitatively similar to those independently uncovered for business firms, and consistent with the hypothesis that the growth dynamics of complex organizations may be governed by universal mechanisms.