Australian public-private knowledge collaboration

Public-private collaborations provide an opportunity for spillover to the private sector, but in Australia, such collaborations are rare. Although the Australian public R&D receives significant funding (more than most other OECD countries), there is little private R&D investment. In this study we investigate public-private collaborations from an absorptive entity perspective, using data of almost a thousand Australian businesses, across industries. We show that while collaboration can have a positive impact on a business's innovation outcomes, it may hamper its absorptive capacity because such collaboration tends to lead to a greater reliance on technological solutions from external sources than the reliance on internal innovation effort. We argue that unless companies develop the ability to absorb external knowledge rather than merely use it as an ad hoc solution, public-private collaborations should not be targeted in government policy.