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Procedia - Social and Behavioral Sciences 213 (2015) 1063 – 1067

20th International Scientific Conference Economics and Management - 2015 (ICEM-2015)

Triple Helix Model of university–industry–government cooperation

in the context of uncertainties
Irena Vaivodea, *
a
Riga Technical University, Kalnciema Str. 6, LV-1048 Riga, Latvia

Abstract

The purpose of the research is to look for the new ways of the investigation of the subsidy impacts on research and development
(R&D) investment and company’s innovation performance. Methodology of research based on the papers type or theoretical
approach. Innovation performance measured by firms’ success in bringing innovations to the market, the share of sales that can
attributed to products that were new to the market. R&D efficiency is the essential factor for company’s innovation performance,
it is the link between R&D input and output. The Triple Helix (TH) model assumes that the driving force of economic
development in the post-industrial stage is the production and dissemination of socially organized knowledge. Institutions that
generate knowledge increasingly play a role in the networks of relations among the key actors: University (Science), Industry
(Business), and Government (Governance). Nowadays the impact of the external environment in particular is critical for
innovation under different kinds of the uncertainty. Targeted innovation policy design fosters innovation performance, that is,
whether the publicly induced part of the R&D investment translates subsequently into product market innovations. New research
framework is created for practical implementation.
© 2015
2015 Published
The Authors. Published
by Elsevier by Elsevier
Ltd. This Ltd.
is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of Kaunas University of Technology, School of Economics and Business.
Peer-review under responsibility of Kaunas University of Technology, School of Economics and Business
Keywords: Cartesian coordinate system; Innovation performance; Research and development (R&D); Triple Helix Model; Uncertainty.

Introduction

Economic growth and the welfare of nations depends on basic innovations (Atkinson et al. 2012). The goal of
innovation policy is to select a desirable future and facilitate its realization. Innovation is the result of the very

* Corresponding author. Tel.: NA

E-mail address: vaivodeirena@gmail.com

1877-0428 © 2015 Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of Kaunas University of Technology, School of Economics and Business
doi:10.1016/j.sbspro.2015.11.526
1064 Irena Vaivode / Procedia - Social and Behavioral Sciences 213 (2015) 1063 – 1067

common linkage of "science," "technology," and "innovation," that implicitly conveys a linear progression from
scientific research to technology creation to innovative products. More nuanced pictures of these complex activities
break them down into components that interact with each other in a multidimensional socio-technological economic
network (Marburger, 2011). Entrepreneurship is the driving force of innovations, moreover, it creates welfare and
improves the standard of living. Government has a significant role by creating and maintaining the framework, in
which enterprises may introduce novelties. How innovations will be adopted and integrated into economies depends
on their ability to satisfy some perceived need by consumers, and that perception may be an artifact of marketing, or
fashion, or cultural inertia, or ignorance (Marburger, 2011). Economic theory must provide a strong justification for
government support for research and development (R&D), including subsidies and incentives for business research.
The Triple Helix model assumes that the driving force of economic development in the post-industrial stage is the
production and dissemination of socially organized knowledge. Institutions that generate knowledge increasingly
play a role in the networks of relations among the key actors: University (Science), Industry (Business), and
Government (Governance). The purpose of the research is to look for new ways of the investigation of the subsidy
impacts on research and development (R&D) investment and company’s innovation performance. Methodology is
based on the papers type or theoretical approach. The Triple Helix model is mapped in a Cartesian coordinate
system where dimensions of (S) science, (B) business, and (G) government are spanned orthogonally.

1. Literature review

1.1. Innovation performance, bringing innovation into the market

Innovation is the introduction and application new ideas, processes, technologies, or products. The innovation
process involves two qualitatively different stages: creativity (or idea generation) and implementation. The
distinction between the two stages of innovation is significant, because they have different basis at the individual
and organizational levels. An ability to generate creative ideas may not always lead to successful implementations
(Wang, 2015). Schumpeter in 1942 provided the definition of innovation as the commercialization of invention.
Market orientation lies at the very heart of modern marketing thinking and practice, it contributes to firm
performance through innovation, competitor orientation, and inter-functional coordination that may have differential
effects on innovation commercialization (Wang, 2015). At the center of them innovation value-added chain is the
innovating organization (Hueske et.al 2015). Since entrepreneurship is the driving force of innovation, the main
objective of the company's strategy is concretely enhance shareholder value, through increased prosperity owners or
shareholders in order to exploit the key resources and achieve competitive advantage. Profitability is a common
measure of the innovation performance for the company (Bastian et.al 2010).

1.2. R&D efficiency

R&D efficiency is the essential factor for company’s innovation performance, it is the link between R&D input
and output. Schumpeter in 1942 observed that innovation could be based on new scientific breakthroughs. R&D
activity is a well-organized process of knowledge creation, production, diffusion, and application. It involves
innovation in scientific technology, in management measures, and in social and political systems (Wang, 2015).
Sources of R&D financial support would translate into multidimensional research outputs involving science-
technology, training and socioeconomic gains that would be basis of lasting cooperation with the private sector
(Jiménez-Sáez et.al 2010). The countries that engage in more R&D activities will tend to achieve higher income
levels, R&D efficiency directly affects a country’s growth and development prospects. How to improve the R&D
performance in the each country has thus become a pertinent issue. It considers that any country that manages its
R&D resources efficiently could benefit in terms of achieving better economic performance (Wang, 2015).

1.3. The Triple Helix model

Economic theory must provide a strong justification for government support for research and development
(R&D), including subsidies and incentives for business research. Institutions that generate knowledge increasingly
 Irena Vaivode / Procedia - Social and Behavioral Sciences 213 (2015) 1063 – 1067 1065

play a role in the networks of relations among the key actors: University (Science), Industry (Business), and
Government (Governance). The governments create a system that defines, regulates an innovation process of
enterprises. Conceptualization of this system is provided by a three-dimensional vector space so called Triple Helix
of university–industry–government model. The Triple Helix model assumes that the driving force of economic
development is the production and dissemination of socially organized knowledge (Ivanova & Leydesdorff, 2014).
Each of the three actors, university–industry–government, participates in Wealth generation, Novelty production,
and Normative control. This can be expressed by using the equations of the vectors of Cartesian coordinate system
in the following way:

W=a 11 G+a 12 S+a 13 B

N=a 21 G+a 22 S+a 23 B (1)
L=a 31 G+a 32 S+a 33 B

Coefficients a 1, a 2, a 3 in the expression (1) and b 1 , b 2 , b 3 in the expression (2) reflect the relative contributions of
Wealth generation, Novelty production, and Legislative control to scientific research (Ivanova & Leydesdorff,
2014). A mathematical expressions of the transformation from the coordinate system (W, N, L) to a new coordinate
system (G, S, B) are following:

G=b 11 W+b 12 N+b 13 L

S=b 21 W+b 22 N+b 23 L (2)
B=b 31 W+b 32 N+b 33 L

where

• W = Wealth generation
• N = Novelty production
• L = Legislative control
• G = Government
• S = Science
• B =Business
• a, b = coefficients

Expressions (1) and (2) show that TH system can be regarded from a unified viewpoint. System functions and
components are interdependent (Ivanova & Leydesdorff, 2014).

1.4. Uncertainties

Entrepreneurship is the driving force of innovations. Government has a significant role by creating and
maintaining the framework, in which enterprises may introduce novelties, R&D inputs is one of the components of
this framework. Demand uncertainty restricts the predictability of expected revenues of sale of the innovative
product (Siguawa et al.2003). Environmental dynamism has been found to positively moderate the relationship
between strategic orientations and new product commercialization. According to the market uncertainty, when
markets are fluctuating and their developmental directions are difficult to forecast a strong technology (Sainio et. al
2012). The popular concept of need, of what is wanted, is the ultimate driver of markets and an essential dimension
of innovation. The necessity is said to be the mother of invention, but in all human societies, "necessity" is a mix of
culturally conditioned perceptions and the actual physical necessities of life (Marburger 2011). Table 1 shows four
dimensions of uncertainty that must be overcome before an idea or invention qualifies as an innovation (York et.al
2010):
1066 Irena Vaivode / Procedia - Social and Behavioral Sciences 213 (2015) 1063 – 1067

Table 1. Four dimensions of uncertainty.

The dimension of uncertainty Description
Technological Uncertainty the concept is based upon corporate scientific
and technological competencies
Commercial Uncertainty commercially viable, compete in the
marketplace
Organizational Uncertainty congruent with the firm's strategy and
capabilities
the societal impact on or from diverse
Social Uncertainty secondary stakeholders

It is necessary to explore uncertainties to consider how technological development may lead to unintended social
and commercial consequences of technology development, and look for ways how overcome this uncertainties
(York et.al 2010).

2. How to ensure the balance in the Triple Helix Model

The equation (3) and Fig. 1 show the core of the unit vector of the Cartesian coordinate system.

(3)

a) b)

Fig. 1. (a) unit vectors of Cartesian coordinate system; (b) Triple Helix Model in terms of unit vector

The balance in the Triple Helix of university–industry–government model may be depicted through the unit
vector expression as follows (equation (4)):

|G|=|S|=|B|=1 (4)

To ensure the balance in the Triple Helix of university–industry–government model, the complex approach to
planning of innovation processes is requisite. It is necessary to take into account the required R&D intensity,
competition, and market structure. All of them have a positive impact on the sales of new products. Uncertainties
restrict the predictability of outcomes in all elements of Triple Helix model. Business models would help to analyze
the interaction of these elements. The business models is the tool that could help to analyze how innovations will be
adopted and integrated into economies what depends on their ability to satisfy some perceived need by consumers.
In order to reduce uncertainty it is necessary to select the business model that would work as both a calculative and a
narrative device. The task of the business model would be to analyze all components that interact with each other in
a multi-dimensional socio-technological economic network in the innovation process (Doganova et al.2009). Under
conditions of uncertainty, essential is the managerial factor, managers must employ steps to the approach by
exercising the option of expanding sequentially into new markets.
 Irena Vaivode / Procedia - Social and Behavioral Sciences 213 (2015) 1063 – 1067 1067

Conclusions

The purpose of the research is to look for the new ways of the investigation of the subsidy impacts on research
and development (R&D) investment and company’s innovation performance. The ways of interaction of the
components in the Triple Helix Model would help to provide an investigation of the R&D subsidy impacts on
innovation output. It is necessary to take into consideration and analyze the factors of uncertainty. The Triple Helix
model assumes that the driving force of economic development is the production and dissemination of socially
organized knowledge. Each of the three actors, university–industry–government, participates in Wealth generation,
Novelty production, and Normative control. It is necessary to emphasize R&D activity as a well-organized process
of knowledge creation, production, diffusion, and application. Sources of R&D financial support would translate
into multidimensional research outputs.

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