4.3.1. The Agreement between Tsinghua and UTC: An Agreement Based on the Logic of Knowledge Innovation

UTC has its in-house research institute with a strong research capacity, and it was the logics of market orientation and process management that drove the UTC to approach Tsinghua: the government resources possessed by Tsinghua could help the UTC to expand its market in China. Moreover, Prof. Jiang's Tsinghua team was one of the top in the field. In the first five years, the UTC demonstrated high respect and patience for knowledge innovation and accumulation.

In the process of building up the partnership, the Tsinghua side was passive (Interview THU UA 01). The final agreement for establishing the joint R&D institute was a result of both sides' common pursuit of knowledge innovation. Mr. Robert Hobbs, the then-Director of the UTC research institute, sketched a blueprint for the joint venture to persuade Prof. Jiang. He promised sufficient space for knowledge innovation and no interruption from the UTC business units. It is rare for a for-profit industrial organization to make a promise not to request any concrete technology or product innovation from a partnership with a university. Prof. Jiang's Tsinghua team was fascinated by the aim of exploring the new generation of building control systems, and Prof. Jiang assumed the directorship of the Center in the end (Interview THU-UTC 08).

The orientation of the Centre to knowledge innovation amazed some Tsinghua researchers, as described by one of them:

I felt a bit shocked when I joined the Center. I feel that what the enterprises undertake should be closely related to products, and profit is usually the primary goal of enterprises. However, what the enterprise (UTC) proposed is even more forward-looking than the university (Tsinghua). (Interview THU-UTC 08)

4.3.2. Disparity in Thinking Paradigms: Logics of Technology Innovation and Market Orientation

Even if Tsinghua and UTC agreed that the research orientation of the Center was forward-looking, their thinking paradigms were disparate: academics are excited about discovering or creating an

innovative research field that deserves long-time investigation, while industrial people pay more attention to profit generation. Moreover, they may understand a term from different perspectives, as illustrated by a Tsinghua researcher: "At the beginning, we thought the 'cost' they talked about was an economic term. Actually, it implies a more generalized concept, which also includes something of a technological perspective." (Interview THU-UTC 08). The divergence caused difficulty in collaboration, but their interactions also created sparks of innovation.

Although disparity existed, the Tsinghua researchers appreciated that the joint R&D institute allowed them to work closely with UTC, which had been taking the lead in technology innovation in this field. The Tsinghua researchers valued the market-oriented culture in technology innovation brought by the partnership, as explained by a Tsinghua researcher of the Center:

I feel that many of their suggestions are valuable. They advanced these ideas from the perspective of the industry. They stand at the frontiers of the market and can anticipate the development orientation of the market. When we study a technology or a system, we only focus on how advanced this system or technology is. Rather, they would analyze the cost of using this technology or working out this system. The questions they most frequently ask are: How much money should we input to work out this? What benefits can be obtained from doing this? (Interview THU-UTC 08)

### 4.3.3. A Salient Impact: The Logic of Process Management

The logic of process management brought by Tsinghua's substantive and sustainable partnership with UTC had a salient impact on the processes of knowledge production and technology innovation. It was also important for innovation efficiency [82].

In the first five years, the UTC side designated researchers and project managers from the UTC in-house research institute to be stationed at the Center, and they were paid by the UTC side. This situation was rare among Tsinghua's joint R&D institutes with enterprises. The UTC staff played multiple roles as project managers, coordinators and also researchers. They had to coordinate different actors from both Tsinghua and UTC. All the UTC staff were Chinese nationals and had relevant disciplinary backgrounds in the research field. They did not have difficulties working with the Tsinghua researchers in terms of professional knowledge (Interview THU-UTC 08).

Nevertheless, the UTC staff positioned themselves clearly, as they were paid by the UTC side. They informed Tsinghua of the ideas and decision of the UTC side, and they were also responsible for reporting the research progress to UTC. Sometimes, they had to reconcile conflicting opinions from different actors (Interview THU-UTC 08). UTC influenced the research process of the Center through these designated staff, as elaborated by one of them:

We would listen to the ideas from both sides. We worked and discussed with the Tsinghua researchers, and we regularly had meetings with our headquarters in the US and listened to their views. Their ideas would affect our thinking. Then, our considerations would also impact the research of the Center. (Interview THU-UTC 08)

The logic of process management therefore infiltrated the Center through these continuous efforts and interactions. The research management style of the UTC staff was apparently different from that of the Tsinghua researchers: at the start of every project, the UTC staff would discuss and confirm the timetable with the Tsinghua research team; they would remind and push the research team before each time node, and the project could not go on to the next step unless the previous task had been verified, as UTC needed to control costs and progress (Interview THU-UTC 08).

On the other hand, the university researchers were comparatively flexible in managing research projects. They had their individual priority lists, and they were multi-tasking. In Chinese research universities, the reality is that industrial research projects are always outranked by governmental projects in the university professional promotion system. Moreover, the Tsinghua researchers were not administratively affiliated with the joint R&D institute, and they were from different disciplinary departments. It was quite challenging for the UTC staff to manage the research process. They tried very hard to build up a sense of belonging and team spirit at the Center, which proved to be effective (Interview THU-UTC 07, 08).

In addition to regular project meetings, a series of formal and casual activities to increase cohesive forces were organized. When necessary, the UTC staff also talked with the researchers individually. By the end of the first five years, most of the Tsinghua researchers identified themselves as "members" of the Center, rather than just "working for" the projects of the Center. They were enthusiastic about joining the research teams, and even proud of being members of the Center. This sense of identity is important for optimizing the institutional environment of joint R&D institutes, but managing this process is particularly difficult in the context of joint R&D institutes, and even harder if they conduct interdisciplinary research (Interview THU-UTC 07, 08).

Lang [83] believes that the success of technology innovation in the West is greatly attributed to the culture of process management. It was the culture of process management, among other so-called Western institutional logics, that had the most thorough impact on the Triple Helix relationship through an international joint R&D institute in two ways. Firstly, UTC, as a for-profit organization, is goal-oriented, without question. However, their patience for knowledge innovation and the trust they provided to the joint endeavor with Tsinghua made it a process-oriented adventure. Lang [83] believes that Chinese practices are more goal-oriented rather than process-oriented. The mentality of being pragmatic leads the Chinese to find shortcuts to outcomes and neglect process management. It is hard to conclude that being pragmatic originates from the country's inherent cultural constraints. Being pragmatic is strategically feasible and necessary in certain periods and conditions. Secondly, the Center embodied the standardized process management of knowledge production, which is a favorable institutional logic, especially in the process of academia and industry "taking the role of the other".

4.3.4. The Danger in "Taking the Role of the Other": Logics of Market Orientation and Process Management

The logics of market orientation and process management stand near the core element of the Triple Helix thesis—"taking the role of the other". One of the most important implications of this thesis is that when universities take on the role of industry, they must maintain their core missions of research and teaching, and "the third mission" must be adaptable to the primary ones [84]. Joint R&D institutes are one of the mechanisms that a research university employs to translate its research findings into use. Etzkowitz [84] warned of the danger of a university mining its innovation store and failing to replenish it because of dependence on short-term commercial gains (Ibid, p. 319). Joint R&D institutes, as hybrid organizations, are generated as a result of "taking the role of the other". Compared with other university research institutes, the university side of a joint R&D institute is more likely to run into the danger described by Etzkowitz [84].

In the second five years of the Center, Dr. David E. Parekh took over the role of Mr. Hobbs as director of the Center, which led to structural transformation of the joint R&D institute. Dr. Parekh felt that the Center had gone too far away from market needs, and it would take too long to see results. Short-term interests were more important than the benefits that might come from long-term knowledge innovation. As a result, the Center shifted to become pragmatic and goal-oriented. UTC asked the Center to generate R&D outputs that could be easily transferred into products by its business units (Interview THU-UTC 08).

The author of this study argues that, in the context of joint R&D institutes in China, the danger of "taking the role of the other" is not universities engaging with industry and becoming part of it, as Cai [23] stated; it is the service and "catch-up" mentalities of the Chinese university researchers, which can result in deviating from knowledge innovation. The service mentality is based on the university serving its industrial partners as funders and clients. This happened in the case of the

Tsinghua-UTC Center, especially in its second five-year term. Consequently, the Tsinghua researchers became outsourced researchers of UTC, identical to those at the UTC research institutes.

The "catch-up" mentality arises when universities partner with world-leading international enterprises like UTC. In the second five-year term, the UTC side progressively intervened in decision-making about the Center's research orientation, and the Tsinghua side tended to make concessions. One of the reasons for this is that the Tsinghua researchers believed that "they [UTC] stand at the frontiers of the market and can anticipate the development orientation of the market" (Interview THU-UTC 08). During the most recent decade, while China's flagship research universities like Tsinghua have grown to be acknowledged worldwide for their knowledge and technology innovation, they have gradually learnt how to get rid of the "catch-up" mentality and maintain equal dialogue with powerful international partners [58].

4.3.5. Inadequate Regulations and Inexperience: Logic of Intellectual Property Rights Protection

The Role of Tsinghua Administration

The Tsinghua-UTC Center had been regarded by the Tsinghua administration as a showcase for joint R&D institutes. As mentioned above, in 2014, the UTC research institute, as a quality international enterprise partner of Tsinghua, was awarded the 2013 Overseas Enterprise Cooperation Award and the 2013 UICC Overseas Cooperation Consultant Award (http://news.carnoc.com/list/280/280533.html (accessed on 10 November 2019, in Chinese)). The quality of a partnership is based on trust between university and industry, and this trust is greatly endorsed by a mature institutional environment for IPR protection [49]. In the case of the Center, both parties were satisfied with the allocation of IPR ownerships, but the institutional environment of China's Triple Helix for IPR protection is far from mature.

As a leading science and engineering university in China, the practices and principles adopted by Tsinghua in handling Triple Helix inter-organizational relations are always followed by other Chinese universities [60]. Therefore, Tsinghua's standpoints on and methods for IPR protection are crucial for optimizing the institutional context of China's Triple Helix linkages. The Overseas RDMO of Tsinghua has taken charge of negotiating with international industrial partners regarding issues of IPR ownership. The Tsinghua administration sticks to the following principles: first, the IPs produced by the joint R&D institutes affiliated with Tsinghua are owned by the nation. If ownership of the IPRs of the R&D results produced by Tsinghua researchers is easily taken by international industrial partners, this can be regarded as a loss of national assets, unless both sides can agree on the terms of this ownership; second, the price of IPR ownership must be equal to the real value of the related patents; third, the R&D products created by Tsinghua researchers need to be highly valued and protected by the university (Interview THU UA 01,02).

However, Tsinghua's disadvantage in dealing with IPR with UTC came from inadequate regulations and inexperience. While the Tsinghua side was willing to transfer their half of the IPR ownership to UTC, this deficiency of the university administration resulted in an unsuccessful result, as described by a Tsinghua researcher of the Center:

In the first five years, each side (Tsinghua and UTC) owned 50 percent of each IP, and both sides had the rights to use these patents produced by the Center. Once, UTC wanted to buy the half (of the IPR) of a patent owned by the Tsinghua side; however, the Overseas RDMO had no idea about the charge. They just randomly set a price of 100,000 US dollars. But UTC deemed it too expensive. The UTC side thought that they had invested one million US dollars every year; the price of 100,000 US dollars was unreasonable. In the end, UTC gave up and both sides did not achieve an agreement. (Interview THU-UTC 06)

This situation was explained by a staff at the Overseas RDMO:

We are accumulating our experience and learning from foreign institutions. We learned a lot when the headquarters of the UTC research institute invited us to the US. However, our standpoint is different [from those of the university researchers]. We have to balance the benefits of different stakeholders: we need to respect the willingness of the university teachers, consider the benefits to the university, and keep a favorable relationship with the enterprise. We also need to take the issues of law and contract into consideration. (Interview THU UA 2)

The director of the Overseas RDMO was designated by the President of Tsinghua as the legal representative to sign contracts with international industrial partners. Before decision-making, the Overseas RDMO needed to make sure that the international technology transfer would not harm the interests of the nation (Interview THU UA 02).

The service mentality of Tsinghua researchers brought them into a disadvantageous position in terms of IPR ownership negotiations, and such a mentality was common among Tsinghua researchers. They believed that when their international industrial partners paid for joint R&D projects, and the researchers repaid them with expertise, it was reasonable for the industrial partners to own the IPRs. As a result, the university side easily gave up IPR ownerships in negotiations (Interview THU UA 01,02).

This way of giving up IPR ownerships was opposed by the Tsinghua administration. The Overseas RDMO had been considering measures for IPR ownership distribution. The university side believed that, in principle, an enterprise inputs the funding for a joint R&D project or invests in establishing a joint R&D institute, and the R&D outputs are shared by both sides. However, in many cases, the large international enterprises are stern and insist that the IPRs should be entirely owned by them. As a result, it is often difficult for both sides to reach an agreement. Even though the Tsinghua leadership had set up a principle of IPR ownership sharing, it was not strictly enforced. Tsinghua allowed flexibility for the department and university researchers to judge whether giving up IPR ownerships was worthwhile. However, the Overseas RDMO had set some corresponding measures to restrain such cooperation. It charged high administration fees to joint R&D projects that gave up the university's IPR ownerships. For example, if the total project budget was one million yuan, the university charged a 250 thousand yuan administration fee. The percentage was much higher than the fee charged to other joint R&D projects. These fees were used for a university development fund (Interview THU UA 01,02). This countermeasure was explained by a staff member of the Overseas RDMO:

The university allows you to take on these projects, although such undertaking can only make money. However, these projects, compared with those projects which can share the IPRs, have to pay extra administration fees. The university cannot forbid the researchers from conducting these projects, since the university administration cannot judge for the researchers whether these projects are indeed worthwhile or not. But the university does not encourage researchers to conduct the kind of project which loses IPR ownership. Charging an administration fee is meant to indirectly limit the researchers who undertake this kind of cooperation through disadvantaging the benefits of the projects. When the researchers feel the projects are not worth it, they will redirect themselves to other cooperative projects. The university can also use these administration fees as university development funding to improve the university R&D environment and facilities. We have a series of specific measures [to use the development funding]. (Interview THU UA 02)

The countermeasure implemented by the Tsinghua administration was reasonable. Large international enterprises pay great attention to IPRs; they are clear that it is highly cost-effective to cooperate with Chinese universities, since they can easily own the IPRs with low financial inputs from such R&D cooperation [85,86].

The Change in IPR Ownership Distribution Pattern

As agreed, in the first five years of the Center, every patent was equally owned by both sides. Inventors—in most cases, the Tsinghua researchers of the Center—had the right of authorship to the patents. In the second five years, an unsuccessful case of purchasing IPR ownership partially resulted in UTC's decision to transform the IPR ownership distribution regulation. The more important reason was the shift of the Center's research orientation from knowledge innovation to technology and production innovation. The outputs of the joint research were more likely to be transferred into products (Interview THU-UTC 08).

In the second five years, when Tsinghua and UTC advanced their research topics of interest, the IPRs of the outputs generated from the UTC research topics were entirely owned by the enterprise. This was also applicable to the Tsinghua side. In addition, if UTC was interested in the outputs owned by Tsinghua, Tsinghua needed to sell them to UTC upon agreement on the price. If the patents generated benefits, the inventors could have economic compensation. This transformed distribution regulation was more beneficial to UTC's acquisition of the patents it deemed promising in the market (Interview THU-UTC 07, 08).

As a result, UTC had more authority in the distribution of IPR ownership. In joint R&D cooperation, large international industrial partners are always more powerful in terms of IPR protection. UTC understood that the Tsinghua administration was inexperienced in dealing with IPR issues, and the university researchers did not really care about the IPR ownerships (Interview THU UA 02). Some of them deemed it to be a wise change:

The pattern of the second five years is better; it is actually troublesome if every patent is jointly owned. It may cause conflict if a patent is going to be transferred to product. Many of us [the Tsinghua researchers] feel that the changed pattern is clearer and more scientific than the one before. It is hard to imagine that when UTC wants to launch a product, it has to get approval from Tsinghua. (Interview THU-UTC 06)

Moreover, the changed pattern made it easier for Tsinghua researchers to publish papers, as elaborated by a Tsinghua researcher of the Center:

In the past five years, if I wanted to publish a paper, the paper needed to be reviewed and approved by UTC. Nowadays, if I publish a paper regarding the research projects allocated to the Tsinghua side, I do not have to get approval from UTC; this truly provides us with more flexibility. (Interview THU-UTC 07)

In the third stage, when interactions between organizations in the three sectors become increasingly intensive, logics of intellectual property turn out to be a key factor in the Triple Helix development, obviously in the case of the Tsinghua-UTC Center. The problem of IPR in China originates from the inadequate reinforcement of patent law [87]. Nevertheless, the awareness of Chinese government and universities about IPR protection was raised in the process of cooperating with international industrial partners. In the past three decades, a dramatic change has taken place in the percentage of invention patents granted in China. In 1990, 70 percent of invention patents granted in China were owned by international actors; this proportion decreased to 50 percent in 2008. From 2009 to 2012, it declined substantially from 49 to 34 percent. In 2017, it became 22 percent. (See Figure 3). Among various reasons for this trend, the intensive interactions between universities and international industrial partners on the platforms of joint R&D institutes have made a difference.

**Figure 3.** Domestic and foreign invention patents granted (1985–2017). Sources: *China Statistical Yearbook 1999-2018* (For example: http://www.stats.gov.cn/tjsj/ndsj/2018/html/CH2015.jpg (accessed on 1 December 2019)).

As for the logics of civil society, which is a Western concept and seems absent in the discourse of the study, the Chinese government lacks effective policy measures to stimulate bottom-up initiatives. Future studies can explore whether the endeavors of joint R&D institutes have the potential to create functional mechanisms that can coordinate between top-down control and bottom-up initiatives [49].

#### *4.4. Stage 4: Institutionalization of Joint R&D Institute*

In the final stage, to facilitate the institutionalization process, logics of the market competition environment and democracy in policymaking are important in collective sense-making and belief shaping [49]. The joint R&D institutes provided benefits for international enterprises, including convenient access to governmental resources and the local market. As a result, these advantages may help accelerate their acceptance by the local market, and then reduce the Chinese enterprises' profit margins. Moreover, joint R&D institutes may also cause a crowding-out effect [16] between international and Chinese enterprises: the deeper the international enterprises' involvement in the university R&D, the less the universities will be in demand to cooperate with Chinese enterprises. This is partly because the university R&D resources are limited. On the other hand, the enterprises would be concerned about issues of confidentiality if two enterprises in the same field set up joint R&D institutes at the same university. For example, Huawei Technologies Co. Ltd., which was considering creating a joint R&D institute with Tsinghua, gave up the plan because of the existence of the Tsinghua-Cisco Lab. Therefore, it has been commonly acknowledged that Chinese enterprises' market competition is insufficient, which has limited their innovation capacity [88]. The joint R&D institutes can raise the logics of market competition in China's Triple Helix linkages.

Regarding the logics of democracy in policymaking, the relevance of this study can be predicted when major challenges of international R&D cooperation have raised importance of policy-makers to improve the institutional environment of the transnational and national innovation system, including week IP protection, insufficient coordination for competition, and low degree of technology transfer.

#### **5. Conclusions**

In conclusion, this study discussed the institutional logics generated in the institutionalization process of a joint R&D institute at a Chinese research university; furthermore, it zoomed in on the ways in which the collision between Western and Chinese institutional logics have affected China's transnational Triple Helix relations. The institutionalization process of joint R&D institutes results in an increasing difficulty to differentiate Western from local logics. In the Chinese context, some of the so-called Western logics have taken roots: (1) vision and patience in knowledge innovation and (2) beliefs in technology innovation as a key to economic growth [49]. Some have started to sprout: (1) market orientation and market competition; (2) process management; and (3) IPR protection. The others are still largely absent: (1) civil society, and (2) democracy in policymaking.

The Chinese are pragmatic, and they are inclined to find shortcuts to outcomes [83], but this does not necessarily mean they do not have patience in knowledge innovation or that they will ignore process management. Because of the Chinese mentality of being pragmatic and retaining flexibility in various conditions, Chinese people always preserve space for digesting the Western logics that they deem useful and that have proved favorable for economic development.

The most significant policy implication is related to the improvement of patent law. The case of the joint R&D institute's IPR ownership distribution provided experience and lessons for improvement. China's incomplete IPR legal system is the largest barrier for substantiating the university–industry R&D cooperation. At the institutional level, the universities need to improve the professionalism of their legal advisory offices. When negotiating with the large international enterprises about IPR ownership distribution issues, the professionals representing the university side need to hold explicit principles and standpoints. This can ensure equal R&D partnerships. As a result, the university researchers would be more stimulated and confident in participating in joint R&D institutes as the university's legal section could protect their rights and interests.

Secondly, the policy vacuum in international joint R&D cooperation needs to be filled. This deserves joint efforts from related governmental agencies (i.e., the Ministry of Science and Technology and the Ministry of Education) and research universities. The experience and lessons from the joint R&D institutes would be especially valuable for filling in this policy blank. Moreover, science and technology policies can provide specific incentives to attract international enterprises to locate their innovative-oriented R&D in China. For example, if the government could provide matching funds for international enterprises to locate their technology-intensive and forward-looking R&D activities in Chinese research universities, the joint R&D institutes would achieve both financial and human sustainability.

Thirdly, the joint R&D institutes, with the logics of process management, technology innovation, market orientation, and IPR protection, can serve as experimental bases for completing policy-making related to university technology transfer systems. For example, The law of the People's Republic of China on Facilitating the Transfer of Scientific and Technological Results, revised in 2013, emphasized the connection between R&D outputs of joint R&D projects and university professional promotion systems; moreover, it aimed to improve the distribution principles of IPR ownerships. The policy-makers have realized that the disconnection between joint R&D outputs and university promotion systems has led to the inefficiency of China's innovation system. The joint R&D institutes can provide a stable and enabling environment to measure the institutional mechanisms that can contribute to an innovation-oriented system.

Finally, the logics of vision and patience in knowledge innovation and process management could resolve the university researchers' "role strain" between governmental and industrial research projects. The governmental research projects enjoy higher scores in the university's professional promotion system and they can generate more publications. The university researchers, especially the junior

ones, have to allocate more time and energy to governmental projects. In contrast, Su's [89] study in an American context drew a different conclusion from that found in the flagship Chinese research universities: in the United States, affiliation with joint R&D institutes is more appealing for junior researchers than for tenured faculty members; in the United States, working closely with industry can produce more publications, which is advantageous for professional promotion [89].

The pattern of the Center in the first five years, with its forward-looking and interdisciplinary features, had great potential for generating high-quality publications. Whether and how joint R&D institutes can contribute to resolving the university researchers' "role strain" between governmental and industrial projects deserves future research.

**Author Contributions:** Overall research design: J.M.; Data analysis: J.M.; Writing original draft: J.M.; Review and editing: J.M.

**Funding:** This research was funded by the National Education Sciences "Thirteenth Five-Year Plan" of China, National General Projects in 2019, "Research on the Societal Impact and Assessment Mechanism of International (Regional) Scientific Research Cooperation in Chinese Universities", Grant number: BIA190166.

**Acknowledgments:** I am highly grateful to the guest editor's and three peer reviewers' constructive and inspiring comments and suggestions, which have greatly helped me to improve the paper. I also appreciate the participants of this research. They provided empirical data and valuable insights, which are the basis of this study.

**Conflicts of Interest:** The author declares no conflict of Interest.
