SOCIAL CAPITAL STUDY TO ESTABLISH INTERACTION BETWEEN

ACADEMIA, BUSINESS AND THE GOVERNMENT

Siti Meiningsih and Nani G. Simamora

Center for Science and Technology Development Studies, The Indonesian
Institute of Sciences, Gedung Widya Graha Lt 8, Jalan Gatot Subroto 10, Jakarta
12720, Indonesia

Abstract
Progress in science and economy has created a new institution- research
collaboration or co-production between university, business (industry) and the
Government. Etzkowitz stated that in the interaction, the University, Business
and Government play role, teaching and learning. The three institutions with
different rules and environments exchange knowledge. This does not mean that
the university changed into industry or the government does the business
activity, but the three institutions collaborate with each other, fill in and repair
other weaknessess to produce an innovative outcome. This process requires
several steps towards concensus among the interacting institutions. In university
there are 4 elements that are usually involved: research support, collaborative
research, knowledge transfer and technology transfer. Social capital plays
important role in the continuous interaction between the institutions by creating a
bonding-bridging condition. Bonding is meant as high intensity interaction,
homogenous network, and has built trust among the player whereas bridging
pertains the player condition when try to build external relation, and the network
is heterogenous (Woolcock and Narayan,2000).

Using Gajah Mada University, a university with a new status as State-

owned Legal Entity (P.T. BHMN), as a case, we have initiated a study to map the
bonding-bridging condition in the interaction between the university, business
and the government, through social capital element that support the bonding-
bridging and to map the inter-relation components between them.
The results revealed that collaborative studies conducted by the Gajah Mada
University are mostly in bilateral system either with the government or business
(industry) and the initiative to conduct collaborative activities mostly came from
the government or industry. Bonding-bridging analysis indicated that the study
centers in Gajah Mada University did more bridging whereas the Faculty units
conducted more bonding. This study also found three patterns of interaction
between the university and its counterparts. Trust and reciprocity are the most
dominant social capital elements that support the bondng-bridging condition.
Overall, interaction between the Gajah Mada university with the business and the
government apparently still low.

Keywords:Academia, business, government interaction, bonding-bridging,

social capital
1. Introduction
Within the last few years, globalization in economy is typically characterized
by competition based on knowledge in innovation. With particular emphasis on
knowledge, scientists, initiated by Kline and Rosenberg developed a new
approach in innovation, called systemic approach (Edquist, 1999). Systemic
approach in innovation pertains a complex interaction between university,
business and the government as actors and institution in creating and exchange
knowledge. This complex interaction has caused change in the role of each
actor (player).
Etzkowitz (2002) described that the interaction has made the University,
business and the government play role as teaching and learning. The three
institutions with different rules and environment will exchange knowledge. This
does not mean that the univerity changes into industry or the government will
conduct business but each institution will communicate, fill in and repair the
weaknessess of the others. The interaction conducted by the institutions,
according to Etzkowitz (2002 is activity at the concensus creation. At this stage,
social capital such as rules (norms), regulation and trust influence the concensus
creation as well as continuous interaction between them. This statement is
further strengthened by Chakrabarti (2004) through his study about the
interaction between several universities with industries in USA. Chakrabarti
analysed 4 components of inter-relations, such as (1) research support, (2)
research cooperation, (3) knowledge transfer, and (4) technology transfer, as the
level of interaction between the institution. Within the 4 components, social
capital possesses the capability of solving the occurred problems, increase the
intensity of network and trust between the interacting institution. At the end, the
bonding-bridging figures in the interaction will appear. Bonding is meant
interaction with high intensity and usually has a homogenous network, and has
been going on for a long period so that trust has established among the players
(Woolcock and Narayan, 2000). Bridging is the condition of the player when the
external relation is built and the network is therefore heterogenous.
Although the level and quality of the role of universities in Indonesia is not
comparable to the universities in devloped countries, there is an indication of the
role switching among the universities in Indonesia. The status change to State-
owned Legal entity (Badan Hukum Milik Negara) among several universities in
Indonesia, including the Gajah Mada University is one of the typical example of
this switching. In an attempt to increase the academic quality within the limitation
of manpowers, environment, universities that are regarded capable, are given
autonomy an indpendence to manage their institutions. The Gajah Mada
University (UGM) has adopted this policy by changing its vision, mission,
program and academic activities. By referring to the worl-class universities,
Gajah Mada University has prepared itself to become an excellent, competitive
an could contribute to economic development through innovative collaborative
activities with business or government. Interaction between UGM with
business and government has been in place, either in the formal or informal
levels. The activities include research collaboration, publication or personnel
mobilization. However, at this stage, it is still not known the role of social capital
in the interaction between the three institutions. Therefore, the present study
aims to address the following questions: 1). How is the bonding-bridging
condition in UGM interaction with business and government?, 2). What sort of
social capital element that support the UGM interaction with business and
government?, 3). How is the pattern of inter-relation components between the
university with the business and Government?.

2. Inter-relation components in Iniversities

Chakrabarti (2004) pointed out that there are 4 major inter-relation
components that are always conducted by the university in performing its
collaboration with business or government. The 4 components has a different
level of interaction, from the lowest to the highest: (1) research support, (2)
cooperative research,(3) knowledge transfer, dan (4) technology transfer..
Research support, is an inter-relation component with the lowest interaction.
This component includes financil support from business or government that is
intended to support the university to increase the laboratory facilities, scholarship
for the graduate students. In a more tight stage, the business or government
provided the financial support in a long term period. Cooprerative research
component has a more intens interaction in comparson to research support. In
cooperative research, a research contract that involves manpowers from
university either as consultative or collaborative team. This component also
establish a formal network using agenda of activities that have been agreed in
the contract. Knowledge transfer is an interaction activity with a high intensity.
The activities could be either formal or informal, including collaboration in
education, curriculum development and personnel change. In addition,
knowledge transfer could be conducted in form of association, research
consortium between business an university, collective research writing between
university, business and government, recruitment of university graduates to
business, collaboration in education pogram that assist the university to produce
graduates that is appropriate with busines needs. Technology transfer is an inter-
relation component that is similar to knowledge transfer that also has a high
intensity. Technology transfer activity is usully conducted together by the
university and business. This activity is focused to solve the problem in industry
as well as to develop innovation that is reuired by the market. Technology
transfer is usually conducted through consultative, research collaboration,
education and trainings.

3. The role of social capital in collaborative activities

Woolcock and Narayan (2000) intorduced 2 conditions that are valuable to

learn in the pattern of network. The two conditions are bridging dan bonding.
Specifically, the difference between the two conditions laid upon the related
network. Homogenous network is associated with bonding whereas
heterogenous network is more associated with bridging. Bonding is usually
associated with a closed network whereas bridging is more associated with
overlapping networks, that is more closely realted to establishment of external
(Coffe and Geys, 2006). Putnam (2000) associated bridging as ‘getting ahead’
activity whereas bonding is a ‘getting by’ activity. Bonding includes trust and
reciprocity in closed network, and assist the ‘getting by’ process whereas ‘getting
ahead’ is facilitated through cross-cutting ties that forms bridging. Theoretically,
there is an agument that positive experiences among different individuals has a
profound impact on generalized trust in comparison to homogenous individual in
characteristic, attitude, and behaviour (Putnam, 2000). Bonding is linked to
survival whereas bridging is associated with advancement, development and
growth. Putnam (2000) in Knudsen et.al (2007) discussed bridging and bonding
as two matters that are very important in leaning the pattern of network. Putnam
also stated that bridging is linked to the network expansion whereas bonding
strengthens a homogenous group and also has exclusive identity.

4. Interaction between University, Business and Government: The case of

Gajah Mada University (UGM).

This study tries to identify social capital dimension, structural and

relational to determine bridging andn bonding that exist in the observed
university and to identify inter-relation components that include: research
support, cooperative research, knowledge transfer, and technology transfer. The
observed university in this study is UGM. This university is selected because it is
multidisciplinary and has become a state-owned legal entity (PT BHMN) since
2000. The evaluated interaction includes: interaction between university and
government, University with business (industry), university, business and
government. The evaluated collaboration includes collaboration at the university
level during the last 4 years (2004-2007).

a. Bonding and Bridging condition

UGM does not have a special unit that manages collaborative activities.
Collaborative activities can be conducted at the faculty level, centers for
interested study and University level through Research institution. In this study,
data on collaborative activities were collected from study centers for specific
subjects (Pusat study) and Faculties (Departments) because both units
conducted more collaborative activities than the other units. As shown in Figure
1, during 2004-2007, 84% of the research fund that was given to the study
centers and faculties, were from the outside UGM (44% from government and
40% from industry or business) (Figure 1).
 Figure 1. Distribution of the research fund, based on the source

The study centers and faculties, in performing the interaction, have its
own characteristic. The study centers performed more heterogenous
colaboration. In a team has a multidisciplinary members and multi-institutions
background. Usually, the collaboration is a reserved activity and conducted for a
period less than a year. After a year the collaboration is usually stopped and a
new counterpart is usually sought. As shown in Figure 2, during the period of
2004-2007, only 17% of the counterpart continuously conducted collaboration
with the study centers, only 50% of the counterpart has collaboration up to 1 year
and the remainings 33% were the new counterparts.
This collaboration pattern indicated that bridging condition is more dominant than
bonding.

Figure 2. Bridging-Bonding condition in the study centers interaction

This situation is different in the faculty unit that is characterized by a more
homogenous collaboration (including the community). Approximately 70%,
including 12 different counterparts continuously interact for a period of 2 years
(2007-2008, although 24% of the interaction is not continuedt (Figure 3). This
phenomenon demonstrates that condition more favorable bonding is more
frequent is the faculty unit.
 Figure 2. Bridging-Bonding condition in the interaction in the faculty unit

Studies in bonding and bridging within the social capital inseveral

countries indicated that bridging condition possesses the ability to support the
funding for the university in comparison to bonding (Putnam, 2002; Bengelsdijk,
2002). The findings are in accordance to the results in UGM whereby 71% of the
research fund was collected through involvement of new counterparts (Figure 4).
This finding, however, still requires further elaboration.

29%

71%

Bridging Bonding

Figure 4. Composition of the budget for conditions of Bridging and Bonding

b. Social Capital elements that plays role in supporting bonding-

bridging

In this study, the role of the social capital is reflected through the pattern of the
interaction between UGM with the counterparts. Based on the in-depth interview,
three patterns of interactions existed in the UGM collaboration: Two of which are
bridging condition and one is in bonding condition. In bridging condition, the
established patterns include: (1) the pattern of interaction that relies on the role
of the alumni, and (2) the pattern of interaction that begins through the
socialization of the UGM competence to the counterparts. The bonding condition
is usually formed through experience during the interaction.
At the first pattern, the alumni plays role to establish and maintain
collaboration (Figure 5). UGM contacts alumni to obtain information regarding the
possible collaboration with the institutions where they are employed.

client

Figure 5 Pattern of Interaction that relies on the role of alumni

By contrast, when counterpart institutions intend to conduct collaboration with

UGM, alumni that are employed in that institution will contact the person that has
competence required by the counterpart. After finding a suitable person, both
parties will communicate either direct (Face to face) or indirect (through
telephone, email and other means) to make a proposal for collaboration. In
writing the proposal, both parties will give a feedback to reach the intended goal
or objective. After the proposal is agreed , minimally 80%, the collaborative
activity will be brought to the level of contract signing at the University. UGM and
its counterpart occasionally use the the first pattern in the interaction, particularly
during bridging. In this context, UGM is even dared to lower the agreed price to
increase the chance to get the newly initiated collaboration.
In the second pattern, interaction is started by meeting of the UGM personnel
with the potential counterpart. The meeting aims to socialize the competence as
well as to commercialize the output or product of the UGM. The meeting could
be in the foms of meetings with counterparts, road-show, Exhibitions etc. At that
time, UGM will evaluate informally the potential counterparts. Meanwhile, the
potential counterparts will also evaluate the competence and the capability of the
UGM personnel. The evaluation can be done through presentation, findings that
are demonstrated etc. After that, the counterpart will consider the benefit,
appropriateness with the needs and the posibility of solving the problems. The
meeting can be followed up by further meeting to discuss the proposal for
collaboration. As shown in the figure 6, proposal that has been agreed or close to
agreement will be brought to contract signing (Figure 6).

Figure 6. Pattern of interaction that begins from the

socialization of UGM competence to the counterpatrts.

The third patterns is a pattern on the bonding condition. In this context,

the counterparts rely on the level of the acquintance and experience in the
collaboration. Usually, UGM will contact the counterpart that has been
previously known. In this situation the time that is spent for appropriate
personnel could be minimized or avoided. Subsequently, the proposal for the
collaboration ith the counterpart could be made. Communication in the
proposal establishment could be made either direct or indirect, but more in
informal nature. In this regard, both parties has known to each other, trust to
each other and understanding on the oother needs so that the agreement can
be reach earlier (Figure 7).

Figure 7 The pattern of interaction that is based on the experience during the
interaction.
Proposal that has reached 80% of the required condition will be brought to the
contract signing at UGM and that enable the continuation of the collaboration.
This is also linked to the strategy that is used by the UGM personnel to seek the
chance for the continuation of collaborative activities when the activity is almost
completed. This strategy is predominantly applied in the collaboration with
business (industry).

Among three patterns above, it is known that the social capital element that
dominantly support the bridging and bonding are trust and reciprocity. Both
elements are included in the relational dimension. The role of the alumni is
relatively significant in the establishment of collaboration. This is particularly true
in the beginning of a collaboration. Alumni will serve as sources of information to
indicate the person who has the required competence. In this regard, the alumni
will build the trust between the counterpart and the UGM. In addition, continuity
of a collaborative activity also indicates the trust of the counterpart to UGM. The
results of the interview also indicated that the basis for the trust is the quality of
the services that are provided during the collaboration.
Reciprocity element is seen during the inter-relation or feedback between the
counterpart and the UGM by providing suggestion or idea, input or critics during
the development of a collaborative research proposal. At that stage, feedback is
given to unite the perception towards the project that will be carried out and the
intended outcomes by minimizing the risk of failure and problems or
misunderstanding when the project has been implemented. In giving the
feedback, the knowledge exchange and information usually occur, such as the
weakness of the methods used in the research, recent progress in science and
technology etc. The inter-relation also occurs during the mid- or end evaluation
of conducted activity. Feedback is usually provided during the informal forum so
that all the players are comfortable in expressing their idea and that the feedback
can be accepted. This feedback giving indicated a sort of balanced reciprocity
(Item exchnge that is simultanous in the form of idea and opinion).

Both social capital elements are very important in facilitating the agreement
in proposal establishment and enable the continuation of the collaboration. The
other social capital elemnts such as norms and regulations is not dominant in the
interaction between UGM and the counterparts. Indeed, the norms that are
applied during the collaboration is merely an informal norm although in the
contract formal norms have been clearly stipulated. The problems arise during
the implementation is usually settled on a family basis by prior discussion so that
the problem can be settled and the inteneded outcome can be obtained.
So far, UGM and the counterparts have done their duties as stipulated in the
previously agreed contract. This can be seen through the trust given to UGM to
conduct more than one collaborative research with the same counterpart.
Nevertheless, to avoid the possiblity of misconduct, they have agreed several
written sanctions in the contract. Up to the present, there is no misconduct in the
collaborative activities in UGM that thas been given severe sanctions. Usually
the problem is settled trhough discussion between the players and the solution is
usually reached through family basis, so that the collaborative study could be
continued to obtain the intended results and not blaming each other.

c. Inter-relation components between University, business and

Government.

As have been described above, identification of the inter-relation

components is intended to detrmine the level of interaction between the
collaborative institutions. Based on the classification of collaboration data in UGM
during 2004-2007, UGM has had four components of the inter-relation research
support, cooperative research, knowledge transfer, and technology transfer.
However, the most frequent component in UGM is ‘cooperative research’, which
is around 276 collaborative activities. This collaboration includes: research
activities that is based on the reservation of the counterparts (Government or
business). In this context, the activities are conducted formally and the inter-
relation is based on the agreed agenda by both parties.
The other inter-relation components that constitute significantly is
‘research support’, with the amount activities is similar to the cooperative
research, approximately 271 activities. This includes increase the expertise and
skill of the manpowers (faculty staff). Interaction with the second party (funders)
is usually not intens, usually during presentation of the prand oposal or research
report only). The other two components ’knowledge transfer’ and technology
transfer’ are very few, 27 and 17 activities, respectively (Figure 8.)
Owing to the facts that inter-relation components in UGM are still mainly
composed by research support and cooperative research, it therefore could be
concluded that the level of interaction of collaborative research activities in UGM
is still relatively low.

Research Support
300
200
100
Technology transfer 0 Cooperative research

Knowledge transfer

LPPM Fak. & Pusat studi Kerjasama

Figure 8. Map of the inter-relation components in UGM

5. Conclusion

This study revealed that based on the mapping of bridging and bonding, it
was found that study centers in UGM, which have multidiscilinary and multi-
institutions activities, are more often to obtain new collaborations and extend the
external relation. This finding is supported by the amount of new counterparts
gained every year. The finding is different in the faculty unit whereby the
counterparts consistently extended the collaboration and that more favorable to
bonding condition.
There were three patterns of interaction between the UGM and its
counterparts: (1) interactions that relies on alumni, (2) interaction that is initiated
through socialization of the UGM competence to the counterparts, (3) interaction
that is based on experience during the interaction or collaboration. Within the
three patterns, it is found that trust and reciprocity are the most dominant social
capital that support the bridging and bonding condition during the interaction of
UGM with the business and Government.
Mapping on the inter-relation components among the collaborating
institutions indicates that most of the research collaborations in UGM with the
government are in the forms of ‘research support’ whereas with industry are
mostly in the form of cooperative research. This finding indicate that the level of
interaction between UGM and the government and business is still low. The
interactions that include knowledge transfer and technology transfer is relatively
few.
The high amount of reserved research collaborations in UGM should not
be terminated when the contract end. The results of the collaboration should be
published in the national or international scientific journal or patent application.
This relates to the level of interaction in the inter-relation components whereby
the level is still low. By publishing the results of the research collaboration, it is
intended that it can attract the counterpart either government or industry so that
the interaction can be increased to knowledge and technology transfers.

Acknowledgement

The authors wish to thank the chairman of the Center for Science and
Technology Development, The Indonesian Institute of Sciences, for his
encouragement, Staff of University of Gajah Mada for their assistance during the
execution of this study.
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