Traditional state-run research and technology institutes (RTIs) face significant challenges and in some cases extinction, warns a new report from management consultancy Arthur D. Little.  With the global recession signalling cuts in state funding, more demanding industry customers and governments facing complex policy issues such as the low-carbon economy, RTIs today face a new set of challenges.
According to the report "Research and Technology Institutes: Meeting the challenges of the post-recession world," there are thousands of RTIs operating worldwide, and while few enjoy the high profiles of MIT in America or Fraunhofer in Germany, these national R&D centers have a key role to play in any country’s national innovation system.
Designed to support national policy goals by developing and transferring new technologies to both government and industry, RTIs often hold special knowledge in areas like infrastructure, environment, and climate change that makes them increasingly important to governments in search of market-based solutions to mitigate the risks of climate change and insecure energy supplies.  
However, according to Arthur D. Little’s report, this specialist knowledge may be lost if RTIs cannot find ways to manage increasing pressure to cut costs, develop more commercially-focused ways of working, and partner more closely with private industry partners.
"Our experience working with RTI shows that many are unable to cope with the pressure to become more commercial and globally competitive whilst simultaneously seeing their state funding stream dwindle," said Rick Eagar, a Director in Arthur D. Little’s Technology and Innovation Management Practice. "However, the opportunities for the modern RTI are countless – from creating new markets in developing countries to hastening the development of low carbon technologies and furthering our understanding of critical environmental issues such as climate change and water and food security."
Arthur D. Little suggests three steps which RTIs must take to adapt and thrive long-term:

1. Customer focus – engage stakeholders early on in developing a strategy and research agenda
2. Follow the money – align research programs to funding and commercialization opportunities
3. Cultural transformation – rethink how R&D teams are incentivized to increase efficiency and effectiveness

Research Technology Institutes is now available for download a
www.adl.com/RTIs