The evolution of public industry R&D institute ‐ the case of ITRI

Public industrial research institutes are important in regard to aiding industry development in many countries. Research institutes have to constantly change their strategies according to their industrial environments in order to remain influential. The Industrial Technology Research Institute (ITRI) has been recognised as a successful institute in facilitating industrial development. During its 40‐year development process, ITRI has gone through three stages of strategic repositioning and organisational reforms. The evolution of the organisational structure and the interactions with its social‐technological environment are both complex and dynamic. This study proposes a framework which integrates the role of the institutes with organisation structures and strategies to analyse the process of the evolution of ITRI. Based on the framework, this study uses system dynamics to identify the underlying structure driving the process of its evolution. The result shows that it is important to align the organisational structure with development strategies; in a long‐term perspective, the strategies for short‐term and long‐term goals can reinforce each other. The recent transition of ITRI suggests a new direction‐seeking role for public research institutes to play among the national innovation systems. This study also discusses the potential impacts of the system dynamics approach to R&D management.