Doing the business University-business links and innovation

Transcription

1 Doing the business University-business links and innovation The UK government has increasingly expected universities to develop stronger links with business. Such links are believed to contribute to innovation and economic growth, particularly regionally. Targeted funding by the Higher Education Funding Council for England has been provided to encourage innovative business links, which are often characterised by the development of specialist knowledge transfer offices. The 2003 Lambert Review saw such funds as important in changing the culture within universities towards collaboration with business, which can include the commercial exploitation of university research either by existing businesses or spin-out companies that originated in universities. A recent study for NESTA by Dr Nola Hewitt-Dundas of Queen s University Belfast, suggests that other factors in a university may be more important than specialist knowledge transfer offices in determining the strength of institutional capacity to engage with business. In particular, their entrepreneurial ethos and the quality of their research may be more important than organisational resources. There are also significant geographical factors. Previous research has been largely case-study or survey based. This report adopts a quantitative approach, combining four databases to inform the analysis. 1 The study has important implications for policymakers at a time when funding is constrained and there is a need to make the most effective use of university-business links to stimulate the innovation that could support economic recovery. 1. The four databases are: HEFCE Higher Education, Business and Community Interaction Survey 2007; Postcode data files (to 4 digits); Higher Education Information Database for Institutions; and the UK Innovation Survey (CIS 4 UK). The commercialisation of UK universities? Universities are much more focused on commercial objectives than ever before. This means that in addition to pursuing academic knowledge and research, they are keen to patent new ideas and develop those ideas through spin-out companies or commercial partnerships. They are also selling consultancy and hiring facilities to a greater extent than before. Concerns that such commercialisation may come at the expense of research quality seem misplaced. The evidence is that both agendas are inter-related: academic publications and patents are a signal to the business community of research quality. As that quality increases, universities become increasingly attractive to potential commercial partners. The effectiveness of knowledge transfer The process of spreading ideas developed in universities to business and the wider community is known as knowledge transfer. Since the mid-nineties, it has been regarded by policymakers as an important part of the mission of universities, with funding to support it. Where scientific publication was once the dominant means of knowledge transfer, collaborative research and improved contacts with business are now increasingly important. This has led to the growth of specialist knowledge or technology transfer functions within universities to complement academics own networks. NESTA Policy & Research Unit 1 Plough Place London EC4A 1DE research@nesta.org.uk 1

2 Diversity in UK universities UK universities can broadly be divided into three main groups. According to their research, the includes 20 high quality research-intensive universities, which win nearly two-thirds of all research grant income. There is a middle-tier of 19 universities that form the 1994 group, which emphasise their research and teaching excellence. And there is a third and larger group of new universities and former polytechnics, many of them affiliated to Million+, as well as specialist arts or education institutions that have been more technically and accessfocused; most received university status in What each type of university does best and where The research found large differences in perceived economic contribution of different universities. Post-1992 universities tend to concentrate on improving people s skills, as well as providing support to small firms. While many universities recognise the economic contribution of their educational and research outputs, they tend to see their main economic contribution as being in technology transfer and collaboration with larger businesses. Interestingly, fewer cite spin-out companies than might be expected. Figure 1: Perceived economic contribution of Russell group universities vs. post 1992 institutions 2. Higher education is also provided by many further education colleges, usually linked with universities. Where there is no local university, an FE college may provide technical or training expertise. Access to education Graduate retention Attracting non-local students Regional skills needs National skills needs Management development Technology transfer Supporting SMEs Research collaboration with industry Spin off activity Support community development Develop local partnerships Attracting inward inv 5.2% 15% 12.1% 1.7% % 15.5% 5% 1.7% 1 15% 4 31% 53.4% 45% 25.9% 36.2% 25.9% 81% Percentage 2

3 Building knowledge transfer capacity Since 1999, universities have had access to funding for third stream or knowledge transfer work (in addition to teaching and research). Most universities used the funding to establish a dedicated unit to link with business and the wider community. They also tend to provide specific advice to small firms, contracting help and indemnity insurance for staff. This has created an infrastructure and supportive environment for business links. Russell group universities have significantly greater numbers of staff liaising with private sector partners than post-1992 universities. universities are more likely to have in-house capability to file patent applications and seek licensing opportunities. Figure 2: Capability of UK universities to deliver knowledge transfer activity, Percentage In-house patent filing Outsourcing of filing In-house licensing External licensing Scale of knowledge transfer activity Income from activities such as collaborations, contract research, consultancy, facilities and equipment services, and professional development courses, is a good measure of the scale of knowledge transfer activity. While post-1992 universities gain significant income from courses, universities far exceed them in income from other knowledge transfer activities. Indeed, in the post-1992 universities the median income for research collaborations, contract research and facilities services is less than one tenth and that from consultancies is less than a fifth that in universities. While a significant element is the larger staff size in research universities, the differences are still significant. Where the income comes from universities gain a greater share of research council and EU research collaborative income than post-1992 universities. However, post-1992 universities gain significant funding from government departmental research budgets. Three-quarters contract research and two-thirds of consultancy income in post-1992 universities comes from non- 3

4 Figure 3: Differences between types of income at post-1992 and Russell group universities, ,000 18,000 16,000 14,000 12, s 10,000 8,000 6,000 4,000 2,000 0 Collab. income/fte Contract research income/fte F&E income/fte Income from courses/fte IP income Note: FTE=Full-time equivalent commercial contracts, whereas larger businesses are relatively more important for Russell Group universities, accounting for 40 per cent of their contract and consultancy income. Training for small firms and the public sector is an important source of income for post-1992 universities, whereas universities gain a larger share of income from training individuals and large businesses. To what extent do universities gain income from their home region? In general, post-1992 universities are more likely than universities to gain a larger share of income from within their own government region. This is true of contract or consultancy work, for example. However, both groups gain the majority of such work from outside their region. Even so, the average university performs nearly 3.8 million worth of regional contract research and 769,000 worth of home regional consultancy work, and each has a higher absolute average income from regional work than the average post-1992 university. Even with facilities and equipment hire, 45 per cent of all income in post-1992 universities comes from outside the region, as does nearly two-thirds of Russell Group income. Post-1992 universities gain half their course income from their home region, compared with a quarter of course income. What this means for regional and government economic policy The presence of universities in a city or region has been seen as more important than the nature of those universities. But this research suggests that their nature matters too. Public funding cuts make it more important than ever that business can access the type of links it needs from the most appropriate universities. Indeed, the research shows that businesses are more likely to work with universities where there is an open approach to sourcing knowledge beyond the local university. There are important implications for regional policy, and regional development agencies (RDAs) or devolved administrations in particular. 4

5 Figure 4: Percentage of total activity income from region, Percentage Total contract research income Total consultancy income Total F&E income Total income from courses IP income National policymakers need to understand and manage the diversity in knowledge transfer more effectively. For example, post-1992 universities tend to support small firms and providing training courses for the community, whereas universities excel in technology transfer and working with large national and international companies. There should be a stronger alignment between the capabilities of different universities and strategic priorities and activity. Investing in first class research stimulates university-business co-operation locally as well as nationally. There are real economic benefits in having research labs and facilities locally, as they provide jobs and increase the overall knowledge of local firms. These economic benefits should be recognised at a time of financial austerity. What this means for business Firms typically recruit the best graduates available, regardless of where they live, and they are happy to arrange their training away from local universities. But where they have their own research facilities, companies tend to work with local universities rather than those located further afield. Businesses should be ready to shop around for the right university links, which won t necessarily be at a local university. The benefits of personal contact are often strong with consultancies or technical training, requiring a local university. These benefits may outweigh any extra benefits from more specialist expertise. So, businesses need to weigh up the importance of such contacts. Businesses can often benefit from working on joint research projects with researchintensive universities, and shouldn t see such institutions as solely international experts without relevance to their research needs. Government including local government funding is often tied into work with particular local universities. But innovation is more likely to occur if such funding has fewer strings attached, as is the case with European funding, and allows links to develop with the most appropriate university even if that isn t the nearest one. 5

6 What this means for universities Universities particularly the post-1992 institutions should be more willing to sell their services and develop links beyond their immediate locality. In particular, where they have specialist expertise or research, this may appeal to companies regardless of their location. By playing to their strengths, different universities can maximise their impact. Universities should strengthen their networks with local companies that have a strong internal research and development capacity. The evidence is that such companies are keen to work with local universities, and such links can be mutually beneficial. By focusing on the quality of research, universities can develop more effective longer term relationships with businesses, as well as having a wider economic impact. Universities should be more willing to promote the local economic benefits of quality research facilities in their campuses and science parks. 6