How does university-business interaction contribute to new to the market innovation?

Nola Hewitt-Dundas, Stephen Roper & Areti Gkypali

15 September 2016

Update on progress

• SME-University links and their innovation and productivity benefits

Agenda…

• Defining ‘Innovation’• What is our research contributing?• What determines University-Industry

Collaboration (UIC)? • Is UIC important for innovation? • Is UIC equally important for firms of all sizes?• Does the location of the university have an effect

on innovation?• Key findings & preliminary interpretations• Reflections

New to the market (NTM) and new to the firm (NTF) innovation

What do we mean by innovation?

New to the market innovation

‘This business introduced a new good or service to the market before competitors’

New to the firm innovation

‘This business introduced a new good or service that was essentially the same as a good or service already available from competitors’

NTM and NTF innovation across UKIS waves 4-8

The proportion of UK firms undertaking both NTM and NTF innovation has fallen with a greater fall in NTF innovation.

NTM and NTF innovation by sector

There is very significant variation in both NTM and NTF innovation by sector – both are largely consistent however.

Barriers for high innovation and low innovation sectors

(% innovating firms saying barriers significant across waves 4 to 8)

And the barriers for innovation are largely the same across high and low innovation sectors

NTF and NTM and high growth –UKIS 8

Both NTM and NTF innovation is more common among high growth firms….

Universities and NTM innovation

Does collaboration with Universities matter for business innovation?

Prior knowledge and research questions

• Co-operation with universities increases the probability of innovating:

Germany; France, Sweden

• Is this true for the UK?

• How does our research contribute to what we already know?

Our Approach

Causality

Novelty

Firm Size

Geography

Profiling UK Innovators

44.9

20.024.0

48.8

43.9

19.4

75.5

51.4

63.4

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

New toMarket Innov

Uni Collab ConsultancyCollab

CustomerCollab

SupplierCollab

CompetitorCollab

In house R&D Design Exporter

All Large Medium Small

Alln=3,581

10-49n=1,296

50-250n=1,104

250+n=1,181

L. University Collab +++ ++ +++ +++

L. Consultancy Collab + ++ +++

L. Customer Collab ++ ++

L. Supplier Collab ---

L. Competitor Collab -- -

L. NTM +++ ++ +++ +++

What determines university collaboration by size band?

Alln=3,581

10-49n=1,296

50-250n=1,104

250+n=1,181

University Collab +++ ++ +++ +++

Consultancy Collab - ++

Customer Collab +++ ++ -

Supplier Collab (+)

Competitor Collab (-) +

What determines New to the Market Innovation?

dy/dx Std. Err. z P>[z]

University collaboration (0/1)

.2466 .0331 7.46 0.000

University collaboration (0/1)

.2214 0.046 4.80 0.000

University collaboration (0/1)

.2134 0.0322 6.62 0.000

University collaboration (0/1)

.2119 .0830 2.55 0.011

… so how important is University collaboration to NTM innovation?

1. Causality - University Collaboration increases the probability of NTM innovation (overall by c.25%)

2. Diversity of collaborations may not be the most important factor for NTM

– External knowledge sourcing partnerships reflect internal capabilities and market positioning (not power)

Key Points

Universities

Customers

Universities

Consultants

Customers

Consultants

Universities

Small firms

Medium firms

Large firms

UKIS, Waves 4-8 Alln=23,616

10-49n=10,910

50-250n=6,629

250+n=6,053

Regional University +++ +++ ++

National University +++ +++ +++ +++

International University - +

! Fact: University Collaboration increases the probability of New to the Market (NTM) Innovation ? Question: Does this relationship hold for all Universities, irrespective of their location

Key findings [1]

1. Benefit in adopting a narrow definition of innovation: ‘New to the Market’

– Rationale based on business growth

– Rationale based on declining NTM activity

– Appropriate in relation to University collaborations

2. Causality & Novelty: University cooperation increases the probability of introducing NTM innovation

3. Size: This holds true for all firm sizes (10+)

Key findings [2]1. Openness & Diversity:

not all partners contribute positively to NTM innovation

i. Small – Universities & Customers (directly and indirectly) ii. Medium – Universities & Customers (indirectly) and Consultants

(indirectly)iii. Large – Universities and Consultants (directly and indirectly)

2. Proximity of University Business collaborationNot all universities have a positive effect on NTM innovationAgain effects vary by size of firm

i. Small – Regional & National (international being –ve)ii. Medium – Regional, National and to some extent Internationaliii. Large – National

What does this suggest?

• Support for policy efforts to promote UIC

• UICs should be better understood in terms of other external partners

• Policy initiatives adapted to different firm sizes

• Support for investing in the National University system

• University proximity becomes a less significant determinant of NTM innovation as firm size increases

Policy UIC NTMHigher Growth

Next steps …

• Further explore the interrelationships between Regional-National-International University collaborations

• New ventures; case based – sector / universities

• Reflections of findings?

• Interpretation?

• Questions?

• Suggestions for remainder of project?

Policy UIC NTMHigher Growth