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The Impact of Higher Education on Regional Economies Research Initiative
University-Industry Knowledge Exchange: Demand Pull, Supply Push and the Public
Space Role of Higher Education Institutions in the UK RegionsMaria Abreu, Alan Hughes,
Michael Kitson and Vadim Grinevich
Centre for Business Research
University of Cambridge
10th October, University of Strathclyde, Glasgow
The Impact of Higher Education on Regional Economies Research Initiative
Research Objectives
• Identify the factors that affect the incidence, form, effectiveness and regional impact of knowledge exchange activities between business and HEI in the UK.
• Identify the way these interactions vary across UK regions and within those regions. – Knowledge exchange includes the full range of ways in which
the businesses and the higher education sector interact• Consider the objectives and the evaluation of their success from
both a business (or 'demand' side) perspective and from the academic (or 'supply' side) perspective.
• Draw implications for public policy in the area of knowledge exchange and regional development.
The Impact of Higher Education on Regional Economies Research Initiative
Research Background: Collaboration and CBR Research Expertise
• Collaborator: Council for Industry and Higher Education (CIHE) – Philip Ternouth
• Related Previous Projects– International Innovation Benchmarking and the Determinants of
Business Success (funded by the Cambridge-MIT Institute)– Regional Variations in Innovation and Absorptive Capacity
(funded by DTI)
• Related Expertise– CBR Survey and Database Unit
The Impact of Higher Education on Regional Economies Research Initiative
Project: Methodology
• Stage 1: scoping case studies
– develop and refine the questions in the national surveys (stage2).
• Stage 2: development and empirical analysis of large scale surveys
– Businesses
– Academics
• Stage 3: detailed case studies of knowledge exchange activities in selected sectors and regions (informed by stages 1 and 2)
The Impact of Higher Education on Regional Economies Research Initiative
Background: the Evolution of University – Business Knowledge Exchange
• The ‘laissez faire’ model– Importance of chance, luck and serendipity
• The standard model– Focus on a narrow range of technology transfer
mechanisms
• The wider model– Focus on a wide range of interactions– Exchange rather than transfer
The Impact of Higher Education on Regional Economies Research Initiative
The Laissez Faire Model
• Universities focussed on two missions – research and education
• Example: the ‘Cambridge Phenomenon’ developed when the University took little active interest in business engagement. In the past:– University largely ignored IP issue– Adopted a liberal attitude to what academics did– Industrial liaison merely acted as ‘window’ on what
the university did – little exchange or dialogue
The Impact of Higher Education on Regional Economies Research Initiative
The Standard Narrow Model • Narrow focus on Technology Transfer• Mechanisms: Patents, Licenses, Spin-outs• Limitations
– Model is incomplete – Potential financial returns were frequently over-
estimated – Metrics distorting behaviour (Goodhart’s Law: any
observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes)
The Impact of Higher Education on Regional Economies Research Initiative
The Wider Model: Multiple Knowledge Exchange Mechanisms
• Educating people• Increasing the stock of ‘codified’ useful knowledge• Problem solving• Public space functions (Universities do not move)
– Relatively neglected, but distinctive– Includes networking; social interaction; meetings,
conferences; entrepreneurship centres; personnel exchanges, including internships
• Focus on exchange and interactions
Knowledge Exchange – Multiple Mechanisms
Educating People• Training skilled
undergraduates, graduates & postdocs
Providing public space• Forming/accessing networks and stimulating
social interaction• Influencing the direction of search processes
among users and suppliers of technology and fundamental researchers
–Meetings and conferences–Hosting standard-setting forums–Entrepreneurship centers–Alumni networks–Personnel exchanges (internships, faculty
exchanges, etc.)–Visiting committees–Curriculum development committees
Increasing the stock of ‘codified’ useful knowledge• Publications• Patents• Prototypes
Problem-solving• Contract research• Cooperative research with industry• Technology licensing• Faculty consulting• Providing access to specialized
instrumentation and equipment• Incubation services
Source: A. Cosh, A. Hughes and R. Lester UK PLC Just How Innovative Are We? Cambridge MIT Institute 2005
The Impact of Higher Education on Regional Economies Research Initiative
University- Business Interactions: US UK Innovation Benchmarking Survey
• Joint IPC MIT and CBR Cambridge Innovation Benchmarking Survey (Source: Cosh, Hughes and Lester, 2005)– Unique survey comparing UK and US 2005– Manufacturing and Business Services– Overall Sample: 2129(UK) 1540 (1540)
The Impact of Higher Education on Regional Economies Research Initiative
University-Business Interactions: Results from US UK Innovation Benchmarking Survey
• To increase innovation, businesses engaged with companies using a wide range of interactions
• Informal contacts are most frequent• Conventional modes of university output (graduates,
publications, conferences) amongst most frequently cited• Licensing and patenting amongst least frequently cited
The Impact of Higher Education on Regional Economies Research Initiative
Types of University Business Interaction Contributing to Innovation (% Companies)
0 10 20 30 40 50 60
Non-exclusive licensing of University held patents
Innovation-related expenditure spent on universities
Exclusive licensing of University held patents
Internships
Joint research and development projects
Problem-solving / consulting by university staff
Recruitment at post doctoral level
Testing and standards
Conferences
Publications
Recruitment at first degree, or masters level
Informal contacts
US
UK
Source: A. Cosh, A. Hughes and R. Lester UK PLC Just How Innovative Are We? Cambridge MIT Institute 2005
The Impact of Higher Education on Regional Economies Research Initiative
University Business Interactions and Innovative Activity: Degree of Importance
• How important are interactions?• US companies rate all interactions as highly important
more frequently than UK• US companies place a relatively high importance on
– Licensing, joint R&D and problem solving• BUT this is a low frequency activity
– Post doc and graduate recruitment and internships• AND this is a high frequency activity
• Differences less marked for informal contacts, publications
The Impact of Higher Education on Regional Economies Research Initiative
Universities in the Innovation ‘Ecosystem’
• In both countries universities are ranked low in frequency of use
• Customers, suppliers, competitors and internal knowledge are the dominant sources
• In all cases UK firms are more frequent users of external sources than US
• In all but 3 cases (competitors, in-house knowledge, clients and customers) US companies were more likely to rate the knowledge sources as highly important than the UK– Especially public sector, university and private
research institute sources
The Impact of Higher Education on Regional Economies Research Initiative
Use of Sources of Knowledge for Innovation: All Companies %
0 20 40 60 80 100 120
Private research institutesGovernment research organisations
Commercial labs or R&D enterprisesUniversities/higher education institutesOther public sector, eg Business links
ConsultantsTrade associations
Professional conferences, meetingsEnvironmental standards and regulations
Technical standards or setting bodiesTechnical press, computer databases
Fairs, exhibitionsHealth and safety stds and regulations
Competitors in your line of businessKnowledge within the group
Suppliers of equipment, materials etcClients or customers
Internal knowledge within the company
US UK
Source: A. Cosh, A. Hughes and R. Lester UK PLC Just How Innovative Are We? Cambridge MIT Institute 2005
The Impact of Higher Education on Regional Economies Research Initiative
The Importance of Diversity
We should, however, guard against a situation where all our universities aim for the same goals. What is required is a diversity of excellence, with research universities focusing on curiosity driven research, teaching and knowledge transfer, and business-facing universities focusing on the equally important economic mission of professional teaching, user-driven research, and problem solving with local and regional companies. Sainsbury (2007): The Race to the Top: A Review of Government’s Science and Innovation Policies, p.44
The Impact of Higher Education on Regional Economies Research Initiative
Universities and Innovation: the Importance of Diversity and Local Economic Structure
A. Knowledge Generating Locations• Indigenous creation of new technologies
B. Knowledge Using Locations• Tranplantation of new economic activity into region• Diversification of existing industry into new
activities• Upgrading of mature industries
Adapted from Richard Lester Universities, Innovation, and the Competitiveness of Local Economies: A Summary Report from the Local Innovation Systems Project – Phase I, MIT IPC Working Paper IPC-05-010, December 2005
The Impact of Higher Education on Regional Economies Research Initiative
The Importance of DiversityDeveloping New Technologies -the Tale of Two Cities• Strong biotechnology clusters in the Cambridges
(USA and UK)• But the development of the industry in the two
cities reflects different trajectories and different challenges
• Indicates the importance of understanding the geography and history of place
The Impact of Higher Education on Regional Economies Research Initiative 1 mileSource: MIT Entrepreneurship Centre
The Impact of Higher Education on Regional Economies Research Initiative
University-Business Interactions: Constraints and Hurdles
• Misaligned Incentives• Time frames• Institutional Differences
• Vertically organised businesses• Horizontal flat Universities
• Cultural differences• ‘Language’ differences• Lack of skills and competences at the collaboration interface (the
‘boundary spanning’ function)• Funding (especially where the social rate of return is high but the
private rate of return is low or widely spread)
The Impact of Higher Education on Regional Economies Research Initiative
BOHR
PASTEUR
?
EDISON
Aligning Incentives –
Knowledge Exchange in which space?
Consideration of Use
No Yes
No
Yes
Quest for Fundamental
Understanding
Source: D. Stokes (1997) Pasteur’s Quadrant Washington Brookings Institution
The Impact of Higher Education on Regional Economies Research Initiative
Project: Key Research Questions• What are the processes by which opportunities for
knowledge exchange are recognised by businesses and academics?
• What are the key motivations and objectives of the parties to the knowledge exchange and their implications for the incidence and effectiveness of the exchange process?
• What factors affect the choice of modes of knowledge exchange?
• How do the parties to knowledge exchange measure success?
The Impact of Higher Education on Regional Economies Research Initiative
Project: Key Research Questions
• What factors affect the geographical location of partners to knowledge exchange and the consequent potential impact upon the regional and sub-regional economy of the exchange process?
• What factors affect differences across regions and sub-regions in the incidence, form, perceived success and impact of exchange interactions?
• Is the region the appropriate scale at which to identify, measure and seek to develop policy in relation to knowledge transfer and can other geographical scales be identified such as the city or other sub regional grouping?
• What is the extent of extra regional knowledge exchange activity?
The Impact of Higher Education on Regional Economies Research Initiative
University-Industry Knowledge Exchange in the UK Regions: The State of Play
• There is no one ideal model of university-business interactions
• Each individual case requires– a strategic view by universities of their capabilities – a strategic view by region of sectoral requirements– a careful matching of university capabilities and regional
development path needs
• The need for more evidence on the role and impact of university-business interactions in the innovation ecosystem.