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Universities in Transition: Developing Entrepreneurial Universities for Organizing

Third Mission

PhD Project

School of Business and Economics, UiT – The Arctic University of Norway

The Entrepreneurial University

Universities worldwide are increasingly tasked with fulfilling and enhancing the third

mission of “service” with a concerted effort to help stimulate and sustain economic

development. With this increased emphasis on commercializing research, licensing of

technology, creating university spinoffs, introducing entrepreneurship programs, and

expanding university-industry relations, universities are being encouraged to take an

entrepreneurial turn. This term identifies the transition that challenges universities as

institutions, beyond their first mission (education) and second mission (research).

Theoretically the entrepreneurial turn can be viewed as an institutional change (Scott,

2014) consisting of the roles, norms and conventions that society has identified for how

universities are expected to perform. This project aims to test hypotheses on how

universities institutionalize the third mission through an “entrepreneurial architecture”.

The term entrepreneurial university can be traced back to the well-cited book entitled

“Academic Capitalism” (Slaughter and Leslie, 1997), which examines the changes of

academic labour between 1970 and 1995. It defines the phrase 'academic capitalism' as the

market effort to secure the external finance of universities. In a study of the transformation

of five European universities, Clark (1998:3-4) uses the term “entrepreneurial university”

to mean a“characteristic of social systems; that is, of entire universities and their internal

departments, research centres, faculties and schools. The concept carries the overtone of

‘enterprise’ —a wilful effort in institution-building that requires much special activity and

energy. Taking risks when initiating new practices whose outcome is in doubt is a major

factor. An entrepreneurial university, on its own, actively seeks to shift in organizational

character so as to arrive at a more promising posture for the future. Entrepreneurial

universities seek to become ‘stand-up’ universities that are significant actors on their own

terms. Institutional entrepreneurship can be seen as both process and outcome.” This

project follows Clark’s (1998) definition by viewing universities as institutional

entrepreneurs when seeking to accommodate the entrepreneurial turn as a societal norm.

According to recent literature, universities can be entrepreneurial in two main ways. First,

academic entrepreneurship focuses on the commercialisation of knowledge and research

findings (Klofsten and Jones-Evans, 2000; Roessner, et al., 2013). In this way universities

relate the third mission to research by becoming knowledge hubs (Youtie and Shapira,

2008) and are often concerned with the challenges and opportunities associated with

technology transfer (Mowery, et al., 2002; Owen-Smith and Powell, 2003). Second,

entrepreneurial education (Gibb and Hannon, 2006) links the third mission to the

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university’s teaching mission and the building of entrepreneurial competency (Altmann

and Ebersberger, 2013). This project builds on both these ways in which universities can

develop entrepreneurially, thus research based innovations as well as entrepreneurship

education and student entrepreneurship are seen as outcomes.

It is clear that governments, businesses, and societies differ in how they expect universities

to contribute to knowledge-based growth, just as societal and institutional contexts differ

in how they enhance or impede third mission programs and activities. Despite an

increasing amount of research focusing on university entrepreneurship (Morris et al., 2013;

Hoskinson and Kuratko, 2014; Fayolle and Redford, 2014; McKelvey and Holmen, 2009;

Fetters, et al., 2010), scant attention has been given to how universities organize themselves

in order to develop entrepreneurially. The research topic of this project is thus: How can

universities organize themselves in order to address this entrepreneurial turn and execute

the third mission of service? Institutional theory claims that organizations are both

creatures of their institutional environments as well as active players in these processes

(Scott, 2014). Thus the emerging entrepreneurial university is a result of complex recursive

processes by which institutional forces both shape, and are shaped by, organizational

actions.

Tolbert et al (2011) argues that the mutual neglect of entrepreneurship research and

institutional theory has limited the development of both traditions. Conceptualizations of

entrepreneurial universities have generally failed to understand the complex

interdependent and intricate institutional dynamics (Howells, et al., 2012). Consequently,

there are few contributions to establish and test a theoretical approach to how universities

can institutionalize the third mission.

Institutionalizing the Third mission through an Entrepreneurial Architecture

In an extensive literature review, Rothaermel, et al., (2007) concluded that current research

in university entrepreneurship lacks a complexity in models and richness in data to

understand the interdependent process across different actors, agents, and institutions.

Recent empirical studies support the complex interrelationship between the university and

an intricate institutional organisation and its environment (Curi, et al., 2012; Howells, et

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al., 2012). Nelles and Vorley (2010b) claim that few contributions have attempted to

establish a theoretical approach to conceptualize how universities can respond effectively

to entrepreneurial imperatives. They propose that the third mission can and should

reinforce the missions of teaching and research and that embedding the third mission and

viewing the three missions as mutually constitutive is essential for the future coherence of

the contemporary university (p.342). Nelles and Vorley (2011) further identify a gap in

previous studies as not seeking to theorize the process or dynamics of transformation in

response to the pressure to become more entrepreneurial as institutions, nor encouraging

entrepreneurship from within. They advocate that the concept of entrepreneurial

architecture contributes to the literature by reconceptualizing the dynamic process of

organizational change that accompanies university adaption of the third mission (p.344).

They introduce the concept of “entrepreneurial architecture” from the corporate

entrepreneurship literature (Burns, 2005) as a lens though which the expanded mission of

the universities can be better understood (Nelles and Vorley, 2010a).

Elements of Entrepreneurial Architecture: Defined and Identified Source: Nelles& Vorley (2010a: 169)

According to Nelles and Vorley (2008), the metaphor ‘entrepreneurial architecture’ (EA)

refers to the collection of internal factors that interact to shape entrepreneurial agendas at

universities. It comprises five dimensions that represent the institutional, communicative,

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coordinating and cultural elements of an organization oriented towards the third mission,

as shown in the Table above. Vorley and Nelles (2008:130; 2009:288) advocate that the

third mission is best integrated into an institutional strategy where inner connections link

functions and goals while coordinating and embedding third stream activities as

fundamental to institutional development.

How universities design, develop and implement their EA is an institutional question,

which will also be determined by how the different dimensions interrelate. Indeed the EA

of universities, as with other missions, are subject to a multitude of power struggles and

internal tensions. Etzkowitz (2003: 116) asserts that entrepreneurial universities have

learned to function with antithetical norms, although arguably entrepreneurialism can only

thrive where seemingly contradictory ideas and practices are reconciled. EA provides a

framework to understand the entrepreneurial evolution of universities and with it their

legitimation while also serving to highlight the varied locus of power within (cf. Philpott

et al., 2011). Universities consist of scientists within various disciplines, e.g. life sciences,

technology, engineering and humanities – who have different motivations and interests in

pursuing the third mission (cf. Lam, 2015; Rasmussen et. al., 2014; Foss, 2012).

A newly published study of how 10 universities from five different countries meet the

entrepreneurial turn supports the importance of the contextual embeddedness of the

architecture dimensions (Foss and Gibson, 2015). All the case narratives support the

importance and impact of the regional and national context in which the university is

embedded concerning the launch, development, and sustainability of programs and

activities supporting the entrepreneurial turn. Thus, the national and regional context is

important to how and at what speed a university employs an entrepreneurial architecture.

Following institutional theory, Scott’s regulative pillar of influence (Scott 2014:59) is

relevant here as well as the importance of the region/context in which the university is

embedded (Uyarra, 2010; Welter, 2011). The interrelationship between the institutional

and regional context and the development of the entrepreneurial architecture is under

researched and thus needs to be addressed.

The new study “Academic Entrepreneurship: Time for a Rethink” (Siegel and Wright,

2015) argues that the field has moved from the traditional perspective of entrepreneurial

universities generating direct financial returns through academic spin-offs, licensing and

patents by faculty and postdocs in TTOs and science parks to an emerging perspective.

This positions the university as providing a wider social and economic benefit to the

university ecosystem based on student and alumni start-ups, entrepreneurially equipped

students and job creation in the local region or state. They view students, alumni, on–

campus industry collaboration and surrogate entrepreneurs as the central actors, while

shifting TTOs and science parks to accelerators, entrepreneurship garages, student business

plan competitions, collaborative networks with industry and alumni, employee mobility

and public and private “incubators”.

An emerging stream of literature indicates that there is a relationship between university

context and the intended entrepreneurial action of students (Kraaijenbring et al., 2010;

Turker and Selcuk, 2009; Saeed and Muffatto, 2012). A number of studies have addressed

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the context in which students operate throughout their studies at higher education

institutions. The study by Todorovic et al., (2011), for example, shows that universities

which provide entrepreneurship support achieve a higher number of spinouts and patents.

The entrepreneurial orientation of a university, including research mobilization,

unconventionality, industry collaboration and university policies, increased the

entrepreneurial intentions and attitudes of the students (Saeed and Muffatto, 2012).

Another study found that the most important support services requested by students at

universities include bringing students into contact with a network supporting new business

startups, arranging entrepreneurship conferences and workshops, and offering project work

(Davey et al., 2011). Consequently, an important part of developing the third mission is for

universities to invest in an entrepreneurially-friendly university context.

Research Questions

Based on the role of the university, which to a large degree encompasses co-creation within

its environment, the modern aim of universities can be defined as to “collaborate with

diverse social actors to create societal transformation in the goal of materialising

sustainable development in a specific location, region or societal sub–sector” (Trencher et

al., 2014:4). This project suggests that entrepreneurial architecture can be viewed as an

institutional change to create this transformation by executing the third mission. It follows

Nelles and Vorley (2010), who advance the concept of ‘entrepreneurial architecture’ (EA)

as a heuristic technique for understanding the foundations of entrepreneurial universities.

Comprising the five well-established dimensions of structures, systems, leadership,

strategies and culture, the contribution of EA is in bringing them together to understand

the makings of entrepreneurial universities. This project therefore aims to integrate the

concept of entrepreneurial architecture at an organizational level in a larger institutional

framework (Nelles and Vorley, 2010; Nelles and Vorley 2011; Vorley and Nelles, 2008).

An institutional perspective allows analysis within the embedded contexts of universities.

The project builds on recent findings that the components of the EA are interrelated as well

as impacted by the institutional context (Foss and Gibson, 2015).

The overall research question of interest in this PhD project is: How can universities

develop their entrepreneurial architecture to successfully execute the third mission? There

are several directions this idea can be explored that could result in some interesting

findings: (1) How does the entrepreneurial architecture of universities both enable and

constrain so-called third mission activities? (2) How does the way in which a university's

entrepreneurial architecture evolve and/or is constructed determine the scale and scope of

the third mission? (3) How do university organizational factors (incentive structures,

management, etc.) stimulate entrepreneurship? (4) How does the way in which universities

engage in entrepreneurial/third mission activities vary within and across institutions? (5)

In which ways does the disciplinary focus of institutions/departments affect the

entrepreneurial orientation of universities? (6) How do successful third mission activities

vary among institutions? These questions can be explored within the university context

and the regional context in order to create new knowledge of the embeddedness of EA for

serving the third mission (see Figure below).

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Empirical context- Norwegian universities

Due to the recent reformation of the Norwegian higher education system, there are now

eight universities in Norway: UiO, NMBU, UiA, UiS, UiB, NTNU, Nord Universitet and

UiT. These are all state-financed and widely dispersed in various regions, with different

populations, infrastructure and industrial sectors. R&D specializations vary widely among

these universities (Gunnes, et.al., 2015). In 2003 a new law was established that gave the

universities ownership to commercialize research. A new report shows that Technology

Transfer Offices (TTOs) are situated in close proximity to five of the universities and are

embedded in the local systems while collaborating with many different actors (Spilling et

al., 2015). Although the rate of commercialization has increased since 2003, there is still

skepticism among researchers regarding the legitimacy of “making business out of

research”. Attention is paid to the two primary missions of the university, research and

education, which are viewed as important for international competitiveness, whereas

commercialization is viewed as a more peripheral activity (Spilling et al., 2015). Norway

uses a smaller share of its GDP on R&D than Finland, Sweden and Denmark, and the

private sector contributes only half of the average of the private sector in OECD countries.

Still, Norwegian universities have the largest public funding source compared to all the

other OECD and EU countries (Forskningsbarometeret, 2015). The government has

increased investments in FORNY1 money, pre-seed money and a “Gründerplan” (Nærings-

og fiskeridepartmentet, 2016) Consequently, there are high expectations of Norwegian

universities to build internal cultures supporting the commercialization of research,

university–industry interactions and student entrepreneurship.

1 A program supported by the Research Council of Norway in order to encourage the commercialization of research results.

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Methodological approach

Models of analysis as well as hypotheses are to be developed based on the refinement of

the research questions and the performance of a literature review. The hypotheses will be

tested through a comparative analysis of the entrepreneurial architecture in Norwegian and

some international universities using quantitative methods. A starting point for developing

a measurement of constructs and working hypotheses will be field work to universities in

Scandinavia, the UK and the US, where key authors of narrative case studies in the book

“The Entrepreneurial University: Context and Institutional Change“ (Foss and Gibson,

2015) will be available for consultation. As there exists scant empirical research on the

entrepreneurial architecture of universities, a large part of the PhD project will be devoted

to operationalizing concepts, developing empirical scales, and the testing of measurement

instruments. Thus the candidate must have interest in and must be willing to learn advanced

multivariate statistics.

PhD training, work plan, academic support

The Norwegian Research School of Innovation (NORSI) provides an internationally

competitive PhD program in innovation, and consists of a research network of Norwegian

universities, leading institutions in Scandinavia, as well as top international universities in

the United States and Europe. The Business School at UiT is represented in the NORSI

board and faculty. The PhD candidate is suggested to be enrolled in this program. The High

North Academy at UiT and Young Scientist Forum connected by Arctic Frontiers in

Tromsø are also relevant networks for the PhD candidate, as well as the international

network of the research group “Researching Entrepreneurial Universities,” to which the

PhD candidate will belong.

We foresee a 4 year plan for the PhD candidate, with the 25% lecturing responsibility either

at the Bachelor or Master level in entrepreneurship and innovation. The PhD dissertation

is to be based on three published articles and an umbrella chapter. The PhD candidate will

be supervised by a professor in the REU group and an international Professor, expert on

the entrepreneurial architecture, as a second supervisor.

Table 1: Progress and dissemination plan

Time Activity

1.09 2016 Developing research framework, literature review,

bibliometric analysis, methodological approach, PhD

Courses

1.09 2017 Data collection (fieldwork, survey, interviews)

and data analysis in Norway and some international

universities

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1.09 2018 Writing articles for conference participation,

scientific journals, submitting and resubmitting

articles

1.09 2019 Finalizing three publications, writing an umbrella

chapter, defending thesis

Dissemination

The project has a strong focus on dissemination. Universities are expected to strengthen

their role in societies (Jarvis, 2013) and research evaluating third mission activities is of

high interest among policymakers in the higher education sector. New knowledge of the

performance of entrepreneurial architectures in various institutional contexts will be of

interest to policymakers. Consequently, dissemination has a high priority in this project

and a dissemination group is planned throughout the project period.

The results of the PhD project shall create new knowledge that can help public policy to

support the modernization of the higher education sector in Norway. In order to create

sustainable future universities (Ferrer-Balas et al., 2010; Sterling 2005), new knowledge

on how and to which degree universities actually translate the third mission into action is

of value. Modernization of universities involves re-orientation of university strategies and

policies (Siegel and Wright, 2015). University managers and administrators will also be

relevant user groups. The candidate is expected to present his/her research at policy

conferences, contribute with implications for practice and write chronicles for newspapers

such as Dagens Næringsliv and Aftenposten.

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