by
Hans G. Schuetze
Centre for Policy Studies in Higher Education and Training University of British Columbia, Vancouver B.C., Canada
Introduction: universities and “technology transfer”
“Technology transfer” and “industry liaison” have become the creed of policy makers, industrial strat-egists, and university managers only fairly recently, but research links between universities and industry have existed for a long time. In the past, however, links were largely limited to particular types of institu-tions, e.g. Technische Hochschulen, Land Grant Colleges, or Institutes of Technology, and to particular disci-plines and programmes, such as engineering, medicine, and other applied sciences. The US is an exception. From their inception most universities had a more “practical” orientation than the European counterparts, mainly because the decentralised nature of the American higher education system focused their missions and styles on the respective needs of their local and regional environment (Rosenberg and Nelson, 1994). But now in all industrialised countries, technical and political developments are transforming the former arm’s length relationship between industry and the academy into a close embrace. Given the knowledge-intensive nature of the modern economy, the general knowledge needs of society, and the dimin-ishing time lag between research and the development of new products or processes it is argued that all parts of the university – not just applied sciences and management programmes – must become more involved in the application and active dissemination of knowledge (Lynton and Elman, 1987; Walshok, 1995).
All industrialised countries have implemented policies to enhance innovation and competitiveness through increased and intensified collaboration between universities and private companies. In the US, legislation was introduced at the beginning of the 1980s that allowed universities to patent or copyright results of federally funded research activities and market them in their own name, and permitted univer-sities and industry to build consortia for engaging in pre-competitive research. Other policies require uni-versities to undertake joint research projects with industrial partners in order to be eligible for federal research grants. These policies have proven to be effective in promoting collaborative research ventures and the protection and commercialisation of intellectual property (Cohen et al., 1998) are now being emu-lated by many other countries.
For example, in Spring 1999, Canada’s Expert Panel on the Commercialisation of University Research recommended that in order for university researchers to qualify for federal research funding and univer-sities to qualify for federal support for commercialisation, univeruniver-sities must adopt policies require researchers to disclose all research results with commercial potential to their institution. Universities would be required to report all intellectual property emanating from federally funded research to the federal government annually, and demonstrate efforts to commercialise those results found to have inno-vative potential.
Likewise in Germany, where the law leaves the protection and the commercialisation of intellectual property to the individual researcher, the Hochschulrektorenkonferenz (the council of university
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dents and rectors) recommended in 1997 that universities adopt institutional policies to secure intellec-tual property rights and take them to the market through special commercialising units.
The general concern is that much of the research and technology generated by higher education insti-tutions is not fully exploited, or often not exploited at all. Similar initiatives have been undertaken in the United Kingdom (Howells et al., 1998) and more recently in Scotland, where the Enquiry into the Commer-cialisation of the Academic Science and Technology Base was conducted to develop a Strategy for the Commercialisation of R&D for Scotland (Scottish Enterprise and the Royal Society of Edinburgh, 1996).
In Japan, collaboration between universities and industry was traditionally considered taboo. Strict rules existed to prevent researchers at the National Universities to from engaging in any formal co-operation with private firms. But recently both Monbusho, the Ministry for Education and Science (Monbusho, 1996a), and the Japanese Society for the Promotion of Science have made serious efforts to improve the co-operation between the two sectors. The Study Group on University-Industry Cupertino, set up by Monbusho in 1996, recommended far-reaching changes to university rules and infrastructures in order to permit dialogue and Cupertino with the private sector. The group pointed out that engagement by uni-versity researchers in co-operative projects with industry should be “regarded as working towards the general good of the nation” (Monbusho, 1996b). In the same year, the government issued a Science and Technology Basic Plan, emphasising the intensification of university – industry Cupertino as one of the keys to the nation’s future.
In spite of the recent policy emphasis on university-industry relations and Cupertino, increased research links and intensified Cupertino are not without problems. The objectives, mandates, values, reward systems, cultures, and codes of practice of universities and private enterprises are different and sometimes in conflict, making communication and collaboration problematic. As already mentioned, some types of institutions – for example Technical Universities in Europe and Land Grant Colleges in the US – have less difficulties since Cupertino with industry (or agriculture) was the rationale behind their establish-ment and therefore an explicit part of their mandate. But many academics in traditional universities resist the idea that knowledge has an economic value and that helping to realise that value is part of the univer-sity’s mission. This perspective is grounded in the idea that university education and research are “public goods”, freely accessible and serving the public not private interests. It was reinforced by strict rules in many countries that made collaboration by university researchers with private firms not only morally ques-tionable but also practically difficult, if not impossible. Japan has already been cited as an example of this tradition, which has parallels in other countries.
More recently with globalisation of markets and international competitiveness becoming major pol-icy concerns in the OECD countries, there has been a marked shift in attitude by both governments and industry towards appreciation of the role and potential contribution of university research to industrial innovation. As mentioned, governments have eliminated many of the former hurdles to closer university – industry collaboration, and established a system of both pressures and incentives for insti-tutions and individual faculty to engage in closer research contacts and joint projects.
Partly as a result of these policies, but partly due to their own interests and initiative, universities have opened up their research facilities and staff to industry to an unprecedented extent. At the same time, they have started to commercialise intellectual property by licensing patents and copyrights to industry. Especially in the US, where this practice has been installed for some time now, these changes have had far-reaching effects not only on the traditional organisation of universities but also on their
“inner life”. Generally policy makers, university administrators, and industrialists see this “second aca-demic revolution” (Etzkowitz et al., 1998; Webster and Etzkowitz, 1991) as a great success story, but many academics warn about the dangerous effects of this trend towards “academic capitalism” (Slaughter and Larry, 1997) on the integrity and principal functions of universities, research, and education.
However, the traditional functions of the research university may be changing for other reasons as well.
In the past, with the exception of specialised higher education institutions and some “applied” fields, there was a relatively clear distinction and division of labour between university research and industry which con-centrated on basic research with little or no regard for its usefulness and commercial application, the latter
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was directed at technical innovation, market share, and profit. The distinction is becoming increasingly blurred.
New technical and economic developments put into question the traditional understanding of inno-vation as a linear and uni-directional process moving downstream from the university research laboratory into industry and then the market. It is now recognised that there are other forms of knowledge and knowledge creation that take place outside of university laboratories and involve the complex interac-tions of producers and users, theory and practice, and academia and industry. There are important con-sequences for universities and the traditional concepts of academic research and dissemination. As universities become players in “systems of innovation”, knowledge networks, and other forms of joint knowledge creation and dissemination, traditional concepts are being scrutinised and redefined.
In this article I will look at the university – industry interface from the perspective of innovation sys-tem theory, discussing the issues of organisational structures and procedural mechanisms for university-industry collaboration. Such collaboration is often discussed in terms of demand and supply of scientific and technological knowledge, or “technology push” by universities vs. “technology pull” from industry.
Starting with the demand side, I explore first the question of how firms innovate and what motivates them to collaborate with universities, distinguishing both between firms of different size and different indus-trial sectors. In the second section, I then address the question of how universities are disposed and orga-nised to collaborate with industry. In the framework of this paper, I can only mention briefly the problems in the university – industry interface which have given rise to critical comments from observers both from industry and academia. In the final section, I emphasise the education and learning side of the university – industry relationship.
How do firms innovate?
Firms and systems of innovation
The ability of firms to innovate – that is harness new ideas to create new or improved products or processes – depends on their innovative capability. This capability depends on the entrepreneur, as Schumpeter (1934) suggested, as well as the firm’s staff and their qualifications, experience and attitudes.
But it depends also on many factors outside the firm. Such factors include linkages with other firms (com-petitors, suppliers, clients, business services); the local research and development infrastructure (uni-versity or other research laboratories, graduate seminars, libraries, engineering bureaux, software firms, internet access); educational institutions (schools and post-secondary education and training institu-tions); intermediary organisations or agents that facilitate the search for and access to knowledge and information (knowledge networks, local knowledge and technology brokers); the availability of venture capital and other forms of financing; and generally a culture that values creativity, innovation, and entre-preneurship. This dependency of enterprise innovation on external factors has led to the realisation that innovation does not normally occur in isolation, but within a “system of innovation”1 which involve a great variety of institutions, networks, linkages and relationships (Lundvall, 1992; OECD, 1992).
Also, as mentioned earlier, research has found that innovation is not the result of a linear trajectory from university laboratory to the innovative product or process. Rather, it is the result of a multi-faceted and multi-directional process with many inputs and feedback loops. In this process, scientific research sometimes plays an important role. Often though, a technical innovation will involve not new research but a particular application of a known scientific discovery or technical development, or a substantial improvement of an existing product or process. It takes a long time before fundamental advances in the sciences have an impact on industrial technical innovation (Rosenberg and Nelson, 1994). Rather than being directly research-based, innovation is a comprehensive social, communicative, and learning pro-cess involving knowledge and expertise of different kinds. Even where innovation does involve the appli-cation of original research, it also requires other knowledge inputs and learning processes as well.
Empirical research on firm-based innovation has provided valuable information and insights into the organisation of information flows, decision-making, the role of in-house R&D in knowledge creation, and the use of knowledge or information from sources outside the firm. Most large firms that
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build cutting-edge high-tech products employ scientists and engineers and have in-house research laboratories. In sectors such as pharmaceutical production, firms spend up to ten percent of sales on R&D. Accordingly, R&D is given high priority in such companies and is linked to design, production and marketing through highly sophisticated management and monitoring systems. Parallel to in-house R&D efforts, the firm’s technology antennae investigate and monitor specific new scientific develop-ments and technologies developed outside the company, providing the corporation’s scientists, engineers, and managers with ongoing information about state-of-the-art potentially relevant research. In turn, this information serves as the basis for a process of dynamic and interactive eval-uation and strategic decision-making. Regular contacts with the field’s most advanced university researchers and laboratories are seen as useful in obtaining early access to basic scientific knowl-edge and monitoring longer-term developments. Thus such firms often participate in the corporate affiliate programmes offered by large research universities like the Massachusetts Institute of Tech-nology or Stanford. Affiliate programmes offer corporations advance access to developments that might eventually lend themselves to commercial application. As a result of these contacts, these companies will often engage in joint research projects, hire university scientists as consultants or company researchers, or place some of their own R&D personnel into university laboratories to work with university scientists.
Little empirical research on innovation has been conducted on smaller firms (Acs and Audretch, 1990) even though many of them are no less innovative than larger firms. Innovation in small firms is sig-nificantly different than in large. Even in cutting-edge technical fields, small firms rarely have their own research laboratories, although some will have university-educated personnel. With rare exceptions, the majority of SMEs lack the resources to engage in such activities and must rely on external sources of knowledge and spill-overs from research done elsewhere. As well, although innovative in many ways, they often face problems in utilising external R&D as there is a strong link between expertise built on in-house R&D and the firm’s “absorptive capacity” (Cohen and Levinthal, 1990). The latter constitutes the expertise and capacity to systematically monitor research and technological developments done else-where and to recognise those of potential interest and relevance, as well as the ability to actually harness and apply them. This explains why external sources of information and knowledge, such as public R&D organisations (research universities or non-university research institutes), are rarely used by smaller firms directly, rather access is usually mediated by transfer agencies, consultants, links with other firms or industrial associations, and specialised business services (Schuetze, 1998).
While firm size is an important variable for determining the nature and potential extent of university-industry relationships, other factors are also important. One is they type of university-industry involved. Research on scientific and technological developments shows that the role of university-based R&D is quite differ-ent in various industrial sectors. For example, the fledgling field of biotechnology was primarily devel-oped in university labs, while computer and telecommunication technologies were largely develdevel-oped by industry without the involvement of university laboratories (Eliason and Eliason, 1996). As several other studies show, such cross-differences are important. The1994 Carnegie Mellon Survey of some 1 500 R&D lab managers in the US manufacturing industry found considerable reliance on university research, pro-totypes, and instruments not only in high-tech industries such as semiconductors, drugs, and medical equipment but also in more mature industries such as food, petroleum, and steel. In contrast, textiles, plastic resins, metal products, and electrical equipment use much less academic R&D in their product design and production (Cohen et al., 1998).
In assessing industrial demand for university-based R&D, it is also useful to distinguish different motivations for why industry might seek university collaboration (Bonnacorsi and Piccaluga, 1994). Three sets of motives seem prevalent (see Table 1). First, industry seeks linkages with university research for obtaining access to new scientific frontiers, where developments from basic research are long-term and beset with incalculable risks, and where the potential application or commercialisation is not yet entirely clear. Obtaining early stage, state-of-the-art information about scientific developments that may become commercially viable is a rational strategy (and investment) on the part of larger firms producing cutting-edge technological products.
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Second, firms are also motivated by the chance to save on their own resources and reduce risks by engag-ing in collaborative research or by commercially exploitengag-ing the results of R&D originatengag-ing in university labs or the offices of university researchers. Prime examples are various forms of contract R&D, normally conducted at the university or in intermediary institutions, such as university-industry research centres and other types of institutes associated with the university in one way or another, e.g. the various An-Institute in Germany. Fre-quently such collaboration takes place at the firm itself through consulting contracts with individual university researchers. These forms of collaboration are not limited to science and technology-based fields. University researchers are also involved in collaborative interchanges in other fields such as exploration of legal issues, preparation of marketing and organisational studies, and design of products and software.
Finally, firms are motivated by the opportunity to access embodied knowledge in the form of high quality personnel. The screening and recruitment of graduates is of primary importance for firms and their innovative capacity. Companies involved in joint research projects or other related activities often the hire graduate stu-dents and assistants who have worked on these projects. The majority of firms, especially smaller firms with-out research links, must find and screen graduates through other means, e.g. contacts with professors, interviews on campus, or temporary employment of students in co-operative education schemes, and so on.
Access to university continuing education opportunities is more important for some firms than others.
Larger firms can take advantage of strong professional organisations that offer updating, management or mar-keting courses under their own auspices, often hiring university professors to teach them. Smaller firms tend to rely on industry associations, chambers of industry and trade, and proprietary (for-profit) schools as the main providers of continuing education and training. In some cases this is due to threshold inhibitions that make access to university programmes problematic for many smaller firms; more often though, it appears to relate to the perceived lack of relevance of university provided courses and programmes (Schuetze, 1998).
There are a few university extension programmes aimed especially at small firms, such as the Georgia Tech Industrial Extension Service in the US (OECD, 1995), but such programmes are relatively rare.
Summing up, demand from industry for scientific and technological knowledge manifests itself in many fields. While the focus of most studies on industrial innovation is on “technology transfer” in a nar-row sense, the often overlooked or neglected “teaching and learning connection” is an essential part of this relationship. In the following section, I look at the university side of university-industry relationship.
How do universities collaborate with industry?
Several developments have caused universities to change their views on the instrumental aspects of research and make attempts to collaborate more actively with private companies. One is the search for additional sources of research funding. Public sources of funding, in particular from government depart-ments and research councils, saw a massive increase in the 1960s and 1970s but began to level off or decrease in the 1990s.2 Important also is the change in government policy alluded to in the introduction, which actively promotes industry collaboration in a number of ways. These range from the strengthening
Table 1. Industry motivations and demand for, and forms of, university-industry collaboration
Motivation Forms of collaboration
Obtaining access to emerging scientific frontiers and state-of-art knowledge
– corporate affiliation programmes – consortia for pre-competitive R&D
(centres of excellence) Saving money and reducing risks through
– collaborative R&D
– exploiting commercially viable results of university R&D
– contract R&D – modelling and testing
– use of university researchers as consultants – purchase of patents, copyrights etc.
Obtaining access to knowledge through human resources development and lifelong learning
– hiring of university graduates – internships, co-operative education
placements
– participation in continuing professional education and other learning opportunities
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of co-operative and transfer mechanisms inside or outside of universities, to making government funding dependent on industry participation. This policy has its origin in the increasing globalisation of foreign investment and trade and the resulting concern of governments to keep or make their industries inter-nationally competitive (Gibbons, 1992; Slaughter and Rhoades, 1996).
But the modern university’s interest in collaborating with industry surpasses the desire for additional research funding. As scientific research and technological development have become more interdepen-dent, and their relationship more dynamic, important areas of R&D are increasingly conducted in indus-try rather than university labs (Eliason and Eliason, 1996). Universities no longer have a monopoly on scientific knowledge generation. In order to stay abreast of their fields, university researchers are forced to become involved not just in exchanges with their academic peers but also in networks of knowledge producers whether in the academy, in industry, or elsewhere (Schuetze, 1996a and 1996b). In conse-quence “academics who remain aloof from technological innovation will find themselves excluded from important peer groups – to their individual and institutional disadvantage” (Gibbons, 1992, p. 97).
University organisation and its rationale
Traditional universities are organised in particular structures, for example faculties, chairs, depart-ments, and institutes. These structures reflect not only the division of power and tasks within the partic-ular organisation, but also the tradition of basic and discipline-based research. There exists a highly structured division of labour and a finely tuned specialisation both between different types of institu-tions and within the individual university and its sub-structures that makes internal and particularly external collaborations difficult. In spite of rhetoric to the contrary, the university is neither a coherent institution nor a community of scholars, but rather “a collection of substantially autonomous individuals, loosely organised into departments or equivalent units – themselves often fragmented” (Lynton, 1996, p. 83). The frequent complaint by industrialists that “industry has problems – universities have depart-ments’ reflects this fragmentation. It indicates the difficulties if not the inability, for traditionally struc-tured universities not only to do interdisciplinary research but also to reach out over university boundaries to work with outside organisations like private companies or industry consortia.
Academic researchers are members of their university and department but they belong, at the same time, to a discipline or a field of study. These multiple memberships “shape their work, call upon their loyalties and apportion their authorities” (Clark, 1984, p. 112). Changes in these kinds of institution occur very slowly, “with much grass-roots initiative, with persuasion and voluntary initiative rather than com-mand, incrementally rather than grandly with changes flowing quietly over institutional boundaries, and often in highly intangible ways” (ibid., p. 126). Of course, the tendency of institutional inertia does not mean that all individual academics are inflexible, even if it can probably be assumed that this organisa-tional framework has a certain degree of influence on the mindset of those who have been successfully working in it.
Another factor which make collaboration with industry problematic from the faculty point of view is the particular conception of the nature of knowledge and ways of knowing:
Deeply ingrained in the self-image and the attitudes of the academic world is (…) the notion that there exists a set of theories and principles – some known, some waiting to be discovered – that can be applied rigorously to well defined problems and lead to correct solution. Application in this con-ceptual framework is no more than the act of putting theory to use and, therefore, is not in and of itself a potential source of new knowledge. Hence the flow of knowledge is linear and unidirectional, from the locus of research to the place of application, from scholar to practitioner, teacher to student, expert to client (Lynton, 1996, p. 81).
Such a framework of “technical rationality” (Schön, 1983) is in conflict with the innovation systems approach to technical innovation, mentioned above, that sees innovation as a social process with many players, feedback-loops and multi-directional channels of communication. The traditional framework has a number of concrete practical repercussions for people working in the academy and the value and reward system that applies to them and their work. In particular, it tends to place traditional, basic
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research on top of the hierarchy of functions from which all other functions flow, thus classifying other forms of scholarship such as applied research as secondary (Boyer, 1990).
The hierarchical conceptualisation of “scholarship” and the adherence to a linear model of knowl-edge creation and flows from university lab to industrial shop floor, tends to create attitudes that see applied and industry-sponsored research as something less desirable and proper for academics to undertake. In particular in the sciences, the social sciences and the humanities, applied research carries with it an “intellectual stigma” and applied researchers in these disciplines “may lose in prestige what they gain in dollars” (Bowie, 1990, p. 211). This is in marked contrast to “applied” academic fields, notably engineering, computer sciences, and the health sciences, or emerging hybrid fields such as biotechnol-ogy, where such notions appear quite strange and where the bulk of university – industry collaboration in fact takes place.
The major impediments to academy-industry relationships result from basic differences between the two sectors. The concept and emphasis of university research, and the disciplinary basis of traditional university structures, are in conflict with the instrumental, market-based, and bottom-line oriented approach to knowledge in industry. The basic differences between the academic and industrial concepts of knowledge and knowledge creation are summarised in Table 2.
The differences in basic missions, objectives, values and attitudes help to explain why industry and the academy are “uneasy partners” (Cohen et al., 1998).
Because of the slow path of change in the traditional organisation of the university, as well as in the attitudes and values that prevail in a large part of the academy, institutions have often created organisa-tional units outside the tradiorganisa-tional structures in order to facilitate communication and collaboration with industry. Examples of such new organisational structures and mechanisms are industrial research chairs, associated institutes, An-Institute in Germany, science parks, intellectual property, and university-industry liaison offices. Parallel to such university units, governments have also set up or sponsored structures outside universities, though closely linked to them, such as the institutes of the Fraunhofer Society for Applied Research in Germany, the Networks of Centres of Excellence in Canada,3 and the Science and Technology Centres and the university-industry R&D centres in the US.
University – industry collaboration and the inner life of the university
“The relationship between academic research and industrial R&D has come under intensive scrutiny (…). Academic research is perceived to be both too distant from the needs of industry and, for those few industries where its relevance is apparent, too close to industry” (Cohen et al., 1998, p. 171). Critics from within the university claim that such a close relationship compromises the principal missions of the university – teaching and research – and that the commercialisation of university research produces important conflicts of interest for university researchers with negative consequences for their scientific objectivity and commitment to students. Studies have shown that in many cases industry-sponsored
Table 2. Industry motivations and demand for, and forms of, university-industry collaboration
Industry Academy
Realisation of Economic Value Creation of Intellectual Value Industrial Applicability Scientific Credibility
Market Oriented Mission Oriented
Inductive or Synthetic Deductive or Analytic
Problem oriented (Trans-Disciplinary) Disciplinary
Telesis (goal-orientation) Serendipitous/curiosity driven Commitment to Schedules No time constraints
Private Good (Proprietary) Public Good
Source: Adapted from Tomiura (1997).