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Increasing business-university collaboration for innovation beyond 12%

Imagine a school with 500 pupils sitting at their desks and keen to learn. However, only 2 of the 500 pupils are taught maths; 50 of the 500 pupils are taught English and 125 are taught languages. Faced with this scenario you might consider what you could do to ensure that all pupils had access to the maths teacher and are taught maths, as well as English and languages. Your motive to intervene being to increase the knowledge sharing from the teacher to the pupils and also to ensure that all had access to the learning and development that this would provide.

While this scenario is highly unlikely in the real world, the parallel with university knowledge sharing with businesses in the UK is very real. A (slightly dated) report published in 2013-14 on knowledge exchange between English universities and small and medium sized businesses (SMEs with 5 to 250 employees) found that only 1 in 231 SMEs were engaged with universities for contract research; 1 in 9 were engaged in consultancy with universities; and 1 in 28 accessed university facilities and equipment. Similar proportions to the hypothetical scenario of pupils’ access to education!

This leads to the question: ‘Does it matter if businesses engage with universities?’. The short answer is ‘Yes’! The basic reason being that universities – like the teacher in our scenario – provide a valuable source of knowledge that can directly benefit business innovation and in turn, growth and productivity.

Partnering for innovation stimulates creativity, reduces risk in the innovation process, accelerates or upgrades the quality of the innovations made and signals the quality of firms’ innovation activities. Innovation partnerships may also increase firms’ access to technology developed elsewhere and their ability to appropriate the returns from innovation.

Yet, despite the apparent advantages, collaborating with universities for innovation is not easy for smaller firms. Indeed, we consistently find that only around 12 percent of firms that are ‘innovating’ cooperate with a university as part of this. Explanations as to why university-business co-operation rates are so low include: limited managerial resources in SMEs to identify appropriate partners; a restricted ability to absorb external ideas and technology; and even a cultural clash between the logics and priorities of businesses and universities – something which has been referred to as the ‘two-worlds’ paradox.

If the proportion of businesses collaborating with universities is to increase, then we need to look at the fundamental steps in the process of collaboration. Kim et. al., (2010), suggest that there are four stages in forming a collaborative partnership. These are: (i) identifying strategic needs; (ii) assessing and selecting a partner; (iii) implementing a partnership; and, (iv) re-assessing and re-shaping the partnership. Stages (ii) and (iii) are a particular problem in the UK, with limited information on the expertise in universities often meaning that businesses are unable to identify the best partners. As a result, they either partner with the wrong universities or more likely, do not collaborate at all.

This lack of information on the expertise in the university sector, along with a lack of understanding of the different channels through which universities and businesses can collaborate can be viewed as a ‘market failure’. Recognising this, UKRI and the National Centre for Universities and Business (NCUB) developed konfer. Konfer is an innovation brokerage platform created through data mining and machine learning, that enables businesses to understand better with whom they might cooperate.

The Innovation Caucus, working alongside konfer, also recognised that for smaller businesses in particular, unless they understand how they can work with a university – in other words, the channels for collaboration – then it is difficult to identify partners with whom to cooperate. A better understanding of the different channels for collaboration, also helps businesses to identify their strategic needs – stage (i) in the partnership formation process.

These different channels for collaboration span interactive relationships that characterise collaborative research between both partners. This includes contract research and consultancy where businesses are more likely to commission a university to undertake a research project. Other channels for collaboration may also include: the use of university facilities and equipment; access to and collaboration with universities to support PhD research; placements for Doctoral students; Knowledge Transfer Partnerships; or the acquisition of university-generated Intellectual Property through patents and licenses, etc.

Each of these channels for collaboration provides different resources and capabilities to a business and in turn requires different levels of engagement from the business. Similarly, each channel has different timelines for the benefit to be achieved and different costs, with some being eligible for grants or other forms of public funding support. The innovation and competitive benefits of each channel will also vary considerably, and some channels may be more suitable for larger than for smaller businesses.

Ultimately, the konfer brokerage platform helps to find the ‘right’ partners but, more fundamentally, shaped by the work of the Innovation Caucus, the platform also helps businesses to consider why and how they might collaborate with universities. If businesses can think more strategically about the different channels through which collaboration can occur and at the same time, understand the implications of each channel, then with support to find the right partner, we can hope to see the proportion of innovating firms collaborating with universities increasing from the current low level of 12 percent.

To explore konfer, click here.

Nola Hewitt-Dundas,

Professor of Innovation Management & Policy and Head of Queen’s Management School,

Queen’s University Belfast