Academic literature on innovation in the university, including research funding and R&D policy, identifies programs common in industrialized countries: spin-offs; programs to help small-medium sized enterprises access and absorb technologies; and seed and venture capital instruments. [Innovation and university references pdf.]
There is a general recognition that the conventional “linear” model has been replaced by a “holistic” or interactive model incorporating non-traditional disciplines and policy domains. Inter-disciplinary collaboration and a blurring of lines between pure and applied research has resulted in both evaluation problems and the clashing of cultures among academic fields. Governance of the innovation system is compartmentalized; policy makers face the difficulty of coordinating different societal and economic goals of research. Proponents of the controverisal entrepreneurial university (subject of a future post) construe the university’s mission as contributing to economic benefit of both the community and university faculty.
Strategic risk: small firms’ contribution to productivity
UK researcher Alan Hughes, in examining US pre-2003 data, draws conclusions pertinent to commercializing high-tech in the knowledge economy:
1. Significant gains in productivity were achieved not by high-tech firms themselves, but rather by the diffusion of information-communication technologies and its adoption among relatively low-tech sectors (such as retailers);
2. The part that new-intellectual-property firms play in the overall economy in terms of number of companies and revenues is very small, even if qualitatively important. It is instead other firms, second movers with different skill sets, who seize and profitably scale-up new technologies – while university licensing offices do not break even, given their research expenses;
3. The overwhelming contribution to productivity (studied in all sectors in all OECD countries) is not made by new entrants, who exit at the rate of 50-70% within 5 years, but rather by persistent firms: post-entry growth is more critical than entry per se;
4. In both the UK and the US, with similar results for the EU and Australia, it is the firm’s internal knowledge, customers, suppliers, and a list of other factors, that rank ahead of government and private research institutes as direct sources of innovation knowledge (measured both in frequency of consultation and information value).
Hughes goes on to analyze a diverse array of activities performed by universities, and reports on the perceptions by business of their relative importance for innovation. All this has relevance for nuanced decision-making in university research policy. The university, as a source of innovation and productivity, must consider itself part of a wider complex knowledge system.
Tags: innovation policy, innovation strategy, innovation university, university research funding, university research innovation