19.09.2016 - Natural Sciences Sector

Only a minority of innovative firms collaborate with universities

Photo: © Ju1978 / Shutterstock.com. Car assembly plant in Lovech, Bulgaria in 2012.

In 2013, the UNESCO Institute for Statistics surveyed manufacturing firms that were active innovators to ascertain the extent to which they partnered with universities and public research institutes to develop new products and processes. The survey found that the great majority of firms did not interact with public research institutions at all.

In the 31 high-income countries surveyed , university–industry ties were lowest in Australia (1.4% of firms), the UK (4.7%) and Italy (5.3%). Less than 10% of firms in a further eight countries reported collaboration with universities, namely Cyprus, Estonia, Latvia, Malta, New Zealand, Portugal, the Russian Federation and Spain.

Even in Japan and the Republic of Korea, two of the world’s most committed countries to research and development (R&D), the proportion was just 15.7% and 10.0% respectively. More than one-fifth of firms reported university–industry collaboration in just two of the countries surveyed: Finland (33.8%) and Austria (24.7%). Like Japan and the Republic of Korea, Finland has one of the highest levels of business research funding in the world.

The findings were similar when it came to collaboration between manufacturing firms and public research institutes, with the notable exception of Finland and Austria, where this type of collaboration dropped considerably to 24.8% and 11.6%, respectively.

There was a similar pattern in the 22 low- and middle-income countries surveyed. Only in the following countries did more than one in five firms collaborate with universities: Malaysia (20.7%), Hungary, (23.1%), Costa Rica (35.3%), Kenya (46.2%) and the Philippines (47.1%). Whereas a similar proportion of firms in Malaysia (17.4%), Kenya (40.9%) and the Philippines (50.0%) collaborated with public research institutes, the figure dropped to 8.1% for Costa Rica and 9.9% for Hungary.

The survey’s findings were analysed in the UNESCO Science Report: towards 2030, which was released in November 2015. The report notes that ‘one concern for policy-makers should be the low importance attached by most firms to maintaining linkages with universities and government research institutions, even though strengthening university–industry ties is often an important target of policy instruments.’

Bayh Dole: a game-changing act

Ever since the Bayh Dole Act was passed by the US Congress in 1980, it has become a model for strengthening university–industry ties. Japan, for instance, adopted its own version of the Bayh Dole Act in 1999.

The UNESCO Science Report recalls that Congress passed the Bayh Dole Act after ‘realizing that it had a lot of gain from encouraging the adoption of technologies developed with federal grant money... The act allowed universities to retain intellectual property rights from federally funded R&D and launched a trend in the university system towards the patenting and licensing of new technology.’

The UNESCO Science Report recalls how the Bayh Dole Act transformed academic research in the USA. ‘As a result, some universities have become foci of innovation, where small start-ups developed from on campus research add value and, usually, partner with a larger established industrial partner to bring its product(s) to market. Having observed the success of these universities in seeding local innovation ecosystems, a growing number of universities are developing internal infrastructure like technology transfer offices, to support start-ups based on research, and incubators for faculty inventors that are designed to support embryonic companies and their technologies.’

For universities and companies, the relationship can be mutually beneficial. ‘Technology transfer supports the university mission in disseminating ideas and solutions that can be put into practice’, explains the report. ‘It also supports job growth in their local economies and increases ties to industry that form the basis for sponsored research…. From the industrial perspective, many [US] companies in technology-heavy industries are finding that partnering with universities is a more effective use of their R&D investment than developing technologies internally. By sponsoring university research, they benefit from the broad expertise and collaborative environment within academic departments’.

The most striking examples of university–industry collaboration in the USA are the States of California and Massachusetts, which together concentrate one-third of business research activity, according to the UNESCO Science Report. Both states ‘offer a potent combination of academic excellence and a strong business focus on R&D: prestigious Stanford University and the University of California rub shoulders with Silicon Valley and, in much the same way, Route 128 around Boston in the State of Massachusetts is not only home to numerous high-tech firms and corporations but also hosts the renowned Harvard University and Massachusetts Institute of Technology’.

Why are so few firms interacting with universities?

If university–industry ties are so desirable, why then are so few firms interacting with universities?

One explanation for the phenomenon in high-income countries may lie in the fact that, ‘owing to its unpredictable nature, technology transfer is not a reliable supplement to the university’s revenue compared to other sources of revenue’, such as government research grants and tuition fees.

However, industry-sponsored research can be a valuable source of income in the face of government austerity budgets. In the USA, for instance, federal investment in R&D stagnated in the wake of the 2008–2009 recession. ‘Although industry-sponsored research accounts for only 5% of academic R&D’, the UNESCO Science Report observes, ‘leading [US] universities are increasingly relying on research dollars from industry as alternatives to federal and state dollars’. Unfortunately, the USA does not survey business ties to universities and other public institutions.

Another explanation for the low level of collaboration between manufacturers and universities could lie in the different work cultures of the public and private sectors. The interests of academics and entrepreneurs do not always converge. ‘The career of academic researchers is dependent on publishing their results’, observes the report, ‘whereas industrial partners may prefer not to publish to prevent competitors from benefiting from their investment.’

A UNESCO study on Biotechnology and Bio-entrepreneurship in Tanzania (2011), cited in the UNESCO Science Report, observed that ‘incentives are lacking for academics to collaborate with the private sector [in Tanzania]. Obtaining a patent or developing a product does not affect an academic’s remuneration and researchers are evaluated solely on the basis of their academic credentials and publications’.

A difficult business climate can be another obstacle to collaboration. In Brazil, businesses lack modern infrastructure and face cumbersome regulations relating to business registration, taxation or bankruptcy, resulting in a high cost of doing business that hinders innovation. This phenomenon has been termed the Custo Brasil, or Brazil Cost.

Just 6.3% of innovative manufacturing firms partner with universities in Brazil, even though the latter play a pivotal role in technology transfer to the private sector. In a 2014 report by the Brazilian Materials Research Society, Rubén Sinisterra from the Federal University of Minas Gerais considered that Brazilian universities now had the capacity to develop nanoscale materials for drug delivery but observed that ‘our domestic pharmaceutical companies don’t have internal R&D capabilities, so we have to work with them to push new products and processes out to market’.

In Zimbabwe, the current regulatory framework hampers technology transfer to the business sector and the development of industrial R&D, despite the commercialization of research results being one of the major goals of the Second Science, Technology and Innovation Policy adopted in 2012.

Lack of funding can be another obstacle to collaboration. In Tanzania, just 7% of innovative manufacturing firms collaborate with universities. The business (0.1%) and academic (0.3%) sectors finance a fraction of research, the bulk of funding coming from abroad (42%) and from the government sector. Private entrepreneurs in the biotechnology sector have appealed to the government for tax regimes to support ideas developed domestically and for the provision of loans and incubation structures to allow them to compete with foreign products.

Innovative firms consider universities a minor source of information

The survey by the UNESCO Institute for Statistics revealed another disconcerting trend. Manufacturing firms which are active innovators tend to consider universities a minor source of information, compared to suppliers, clients or their own staff. In Brazil, for instance, just 7% of firms ranked universities as highly important sources of information and, in Tanzania, 12%. Even in Finland, the figure was just 4.5%.

Among high-income countries, New Zealand topped the scoreboard, with 10.2% for this indicator. Among lower income countries, the range was much wider, with 40.0% of firms valuing universities as a source of information in Argentina, 37.6% in Kenya and 26.4% in Mexico but only 1.9% in Ukraine and 0.4% in Indonesia.

The UNESCO Institute for Statistics has since followed up with another survey of innovation in manufacturing firms in 2015. The data have just been released on its website . This new survey should shed more light on why so few firms are choosing to partner with public universities and research institutes.

Source: UNESCO Science Report: towards 2030, see in particular Chapter 2 on Tracking Trends in Innovation and Mobility and Chapter 5 on the USA.

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