How should universities work with business to meet society’s call on innovation?

Professor Luke Georghiou, Deputy President and Deputy Vice-Chancellor talks about how the Manchester approach to business engagement is reaping rewards.

Few would question the positive impact that innovation has on the economy – nor the integral role that universities play in this. However, discussing this subject can quickly lead to generalisation. It is common to hear, for example, that innovation is an urgent policy problem that needs fixing. Certainly in the UK, and in my experience in most other countries, there is a tendency for policymakers to run to this topic whenever the spotlight is shone on deficiencies in innovation performance. Usually there is a negative comparison with another place that does it better. 

The UK has had inquiries into university-business links in every decade for over a century. The oldest I have found is referenced in a Times editorial of 1901 which bewailed the “numerous cases” of revolutionary British discoveries in science where “the chief fruits of their work have been reaped by businesses in Germany and other countries,  where industry and science have been in close touch with one another”. It is surely time to move on and to understand instead that what we have is of great value even though it needs to evolve to keep up with broader changes in how and where innovation happens.

I have been invited to give several presentations on the topic of university-business engagement in the past few months, usually with one twist or another, be it region, sector, type of firm, high policy or basic practicalities. Here I have decided to pull my thoughts across these together in one place, with reference to what we are doing at The University of Manchester (UoM). This is partly because I think we are pretty good at it (though trying to be better and learn from the likes of MIT and the Weizmann Institute). But it is also because this is a topic that, if you are not specific, falls easily to platitudes.

What universities do for business and the economy

Enterprise and entrepreneurship by firms (and other organisations) are crucial to innovation but there are few innovations that have not originated in or been enhanced by the knowledge generated in universities. The recent MadeAtUni campaign gives many examples of how these play through to public benefit, ranging from health to environment to social welfare. More fundamental work creates entire industrial sectors that did not previously exist. At UoM we point to historic breakthroughs such as Rutherford splitting the atom, Wiliams, Kilburn and Turing providing the basis for computers and artificial intelligence, and more recently Geim and Novoselov’s isolation of the pathbreaking wonder-material graphene. Benefits come from the pipeline of talent that we educate, our research, the conduit we provide to global networks and markets through our inherently international activities, and the work we do in founding and supporting firms.

For businesses we also provide access to scarce scientific expertise and exploitable intellectual property. At a time when research is becoming increasingly capital intensive, our facilities can enhance the scope of in-house corporate activities. There is also cost saving through outsourcing of research, but with an important caveat. We are at our best when pushing the boundaries of knowledge and not in turning the handle on development. As one of our senior corporate partners put it: “We do not want universities to be second-rate corporate R&D labs”.

Dealing with the downside

It is best to be realistic about the barriers which have to be overcome for successful collaboration between business and universities. We work at different clockspeeds – the corporate competitive environment demands more speed than we sometimes can deliver and companies’ objectives for research can be volatile as business directions change. On the university side, both at the level of the institution and that of the individual it is necessary to balance multiple missions and limited resources against a background of rising expectations. It is important to align career incentives to create balance with high expectations in publication and teaching quality. At UoM we have a knowledge transfer promotion track and this area is considered in all cases. Having said that, it is normally the case that the most outstanding researchers also have a high commitment to seeing their ideas reach application. There are transactional barriers in negotiating price and intellectual property terms. We are not allowed to subsidise industry. Ethical and security concerns mean that there are some areas where we must politely decline the opportunity to collaborate.

“We are at our best when pushing the boundaries of knowledge and not in turning the handle on development”

Getting it right

In the past few years we have moved to become UK industry’s favourite university as measured by the value of research contracts and overall sit in second place for the value of collaborative research. This has been reflected in being the fastest riser in the Reuters Top 100: the World’s Most Innovative Universities list though again there is some way yet to go. Our position has been founded upon some key mechanisms and some core principles. The bulk of collaborative activity takes place in the context of formal strategic partnerships with some of the world’s leading technology-based firms. Though each is precisely tuned to the needs and practices of the partner, they all have in common an agreement on core matters such as price and IP, which substantially reduces transaction costs. More importantly, regular senior contact allows sharing of strategic information, builds mutual trust and understanding, and enables us to extend the scope and scale of collaborations across research, careers, executive education, alumni activities and more. These deep contacts in turn often expose needs and opportunities which the companies themselves may not have been aware of.

A good agreement generally can be judged by its being left in a drawer once it is signed. There needs to be more. Excellence in research is a given despite being wrongly seen as a trade-off by some. Partners would not be very happy if we told them that we thought that something less than excellent would suffice for their needs!  On top of that a key requirement is the capability to work in an interdisciplinary mode. Industry’s challenges normally require the configuration of several disciplines to address them. We were fortunate at UoM to have been through a merger in 2004 which shook up our structures and left us with fewer boundaries across disciplines. Since then we have worked to foster that ethos. It is also an advantage for larger institutions who can exert economies of scope as well as scale in having the full range of skills and knowledge in-house.

Working with SMEs brings a different kind of challenge, not least because of the variety we face. At one end of the scale is our immediate ‘family’ of spin-outs and start-ups inhabiting the adjoining Manchester Science Park (the UK’s largest science park company and a key source of advantage) or keeping close though formal and informal people-based links. That works pretty well. A much bigger challenge is the huge number of firms with little or no history of working with universities despite being challenged by the need to innovate. We are not always the answer for them – for many the key to improved productivity is the adoption of existing technology or business practices. There remains a core with genuine research needs. Our challenge then is to overcome transaction costs and price expectations which are often as complex as those with large firms but representing a much higher proportionate overhead.

More fundamentally, with many such firms there is not an R&D department for us to work with. The best solution in these circumstances is a combination of people-based knowledge transfer and public subsidy. The premium scheme here is the long-running Innovate UK Knowledge Transfer Partnerships which put a researcher into a company to work on a specific innovation while maintaining a link with an academic supervisor. We hugely value this scheme and have some notable success, such as record-breaking graphene sports footwear. We now have the largest number of KTPs in England. Their benefit is generally enduring as the company gains the capability to collaborate and returns for further projects, often employing the original researcher. At an earlier stage student and graduate internships carry similar benefits. We have been particularly happy with our new International Talent scheme that turned what had been a challenge in placing some of our 10,000 plus international students with companies into an opportunity. This was presented to firms as a means to internationalise their business and move to export using the linguistic and cultural knowledge of the students. Several hundred have now been placed.

The National Graphene Institute

The National Graphene Institute

Social dimension

At a time when issues of inclusion have dominated the political agenda, university business relations needs to emphasise some further dimensions, notably that of social responsibility (UoM’s third core goal alongside research and teaching). One aspect rising to the fore is the issue of left-behind communities. Support for social enterprise forms a useful means to widen engagement both within the university and with community enterprises. Innovation in sustainability also is crucial to meet challenges in areas such as transport, energy and clean growth. Agendas may coincide – for example, lightweighting products through innovative materials is beneficial to all of the above. Bringing excluded groups such as the long-term unemployed back into the workforce is also an important goal. The Works is a Manchester partnership established by UoM through which more than 4,000 unemployed people have been brought into work since 2011, creating £47m economic value. The social agenda combines with the economic in bringing to the fore the importance of place in innovation. We are fortunate in Greater Manchester to have joined-up local government with a high degree of devolution, committed to work with us and other stakeholders to create a globally renowned innovation ecosystem in which we are a key anchor institution.

Moving with the times – new sectors and scale-ups

It is well-known that the business sector is subject to the Schumpeterian gale of creative destruction and that the population of companies and even of sectors is in constant flux. Disruptive trends such as the increasing scope for application of big data and AI are bringing new sectors into the sphere of innovation. For universities this means that we need to be broadening our outlook in terms of whom we work with and how. We have responded in several ways. One has been to embrace the service sector. We have a new Law and Technology Initiative where academics from several schools work with leading law firms on emerging technology trends that are likely to affect the legal sector.  More broadly we have worked with the Scale-Up Institute to launch the Scale-Up Forum where our business school organises a peer-to-peer network for firms which meet the high bar of outstandingly rapid growth and as a result face their own set of challenges.

Institutes to accelerate commercialisation

A different type of disruption comes from the commercialisation of new technologies and ideas. UoM has focused its messaging on five beacon areas: advanced materials, cancer, energy, global inequalities and industrial biotechnology. We have found that institutes have been a key mechanism to take these beacon areas forward. We are not alone in following this model. There are comparable institutes in other areas at Sheffield, Liverpool and Warwick universities to name a few, but taken as a whole this represents a new trend by universities to complete the innovation ecosystems that they work in.

The common theme is to provide an environment which accelerates application and connects leading-edge research most effectively to business. Advanced materials at UoM is a case in point. Having initially built the National Graphene Institute as a venue for continuing breakthrough research and early work with industry we discerned that in the area of advanced materials innovation there is a gap at higher technology readiness levels, to take concepts from lab scale to rapid prototyping and demonstrator scale. With public and private capital funding we have just opened the Graphene Engineering Innovation Centre (commonly called the GEIC – pronounced ‘geek’! – in the Masdar Building, which takes its name from the Abu Dhabi-based clean technology and renewable energy company that has part-funded the facility). This provides factory-scale equipment adapted to graphene in key application areas set in the context of a tiered partnership model with business which enables firms to contract to have their own operation in the building, or an arrangement to use the facilities but only in the context of a broader partnership involving research collaboration. Interest and uptake have strongly exceeded expectations.  Under construction is the hub building for the Henry Royce Institute, the UK’s national institute for advanced materials research. One of its straplines is that it will afford to SMEs facilities previously only available to multinationals.

Global dimension

International opening is an important part of the picture. There is a careful balance to be struck here. On the one hand it is vital to work with the word’s best companies if we are to stay at the leading edge. Many of our students will seek employment with these companies. A major part of the centre of gravity of business innovation has shifted to Asia and of course the rest of Europe, while the USA remains a key player. On the other hand, we have a duty to support our own nation which also accounts for the bulk of our research funding. Our approach in this space is to work as an attractor for inward investment, encouraging our overseas partners to come to Manchester, with research as a precursor to wider relocation. A recent high-profile example of this has been the decision of the global diagnostics company Qiagen to locate a major new venture translating genomic biomarkers into clinical use on the CItylabs campus adjacent to UoM and the Manchester University Foundation NHS Trust hospital group. This investment also highlights the synergies with the start-up ecosystem – Qiagen originally came to Manchester via the acquisition of a spin-out company.

Looking forward

It is unlikely that over a century of expectation of universities to contribute to innovation in the economy will decline, although boundaries between players may shift from time to time and there will without doubt be risers, fallers and newcomers among our collaborators. At UoM we find ourselves remarkably close to the ideas behind our Victorian origins when leading lights of the Industrial Revolution financed the foundation of our predecessor institutions with a clear commitment to the creation of the advancement and transmission of knowledge for material benefit. Much remains to do to broaden and deepen engagement while ensuring that we maintain our values and commitment to excellence in research and teaching. 

It is perhaps not surprising that the answer to staying on the front foot in supporting business innovation is for yourselves to be innovative.