17 michael worton ucl session 3-2

The changing landscape of innovation and university-business interaction Professor Michael Worton Vice-Provost, UCL

The current landscape •

A rapidly changing world as globalization changes the way that we think and do business

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National governments increasingly expect HE to deliver on national priorities

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Employers expect broader skill sets as well as disciplinary knowledge

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Universities and businesses having to re-negotiate and re-define their relationship

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Government funding increasingly targeted on specific outcomes

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Government funding now aimed at establishing and strengthening critical mass and centres of excellence

The current landscape - continued •

Workers at all levels are now highly mobile

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Companies facing increasing challenges to coordinate tasks across time zones, geographical and political boundaries, cultures and organizational contexts.

Companies and universities are not natural partners •

Their cultures and missions are different

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They work at different paces and often with different aims (fundamental; applied; practicebased research)

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Universities are constantly being refreshed by new brains and new ideas

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Universities and governments also find it hard to work together

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Academics value their freedom and independence, resent their reliance on public funding and often feel their efforts are not properly appreciated.

In the UK, the 2003 Lambert Review of BusinessUniversity Collaboration set the agenda for more creative and protective partnerships 2 broad trends identified: • A move away from a system in which companies’ R&D is done mainly in their own laboratories (preferably in secret) to one in which they are actively seeking to collaborate with others in a new form of open innovation • Business R&D is going global. Multinationals locating their research centres in their most important markets – especially if those markets contain centres of outstanding research. The home country is no longer the automatic first choice for their R&D investment.

Lambert argues that universities are potentially very attractive partners for business, because academic researchers operate in international networks and so know what cutting-edge work is going on in their field around the world His report: • stressed that benefits will be gained for business, universities and the economy as a whole by improving communications • emphasized the importance of developing greater trust on all sides • recommended a protocol for the ownership of IP in research, in order to cut down the time and expense of negotiation.

Skills development More recently, the Leitch Review of Skills (2006) introduced the principle of employer demand-led funding and encouraged further, two-way business-universities partnership working Universities are increasingly positioning themselves at the heart of the skills agenda, helping businesses to up-skill their workforce to compete This work is dependent on close dialogic working with business.

An enterprise ethos •

In the last few years, UK universities have supported 2,000 graduates to set up new businesses

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Universities themselves have created over 200 companies based on university IP

• Both consultancy income and the number of patents granted to universities have increased significantly over recent years • The number of social enterprises created by or with the aid of universities is growing swiftly.

Universities and the innovation eco-system Universities play a major role today: •Through knowledge exchange and research collaborations •Through the development of employable, entrepreneurial and inter-culturally aware ‘global citizen’ graduates •Through strategic, rather than purely contractual partnerships •Through public engagement activities.

Collaboration/partnership Collaboration can mean many things: • Working together • Establishing a common vision • Brain-storming and collective horizon-scanning • Communication and co-ordination to achieve a shared goal • Inter-dependence of tasks between organizations Above all, it assumes both a commitment to working together and an active and on-going understanding of the reality and importance of cultural differences.

The place of culture Individually and collectively, we have particular ways of seeing and interpreting the world - as informed by our respective – and very different cultures

It is vital to establish trust in international collaboration It is essential to avoid stereotypes Care must be taken with language above all, but also with social behaviour and rituals; clothing; symbols; colours; flowers, etc

CIHE Report 2009 •

The CIHE report on university-business collaborations in Canada, Japan, UK and USA powerfully argues that we need to go beyond the traditional, oversimplified concept of the relationship between universities and business as one which is predominately linear, narrowly-based and transactional

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In this model, patenting and licensing (technology/knowledge transfer) are seen as the prime relationship

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For CIHE, this reveals a lack of understanding of the complexity of the ways in which public investment in different types of research (fundamental, applied, practice based) is used by business and society to create value

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The report argues that the old paradigm of fundamental research moving to applied research needs to be re-thought.

Gate-keeping •

Strong, trust-based relationships are dependent on efficient ‘gatekeeping’ functions to develop mutual understanding in both the university and the company

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The ‘gatekeeper’ here is not, as in other contexts, an obstacle to access to and communication with, decision-makers and influencers

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Rather, s/he re-contextualises generic knowledge in company-specific terms and facilitates its absorption and use by the company

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Successful knowledge exchange is as much dependent on the absorptive capacity of business as it is on the capability of universities.

Necessary changes in attitude •

Need to understand and support the relational as well as the transactional aspects of collaboration between universities and business

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Need to build trust and mutual understanding (this takes time!)

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The capacity and capability of businesses to interact with universities is just as important as the willingness and ability of universities to work with business

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Need for universities to work with SMEs (and, indeed, with micro-enterprises) as well as with large companies; these relationships need different modalities of partnership and collaboration.

Business-university collaborations: different focuses in Japan and in the UK •

Generally, a more applied emphasis to collaborative R&D in Japan than in the UK where there is an orientation still towards basic science themes

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In Japan, according to the CIHE survey, the vast majority of the projects studied relied on company initiatives in their formulation, with the university responding to issues faced by the company

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The impetus for most projects comes from company research team leaders who themselves performed the role of gatekeeping in the project formulation

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Government-sponsored consortia are very common in advanced areas of science with potential commercial applications

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However, none of the large Japanese companies that discussed recent participation in consortia said they benefited significantly in terms of acquiring new knowledge or establishing new channels of communication

Business-university collaborations: different focuses in Japan and in the UK – continued •

Japanese companies said that the main benefit was leveraging public funds for R&D

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This attitude mirrors that of UK companies

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In the UK, much more university interaction with service companies (c. 30%), whereas this is rare in Japan

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More university work with SMEs in UK than in Japan

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The ease with which Japanese companies obtain exclusive control over the majority of university discoveries is due not only to Japanese patent law and university technology management procedures, but to the system of government funding which shifts the focus of university research more towards applied themes

Business-university collaborations: different focuses in Japan and in the UK – continued •

IP issues becoming a much more contentious issue for UK universities

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In both Japan and UK, strong anxiety in universities about maintaining an appropriate balance between commercially beneficial activities and gain and academic and educational missions

• A need for robust policies in universities – and for strong legal teams to negotiate deals!

We have achieved a lot We are achieving a lot We need to do more by being both more inter-culturally aware and more intersectorally aware This initiative could be a major turning point in UK-Japan university-business relationships So‌ We need to make sure that we get it right!

Annexe UCL’s commercial activity with Japan (companies and academic institutions) Type of agreement Licence & assignment MTA CDA Research collaboration Total

Japanese companies & academic institutions 10 133 12 2 157

Japanese companies 10 15 11 2 38

MTA = Material Transfer Agreement CDA = Confidentiality Agreement Main companies: Eisai, Takeda Pharmaceutical Company, Mitsubishi Pharma, Fujitsu, Olympus, Astellas Pharma, Nikon, Hamamatsu Photonics.

References Lambert Review of Business-University Collaboration. HMSO, 2003.

University-Business Interaction: a comparative study of mechanisms and incentives in four developed countries (Canada, Japan, UK, USA). CIHE, 2009 Leitch Review of Skills: Prosperity for all in the global economy – world class skills. HMSO, 2009.

michael.worton@ucl.ac.uk