Do Universities Matter for Innovation?

by John Steen

Do Universities Matter for Innovation?I’m probably going to get in trouble for this post because the answer to the title question is yes and no. I am employed by the University of Queensland which prides itself as being the most successful commercializer of research in Australia. However, I have never been convinced by the simple argument that universities matter because they produce groundbreaking research that can be patented and sold to commercial interests. While many academics believe this to be the case, the evidence shows that this is possibly the least important thing that a university can do for the business community.

In a survey of firms in Brisbane, Australia we found that universities were relatively unimportant as sources of innovation. Customers, suppliers and competitors are far more important as sources of innovative ideas. That doesn’t mean that the three universities in Brisbane are doing a bad job or that Brisbane businesses should be trying harder to work with universities because it is similar to the results from other surveys around the world. The following table from a study by Cosh, Hughes and Lester (2006) is typical of this. When firms were asked about valuable sources of ideas for innovation, universities appear down the bottom of the list.

Innovation Sources

If you really think about the companies that you regularly interact with, how many would be directly involved in university research? The fact that universities aren’t important for innovation in the majority of firms really isn’t that surprising. But what about the organizations that do interact with universities for innovation? What do they think is important? Again, the notion of universities being originators of IP that gets protected and sold to willing buyers doesn’t stand up to the evidence.

University Innovation Contribution

If you look at the table and think about what is at the top, it’s the flows rather than the stocks or knowledge that really matter. Informal contacts with sharing ideas between the university and external partners, smart graduates with new knowledge and connections between businesses and their former teachers, and published information in journals and conferences are far more important for innovation than protected IP.

This is important because many universities are restricting the flows of knowledge that really matter for innovation. Business engagement is rarely recognized in an academic’s performance review, lip-service is paid to teaching quality and lawyers are always ready to make sure that anything of remote commercial value is protected with a patent or a secrecy agreement.

Universities do matter for innovation, but this is because they can create a public space for the exchange of ideas. Andy Cosh (MIT) and Alan Hughes (Cambridge) tell us that this is the most undervalued way that universities contribute to innovation. In the rush to squeeze more dollars out of IP, there is a very real risk that universities will choke the knowledge flows that created this IP in the first place.

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John SteenJohn Steen is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about innovation at the Innovation Leadership Network.

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