Entrepreneurship and the University. (April 18,2008)

It's on again, the role of the university in innovation and with that the degree of entrepreneurship a university should attempt.

In response to the Federal Minister for Innovation, Industry, Science and Research, Kim Carr's call for an innovation review, the four member innovation inquiry panel headed by

Professor Alan Hughes

 CSIRO board member Terry Cutler had a two-day brain-storming session.

The four other members of the panel are Alan Hughes, director of Britain's Centre for Business Research, Cambridge University, Richard Lester, professor of nuclear science and engineering at the Massachusetts Institute of Technology; Stan Metcalfe, director of policy research in engineering, science and technology at Manchester University; and European innovation adviser Keith Smith.

It's worth remembering that while in opposition, Senator Carr during Senate Estimates hearings evinced serious doubt as to the efficacy of our universities directly pursuing profits from the intellectual property their research developed. Now in office it's not so clear that he retains that scepticism.

But according to Professor Hughes, the business sector invariably stress the need for universities to deliver on their founding goal: education.

He told The Australian's Luke Slattery: "Business sees the key role for higher education as the provision of trained and highly skilled graduates," and as Mr Slattery reports: "He believes, in essence, that universities' contribution to 'human capital' receives too little attention in debates about innovation policy and the knowledge economy."

Professor Hughes then cites the statistics that in 2004 intellectual property from US universities generated 460 start-up companies the US economy as a whole included 500,000 start-ups, and he points to the example that MIT produced 136 patents in 2005, while IBM registered 2941. He went on to say:

We also need to consider that very few of these US universities, even the leading ones, generate income from patenting and licensing that is more than 2 or 3 per cent of their total revenue streams.

It gets far too much emphasis. There are only a handful of patents across the whole of their university system (that) earn more than $US1million in revenue.

His studies into business attitudes to higher education in Britain and the US support a back-to-basics approach. A key finding of this research is that the university sector can best help business by providing a public space for conferences and other forms of interaction, and by cleaving to its traditional role of "applied problem solving".

There are all sorts of contract research, consultancy, access to specialist testing and equipment that are very important economically.

These are focused problem-solving tasks that are not spin-offs of new companies but have a lot to do with improving, incrementally, the innovative capacity of the economy.

This has traditionally been a strong focus of business-university interaction but it tends to get lost given the strong focus on patenting and licensing, which actually is a very low-frequency form of commercial activity.

Universities have a potentially powerful role to play by maintaining a public space in which various stakeholders can come together and interact. This ground can be more or less neutral.

"It's actually one of the things that Caltech, Stanford and MIT do best: get industry together and identify common problems. If the universities think it appropriate, they'll do some work in relation to these problems, or feed back into some of their other functions by designing a course, a graduate program, or developing a piece of consultancy. This is a very important public role which is not necessarily very expensive but recognises the importance of interaction.

And Professor Hughes concludes with the sweeping statement: "If you make university research completely dominated by industrial needs, business will lose interest."

In short, according to the Margaret Thatcher Professor of Enterprise Studies at the Judge Business School, University of Cambridge; and Fellow of Sidney Sussex College, University of Cambridge, universities should "stick to their last".

A novel thought these days.