Opinion- 29 June 2004

 

 

 

Wagging the Tail?
 

Business and University Collaborations

Wagging the Dog?

 

 

On December 4th last year The UK government released the 142 page Lambert Review of  Business-University Collaboration. The review was commissioned in November 2002 by Britain's Chancellor of the Exchequer Gordon Brown, Patricia Hewitt, Secretary of State for Trade and Industry, and Charles Clarke, Secretary of State for Education and Skills. Although it will be a while yet before the Blair Government responds to the Lambert findings and recommendations, the views expressed by Richard Lambert, former editor of The Financial Times, have engendered a joint invitation to visit Australia from the Group of Eight universities and the Business Council of Australia.

 

Last Wednesday, June 23rd Mr Lambert addressed the National Press Club and after telling an audience of journalists and academics that Australia and Britain possessed similar economies, he observed, “Britain’s economy – like Australia’s – has performed rather well over the last 10 years. It’s grown faster than the economies of its neighbours; inflation is low and stable; unemployment has fallen to very low levels. But there’s been one big failure - ... current levels of UK innovation are insufficient to drive UK productivity growth and close the UK productivity gap versus key international competitors.” to overcome this deficiency Lambert said the British government has committed itself to a substantial real increase in its science budget over the next ten years, with press reports suggesting that funding will rise by 5.7% per year in the ten years beginning 2006-7.

    The Group of Eight's Executive Director, Virginia Walsh said bluntly, “Such long term compound growth would be far in excess of the support for R&D promised by either the Australian Government or Opposition.” She  went on to say that the recently announced BAA 2 science and innovation package provides for negligible, if any, funding growth beyond 2006 and on current international trends Australia will fall further behind comparable countries.

 

But to return to the Lambert Review, in the letter to the Chancellor of the Exchequer which accompanied the review Mr Lambert said in part:

The biggest challenge identified in this Review lies on the demand side. Compared with other countries, British business is not research intensive, and its record of investment in R&D in recent years has been unimpressive. UK business research is concentrated in a narrow range of industrial sectors, and in a small number of large companies. All this helps to explain the productivity gap between the UK and other comparable economies.

 

The Review has concluded that although there is much good collaborative work underway already, there is more to be done. Universities will have to get better at identifying their areas of competitive strength in research. Government will have to do more to support business-university collaboration. Business will have to learn how to exploit the innovative ideas that are being developed in the university sector.

 

The Review makes a number of recommendations across a wide range of issues. It suggests that the most effective forms of knowledge transfer involve human interaction and puts forward a number of ways to bring together people from businesses and universities. It identifies a need for the Government to support university departments which are doing work that industry values and suggests that the development agencies could play a greater role in developing links between business and universities. It proposes ways to simplify negotiations over intellectual property and to improve the market signals between employers and students. It suggests that the university sector should develop a code of governance and that the Government should introduce a risk based approach to the regulation of universities.

In his address to the National Press Club Mr Lambert referred to "blue skies research", i.e. basic research, three times and in each case it was in reference to past work undertaken by US big business, e.g. "In this period [approximately the late fifties through early eighties], laboratories owned by the likes of Bell, IBM, and the Japanese electronics companies became perhaps the most fertile sources of blue skies and applied research in history... Deregulation and much increased competition has also left a mark on those big research laboratories... they and others have had to change their approach radically in this environment.

     "...When AT&T had a monopoly of the US telephone system, it could afford to lets the brilliant scientists at Bell Laboratories work on very long term, blue sky projects, often well away from the company’s core competences. Neither Ma Bell or Xerox can afford such luxuries today."

 

Interestingly, Mr Lambert made no reference to university housed basic research and gave the impression that he believed industry played the dominant role in basic research during this period. Even a cursory examination of the listing of Nobel Laureates and impact assessments of peer reviewed papers shows the fallacy of such thinking, but considering Mr Lambert's background it's perhaps not surprising that he would hold such a view.  He took a BA in History at Balliol College, Oxford (1963-66), started working at The Financial Times in 1966 as a trainee and retired as Editor in 2001. Currently he is chair of Visiting Arts, a group which helps to bring international artist and arts managers to the UK, and a Trustee of the British Museum as well as holding an appointment to the Bank of England's Monetary Policy Committee.

 

However, that said, in his review for the Blair government he does make specific reference to university-based fundamental research and research for the public good. For example:

The Review expresses concern that universities may be setting too high a price on their IP. Public funding for basic research, and for the development of technology transfer offices, is intended to benefit the economy as a whole rather than to create significant new sources of revenue for the universities. Even the most successful US universities tend to generate only small amounts of money from their third stream activities, and most acknowledge that their reason for engaging in technology transfer is to serve the public good.

And later:

...In the words of Henry Chesbrough: “The wealth of innovations that diffused out of these [corporate] laboratories since the 1960s is not likely to recur from those labs in the future, given the labs’ shift in orientation away from basic research. The seed corn that will create the innovations of twenty years hence will have to be provided elsewhere in the society. Governments and universities will need to address this imbalance. Increasingly, the university system will be the locus of fundamental discoveries. And industry will need to work with universities to transfer these discoveries into innovative products, commercialised through appropriate business models”.

In discussing how to assess the value of academic research the Lambert review has this to say:

The wide scope of the potential benefits, together with the often indirect channels through which they emerge, make it hard to assess the direct results of public funding in this area. However, the available evidence suggests the economic and social returns from public funding of university research are attractive, and certainly justify increasing investment in this area. More money will be needed for the university system to reach its full potential.

And to support his conclusion Lambert cites the 2001 SPRU review The Economic Returns to Basic Research
and the Benefits of University-Industry Relationships
.

 

The review also looks into the proportionate funding of university research. As of 2001 "industry funds around 7% of total research spending in US universities.... Over a fifth of total university spending on R&D last year was classified by the National Science Foundation as applied research – an enormous investment in applied knowledge." But it also means that a bit less than 80% of university spending on R&D supports fundamental research. It is reasonable to ask not only what is the comparable figure for Australian universities, and what do the Coalition and Labor see as an appropriate one -- quite apart from the question of how much.

 

We've already referred to Phillips Electronics' Hendrik Casimir and his view of basic research and the public good but it is also true that there is cross fertilisation not only between applied and basic research but also between the enabling sciences per se as well as between  biomedicine and the enabling sciences.

 

The problem confronting governments, universities and research institutions is finding the appropriate balance between basic research, applied research, development and innovation for the long term well being of a nation and its people. Certainly during the term of the governing Coalition, Australia seems to be at best treading water while many of the OECD nations are working hard to move on in supporting their R&D and higher education sectors. And perhaps just to sheet home the Coalition's take on progress, the recent regressive Energy White Paper should leave little doubt about the sort of hand rocking the Australian cradle.

 

Alex Reisner

The Funneled Web