While improved institutional management and coordination at the central level will go a long way toward strengthening links with firms, it will be insufficient unless it addresses other constraints. Some are related to capacity, but others can be tack- led by smart choices in managing university- industry links. Policy makers across the region are looking at ways to make this link work.
Well-handled university-industry links can improve information flow between higher education and firms and the incentives to interact, enabling higher education institu- tions to meet skill and research demands of fi rms (fi rst and second disconnects), and col- laborate with other research providers (third disconnect). This section reviews the avail- able modalities to build stronger links.
Although managing public and private institutions very much revolves around issues of autonomy and accountability, “reconnect- ing” the system—particularly the university- industry relationship—will also require other governance-related decisions to translate improved governance at the institutional level into stronger links for skills and research.
For university-industry links (also cov- ering tertiary institutions generally), these governance-related elements include decisions on the modality of the links and the fi nanc- ing, fiscal, legal, and information-related incentives that may be needed to support them. These decisions will be all the more critical in the East Asian context where con- straints to stronger university-industry links in research and technology are multiple (dis- cussed in chapter 3).
The major hurdles in managing university- industry links are that fi rms in East Asia do not rank universities high either as sources of commercializable ideas and technical and commercial information or as fruitful collaborators. Additionally, risk-averse fi rms with little exposure to new technologies and a lack of technically skilled labor are often unwilling to bear the risks or put up the financing to bring new technologies to market.
Moving forward
Some of the deeper constraints related to limited research capability and lack of demand from the private sector will be addressed only with time, investment, smart governance, and economic reforms. Indeed, the success of university entrepreneurship will depend ultimately on the generation of significant ideas and findings and its
reputation in providing high-quality educa- tion, so countries need to continue building capacity, step by step.
Not all countries have the same potential for university-industry links in research and technology. Countries from the lower tech- nology cluster in particular see their potential very constrained by capacity gaps. They there- fore need to continue strengthening their uni- versities. Demand for innovation from their private sectors is also more limited. More selectivity, too, will be required for university- industry links: only a few fi rst-tier universities in a country will ever have the potential to have strong formal interaction with fi rms.
While capacity is being built, policy mak- ers can move to support stronger links (or at least put them in the right direction) in both skills and research.
The main modalities relevant to East Asia involve, in roughly descending order of importance, better aligning the teaching at university and fi rms’ skill demands through collaboration in curriculum development, training fi rms’ current workers, encouraging entrepreneurship, setting up university incu- bators, establishing TLOs and spin-offs, and developing extension and product develop- ment services. Bringing in intermediaries, pro- viding matching funds, and pursuing greater sectoral and subsectoral selectivity will be instrumental in these modalities’ success.
Encouraging university-industry collabo- ration in curriculum development. Aligning the skill demand of firms and instruction at university is probably the most urgent imperative, and stronger collaboration in curriculum development is necessary for meeting it. Among the most widely used (and most promising) modalities are appointing industrial practitioners on the staff of higher education institutions, establishing consulta- tion mechanisms with industry, prioritizing student internships to encourage on-the-job learning and retrofit the curriculum, and including fi rm representatives on university boards.
In New Zealand, for example, the Tertiary Education Commission has funded “experts in residence” from industry to increase the
relevance of curricula, fi nancially supported student work placements, and developed a Business Links Fund to formalize industry input into curricular design.55 France has enacted legislation (Law of August 2007 on the Freedom and Responsibility of Univer- sities) to mandate that two representatives from industry or industrial associations serve on university governing boards.
Persuading tertiary institutions to play a more active role in training fi rms’ current workers. Handled well, this modality has positive consequences for fi rms and curricula.
For example, the University of the Philippines, Diliman, has partnered with the Department of Science and Technology to have engineer- ing students and industrial plant workers undertake training at the university and at plant sites, partly under the direction of uni- versity instructors. Lessons learned during training are analyzed in the classroom, in line with theoretical and academic lessons, and then fed back to industry.56 In Vietnam the Ho Chi Minh University of Technology has been active in training and skill development for local businesses.57
Encouraging entrepreneurship in ter- tiary institutions. Entrepreneurship training for faculty, students, managers, and work- ers is a very promising university-industry link for all countries. This will help boost weak management and leadership skills in low- and middle-income East Asia, indi- rectly lifting productivity. It should also help overcome the reluctance of some faculty members to get in touch with the business world—possibly because of a lack of business acumen and entrepreneurial drive—even if they have promising fi ndings and new com- mercializable ideas. Deepening the pool of entrepreneurs can also complement research- promotion efforts.58 Potter (2008) suggests various routes,59 and the National University of Singapore has introduced several of these approaches in its entrepreneurship courses.
Setting up university incubators. This can help budding entrepreneurs commercialize ideas produced in a university. Universities in Taiwan, China, for example, are setting up incubation services to stimulate interactions
with fi rms;60 universities there run 81 percent of all incubators. But for incubators to launch viable start-ups, they should meet several conditions, in descending order: the univer- sity is a hotbed of ideas and a supportive pro- moter;61 incubation facilities are networked with other incubators and fi rms;62 and the university provides services facilitating the exit of fi rms from the university orbit.63
Establishing TLOs and spin-offs. Commer- cializing research and transferring technology by setting up TLOs and university-supported or sponsored spin-offs have good potential (box 6.3) but need to be well managed.
Among other things, TLOs can help uni- versities address legal issues and deal with the “nitty-gritty” in reaching out to firms.
Yet experience with university TLOs in the United States and Europe suggests that they often struggle to recruit and retain staff with the needed skills and that their incentive is to maximize revenue (inducing them to focus on the few most promising areas of research and to neglect other technologies with longer- term potential). Skills and university leader- ship are thus needed to support results. Sepa- rately, income generation through TLOs will probably remain small relative to total uni- versity income.64
The potential of spin-offs (start-ups) is possibly more for knowledge transfer than commercializing research. Spin-offs have become a lucrative source of revenue for many research institutions in China,65 but only a handful are truly innovative; the bulk are regular firms that would be privately
owned in other countries and just happen to be owned by universities in China.66
Start-up risks can be high. Even in more promising fi elds, such as biopharmaceuticals and nanotechnology, the payoff is uncer- tain.67 And start-ups initiated by faculty
“may lead productive faculty to leave the university, ultimately undermining the uni- versity’s underlying capacity to generate new knowledge.”68 Spin-offs can, however, fulfi ll a role of knowledge and technology transfer, including joint research projects and assimi- lation of existing technology, and so offer some potential in countries of the middle and possibly lower technology clusters.
Reinforcing research and education policies through extension and product development services. Particularly to small and medium enterprises, such services can offer several benefits: providing a means of transferring valuable technical and problem-solving skills to industry; increasing the skill intensity of the subsector and encouraging research and devel- opment activity in fi rms that rarely engage in it; giving university graduates an opportunity to acquire practical experience and provid- ing job opportunities; and partly neutralizing the disincentive effects of the recent global economic downturn for students contemplat- ing a future in science and engineering or in research and development.69
The Fraunhofer Institutes in Germany,70 the Technology Transfer from Research Institutes to Small and Medium Enterprises program in Sweden, the Advanced Technol- ogy Program in the United States,71 and the
BOX 6.3 Technology licensing offi ces in three economies
Universities in Taiwan, China,a and in Hong Kong SAR, China, have set up TLOs to facilitate technol- ogy transfer and research collaboration.b Chinese universities are also collaborating increasingly with industry through contracts for technology services, patent licensing, and sales, and working through
university-affi liated enterprises (unique to China).
The two leading Beijing universities for commercial- izing ideas have established internal TLOs.
a. Mok 2010.
b. Mok 2010.
Technology Transfer Initiative (TTI) in Ire- land (box 6.4) are successful models.
Bringing in intermediaries. Firms them- selves should take the lead in initiating and organizing collaboration,72 but this rarely happens because of credibility and communi- cation gaps. Yet examples abound that inter- mediary groups or associations can help to bridge the university-industry gap. (Box 6.5 provides two—the fi rst suitable to all coun- tries, and the second more suitable to coun- tries of the top technology cluster.)
While more unusual, local governments could also have an important role in relating universities to fi rms for both skill and techno- logical development, as shown by the Ho Chi Minh City government in Vietnam. It encour- aged links with local businesses by establish- ing a university council, which advised the government on how to promote training and innovation in universities linked to the city’s development.73
Providing matching funds. Along the lines of providing more effective incentives, inno- vation funds may also support stronger links
by providing matching funds to fi rms or uni- versities to collaborate in adapting or devel- oping technology. Such funds typically go further than competitive research funding by supporting the commercialization of research and tying up universities, research centers, and fi rms in collaborative research and tech- nology projects. In a skill-provision role, applying the different university-industry link approaches may require some fi nancial incen- tives. Additionally, training funds and dual- training programs to support internships and postemployment training could be explored further.74
Adopting greater selectivity. Skill-related university-industry links make sense in all sectors, but only a few fi rst-tier universities will ever have the potential to have strong formal interactions with fi rms in research and development, and within these universities only a few departments representing specifi c sectors and subsectors may be able to pursue university-industry links. The priority sectors or subsectors should be the most dynamic and innovative parts of the economy.
BOX 6.4 Creating university-industry links in Ireland
The Technology Transfer Initiative is an innova- tive support structure for small and medium enter- prises in some regions of Ireland. It emerged from an alliance of three regional universities. The TTI is cofunded by them and Enterprise Ireland, a state development agency focused on developing industry.
The role of the TTI is to act as a gateway for companies by facilitating access to the expertise and resources of the three universities. Its core aim is to encourage and assist Irish companies to become more innovative and thus more competitive and profitable. Essentially, the TTI aims to enhance technology transfer on an interindustry and inter- regional basis, increase innovation through research and development, and act as a single point of con- tact between expertise in the participating universi- ties and local industry.
Companies request visits from TTI personnel who help identify potential research projects and topics to be addressed at specialist seminars with staff at universities. The TTI also organizes various innovation clubs between industry and academics.
Companies meet regularly to discuss, present, and brainstorm new research areas, to share experi- ence in new innovation, and to meet with academic researchers.
Feedback on the TTI from industry represen- tatives suggests that it has been effective in giving small and medium enterprises access to in-depth knowledge of universities and that it has given uni- versity researchers a more practical look at the needs of industry.
Source: Technology Transfer Initiative; see http://www.biotechnologyireland .com/pooled/profi les/BF_COMP/view.asp?Q=BF_COMP_9249.
BOX 6.5 Intermediary organizations
TAMA association in Japana
The aim of the TAMA (Technology Advanced Met- ropolitan Area) association is to improve the com- petitiveness of small and medium enterprises in the Tama region (northwest of Tokyo). The creation of the association was initially supported by the Kanto regional bureau of the Ministry of Economy, Trade, and Industry. Members of the association include small and medium enterprises, regional tertiary institutes, and banks.
The benefits of belonging to the association accrue mostly to those enterprises engaged in prod- uct innovation, rather than process innovation. So the fi rst condition for this model (and other interme- diary models) to have some utility is the existence of fi rms that are innovation driven, regardless of size.
Knowledge-integrating communityb
A knowledge-integrating community supported by the Cambridge–MIT Institute (a collaboration
between the University of Cambridge, United Kingdom, and the Massachusetts Institute of Tech- nology, United States) may be a good model for government-industry-university collaboration.
One example is the Silent Aircraft knowledge- integrating community of the U.K. government.
Because of the nature of the problem and the indus- try, collaboration among these three parties was seen as essential. A government body was needed to ensure compliance with existing regulations and potentially amending some of these. Industry part- ners (airlines) were involved because they are the end users. The analytical and research part was under- taken by a research institute. The involvement of banks helps address issues of capital.
a. T. Kodama 2008.
b. Acworth 2008.
High-tech subsectors offer potential for university-industry links—and in China, Thailand, and Vietnam particularly, in information technology and electronics. Yet other more medium-tech parts of an econ- omy may offer scope for these links, such as the rubber industry in Thailand, which has shown promising collaboration, nota- bly in testing and standards.75 Some lower- value-added sectors dominated by small and medium enterprises may also offer such scope, to the extent that they are upgrad- ing their technology, or some subsectors in agriculture.76