Business taps sector for ideas

December 3, 2004

British universities are powerhouses of innovation in the UK economy, enjoying far greater links with businesses than previously thought, according to a report.

Two thirds of British companies use universities and higher education institutions as sources of knowledge and almost a quarter of these businesses have research collaborations with them, says the report by the Cambridge-MIT Institute (CMI).

The findings, which were based on interviews with 800 small and medium-sized enterprises in the UK and US, showed that a third of SMEs in the US enjoyed similar links with universities and that 14 per cent were involved in research collaborations.

While the UK outstripped the US in terms of the scale of university-business links, the study found that US collaborations tended to be deeper and more beneficial to companies.

In all, 30 per cent of SMEs in the US rated their links with universities as "highly important" sources of knowledge compared with 13 per of UK firms.

The findings, presented to the CMI's annual conference in Edinburgh this week, are the first part of a comparative study of 4,000 SMEs in the UK and the US.

The three-year programme is funded by CMI, and is being conducted by Andy Cosh and Alan Hughes of Cambridge University and Richard Lester of the Massachusetts Institute of Technology.

Professor Hughes said that while the focus was on spin-offs and licensing, these were not the only ways universities could interact with the commercial world.

"It's not a one-size-fits-all world - pursuing spin-offs and licensing is not necessarily the best or only solution," he said. "We need a differentiated, diverse university system."

He said that the deeper and more beneficial higher education links enjoyed by US companies might be because they placed more emphasis on education.

The study found that 80 per cent of US chief executives and managing directors have a first degree compared with 50 per cent of those in Britain. US bosses are twice as likely to have an MBA than their UK peers.

One in five US workers has a first degree, while in the UK it is one in six.

The final report from the 2003 Lambert review of business-university collaboration suggested that the main challenge for the UK was not how to increase the supply of commercial ideas from universities to business. It said the question was about how to raise overall demand by business for research from all sources.

The CMI research suggests that stimulating demand for university research by industry may be difficult in a country where university expertise is not valued as highly as in the US.

Richard Brown, chief executive of the Council for Industry and Higher Education, questioned the level of business-university links found by the study.

He said that, while small high-tech firms and companies involved in manufacturing supply chains were likely to have such links, service-oriented enterprises such as corner shops made up the vast majority of small businesses and would not need them.

Universities were also often told they should develop links with SMEs even though they were uneconomic, Mr Brown said.

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