Business told not to whinge

British business should stop "whingeing" about the perceived shortcomings of universities and address the damaging decline in their own research and development activities, according to Richard Lambert.

Mr Lambert, who has led the government review of collaboration between higher education and business due to be completed this week, told a London conference that most universities had cast off their ivory-tower images over the past ten years.

But Britain had the third-lowest growth of all Organisation for Economic Cooperation and Development members in business spending on research and development.

Tax credits, potentially worth £500 million for private research and development, remained largely unspent. "It is not good enough for business to whinge away like this," he said.

Higher education minister Alan Johnson confirmed that the tax credit, introduced in April 2002, was "hardly used". Although the government had rejected proposals for a levy on employers to support research, he said a cultural change was needed.

He promised to listen to employers' views and to ensure that they knew what was available from universities.

Mr Lambert hinted that his Treasury-sponsored review would call for state funding to support collaboration. "It is difficult to calculate precise returns, but the evidence suggests that the economic and social returns are significant and certainly justify increased public investment," he said.

But the former editor of the Financial Times added that he had identified "no silver bullet that is suddenly going to change everything". Rather, he would suggest "tweaking" a number of schemes to encourage a better relationship between higher education and business by demonstrating the mutual benefits.

The different objectives of the two fields posed the biggest single barrier. Among the guiding principles informing the review will be the need to support research that does not have obvious commercial application.

"Innovation processes are complex and non-linear," he said. "Great ideas emerge out of all kinds of unlikely routes."

The review will also encourage diversity, both in terms of funding streams and types of institution.

Mr Lambert said: "To distribute funding on any basis other than quality will destroy the whole process, but proximity is also important to companies. It is essential that we have departments with distinctive expertise right across the country."

Although the review is expected to renew calls in the interim report, published in July, for a more businesslike approach to university governance, it may be less hard-hitting than vice-chancellors feared.

"I have come to the conclusion that universities are more complex to manage than businesses," Mr Lambert said. "There is a variety of different stakeholders, all of whom have to be persuaded to buy into the mission, and there is very little room to vary prices."

Mr Johnson said he hoped that the knowledge exchanges proposed in January's higher education white paper would enable less research-intensive universities to increase collaboration between higher education and small businesses.

The first 20 exchanges would help such institutions to fulfil their potential in reaching an important sector of the economy that had so far made little use of universities.