The Impact of International Collaboration on UK University-Industry Links
(Theme 3: The Evaluation of Collaboration and Networking in European S&T;)

David Charles
Andrew Pike
Jeremy Howells


Objectives

The main aim of this research has been to explore the impacts of international research collaboration on UK university-industry links and their broader implications for the wider UK economy. The research has also examined the implications of the changing structure of university research funding; the deepening of UK university research and industrial linkages; the diversion of UK universities from joint work with UK firms, particularly small and medium-sized enterprises (SMEs); and the type of activities undertaken between UK universities and UK firms. Table 1 details the case study institutions examined.


Main Results

Four overlapping and often contradictory forces for change have been identified which impinge on university-industry linkage, particularly in the UK . These are:

  • the increased internationalisation both of universities and industry
  • the introduction of market reforms in the UK higher education sector and encouragement of universities to secure external research funding
  • the increased permeability and overlap between university and industry research needs, the former for research income and the latter to externalise R& D costs
  • the rationalisation of UK industry's manufacturing and research capabilities, which has limited the opportunities for UK industry to work more closely with UK universities

In response to these pressures, increased international collaboration, particularly in EU programmes, has become a key source of research income for universities and, often, a platform from which to secure industrial partners for more lucrative directly industrial funded research. Research income now constitutes a growing proportion of total university income and a deepening of university industrial research funding has also accompanied this increase (figs 1 & 2), although UK research council income remains the largest single element. However, it should be noted that considerable variation exists in the importance, value and volume of research income by UK university and department.

The general impacts of UK university involvement in EC collaborative research programmes included both positive and negative elements. Negative factors included the low overhead recovery rate, increased project cost and time consumption, particularly for interim meeting, and reporting structures and complication of the process for establishing intellectual property rights (IPR) amongst multiple partners. Positive elements included the feeling of involvement in a European scientific community, spin-offs in terms of expertise and contacts to other UK governmental and industrial research and possibilities for getting into the 'inside track' to exert influence over future European Framework funding priorities.

However, despite positive and negative effects it would be misleading to consider that international research collaboration by UK universities leads to a simple, linear 'displacement effect' in relation to other, more local, national linkages with UK industry. The processes at work are far more complex and are as much a product of changes within UK higher education as those without. The market-led reorganisation and prioritisation of securing a broader base of research funding introduced within the UK has led to a re-evaluation of the stance toward industry amongst UK universities. Trends towards research specialisation have had particularly strong impacts. UK university success in securing research income particularly from EC collaborative programmes, which do not stipulate inclusion of industry from home member states, have created a 'gap' through a process of divergence: UK universities are anxious to secure funding which is increasingly available in Europe while UK industry is rationalising its R& D overheads and expenditure. For UK industry, competitive pressure on overheads and R& D budgets, escalating costs of research, declining time horizons for research combined with the accelerated pace of technical change has led to the 'downsizing' of corporate R& D functions. Increasingly research specialised universities, tied into broader European networks of research and anxious to gain external research funding, have therefore become simultaneously more attractive and elusive to industry.

As a result of, or perhaps despite, the pressures for divergence between university and industry research needs, however, the mix and specificity of activities has differed at the university- industry interface, especially in relation to the role of universities and usage of international collaborative research. In terms of the case study of UK university departments, larger 'players' have secured funding from a growing diversity of sources for a wide variety of work, including world-wide linkages with industry for basic precompetitive research work, often of a long-term consultancy nature. Whereas other smaller players are trying to break into the larger game and, in doing so, go through the process of redefining their historic linkages with other, often more localised, industry and affecting a transition away from applied, short term consultancy toward longer term, more basic research of the variety described above.

Although certainly not the rule, the European Commission has encouraged linkages with SMEs. However, our evidence suggests that, whilst SMEs are favourably viewed when bidding for research monies, there is still a risk that those SMEs from the participant university's own member state will lose out unless they are already working closely with the university. The imperative of bringing together partners within a network which includes those from less favoured regions (LFRs) within the European Union - particularly Ireland, Spain, Portugal and Greece - has been seen to present a sufficient problem without looking for UK firms simply to allow the possibility of working with a national partner except, crucially, in those instances where the SME is already working with the university. The regional industrial structure was also cited by two universities interviewed as being problematic when there is a scarcity of both functional decision-making and R& D budgets amongst local firms. The short-termist character of UK firms and unwillingness, or inability, to invest in longer term basic research has also been cited as a problem. In addition, combined with rules surrounding funding criteria, the increasingly internationalised activities and linkages of the UK universities has further excluded UK firms through a self-reinforcing process of working within already established networks when applying for further research funding (figures 3).

The impact of international research collaboration on UK university-industry links is complex. Such are the depth of changes on the part of both universities and industry that a simple explanation is elusive. The evidence suggests that for those parts of UK industry involved in European research with UK universities the benefits are clear - highly specialised research facilities, personnel and expertise working together across the European Union - although the mechanisms for the extraction of commercial gain and IPR might be more problematic. For those universities and parts of UK industry outside the collaborative pattern, the 'repeat' nature of research funding and increasingly knowledge/personnel nature of technologies presents a foreboding challenge. As with any simplistic and unregulated 'market solution' to the research funding problems of the UK's higher education sector, the winners of the past are best placed to continue winning, often at the expense of the losers. An unregulated market leads to a scramble for research money, irrespective of source, and ultimately, leads to a fallacy of composition: success in capturing research funds is not achievable simultaneously by all.


Implications for policy and practice

There needs to be an explicit recognition that an integrated, coherent and interventionist science and technology policy for the longer term is needed which both influences and responds to the EU Framework Programme

  • The relative lack of financial resourcing of both UK universities and industry from the public sector needs to be remedied. New resource (absent from the recent White Paper) as well as funding to encourage industrial expenditure upon R& D particularly in conjunction with UK universities needs to be made available, for example through tax credits

  • Funding criteria for the award of both national and EU research grants needs to be redesigned. More credit and encouragement needs to be given to an 'inclusive' approach to university-industry linkage between as well as within member states, incorporating SMEs and the countries or regions requiring linkages to satisfy cohesion aims

  • Research selectivity exercise need to explicitly recognise the value of university-industry generated work, rather than simply rewarding effort via academic publications. European collaborative research also needs to be valued as highly as that from national research councils in the UK in research selectivity exercises

  • Changes in the cost structure of university research also need to be effected, such that universities successful in securing EU collaborative research are not penalised by having to find additional overhead costs from their own resources. EU research needs to be funded so as not to be treated as a 'loss leader' or a drain on funds from other research sources in the form of cross subsidy


References/Further Reading

Charles, D. and Howells, J (1992) Technology Transfer in Europe: Public and Private Networks. Bellhaven Press: London

Howells, J. and Wood, M. (1992) The Globalization of Production and Technology. Bellhaven Press: London

Mytelka, L.K. (1993) 'Strengthening the relevance of European science and technology programmes to industrial competitiveness: the case of ESPRIT' in Humbert, M (ed) The Impact of Globalization on Europe's Firms and Industries, Pinter: London

Save British Science Society (1993) The SBS 'White Paper': Elements of a Policy for British Science and Technology. Save British Science Society: London

Whittington, R. (1990) 'The changing structures of R& D; from centralization to fragmentation' in R. Loveridge and M. Pitts (eds) The Strategic Management of Technology. Wiley: Chichester


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