The role of universities and research

institutes in an innovation economy

Universities in Sri Lanka indeed need to be drawn into the innovation economy,
keeping in mind that the primary role of universities in providing the advanced
human resource capacity for innovation and that a supporting industry base is
essential for any initiatives to connect university HR to industry

Wednesday, 14 October 2015

The fourth article in an illuminating series written by W.A.
Wijewardena on social market economy is about
universities, research institutions as catalysts of in
innovation economy. There he posits that First,
knowledge has to be created by its universities and
research institutions. Then, such knowledge should be
made available to prospective entrepreneurs for use in
commercially viable productions known as innovation.
In this article, I would like to counter that argument by
saying that although universities are important actors in
an innovation economy, they largely serve an indirect role
through human capital related contributions. University
research is largely about the training of human capital
with advanced skills. In fact, with respect to an innovation
economy, academic papers are, well, academic. The
primary outputs are the researchers who were trained in
the process to go deep into a topic.

There is no question that we have to support our universities to do more

research, but, we need to be more realistic about the manner in which
universities can contribute in innovation economy. If we do not understand
the primacy of the human capital development role of universities, we run
the risk of wasting money on industry-oriented research centres that are
not sustainable.
(I should note here that my arguments are largely based on my knowledge
of the US innovation system. I am open to ideas to the contrary from
European or East Asian innovation economies.)
National innovation system concept
A linear model of innovation where
universities as providers of knowledge
was replaced by a systems approach in
the late nineteen eighties with the
national innovation systems (NIS)
concept put forward by Freeman in 1987
and elaborated by Lundvall (1992),
Nelson, 1993, Patel and Pavitt, 1994 and
Metcalfe, 1995 and others.
The earliest definition of a NIS is possibly
is as a network of institutions in the
public- and private-sectors whose
activities and interactions initiate, import,
modify and diffuse new technologies,
and put forward by Freeman in 1987. A
later definition that elaborates the
institutions further is by Niosi.
A national system of innovation is the
system of interacting private and public
firms (either large or small), universities,
and government agencies aiming at the
production of science and technology
within national borders (Niosi et al.,
1993)
Role of universities as source of
human capital
Although universities are included as one
of three major actors with the other two
being industry and government, the
exact role of universities need a closer look. As Mowery (2008) and others
conclude, universities serve as a medium for circulation of knowledge

through the supply of trained graduates to industry, faculty consulting and

conferences and serves antennas for adopting external knowledge through
international science and technology partnerships. As Mowery further
notes, an exception is perhaps in biomedical research where university
hospitals and faculties of medicine are organically linked university research
outputs are directly absorbed into clinical practice.
Academic publications, patents and licenses from universities play a
marginal role in national innovation systems. For example, the academic
share of patent and license in the USA is fraction of national output and
research expenditure by industry has continued to outpace academic
research by six-fold or more.
The role of research universities in the US is summarised succinctly in in the
2014 Science and Engineering Indicators report of the US National Science
Foundation as follows:
Institutions of higher education are responsible for S&E education and
training and perform the majority of US basic research. In these respects,
the functions of the higher education system have remained largely
unchanged in recent decades
Patenting and licensing by universities may not have contributed
much in the big picture
The 1980 Bayh-Dole Act of the US congress shifted the incentive structure
that governed the research and development path of federally funded
inventions by allowing institutions to own inventions resulting from federally
sponsored research and to exclusively license those inventions. After nearly
thirty years the effect of Bayh-Dole is debated, but, there seems to be
consensus that university to industry technology transfer process is not that
simple.
Over time, universities have come to a more subtle understanding of the
benefits and the limitations of technology transfer. Collectively, university
technology transfer offices (TTOs) have learned that patent portfolios are
difficult and expensive to manage, they take a long time to mature to the
point where they will deliver revenue, results are widely variable and the
investment required represents a long-term commitment. [Boettiger and
Bennett, 2006]
Mowery (2008) too concludes that (1) Growth in patenting and licensing,
licensing revenues are heavily concentrated in biomedical technologies (2)
much of the growth in patenting & licensing would have occurred without
Bayh-Dole and (3) For many US universities, financial returns are modest or
negative and Staff and legal expenses for patenting and licensing offices
are high.

University research centres

University research centres dedicated to specific technology fields is
another mode of taking university knowledge to industry. A series of
engineering research centres funded by the US National Science Foundation
since early 1990s is a case in point. The author had the opportunity to
evaluate some of these NSF Engineering research centres in the state of
Ohio in late 1990s. The research centres received money from the NSF on
the basis that NSF would give funding for 3-5 years and the industry
partners would pick up the costs after. The sustainability of these centres
beyond the government funding period very much depended on the
particular industry of focus, with some being more successful than other.
The US NSF continues fund such university-industry research centres, but,
cost benefits of such centres for developing economies need to be carefully
evaluated, because for success these centres depend on large outlays for
both capital and recurrent expenditures.
For developing economies initial commitment from industry with more
industrial control could be a more viable model.
Industry parks
Sri Lanka Institute of Nanotechnology (SLINTEC), an industry led industry
park located in Homagama could be a more sustainable model for Sri
Lanka. Its initiation was reported by Sunday Times in 2006 as follows:
A Cabinet paper has been prepared in consultation with the two Professors
Prof. Gihan Ameratunga, Head of the Nanotechnology Department,
University of Cambridge, UK and Prof. Ravi Silva, Head of the Advanced
Technology Institute of Surrey University, UK to promote Nanotechnology in
Sri Lanka, by establishing a centre for Nanotechnology in the island,
Minister of Science and Technology Prof. Tissa Vitharana said.
The two expatriate scientists were instrumental in pushing the initiative to
secure funding from Diaolog, Hayleys, Lankem, John Keells, Loadstar and
MAS Holdings as and Virtusa as beneficiary partners and, of course,
contribution from the Sri Lankan government to establish the centre.
Dr. Ajith de Alwis in his FT article titled Being bold: Triple hexagons for triple
convergence cites SLINTEC as a bold experiment that bore fruit. I
remember the initial design drawing where the symbolic three hexagons
and the tower were shown majestically inside a land mass which was to be
the iconic park. Today at Homagama the design has been realised to a
certain degree. One hexagon proudly stands housing the Nanotechnology
Research and Development Wing and boasts of having certainly the most
advanced as well as varied high-end equipment present in Sri Lanka under
one roof. (Notes: The other two hexagons were to be biotechnology and
IT).
The science expertise base of SLINTEC is worth of analysis. A cursory

analysis is presented here. The 14 member board is represented by one

expatriate academic scientist, 3 government representatives, one
independent and nine industry representatives. The leadership team
includes two strong local academics and an expat academic as the chief
research scientist. The contribution of universities is best illustrated by the
team of scientist of whom seven received their received their BSc training
in local universities and two at the Institute of Chemistry, a non-profit
private entity. Two of the nine received their doctoral training in Sri Lanka
and other seven from USA, Sweden and UK.
Alwis draws on examples of Biopolis and Fusionpolis industry parks in
Singapore to exhort policy makers to be bold again and venture into
industry parks devoted to Biotechnology, IT and cognitive Science. Given
the limited resources we have even for forensic analysis of DNA, we may
not be ready from industry side to venture into new areas, except perhaps
in IT.
Research-based post graduate education in Sri Lankan universities
One of the most established modes of university contribution to innovation
is through training of students by way of post-graduate degree programs.
The research strength of a university is indeed judged by the size of its
post-graduate programs. For example, in the earlier versions of Carnegie
classification of university, a research university is defined is one producing
20 or more doctorate degrees a year.
In a study on research and research training Upali Samrajeewa (2003)
noted that Sri Lanka produced 2.5 PhDs per year on average from 7
universities during the 1991-2000 time period. Unfortunately the study was
not updated for the 2000-2010 period. But it is unlikely that the rate has
improved much, because more recently, rightly or wrongly, the focus has
been on sending students abroad for post-graduate study.
Concluding remarks
Universities in Sri Lanka indeed need to be drawn into the innovation
economy, keeping in mind that the primary role of universities in providing
the advanced human resource capacity for innovation and that a supporting
industry base is essential for any initiatives to connect university HR to
industry.
Posted by Thavam