University entrepreneurship in Russia: quest for strategic change in the Russian university system

The Russian higher education system is based on certain number of large state universities managed and financed by the Ministry of Education and Science. They can also be considered a special type of corporation that needs to undergo organisational change in order to become the pillars of a national innovation system.

To describe the strategy of Russian university system development, managers use the three-stage roadmap of change from the Training University, or University 1.0, concentrating on HR training, to the Entrepreneurial University, or University 3.0 that needs to become cornerstone of the innovation system as the key source of innovative technology startups. The intermediate stage is the Research University, or University 2.0, which lies at the focus of the current efforts of the Russian government. In the Soviet system of education and science management, the research work was typically given to specialised research institutes, leaving teaching the key responsibility of universities.

A presidential decree of May 2012 has initiated the Russian Education and Science Ministry’s Project 5-100, aimed at enhanceing the competitiveness of top Russian universities. Progress was to be measured by ranks in three major international university ratings – the Times Higher Education World University Rankings, the QS World University Rankings, and the Academic Ranking of World Universities. Roadmaps for organisational development towards academic excellence have been drafted by 21 universities, in order to apply for an overall budget close to $500m for 2012-15.

More recently, the project’s focus has shifted towards university entrepreneurship as a major vehicle of innovative development within the Russian economy, streamlined by the National Technological Initiative, a roadmap for supporting and developing innovative industries run by the state-backed Russian Venture Company.

In applying corporate entrepreneurship types to universities, we may want to concentrate on the two advanced models that bring the university to category 3.0  – incubation of university projects and external venturing. Although managing or launching an incubator, accelerator or techno park is something most Project 5-100 universities do, only a few have venture funds to support university spinoffs to maturity.

The Russian system of higher education is based on around 960 higher education institutions, around 60% of them owned by the state. The 21 leading universities supported by Project 5-100 are state-owned and for that reason their autonomy is limited, especially when it comes to allocation of budget funds sourced mostly from the supervising ministry. This fact is frequently mentioned as an obstacle to risky allocation of university budgets, running university venture funds and the overall movement to entrepreneurial university.

Leading universities, such as Moscow Institute of Physics and Technology, Institute of Information Technologies, Mechanics and Optics, Urals Federal University and some others, have recently launched venture funds, but still hesitate to position themselves as category 3.0 universities. For example, a manager at the Moscow Institute of Physics and Technology confidently confirms its status as University 2.0, considering it a strong research university that has yet to advance to 3.0, an entrepreneurial university.

Less than 5% of Russian universities seem able to move in that direction, since a great majority of them avoid any form of entrepreneurship and can hardly understand the 3.0 concept.

The inclusion of leading universities in the state-owned system of innovative companies may be beneficial for the integrity of the whole system of generation and employment of innovation, as companies are encouraged by the state to collaborate with leading universities, sometimes through channels of communication provided by the state. However, in practice they have little incentive to do that and are not agile enough to accept the ideas, startup teams, and startups generated by universities.

In the state-owned systems of innovation, the key strategy of change towards entrepreneurial universities being the centre of nationwide and regional innovative economic development is top-down, which implies creation of university relations departments in state-owned innovative companies and strong technology transfer offices focused on securing the university-owned property rights and generating income through sales of patents, licences and startups to corporates, thus ensuring greater budgetary autonomy and further development of university venture funds. At the same time, more work is needed to grow and encourage a grassroots entrepreneurship community to communicate and work together with universities, technology transfer offices, incubators and venture funds.

The obstacles to entrepreneurial university status commonly listed by their managers are the low interest of the top university manager (rector) in organizational changes – the role of rector is extremely important in the top-down model – no niche for university-generated ideas, products and services on the market, no entrance to international markets, weak or non-existent technology transfer offices and venture funds, low level of collaboration with large innovative companies, low participation of people with a business background in university management. However, the University 3.0 model in Russia is gradually emerging, with several top universities moving in that direction.