The world’s leading universities and research institutes are admirable places, responsible for training rising numbers of people and carrying out the basic and applied science and studies that shape the world. In some ways they are the guv’nor, leading the way to a brighter future and providing the rules for society to follow.
Universities, however, face three challenges: limits to their traditional funding source from the state and caps on tuition fees, competition from the internet, and the consequences of globalization where the competition to attract the best students and professors to climb the rankings.
These challenges mean universities are having to examine their roles of educator, researcher and in economic developer and the contributions made to each while their business model is being threatened and they face increasing numbers of challengers.
Universities have been the primary research engines of most economies as part of a global escalation of funding. But while R&D from public and private sources in the US has been increasing again from its 1970s nadir towards 3% of GDP, Asian countries, such as Korea and Japan, have overtaken the US. And Stanford and London School of Economics research indicates optimal proportion of R&D spend could be twice as high.
Another response increasing numbers of universities and research institutes are making is to support their students and faculty in their commercial endeavours both during and after their time on the campus, even if over the past decade they have had “neglible impact”, at least in Europe.
They are setting up seed and investment funds to support start-ups, mentoring and alumni clubs, ways to transfer technology to industry and how to retain and build links to the businesses that might eventually come forth from the ideas developed at universities – collectively these tools are known as university venturing. A crucial tool in building alignment is when the universities can take equity and follow on for the longer-term in order to maintain the partnerships.
In effect, universities are paying more attention to the one asset they have: the people that pass through or work there, rather than necessarily just the fruits of work they do while at the institute.
This ezine will aggregate many of the news stories from around the world on this growing trend of university venturing. The team will also publish later this month a PDF magazine providing analysis on university venturing and the strategies and personalities behind the institutions.
The title, Global University Venturing, is complemented by its sister publication, Global Corporate Venturing, which for the past few years has been looking at how companies have been dealing with similar challenges brought by globalization and competition by taking stakes in entrepreneurial third-parties and supporting innovative ideas.
Global Insight found that ventured firms, adjusted for size, spend over twice as much on R&D as non-ventured firms. In particular, small firms in the venture-dominated information technology and medical-related sectors are major contributors to these trends. The share of US R&D performed by firms with fewer than 500 employees rose from 5.9% in 1984 to an estimated 20.7% in 2003. The dollar value of small company R&D rose from $4.4bn in 1984 to an estimated $40.1bn in 2003, a nine-fold increase.
Even when small ventured firms grow to be among the biggest in their industry, they remain leaders in R&D. Many of the ventured companies founded during venture capital’s infancy 20 to 30 years ago have quickly grown from small private companies to among the largest in the country. Of the top firms in US R&D spending, many were either ventured themselves, such as Microsoft, Cisco, and Intel, or were major acquirers of ventured firms, like Johnson & Johnson and Pfizer.
There are already plenty of close connections between corporations and academia but many senior executives from both sides lament that more could be done together to support the innovation economy. By launching these two titles with dedicated teams responsible for both, we are looking to understand and encourage best practices and the best ideas to be taken up by society for the good of all. This can only be done with the support of those in the institutions themselves – we are thankful for the 900 corporate venturing units that have been sharing their data, concerns and ideas over the past three years and hope to build the same spirit of partnership with the top 150 to 200 universities and research institutes globally.
