Too often, companies pursue collaboration with university researchers in an ad hoc, piecemeal manner. But by giving more thought to the relationship structure, companies can achieve better results.
Companies increasingly recognize that to successfully innovate they cannot exclusively rely on their internal R&D. Working with external partners allows them to access different pools of knowledge and save R&D costs.1 Universities are among the external partners that offer high promise, since they allow access to an enormous global pool of talent and skills.
Sometimes managers think dealing with universities equals only “technology transfer.” While the use of university-owned intellectual property2 has spurred much innovation in business, it is only the tip of the iceberg. Rather than merely licensing inventions, another often-underappreciated opportunity for companies is to get help from universities during the whole life cycle of their innovation projects.3 For example, in the United Kingdom, businesses already spend more than 20 times more on university collaboration than on licensing technology from universities.4
However, working with universities poses considerable challenges for managers.5 Two fundamental issues afflict collaboration. First, the open nature of academic science is at times in conflict with companies’ need to protect technologies they use. Second, while academic research focuses on long-term challenges and thus may move more slowly, industrial R&D is driven by time-sensitive product development projects and day-to-day project solving. As a result, companies can sometimes find universities too slow and too bureaucratic to be good partners. Given that in the Organisation for Economic Co-operation and Development countries, expenditures on higher education R&D represent about $160 billion per annum, businesses that don’t work with universities may be missing opportunities of significant proportions.6
The Leading Question
How can companies work most effectively with universities?
- Companies’ relationships with universities are too important to be managed in an ad hoc fashion.
- When structuring a collaboration, managers should consider two key dimensions: time horizon and degree of openness.
- Each model of industry-university collaboration has benefits and drawbacks; the best format will depend on the goals and capabilities of both partners.
These tensions are exacerbated by the fact that companies’ collaborations with universities are often pursued in an ad hoc, piecemeal manner, led by individual initiatives rather than any corporate strategy.