Andy Coyne examines the relationship between UK businesses and universities and looks to the US and Europe for role models.
The headline news is that engagement with the business community has never been greater among the UK’s higher education institutions.Behind the headlines, though, there’s a feeling that we still have a long way to go if we are to compete with the US and other countries in Europe where the importance of this relationship has been understood for decades.
The education system in the US has not, by and large, seen a reason to discriminate between commerce and culture. The world famous Massachusetts Institute of Technology (MIT) was founded in 1861 and contains 32 academic departments with a strong emphasis on scientific and technological research. But it is a broad enough church to encompass economics, linguistics and political science, and home to anti-establishment figures such as Noam Chomsky and Nobel prize-winning chemistry professors.
It’s hard to imagine a similar institution existing in the UK where the lines between intellectualism and commerce are thickly drawn. MIT was based on the German university model, which puts no barriers between theory and practice. Laboratory instruction was encouraged from day one, for example. This approach has led to US universities becoming world leaders in research and development. Their role as incubators of talent led directly to the growth (some might say world domination) of Silicon Valley in California.
Larry Page and Sergey Brin founded Google while they were studying at Stanford University, and Bill Gates and his Microsoft business partner Steve Ballmer worked on ideas at Harvard.
This idea of nurturing or incubating future growth companies is now very much in the minds of UK universities but we are entering the race late and with fewer resources.
Professor Arthur Francis, dean of the Bradford University School of Management, has a long track record of working with businesses and economic organisations. He has worked with the Economic and Social Research Council (ESRC) as co-ordinator of its research programme on the competitiveness of British industry and advised bodies including the Institute of Directors and the European Commission.
His view of how UK universities compare with their European and US counterparts when it comes to links with the business world are summed up in one word: “terrible.”
He points to major advantages US universities have. “There is an enormous amount of resource there, when you look the endowments at Harvard Business school,” he says. “That has led to an overwhelming volume of work from the US.
Francis suggests there is a long history of a lack of engagement between universities and businesses in this country. “It’s partly because of the British class structure,” he says. “The elite universities were concerned primarily with producing people for the church and the professions. In Europe they had specialist technical universities set up as part of industrialisation in the 1800s. It didn’t happen here until the mid-1960s with polytechnics and technical colleges.”
Conservative government legislation allowed polytechnics to become universities in 1992 and something of their original vocational purpose was lost in the scramble to become ‘proper learning institutions‘. Arguably it took more than a decade for many of the former ‘polys’ to find a new identity that encompassed some of the business link activities of their past. Now many of the former polytechnics lead the way in providing research and nurturing facilities for existing local businesses and start ups.
Business schools, too, have adapted, moving away from centres of pure learning to more practically minded institutions, many of which offer consultancy services to the business world.
According to Francis we still have a long way to go, but he says the signs are encouraging. “Ten years ago in Germany anyone at the head of a large engineering company would have an engineering doctorate. In Britain they would probably have had a history degree from Oxbridge. But things are changing,” he says. “And in sciencebased industries there was always a better relationship, in areas such as pharmaceuticals.”
Francis is encouraged by attempts by universities – often prompted by regional development agencies such as Yorkshire Forward – to focus on the needs of the local economy. “Universities in Yorkshire take pains to take into account local needs. Yorkshire Forward is an important broker in this as is the White Rose group (a consortium of universities),” he says.
Francis is a deep thinker about the future role of business schools and has been influenced by a book from the US, From Higher Aims to Hired Hands: the Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession by Rakesh Khurana.
He agrees, at least partly, with its view that a professional class of managers needs to be created. The management school, which has a good reputation for engaging with businesses, has launched a new business strategy that is intended to make it even more of an industry facing institution.
Plans include greater use of internships and industry based projects, making it easier for businesses to work with the School – via a toolkit of different ways for businesses to use the resources and expertise of the school, tailored to their needs , company based undergraduate programmes for large corporates and research based on identified business problems.
Academics will get close to three or four national and international businesses, and four or five large corporates/public sector organisations in the region will help the school test out its ideas and ensure they work in practice.
“When I took over ten years ago the school of management was going through a phase to build its research and grow in size,” Francis says. “Now we have more or less done that and we can pause to ask ourselves what sort of business school we want to be. My view is business schools within universities have not been that good in engaging with businesses.”
But he suggests businesses also have to take some responsibility. “The issue for us is we don’t think businesses demand enough from us. The demand for MBAs is tiny compared with France, Germany and the US. We can supply it but we need demand,” he adds.
This is a theme taken up by John Brooks, vice-chancellor of Manchester Metropolitan University (MMU), who has said industry is quick to criticise universities, but slow to engage with them. Brooks identifies a lack of understanding on the part of employers, and says often their criticism is based on a 1970s model of higher education and a lack of awareness of what is on offer at institutions such as MMU.
One business woman who has taken it upon herself to find out what universities have to offer and help deliver a service to the wider business world is Christine Cross, a former director of retail giant Tesco. She is working with staff at Hull University Business School’s Logistics Institute to increase the institute’s commercial activity.
The institute – a mix of academic expertise and bespoke logistics consultancy – will tap into Cross’s retail industry expertise. She says: “Universities struggle when developing this kind of venture as they are not set up as consultancies. Business advisers are crucial to ensure initiatives succeed, enabling academia and business to reap the benefits of working together.”
Having set up her own company, Cross acts as a consultant to businesses on international operations, customer insight, brand development and value chain management. She combines this with a mixture of executive and nonexecutive roles. She is a non-executive member of the board at retailer Next and Premier Foods.
Cross told Spark she has been impressed with what Hull University Business School is offering. “Staff have a lot of expertise in looking at the suppy chain,” she says. “It is unique in the links between its academic and commercial work.”
But, like Brooks, she says it is sometimes hard to get businesses to appreciate the value of what is on offer. “Companies often think they can get work done for nothing in the universities,” she adds.
She also accepts that polytechnics becoming universities has had an impact on their outlook. “Technical colleges engaged with business and training. We lost a bit of that link,” she says. “But the business schools are the ones are bringing that back. MBAs are being done on a part-time basis. Business schools have a key role to play.”
There is no lack of political will in the UK for academic-business liaisons. The Labour government has actively encouraged links and backed this encouragement with hard cash.
Rosie Winterton MP, regional minister for Yorkshire and the Humber and a Hull University graduate, stresses the role higher education has in driving prosperity and economic development.
Speaking about Yorkshire, she said: “The region’s universities have a huge and positive impact, especially collectively or working with other organisations. This impact is not limited to the education sector, nor the region.”
And while we may be playing catch up, the number of initiatives around - technical and strategic suggests we may catch up quite quickly.
An example is what is happening at Cranfield University. It has developed an automated framework to help service organisations optimise their business processes. Researchers at Cranfield have discovered that using quantitative computer-assisted techniques can help improve business process optimisation.
Dr Ashutosh Tiwari, senior lecturer in design optimisation at the college, says: “The framework includes these techniques and allows organisations to improve the efficiency of their business, offering cost savings and improving competitive advantage.
“Business process optimisation is especially useful for companies operating in the service industries and enables organisations to measure the results of their output.”
Cranfield has been awarded extra funding to continue further study in this area. The team’s next step is to develop a holistic computer-assisted package to help organisations implement and refine automated business processes based on their individual requirements.
An example comes from Coventry University, where the local branch of the Institute of Directors (IoD) is looking for business leaders to join a mentoring programme to support education and enterprise. The initiative, which is aimed at students setting up their own business, started last year. It has proved so popular that it is going forward to a second year. IoD members are being urged to share their knowledge with the next generation of entrepreneurs and help them realise their ambitions by giving up some of their time to act as a business mentor.
Philip Cornwall, IoD Coventry and Warwickshire Chairman, says. “The 2007 programme has made a difference to the students. The practical input from business leaders works with theory of learning. It is an ideal opportunity to give something back to the community by helping to shape the economy of the future.”