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Lambert Review of Business-University Collaboration

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Lambert Review of Business-University Collaboration Lambert Review of Business-University Collaboration Final Report December 2003 ! Lambert Review of Business-University Collaboration Final Report December 2003 © Crown copyright 2003 Published with the permission of HM Treasury on behalf of the Controller of Her Majesty’s Stationery Office. The text in this document may be reproduced free of charge in any format or medium providing that it is reproduced accurately and not used in a misleading context. The material must be acknowledged as Crown copyright and the title of the document specified. Any enquiries relating to the copyright in this document should be sent to: HMSO Licensing Division St Clements House 2-16 Colegate Norwich NR3 1BQ Fax: 01603 723000 E-mail: [email protected] Contacts This document can be accessed at: www.lambertreview.org.uk For enquiries about obtaining this publication, contact: Correspondence and Enquiry Unit HM Treasury 1 Horse Guards Road London SW1A 2HQ Tel: 020 7270 4558 Fax: 020 7270 4574 Email: [email protected] ISBN: 0-947819-76-2 Devolution and business-university collaboration The remit of this report is UK-wide. However, there are important differences in the roles of the devolved nations and English regions in supporting business- university collaboration. Institutional funding for higher education is devolved, while the principle source of funding for science, through the Office of Science and Technology and its Research Councils, is UK-wide. The development agencies in Scotland, Wales and Northern Ireland are funded by their respective devolved administration. So it will be for the devolved administrations to consult on and decide how to take forward the recommendations on devolved issues in this report. Where references are made to programmes for supporting knowledge transfer, those available through HEFCE, such as HEIF, are available only in England. The devolved administrations have similar programmes of support through their own Funding Councils. Programmes run through the DTI, such as University Challenge, are generally available on a UK-wide basis. Throughout this report, for ease of reading, the term “universities” is used to mean all higher education institutions in the UK. Contents Foreword 1 Executive summary 3 Chapter 1 Introduction 9 Chapter 2 Demand for research from business 15 Chapter 3 Knowledge transfer 31 Chapter 4 Intellectual property and technology transfer 47 Chapter 5 Regional issues 65 Chapter 6 Funding university research 79 Chapter 7 Management, governance and leadership 93 Chapter 8 Skills and people 107 Appendix I Terms of reference 117 Appendix II Draft code of governance 119 Appendix III Summary of recommendations 121 Appendix IV List of contributors to the review 129 Foreword December 2003 Dear Chancellor, My Review of business-university collaboration is intended to meet three objectives: • To illustrate the opportunities that are being created by changes both in the way that business is undertaking research and development (R&D), and in the way that universities are opening their doors to new forms of collaboration with business partners. • To celebrate the success of those businesses which are already collaborating successfully with university research departments, to their benefit and to the benefit of the economy more broadly. They are role models for the majority of companies which at present have no links with universities. • To offer a wide range of ideas to stimulate debate and recommendations to help shape policy. The biggest challenge identified in this Review lies on the demand side. Compared with other countries, British business is not research intensive, and its record of investment in R&D in recent years has been unimpressive. UK business research is concentrated in a narrow range of industrial sectors, and in a small number of large companies. All this helps to explain the productivity gap between the UK and other comparable economies. However, there are reasons to be optimistic. Britain’s relatively strong and stable economic performance in recent years will improve the climate for business investment of all kinds. Public spending on science is increasing significantly in real terms, and the UK’s science base remains strong by international standards, whether measured by the quality or the productivity of its output. The R&D tax credit provides an important new incentive for business investment. In addition, there has been a marked culture change in the UK’s universities over the past decade. Most of them are actively seeking to play a broader role in the regional and national economy. The quality of their research in science and technology continues to compare well against most international benchmarks. Much more attention is being paid to governance and management issues. Business is changing too. Growing numbers of science-based companies are developing across the country, often clustered around a university base. New networks are being created to bring business people and academics together, often for the first time. The UK has real strengths in the creative industries, which are also learning to cooperate with university departments of all kinds. So this is a great time to be looking at the question of business-university collaboration in the UK. I am grateful to the Government for giving me the opportunity to take on this Review, and I hope that it will play a constructive part in what I am sure is going to be an important area of public policy in the coming few years. Lambert Review 1 Foreword The Review has concluded that although there is much good collaborative work underway already, there is more to be done. Universities will have to get better at identifying their areas of competitive strength in research. Government will have to do more to support business-university collaboration. Business will have to learn how to exploit the innovative ideas that are being developed in the university sector. The Review makes a number of recommendations across a wide range of issues. It suggests that the most effective forms of knowledge transfer involve human interaction and puts forward a number of ways to bring together people from businesses and universities. It identifies a need for the Government to support university departments which are doing work that industry values and suggests that the development agencies could play a greater role in developing links between business and universities. It proposes ways to simplify negotiations over intellectual property and to improve the market signals between employers and students. It suggests that the university sector should develop a code of governance and that the Government should introduce a risk-based approach to the regulation of universities. I would like to express my gratitude to Niki Cleal, who has led this project with flair and determination. She was admirably supported by Matthew Toombs, Tom Orlik, Shalini Okhai, Soumitra Mukerji and Jamie Mitchell. I could not have hoped for better colleagues. Ideas for the Review have come from a large number of academics, business people, regional authorities and policymakers in the UK, continental Europe, the US, Japan and Australia. I am extremely grateful to them all for their help. My colleagues and I are excited about the way that businesses and universities are already working together across the UK, and about the scope for substantial further collaboration in the future. We hope this Review will be seen as a useful part of this process. I am copying this letter to the Secretaries of State at the Department for Trade and Industry and the Department for Education and Skills, to whom the Review is also reporting. Richard Lambert 2 Lambert Review Executive summary INTRODUCTION Two broad trends are reshaping the way that companies are undertaking research around the world. The first is that they are moving away from a system in which most of their research and development (R&D) was done in their own laboratories, preferably in secret, to one in which they are actively seeking to collaborate with others in a new form of open innovation. The second is that business R&D is going global. Multinationals are locating their research centres in their most important markets, especially if those markets happen to contain centres of outstanding research. Their home country is no longer the automatic first choice for their R&D investment. These trends have big implications for universities, which are potentially very attractive partners for business. Good academic researchers operate in international networks: they know what cutting-edge work is going on in their field around the world. Unlike corporate or government- owned research facilities, university laboratories are constantly being refreshed by the arrival of clever new brains. UK universities are in a good position to capitalise on these trends. They perform well by international standards in science and technology, and there is evidence that the quality of their research has risen in recent years. There has also been a marked change of culture in the past decade, with many universities casting off their ivory tower image and playing a much more active role in the regional and national economy. There is much more to be done. Universities will have to get better at identifying their areas of competitive strength in research. Government will have to do more to support business-university collaboration. Business will have to learn how to exploit the innovative ideas that are being developed in the university sector. DEMAND FOR RESEARCH FROM BUSINESS The main challenge for the UK is not about how to increase the supply of commercial ideas from the universities into business. Instead, the question is about how to raise the overall level of demand by business for research from all sources. Measured against other developed countries, the research intensity of British business is relatively low – and the position has been deteriorating in recent decades.
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