Universities, Innovation and the Economy In the twenty-first century, universities are part of systems of innovation spanning the globe. While there is nothing new in universities’ links with industry, what is recent is their role as territorial actors. It is government policy in many countries that universities, and in some countries national laboratories, stimulate regional or local economic development. They are expected to be at the heart of networked structures contributing to the growth of productive knowledge-oriented clusters. Universities, Innovation and the Economy explores the implications of this expectation. Its purpose is to situate this new role within the context of broader political histories, comparing how countries in Europe and North America have balanced the traditional roles of teaching and research with that of exploitation of research and defining a territorial role. Helen Lawton Smith highlights how pressure, both from the state and from industry, has produced new paradigms of accountability that include responsibilities for regional development. This book utilizes empirical evidence gained from studies conducted in both North America and Europe to provide an overview of the changing geography of university– industry links. Helen Lawton Smith is Reader in Management, School of Management and Organisational Psychology, Birkbeck, University of London, UK, and Director of Research, Oxfordshire Economic Observatory, Oxford University. Routledge studies in business organizations and networks 1 Democracy and Efficiency in the Economic Enterprise Edited by Ugo Pagano and Robert Rowthorn 2 Towards a Competence Theory of the Firm Edited by Nicolai J. Foss and Christian Knudsen 3 Uncertainty and Economic Evolution Essays in honour of Armen A. Alchian Edited by John R. Lott Jr 4 The End of the Professions? The restructuring of professional work Edited by Jane Broadbent, Michael Dietrich and Jennifer Roberts 5 Shopfloor Matters Labor-management relations in twentieth-century American manufacturing David Fairris 6 The Organisation of the Firm International business perspectives Edited by Ram Mudambi and Martin Ricketts 7 Organizing Industrial Activities Across Firm Boundaries Anna Dubois 8 Economic Organisation, Capabilities and Coordination Edited by Nicolai Foss and Brian J. Loasby 9 The Changing Boundaries of the Firm Explaining evolving inter-firm relations Edited by Massimo G. Colombo 10 Authority and Control in Modern Industry Theoretical and empirical perspectives Edited by Paul L. Robertson 11 Interfirm Networks Organization and industrial competitiveness Edited by Anna Grandori 12 Privatization and Supply Chain Management Andrew Cox, Lisa Harris and David Parker 13 The Governance of Large Technical Systems Edited by Olivier Coutard 14 Stability and Change in High-Tech Enterprises Organisational practices and routines Neil Costello 15 The New Mutualism in Public Policy Johnston Birchall 16 An Econometric Analysis of the Real Estate Market and Investment Peijie Wang 17 Managing Buyer–Supplier Relations The winning edge through specification management Rajesh Nellore 18 Supply Chains, Markets and Power Mapping buyer and supplier power regimes Andrew Cox, Paul Ireland, Chris Lonsdale, Joe Sanderson and Glyn Watson 19 Managing Professional Identities Knowledge, performativity, and the ‘new’ professional Edited by Mike Dent and Stephen Whitehead 20 A Comparison of Small and Medium Enterprises in Europe and in the USA Solomon Karmel and Justin Bryon 21 Workaholism in Organizations Antecedents and consequences Ronald J. Burke 22 The Construction Industry An international comparison Edited by Gerhard Bosch and Peter Philips 23 Economic Geography of Higher Education Knowledge, infrastructure and learning regions Edited by Roel Rutten, Frans Boekema and Elsa Kuijpers 24 Economies of Network Industries Hans-Werner Gottinger 25 The Corporation Investment, mergers and growth Dennis C. Mueller 26 Industrial and Labour Market Policy and Performance Issues and perspectives Edited by Dan Coffey and Carole Thornley 27 Organization and Identity Edited by Alison Linstead and Stephen Linstead 28 Thinking Organization Edited by Stephen Linstead and Alison Linstead 29 Information Warfare in Business Strategies of control and resistance in the network society Iain Munro 30 Business Clusters An international perspective Martin Perry 31 Markets in Fashion A phenomenological approach Patrik Aspers 32 Working in the Service Sector A tale from different worlds Edited by Gerhard Bosch and Steffen Lehndorff 33 Strategic and Organizational Change From production to retailing in UK brewing 1950–1990 Alistair Mutch 34 Towards Better Performing Transport Networks Edited by Bart Jourquin, Piet Rietveld and Kerstin Westin 35 Knowledge Flows in European Industry Edited by Yannis Caloghirou, Anastasia Constantelou and Nicholas S. Vonortas 36 Change in the Construction Industry An account of the UK Construction Industry Reform Movement 1993–2003 David M. Adamson and Tony Pollington 37 Business Networks Strategy and structure Emanuela Todeva 38 Universities, Innovation and the Economy Helen Lawton Smith Universities, Innovation and the Economy Helen Lawton Smith I~ ~~o~;~;n~~;up LONDON AND NEW YORK First published 2006 by Routledge Published 2017 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN 711 Third Avenue, New York, NY 10017, USA Routledge is an imprint of the Taylor & Francis Group, an informa business Copyright © 2006 Helen Lawton Smith Typeset in Times by Wearset Ltd, Boldon, Tyne and Wear The Open Access version of this book, available at www.tandfebooks.com, has been made available under a Creative Commons Attribution-Non Commercial-No Derivatives 4.0 license. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalog record for this book has been requested ISBN13: 978-0-415-32493-9 (hbk) Contents List of illustrations viii Preface and acknowledgements x List of abbreviations xi Introduction 1 1 New paradigms in the twenty-first century 8 2 The regional economy and the university 32 3 Measuring the impact 51 4 Europe 86 5 The United States 110 6 Labour markets in Europe and the United States 139 7 Grenoble and Oxfordshire 163 8 Stanford, Louisville and Princeton 193 9 Conclusions 223 References and further reading 232 Index 261 Illustrations Figures 1.1 Pasteur’s Quadrant 15 3.1 Federal R&D by discipline 60 5.1 The impact of MIT on the economy of the US 129 5.2 R&D systems in the US: paradigm shifts 132 Tables 1.1 Gains to university–industry interaction 18 3.1 Academic R&D share of total R&D performance, by selected countries: 2000 or 2001 54 3.2 Academic R&D expenditures, by country and source of funds: 1981, 1990 and 2000 55 3.3 Ownership of academic intellectual property in OECD countries: 2003 63 3.4 Number of published scientific articles for all types of organizations in a number of rich countries, 1999, in relation to GDP 73 3.5 Comparison of spin-off formation across the OECD 76 4.1 UK incentives to university–industry engagement 104 5.1 Major legislation affecting universities’ links with industry in the US 111 5.2 Leading US states by R&D performance, R&D by sector and R&D as a percentage of state gross domestic product: 2000 117 5.3 Quartile groups for high-technology share of all business establishments: 2000 124 5.4 Select data, 16 universities with most licensing revenues: 1999 126 5.5 Selected examples of state-level initiatives in California and Massachusetts 136–7 6.1 US graduate student enrolment in science and engineering, by enrolment status and sex, and post-doctoral students in science and engineering: 1992–2002 143 Illustrations ix 6.2 European Union industry–university training and mobility programmes 148 6.3 Erasmus student mobility numbers: 2000/1–2002/3 149 6.4 Proportion of graduates remaining in region of study after completing degree and proportion of those who originate from the region 156 7.1 University and Scientific Pole of Grenoble – ‘Pole Scientifique’ 165 7.2 Undergraduate, graduate and professional courses in micro- and nanotechnology in Grenoble 170 7.3 Research laboratories and universities in Oxfordshire 173 7.4 Oxford University income from industrial sources 174 7.5 Student populations in Oxfordshire: 2002–3 181 7.6 Oxford University spin-offs 186 8.1 Student numbers, Stanford, Louisville and Princeton Universities: 2002–3 194 8.2 Stanford, Louisville and Princeton Universities’ income sources: 2002–3 194 8.3 Ranking of the top companies founded or co-founded by Stanford affiliates 205 Preface and acknowledgements Universities are now universally seen as sources of wealth creation. At the one extreme this means that they are mandated through legislation and financial ‘incentives’ to drive economic development, at the other they are seen as catalysts without which local high-tech economic development would not have developed. The reality is more complicated than either. The book is an attempt to explore that reality. This task would not have been possible without the help and support of many people. I am particularly grateful to Tim Cook and Tom Hockaday of Isis Innovation, Oxford University, for their support, patience and data and to Catherine Quinn, Jeremy Whiteley, Nigel Thrift also of Oxford University for their help on points of information. In the US, I would like to thank Alan Attaway, Nancy Davis, Andrew Lane and Teresa Fan of the University of Louisville