October 18-20 | Tucson, AZ

The Research Institution GAP Fund and Accelerator Program Summit

Innovation, at Universities and in Industry 

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October 18-20, 2023 / Tucson, AZ
The annual summit for research institution gap fund and accelerator programs, including proof of concept programs, startup accelerators, and university venture funds

The Story

Some thoughts this morning on universities and industry and their contributions to research – and for once, this isn’t going to be another long screed on drug research in particular. No, I’m particularly talking about what each of these brings to R&D in general, and about the places (both conceptual and physical) where they seem to intersect the most productively.

The last ten or twenty years have seen an awful lot of talk about innovation and entrepreneurship, and in general, I don’t have a problem with that. Well, let me restate that: I certainly have no problem with innovation, but perhaps I do have one with just talking about it all the time. That sentiment seems to be shared by this piece from last year at the Chronicle of Higher Education, with its testy title of “Enough With All the Innovation”. The author, John Patrick Leary (an English professor at Wayne State), had recently attended the kickoff of a new “innovation center” at the university:

It was a success: Students were excited, the free food was unusually good, and the whole production could have probably paid for a couple of adjunct history professors. I left disheartened by it all: the unskeptical embrace of buzzwords, the unexamined enthusiasm for the marketplace as a wise referee of ideas. I also wondered whether the reason students were so enthusiastic about running a potentially lucrative start-up at school was that their Wayne State education wasn’t as affordable as it was two decades ago, when the state of Michigan accounted for two-thirds of the university’s operating budget, as opposed to one-third today.

Private universities like Princeton, Yale, the University of Pennsylvania, New York University, and Rice are locked in what some have called an “innovation arms race,”competing to open new entrepreneurial “labs,” “hubs,” and “makerspaces” to facilitate student and faculty start-ups. Public universities like mine are racing to keep up. The Innovation Hub is part of a major new initiative, explained university officials in a statement, to “prepare our students with innovation and entrepreneurship skills” while also leading “the revitalization of the Detroit region.”

He’s (justifiably) a bit skeptical about the ability of Wayne State’s new innovation center to contribute much to that last part, and he’s also worried about the trend in general for schools to be caught up in a race to see who’s the most innovative, who’s spinning out the most startups, etc. It seems (as it certainly would seem, especially, to someone on the English faculty) that this is part of a change in the relationship that most universities have with their students and with their surroundings, and it’s also part of a long-running debate about what a college education is for, anyway.

We’re not going to solve that one any time soon. But another one of Leary’s questions would seem to admit of an answer: how effective have all these innovation centers been? Data on that are not easy to come by, as you might well expect. Leary cites this paper from a few years back by Marc Levine at Univ. Wisconsin-Milwaukee, who brings in a good deal of evidence that UMW’s talk at the time of becoming an entrepreneurial hub was, in fact, just talk – expensive talk, and unlikely to lead to anything like its stated aims. If that has changed over the ten years since the paper was published, it would be interesting to hear about. Here’s a more recent study trying to address the question directly: in 53 different “college town” environments, does the presence of such innovation centers, research parks, entrepreneurship programs, etc. actually seem to affect startup rates and small business formation in the area? Apparently not. Meanwhile, this paper (which is the source for this article, also at the Chronicle) suggests that while such programs might benefit students, it’s not necessarily in the ways that the university is intending.

Which takes us up to this latest article, “The Campus Innovation Myth”, which summarizes those papers and more. And it quotes from two British researchers who state that “In Europe and the US, it is probably fair to say that there is not a single example of a successful cluster” created by top-down policies intended to start such research hubs. I believe it, and if that’s a goal of these campus innovation centers, then good luck. If we knew how to create another Boston/Cambridge or Silicon Valley/Bay Area, there would be more of them, and that’s just here in the US, where as it stands, it can be notably harder to get a tech company (broadly defined) off the ground in many regions outside the concentrations of venture capital. Much less create another concentration of venture capital itself.

But now we add this new paper into the mix. The authors are looking at a problem that has caught the attention of many economists over the years, that is, the plateau in productivity despite continued scientific and technological advances. There are plenty of explanations for that, ranging from demographics to changes in social structure to claims that we’re not even measuring productivity the right way, and more. But this paper assumes that the stagnation is real, with one part of the problem being a decline in actual industrial research in general.


What you can see from that graph is that business’s share in total research in the US has been pretty flat – that despite increasing amounts of money being spent. Most of that has been going into development work, with less of it in early-stage stuff (the “share of research in business R&D”) line, and I think that these data would reflect the experiences of most readers of this blog, especially the ones who remember the Central Research departments at the larger companies.

That last part, the authors say, suggests that another big part of the problem has been a breakdown in how universities and industry split up the R&D world:

. . .This evidence points to the emergence of a new division of innovative labor, with universities focusing on research, large firms focusing on development and commercialization, and spinoffs, startups, and university technology licensing offices responsible for connecting the two.

In this chapter, we suggest that this division of innovative labor has not, perhaps, lived up to its promise. The translation of scientific knowledge generated in universities to productivity enhancing technical progress has proved to be more difficult to accomplish in practice than expected. Spinoffs, startups, and university licensing offices have not fully filled the gap left by the decline of the corporate lab. Corporate research has a number of characteristics that make it very valuable for science-based innovation and growth. Large corporations have access to significant resources, can more easily integrate multiple knowledge streams, and direct their research toward solving specific practical problems, which makes it more likely for them to produce commercial applications. University research has tended to be curiosity-driven rather than mission-focused. It has favored insight rather than solutions to specific problems, and partly as a consequence, university research has required additional integration and transformation to become economically useful. . .

Which takes us back around to the universities themselves trying to become more commercial and corporate. I think that the authors of this paper would find that to be the exact way not to fix the problem. But fixing the problem (and avoiding the ineffective ways to try to do so) is not easy. Companies worry about setting up blue-sky research divisions disconnected from their business realities (and worry about what the shareholders would say about that), while universities worry about becoming (A) irrelevant and (B) poor, as state funding (for example) has dried up and new sources of money have had to be identified. The incentives are in place to do the opposite of having the universities be more academic and having industry shoulder more of the R&D costs. Funding basic research is always a contentious topic, Vannevar Bush’s endless frontier aside. We’re not going to solve that this morning, but it’s good that people are thinking about it, and I welcome the research that’s going into how to do best do research. And pay for it.


Source: Innovation, at Universities and in Industry | In the Pipeline

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