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The Impact of University Research on Industrial Innovations
 admin April 23, 2010, 09:32:47 AM 

Almost all schools of thought in economics agree that industrial innovations provide the main driving force for economic growth and that they contribute to the creation of competition among firms and countries. In Pakistan, the mechanism linking universities and research institutions with the productive sector appears to be ineffective, despite numerous efforts. There is widespread concern that the research at universities and scientific institutes in Pakistan is not focused on the needs of industry. The research results, therefore, remain largely unused, and this has limited the effectiveness of the science & technology (S&T) infrastructure in Pakistan.


Academic research and innovations in industrialized countries


The importance of universities in promoting technical change and innovation is widely recognized. This has prompted increasing concern about university–industry linkages, as shown by the ever increasing literature in this area.


Various arguments have been used to justify the growing interest in university–industry interactions. First, industry–university relations have been influenced by short-term economic considerations and today’s cutthroat competition. Because of the global economic recession, many countries have found it imperative to marshal their S&T capacities to improve their competitive position. Because academic research and development (R&D) receives a very large portion of the national research funding in most countries, academic institutions must in turn contribute to development. In addition, the general feeling is that institutions of higher learning are underused resources and that explicit policies are required to effectively incorporate them in the development process.


The role of universities and other institutions of higher learning in the innovation process is natural because of their multidisciplinary nature, their competence in undertaking basic research, their reservoirs of knowledge and information, and their ability to recruit young talent. Therefore, the university should be incorporated in the national-development planning process.


For the universities to be effective in stimulating innovation and industrial growth, they must cooperate with industry. But, unfortunately, this is not always the case in developing countries. The universities in the Pakistan are normally concerned with their own internal, urgent problems of staffing, finance, and expansion. On the other hand, industry is preoccupied with its own problems, such as lack of adequate markets, institutional rigidities, and inefficient and inadequate infrastructures, and is usually unaware that the professors might have plausible solutions to its problems. To bridge this gap in communication, effective linkage between industry and university should be established. In certain areas of science the role of universities is to make the initial fundamental breakthrough, followed by many years of basic research to understand the nature of the process; the role of industry is commercially to utilize the breakthrough, concentrating on understanding and harnessing its effects while being largely unaware of their causes. Given the very rapid growth in industrial R&D capability, industry would largely be unable either to utilise the potential of the breakthrough or progressively to enhance this potential. Industry has thus needed increasingly to take over the relevant fields of research itself. At the same time the universities have gone on to open up new fields of research, paving the way for the next generation of industrial applications.


The British Universities and Industry Joint Committee looked at the ways companies use university R&D by size of company. On all the measures of contact between industry and universities, there was a marked pattern: the small firms had by far the fewest contacts. Moreover, out of 403 firms employing fewer than 200 people (out of a total of 1097 firms), 75% had little or no contact with universities, whereas out of 96 firms with more than 5000 employees, only 9% had little or no contact with universities. A correlation analysis of the data revealed that having a higher proportion of scientists in its senior management increased the likelihood of a smaller firm’s having contacts with universities. Further analysis showed that nearly one quarter of the firms approached universities for technical advice, and just under one third of them approached research associations. Companies used universities mainly for the specialists’ advice or experimental facilities. The general impression given by the analysis was that most companies did not regard universities as a major source of technical advice, except when the universities could offer specialized knowledge or expertise.


The Science Policy Research Unit (SPRU) databank of important British innovations introduced since 1945 has shown that universities and research associations have provided major initiating knowledge in a (combined) average of 4.7% of 2293 innovations in 1945–80. Both universities and research associations have decreased in importance as sources of innovation, whereas the contributions of governments and individuals have fluctuated. The databank also yielded information on the level of university input to firms of different sizes: on average, small firms used the universities less than their larger counterparts did.


Academic research and innovations in developing countries


Universities and public research establishments are among the most important scientific institutions in most countries, including Third World countries. Universities usually account for a significant proportion of national research expenditures, a large share of the scientists engaged in R&D, and the bulk of a nation’s production of S&T research. Unfortunately, despite all this, the contribution of public R&D institutions in developing countries is negligible, and studies on the role of universities and research institutes in industrial technological change in developing countries are scarce.

Industrialized countries and developing countries are faced with completely different environments: both skilled labour and capital are in short supply in the Pakistan.


The lack of an effective link between S&T research institutions and the productive sectors in developing countries has been noticed by the larger international community and has resulted in various programs of action. An awareness of the importance and complexity of the problem led the United Nations Industrial Development Organization (UNIDO) to organize an expert group meeting on industry– university linkage. The emphasis of the meeting, held in Vienna in 1973 (UNIDO 1974), was action to be taken by bilateral and multilateral agencies.


Further attempts by the United Nations (UN) include the 1979 Vienna Programme of Action on Science and Technology for Development, which showed that the development of strong linkages between producers and users of R&D is one of the challenges facing developing countries in the reinforcement of their S&T capabilities (Nichols 1984).


In 1983, the Lima Panel, under the UN’s auspices, called for the formation of a network of institutions (including R&D and educational institutions, consulting and engineering firms, private companies, and public enterprises) to apply the classical demand-pull and supply-push theories in the developing countries like they are applied in the developed countries.

Other meetings organized under the auspices of UNIDO included the Regional UNIDO–ESCAP Workshop and National Consultations on the Commercialization of Research Results, held in Bangkok, Thailand, in 1984; and the Ad-hoc Expert Group Meeting on Co-operation among Universities, Industrial Research Organizations and the Role of UNIDO in this Co-operation, held in Vienna, Austria, in 1976.


The role of academic research in industrial innovation: empirical evidence from Pakistan


Pakistan like most other developing countries, has assigned industrial programs a central role in its efforts to create economic growth and increase the pace of industrialization with S&T. Many S&T institutions have been established, often at a great cost. Unfortunately, most of these institutions work in isolation, without effective linkages with the productive sector. There is, thus, a need for a greater understanding of the factors that could lead to improved interactions between scientific research institutions and industry and to the enhancement of Pakistan’s industrialization process.


Academic and Research Institutions are never ends in themselves. They have reason to exist only as they meet the demands of existing firms or serve as toll for technology policy development and propagation. Hence their creation, objectives, structure and programmes must be measured against their ability to make these ends.... Institutions have been created without sufficient consideration of what their role should be in carrying out adopted policy. These institutions, as well as their programmes and activities, have been established without sufficient thought as to whether they are in accord with overall national industrial policy.


The university administration’s view on collaborative research


Just like the government, the Universities in Pakistan do not seem to have any explicit policy regarding its association with local industries.


Characteristics of industry–research interactions


To measure the extent of collaborations resulting from an industry–research interface, it is important to identify successful and unsuccessful linkages and the benefits and impediments connected with such collaborations. I found it difficult to compare the levels of success or failure of linkages and the resulting impacts on the collaborating partner because the collaborative projects were dissimilar, reflecting differences in organizations, personalities, disciplines, institutional and economic contexts, and stages of development and operation. The measurement of success was also affected by the method of interaction (formal or informal) and by the modes of interaction, that is, the modes of industrial financial support for research (donations, transfers, and exchanges and sharing of staff, equipment, and information).


For the sake of simplicity, we assumed that successful interactions were those that both parties were pleased with. However, this does not imply that there was a net financial gain in the exercise. Unsuccessful programs were those that failed to bring about or sustain institutional interaction, despite various efforts to do so.


The Role of Universities Today: Critical Partners in Economic Development and Global Competitiveness


Universities as Knowledge Creators


Universities are the indispensable players in the advancement of scientific knowledge, which continuously seeds new generations of applied research, scientific breakthroughs and streams of new products that enhance our lives and strengthen our economy.


Universities play a central and strategic role in educating and training the scientists, teachers, researchers, entrepreneurs and other skilled workers that fuel innovation in high technology and the knowledge industries that are the primary drivers of successful regional economies today and are predicted to be

the drivers of the global economy well into the future.


Universities, especially large ones like the Virtual University Pakistan, foster equity and "level the playing field" through the dissemination of knowledge and ideas by way of student education, faculty interactions, collaborations with industry, community outreach activities, and through a variety of virtual-world mechanisms such as online training, digital libraries

and e-learning.


Universities, Entrepreneurs and Competitive Businesses


Universities are innovation accelerators. Innovation centers around three ingredients: knowledge creators, knowledge, and knowledge diffusion and application—all three form the core of the activities of today’s leading universities. Talented people create the knowledge; universities diffuse that knowledge throughout society; and innovators and entrepreneurs, often in collaboration with universities, take advantage of these ideas and bring new products and services to market and into our homes and offices.


Universities are key players in the generation of entrepreneurs who form start-ups and expand businesses, thus creating thousands of new jobs—often higher paying skilled jobs for local residents—and new income streams that catalyze

further investment in the economy, which generates still more jobs, personal income and capital investment.


Universities are the conveyors of "seed money" for exploratory research—a key ingredient to the acceleration of innovation and the development of new products and services that result in start-ups and spin-offs.


Universities generate new and applied scientific knowledge that is needed and used by local high-tech companies to expand their businesses and maintain their competitiveness. University faculty and students are an important source of technical expertise for local firms and a significant source of productivity gains.


Universities are important purchasers of local products and services and thus are a significant catalyst to the emergence and development of a local supply chain, including many small businesses.


At the Forefront of Job Training and Re-skilling


Universities are often the unsung heroes of on-the-job training for graduate students and interns who can work on actual industry research and application thus providing necessary resources to industry while also refining their own skills and knowledge resulting in greater efficiencies and productivity upon graduation.


Universities and their extension programs offer accessible means to continually upgrade skills, acquire industry-specific applied skills and learn new knowledge and skills for moving into better jobs or new careers.


In these ways, today’s best universities mean so much more to their communities’ future than just a place for smart kids and great scientists.

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