Universities and Industry

Basic industrialization and economic development can be managed through effectively putting into coordinated activity the resources of a state, broadly speaking. However, advanced economic development – at the high income, knowledge economy end of things – really requires some input from universities. In many countries, particularly western countries, it is in universities (and especially public sector universities) that a great deal of research is conducted in areas which are very fertile grounds for industry. Exceptions to this rule include South Korea and Japan, where corporate research centres are very influential in providing the research results required by their owners.

As a result, governments regularly issue instructions and guidelines as to how the two sectors should interact with each other. However, there are some important contradictions which hamper the ability of institutions to work together. The first of these is that companies are generally narrowly focused on profit-providing opportunities, while university researchers are more likely to be motivated by other factors, such as desire to create new knowledge, improve life for society or personal interests in particular data or hypotheses. Secondly, there is the issue of ownership of knowledge. Companies naturally wish to obtain exclusive access to data which they can exploit for profit. By contrast, universities, especially public sector universities, are supposed to be providing research which will be of benefit of all people. If research is to be conducted purely for the benefit of a specific company, then surely that company should pay for it. Third, there is the concern of the rewarding of university faculty providing input to industry in one way or another. In general, faculty expect to be rewarded for particular pieces of work that provide benefit to individual companies – yet university authorities point out that (irrespective of the issue of whose time the faculty member is using) it is at least in part access to university facilities (which may be intangible as well as tangible) that permits the faculty member to be of value to external actors.

As a result of these kinds of contradictions, universities have found themselves embroiled in all kinds of complex arrangements with third parties regarding who pays for what and who owns what. These arrangements are generally unsatisfactory, irrespective of how fair they may be, since there are strong incentives simply to work at weekends without the knowledge or authorization of the employer. Private sector universities tend to have a little more room to manoeuvre, not least because they have generally come into being more recently and thus can deploy regulations informed by what has been learned from the past. Even so, the same issues persistently erupt.