Innovate Together is our monthly think piece about the world of university-partnered innovation, written by Future Space Centre Director Professor Matt Freeman.
Last week it was reported that Cardiff University has confirmed plans to cut 400 full-time jobs amidst a funding shortfall. Course closures are imminent; whole subjects could potentially be cut or closed. The union has called the measures “cruel and unnecessary”. But Cardiff University is not alone: according to the BBC, Newcastle University, University of East Anglia and University of Kent are just three of the other universities looking at how to deal with their multi-million-pound financial deficits. According to the regulator of higher education in England, almost three quarters of the UK’s universities could be spending more money than they have coming in next year, with a combined deficit of £1.6bn.
Much of higher education feels like the wheels are falling off. There are tons of reasons for this, of course; there always is. Government funding has been under threat for some time; a hike in tuition fees amidst rising costs has led to a growing questioning of the value of university education amongst young people, many of which are left gulping at the financial burden of the loan needed to support their learning experience for three years. Then, most recently, changes to visa regulation policy have resulted in a huge drop-off in the number of international students enrolling on UK programmes, which universities relied on.
There’s something deeply disturbing about all this – and not just because of the apparent impact that this will have on the livelihoods of staff, the experience of students, and the economic, cultural and social effects on the very towns and cities that universities support. It’s also disturbing because – and please don’t hate me for saying this – but if any one sector should never, ever have found itself in this position, it’s the higher education sector. Universities are supposed to be our beacons of progress, of transformation, of innovation. Universities quite literarily work in the business of creating new knowledge. Why, then, have so many institutions struggled to adapt to the changing world around them?
“If any one sector should never, ever have found itself in this position, it’s the higher education sector. Universities are supposed to be our beacons of progress, of transformation, of innovation.”
Universities have changed, but not enough
Like it or not, but education is now a commodity; it is market-driven and commercially orientated. In that sense, an educational course is no different to almost any another commercial product: it should exist if a market demands that it exists. It’s the same with university research: academics, at least those with research in their contracts, are given largely free reign to research and publish whatever they like, as long as it fits within a wider disciplinary frame. When you think about it, isn’t that an oddly individualistic way of working?
To be clear, I’m not suggesting that academics shouldn’t be given autonomy (we all need autonomy to find satisfaction in our work). What I’m saying is that universities have been operating under much the same model – one based on the creation of largely individual academic excellence – for decades now. And it must be time for the model to change.
Because that’s the thing: universities have changed. It’s not like they haven’t evolved as buzzwords like ‘employability’, ‘impact’ and ‘knowledge exchange’ all began to inject themselves into the vocabulary and metrics of the sector. But it’s not enough: if universities are to thrive once more, they need to be thinking in terms of revolution, not evolution.
And like all good revolutions, they need leaders. The university sector needs leaders, figures who not only understand but can also implement collaborative practices that harness research and teaching as properly market-driven and commercially orientated products. Some academics are likely to view that sentence as a contradiction in terms, but that’s kind of my whole point: it no longer needs to be. Let’s be honest, the challenge facing universities isn’t just financial anymore – it’s reputational, too. If the perception of universities is to change, both from the businesses so desperately trying to engage with them and the prospective students so desperately relying on them to provide a measurable career pathway, then a far more customer-led approach is needed.
In fairness, most universities in the UK are now working towards exactly this mindset. Employability is indeed front and centre in countless redesigned programmes; research council funders no longer award grants to proposers without a robust impact strategy. Knowledge Exchange (itself all about how universities work with business and generate income streams through commercial mechanisms like spinouts) is set to become equally as significant as research. The problem is that all of this necessary transformation has in turn brought a change in who and what now constitutes ‘the university customer’.
Rethinking the university customer
Arguably the entire sector makeup of the university customer is now very different. Perhaps for the first time in a long time, businesses need universities, and in whole new ways. It’s a tough time out there for SMEs: investment is harder to find; grants are drying up; there’s been changes to the R&D tax credit system that is making innovation tricky to prioritise.
Why oh why, then, are universities not doing everything in their power to re-market themselves – repackaging their knowledge – as more marketable products suitable for the short-form, day-to-day, R&D-style challenges that businesses currently want and need?
It’s all very well evolving the traditional taught-course model of university education into professional development courses aimed at business professionals, but I often wonder how many of these courses across the UK genuinely to business professionals? How many of them are delivered in formats and in a language that business professionals will respond to? There’s got to be a bolder, more imaginative way of doing all of this.
Embracing the commodity word
Dare I say it, but the real problem here stems from the power tension at the heart of who leads who in this particular relationship – that’s to say, should academics drive the university research that is applied to businesses – or should businesses drive the university research that academics then do? For a long, long time, the former was true, but the pendulum is swinging in a big way. And this swing is what’s needed: universities can only be impactful in today’s world if they fully embrace their role as adaptable and responsive service providers for the needs of a market, providing SMEs with the insight and skills needed to grow and the access to quality facilities they need to remain ahead of the curve.
“Universities can only be impactful in today’s world if they fully embrace their role as adaptable and responsive service providers for the needs of a market.”
Which makes the current statistics around university-business collaboration all the more frustrating. So much Government policy points to the need to accelerate and enhance university-business collaboration. And yet, if anything, it’s slowing down. The National Centre for Universities & Business (NCUB) reported a 3% decline in business R&D spending last year. For larger companies, this decline was a modest 0.9%, but for SMEs it was a far more worrying 6.4% drop compared to in 2022. Which was also bad news for universities, because this led to a drop in university-business interaction.
In the long-term, the NCUB’s forecast suggests that the downward trajectory will persist unless interventions are made. That persistence would likely threaten the UK’s entire innovation ecosystem. Without R&D, many businesses will struggle to develop the technologies and processes needed to enhance productivity, leaving the UK lagging behind its global competitors. And given that R&D drives industrial growth, its decline could well harm a number of key sectors and reduce job creation numbers across the board.
Re-productising university services
So what’s the solution? For me, it’s simple, or at least part of it is simple: universities need to embrace the natural swing in the power pendulum from academics to businesses. If that happens, then all university products and services start being designed with the audience or customer in mind, rather than being created and then applied to a perceived notion of the audience or customer after the fact. The customer needs to come first, always, and that’s true for everything, be it an undergraduate degree to a piece of published research. It’s doubly true for how universities should commercialise their knowledge for businesses.
In short, it’s all about how you package these things up. Or how you re-package them up. Because it’s not that universities don’t have marketable services for businesses – it’s just that, quite often, the way these services are presented don’t work for them. The idea of going back to a school-like setting to complete a course may not appeal to a founder who is decades out of the education system; the idea of embarking on a three-year knowledge exchange programme is unlikely to either. So why not design products for businesses in ways that are structured according to the nature of the actual business challenge? And present this service using the language that is used by the customer?
Let’s use the aforementioned R&D challenge as an example. Many SMEs are keen to stay ahead of the curve in terms of market trends, research insight and innovation. This type of customer would typically seek out opportunities to engage in university-partnered R&D and benefit from a talent pipeline of graduates. Universities can support a business with its R&D, no problem – they have facilities, students, academics, and so on. But it’s not always clear to a business how they engage with these facilities, students and academics. Or in some cases, why. So why not package and structure this R&D according to the steps an SME will follow when undertaking a given piece of R&D?
Maybe something like this…
- Stage 1: Ideas Generation – First, universities can help a business to identify new R&D opportunities, namely through workshops and introductions to academics.
- Stage 2: Feasibility Assessment – Next, universities can help a business to explore ideas to see what’s possible in a market context, namely through in-curriculum student projects, the kind that students need to do as part of their degree and greatly value in terms of experience.
- Stage 3: Prototyping & Testing – Next, universities can help a business to create and test prototypes of ideas, namely through access to their facilities and equipment.
- Stage 4: Validation – Next, universities can help a business to better validate ideas ahead of investor pitches, namely through impact evaluations produced by academics or interns.
- Stage 5: Integration – Lastly, universities can help a business to integrate ideas into their product portfolio, namely through the kind of marketing support that a Business School specialises, potentially taking the form of bespoke skills training consultations.
“Why not design products for businesses in ways that are structured according to the nature of the actual business challenge? And present this service using the language that is used by the customer?”
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