Australian Innovation

The Role of University Research in Business and Market Innovation

A recent report explores how collaborations between universities and business can have a positive impact on the economy.

The report, by the Council for Industry and Higher Education (CIHE) was part of a study supported by Research Councils UK (RCUK) to understand more about the distinctive advantages that companies found in collaborating with university researchers.

The research investigated the nature, relative scale and contribution of university research to company innovation processes. It also explored the capabilities required of companies to derive value from such collaboration, and the nature of different strategies to achieve market innovation.

The research considered the factors affecting absorptive capacity at a company level and their importance in determining successful university-business collaborations.

The report contains the findings from 22 case study companies and examined:

  • Company innovation strategies and processes
  • Where in these processes and typically for what purposes they collaborated formally or informally with university researchers
  • What advantages and challenges they perceived in working with university researchers
  • Who was involved and what capabilities and resources were used in the process of using these interactions in their innovation strategies

Stages of market innovation and research impact:

The contribution of university research depends on the nature of the business and its innovation strategy. From an analysis of the case studies, four different ways in which companies used university research were identified.

The categories correspond approximately to the relative distance to application from the research interaction, ranging from exploratory interactions to near-to-market interactions where the contribution of the research to market innovation (i.e. profit impacting) is highly visible.

How businesses assess the contribution of university research:

Since the use of university research needs to be localised within the company’s objectives and capabilities, the research found that its exploitation often needed a process of co-formulation with academics. The case studies showed that companies valued both the specific deliverables from research collaborations and a broader set of benefits.

Working with universities - added value and limiting factors:

Companies valued university research contributions to the extent that many mentioned that they continued to invest in their own staff time and in sharing research costs in the work they undertook with universities, even where the immediate outcomes were less tangible.

Absorptive capacity as a key requirement for market innovation:

The research findings highlighted the importance of absorptive capacity in companies as a key requirement for working with universities to achieve successful market innovation.

Company engagement is clearly affected by their propensity and capability to engage and to absorb, to translate and exploit knowledge. Different types of interaction require different degrees of these capabilities. Significantly, the case studies found that the practice of collaboration itself – even informal knowledge exchange – increased the ability and propensity of companies to continue collaborating with universities.

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