While in Sydney for the Mont Pelerin Society meeting last week, I was the commenter on a Shaken and Stirred dinner talk by Terence Kealey, VC of the University of Buckingham, the UK’s only private university. He’s profiled in today’s Higher Education Supplement.
Kealey is unlike most VCs. The first thing that strikes you is his personality – an extrovert among introverts. The second thing that strikes you are his political views – a university leader who spurns government funding in an industry convinced that it should receive large handouts in the ‘public interest’.
I think Kealey is right that the obsession with linking university research to industry and ‘innovation’ is largely misguided. We’ve had at least 20 years of this as a policy priority. In my comments I argued that the results here are as disappointing as Kealey argues they have been elsewhere.
For example, the ABS survey of business innovation found that less than 3% of businesses reporting innovation said they sourced their ideas from universities.
The latest university finance statistics indicate income of only $85 million from royalties, licensing and trademarks. Admittedly academics sometimes pocket the money themselves, but for universities I calculate that this represents a rate of return of only 0.27% on the money spent on applied research since the early 1990s.
On the other hand, I suspect that universities do make a more diffuse contribution to innovation. About a quarter of innovating firms reported getting ideas from ‘websites, journals, research papers, publications’, so they may be using research without any direct relationship with a university. Indeed, if the ‘public good’ argument for university research is true this might be a major way research ideas that are potential useful get to be used. Graduates rather than academics are the people who help spread ideas from their familiarity with research and ability to understand what is happening in academia and apply it to ‘real world’ situations.
Kealey points to studies that fail to find any positive correlation between publicly-funded research and economic growth. This is not to say that no publicly-funded research results in economic value. But generally research is something nations buy when they are already rich, rather than something they do to make themselves rich. When you are wealthy not everything needs to be about material advancement. You can afford to do things just because they are interesting.