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Time to recognise and support Australia's industry-university partnerships

Australia has an odd relationship with its universities. On one hand we are justifiably proud of their world rankings, their extraordinary achievements in diverse fields from medical research to space science to the arts and humanities. On the other hand we quickly move to condemn them for being “out of touch”, and we challenge their relevance, and their contribution to our economy and our society.

We have much more data about the former than the latter.  There are a plethora of university ranking systems, all of which show Australia’s universities as competing well with the world’s best.  We win our share of Nobel prizes, and (more recently) Fields Medals.  Our media carries a healthy stream of stories of achievement by our research teams and our students.  No-one would question that our universities are doing their job of producing great graduates and excellent research

The question of how well Australian universities link with the other sectors of our economy and our community, and what contributions they provide to these, is poorly served for data.  There are no good measures – no rating or ranking systems to compare with overseas institutions – that give an objective view.  We draw our cynicism about Australian universities’ contributions from very few data points, supported by hearsay and limited experience.

OECD Measures: Dated and Not Representative

There is one set of data which is frequently cited, when the conversation turns to collaboration between universities and businesses.  This is the OECD analysis from June 2013 of Firms collaborating on innovation with higher education or public research institutions, by firm size:

Australia is ranked 33 of 33

Source: OECD, based on Eurostat (CIS-2010) and national data sources.


The OECD data ranks of the “OECD+” group of 33 nations, and Australia is ranked last of the 33.  For Australia, data refers to financial year 2010/11 and include product, process, marketing and organizational innovative firms (including ongoing or abandoned innovation activities).

The analysis is fundamentally flawed.  Queensland business academic Dr Henri Burgers notes that the OECD data from other countries reports on a three-year basis to better capture innovation, while Australia reports on an annual basis.Other countries count only those firms innovating in processes and products, but Australia dilutes its proportions by including any innovation, including in areas such as marketing.In addition, Australia counts a large firm as one having at least 200 employees when other countries use 250; there are more smaller firms among Australia’s so-called large firms and it is well established that small firms are less likely to collaborate.

The OECD numbers, however, are widely cited, as much as anything because there have been no other numbers available.  For example, a release by Senator the Hon Simon Birmingham, former Minister for Education and Training on 30 January 2017 noted: “Minister Birmingham said the Linkage Projects scheme was a direct response to the country’s “appalling” reputation internationally for collaboration between industry and higher education researchers where the OECD ranks Australia last out of all 33 participating countries for collaboration by large firms”.  This conclusion is still being drawn, by leaders and analysts from Government, industry, and academia.

In an attempt to bring additional perspectives to the debate, the Business Higher Education Round Table (BHERT) drew upon more recent analysis by the Department of Industry.  The National Survey of Research Commercialisation (NSRC) Data Summary 2013–2015 (June 2017) noted that in 2015 there were over 13,000 collaborations, consultancies, and contracts conducted by Australian universities, worth over A$1.2 billion annually.  Australian universities registered around 1000 inventions annually, executed over 500 licenses, options, and agreements with third parties, and launched several dozen new companies per year. nearly 10,000 students and academics were involved in industry skills training.

BHERT also drew on information from IP Australia – who have stated publicly that the collaboration measures of the OECD are inaccurate – to demonstrate that over the period 2000-2015, 455 PCT Applications (2.2% of total Applications) involved multi-party collaborations between universities and industry.  Australia’s performance is similar to two of the world’s most innovative countries, South Korea (2.3%) and Israel (2.0%) and well above Canada (1.6%), the United Kingdom (1.3%), the USA (1%), and Germany (0.8%).

World Competitiveness Yearbook: better measures

The World Competitiveness Centre analysis is important; it provides the only comprehensive and credible view on national performance.  The Executive Opinion Survey (a minimum of 100 responses for each of 63 countries) underpins about one-third of a country’s overall competitiveness ranking.  In Australia, CEDA draws upon its membership and surveys between 100 and 200 companies annually.  It receives a mix of responses from large corporates, universities and SMEs, generally weighted to large corporates.

The WCC analysis also benefits from a better understanding of the interaction between universities and companies.  The term “collaboration” is now recognized to be a poor label for the variety of interactions between the sectors.  Increasingly, Australia and other nations are following the UK model, where “Knowledge Transfer” is treated as the important performance metric.  Knowledge Transfer encompasses the gamut of interactions from deep technology development through technology commercialisation and problem-solving; it also covers the training of human talent, and the knowledge and skills they take into industry through placements, internships, graduation and employment.  Knowledge Transfer also recognizes that the interaction is two-way – that university students, teachers, and researchers learn from companies and the community.

WCY Australian analysis: above the middle of the curve

BHERT has been using the WCY analysis to provide a much more authoritative view on the status of interactions between Australian universities and companies.  The Knowledge exchange measure in the WCY is a direct measure of performance, from the perspective of Australian executives.  On this metric (WCY 4.3.22), Australia scores 5.45 on a scale of 1 (“knowledge transfer is lacking”) to 6 (“knowledge transfer is highly developed”).  This is above the average for the 63 nations assessed in 2019; Australia ranks around 30th.  Over the last 5 years, Australia has ranked between 20th and 30th on this measure; fluctuations are to be expected with these sample sizes.

This reflects strong performance by Australia’s universities and companies, and is consistent with our overall ranking of 18th across all indicators.  The difference between overall ranking and the Knowledge Exchange metric derives from a number of factors, including the nature of our economy (shift from resource extraction and manufacturing base to services).  It indicates that there is still some distance to go before Australia achieves excellence in this sphere.  However, most importantly it dispels the notion that Australia is a complete laggard in industry-university partnerships; that there is a fundamental structural or cultural divide between the sectors, which is not apparent in nations such as the USA, Canada, or the UK.

Further Evidence: spectacular growth in BHERT Awards

High level measures and analysis needs to be corroborated by the lived experience, and this assessment of Australia as a good-if-not-great performer is now borne out by evidence of real partnerships between universities and companies.

BHERT has conducted its Australian Collaboration Awards since 1998; these are acknowledged as the most prestigious national recognition of outstanding partnerships between universities and companies, or universities and community organisations.  The Awards have fluctuated in prominence and importance over the last two decades, but recent years have shown a tremendous flourishing of this aspect of university activity.

For much of the last 22 years, BHERT has received between 50 and 70 submissions for its Awards each year.  In 2018 it reached new heights with a total of 79 Applications. This year, for the 2019 Awards, BHERT received 156 Applications – a near doubling from last year, and three times the long-run annual average.  This is an extraordinary outcome, and demonstrates that university partnerships are alive and well in Australia.

Applications for the BHERT Awards tripled

It should be noted that this growth in partnerships has not come with a diminution of quality – quite the opposite.  BHERT’s Awards assessors have commented on the very high caliber of the entries, in fields from medical diagnostics and therapeutics to energy and environmental applications, through social sciences and indigenous engagement.  It has encompassed a rapid growth in education interactions related to digital learning and skills development in sectors from psychology to engineering, and community interactions such as emergency response, health and safety, and disadvantage.

Next Steps: Understand the drivers and support partnerships

This is not a call for complacency and self-satisfaction.  While there is a good base of industry-university and university-community partnerships from which to build, there is much work to be done.  The WCY analysis is rich, and highlights many other critical areas of interaction, including business expenditure on R&D, innovative capacity of firms, STEM skills (ranked 52), management and language education.

The most important implication is the input it provides for policy measures and the leadership behaviours of universities, companies and associations, and governments.  It confirms that the current system is not broken; productive partnerships are well established, and are proliferating.  Nudges such as Collaboration Premiums on R&D Tax Incentives are useful and can have an impact – although the most important interactions aren’t driven by marginal tax benefits, but by the inherent attractiveness of the partnership outcomes.  The results validate the importance of engagement to CEOs and Board, to university chancelleries and departmental policy makers.

Conclusion

The 2019 WCY assessment of Australia’s performance is timely and important.  Its power is not just in the overall ranking of 18th but in the components of that ranking.

We have focused on what the WCY metrics can tell us about the way our university, industrial and community sectors work together: we believe that engagement is critical to Australia’s future performance.

Our message is that the debate needs to change.  Before we condemn companies and universities for their failures (based on poor data), lets appraise performance properly and acknowledge their successes.  The WCY provides a richer set of measures relating to the performance of our universities within our economy and society – and confirm that the universities and their partner companies work effectively together. The growth of the BHERT Awards tells us that we are getting better at this, as we realise the opportunities and benefits.  There is much more we can do, but Australia is heading in the right direction.

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