UNIVERSITIES AND ENTERPRISE DEVELOPMENT

As regular readers of this blog are aware, I am a passionate advocate of having universities as catalysts for enterprise and innovation in the Welsh economy.

Indeed, much of my own professional career over the last twenty years has focused on trying to identify and develop the best instruments for driving forward change in these areas.

That is why I was very interested in the publication of a recent report which, by examining the world's most highly regarded universities in entrepreneurship and knowledge transfer, attempted to identify the key factors needed for an enterprise ecosystem in which higher education played a major role.

As would be expected, some of these relate directly to the strategy of the higher education institution itself, and most experts interviewed for the report cited a strong institutional enterprise and innovation culture within the university as an essential ingredient of a successful local ecosystem.

Of course, it is not unexpected to find both Stanford University and the Massachusetts Institute of Technology (MIT) in the USA used as examples where enterprise and innovation was "sown into the fabric of the universities from their very foundation" but is also worth noting that there were a number of UK institutions mentioned as a result of the considerable change that has been taking place in the British higher education system during over the last few years.

One example is one of our great institutions, the University of Cambridge. Despite being over 800 years old, it has overcome its traditional academic focus to create an  unexpected entrepreneurial culture. This has been achieved by celebrating enterprising faculty role models, encouraging a relatively unstructured mix of innovation activities across campus, and giving faculty the freedom to devote time to entrepreneurial ideas.

The role of those at the top of the university was also seen as pivotal in sowing the seeds of a strong enterprise culture within the institution as without such leadership, changes rarely happen. In just eight years, Imperial College London was changed by Sir Richard Sykes, formerly CEO of the pharmaceutical giant GlaxoSmithKline, into a powerhouse for academic entrepreneurship. Not only did he transform the technology transfer office into a coherent vehicle for commercialisation across the university but, in doing so, encouraged world-class researchers to become entrepreneurs.

But it is not only university staff that are critical for ensuring changes within the institution. Equally important is the role of student-led entrepreneurship activities that, in many cases, create an environment in which enterprise can thrive.

In Finland, the newly created Aalto University has, in just over three years, established an incredibly powerful engagement by its student population in enterprise and innovation activities. These are supported by resources such as the "Start Up Sauna" incubator on campus and the annual SLUSH conference, which brings together early-stage startups to meet top-tier venture capitalists and media from around the world. In 2012, SLUSH gathered more than 3.500 attendees, 550 companies and 250 investors and journalists for two days in Helsinki, an incredible achievement for a university.

Various external factors are also important in encouraging a more innovative local ecosystem. In particular, the local quality of life is a key issue for attracting and retaining academics as well as entrepreneurs and investors.

In France, the area of Sophia Antipolis has managed, through creating a technology park on a wonderful green field site, to take "the Silicon Valley summery lifestyle and setting it up in the south of France”. And as economic development planners in Wales should take note, this success has also been helped by a strong tourism industry that made the region “open to the world”, an international airport and high-speed train lines to the rest of Europe.

Finally, many of the best universities in the world of enterprise and innovation have not done so alone and have benefited from considerable external support from local and regional governments, usually through generous financial grants. However, what seems to be most important in maximising such a relationship is openness between government and higher education in working to together to achieve similar goals.

In Russia, a Siberian university managed to combine its own facilities with those of the city and local businesses so that all three actors benefited and contributed to the enterprise ecosystem.

Certainly there are lessons there for Welsh universities in working alongside councils and businesses in developing local facilities that benefit the whole community.

Whilst some may say that the ecosystems in Silicon Valley and other innovation hotspots where entrepreneurial university flourish may be hard to replicate in more disadvantaged areas such as Wales, the report does show that an increasing number of successful institutions were to be found in more challenging economic environments. These universities had, despite their location, managed to overcome an internal culture that did not support entrepreneurial behaviour and risk-taking, a lack of venture capital or multi-national companies in the region and a limited local market.

Therefore, with Welsh higher education in Wales facing specific challenges as a result of new configurations, reorganisation and alliances, university leaders and educational policymakers could do worse than learn from some of these examples globally and ensure that their institutions not only stimulate enterprise and innovation internally but play a major role in driving forward their local economies.

GO WALES HAS POTENTIAL TO SUPPORT GREATER UNIVERSITY-INDUSTRY LINKS

Earlier this year, I was delighted to work with the OECD on a project to examine the state of entrepreneurship education in Tunisia.

It was an intensive but enjoyable experience that enabled the international team to examine the strategies adopted by Tunisian universities to encourage greater entrepreneurial activities, as well as the start-up support offered within enterprise centres and incubators.

As expected, the main conclusions from the research showed that the key to success in developing greater number of new businesses depends on increasing the intensity of entrepreneurship support for those students who have the motivation, ideas and capabilities to make a success of entrepreneurship.

However, in various focus group meetings with other students, it was clear that the main concern of those graduating was not always whether they could start a business, but whether they could actually get a job within an existing small firm.

Indeed, one of the key issues identified in a number of universities was the gap between the theoretical competence that students acquire in class and the competences needed within the workplace, particularly in the private sector.

In particular, higher education institutions in Tunisia have been functioning without any real medium-term plan for how to manage this issue and there was clear lack of appreciation, from the university sector, that the majority of SMEs in Tunisia are family-owned enterprises and have very little understanding of the benefits that graduates can bring to their businesses.

This gap in knowledge between universities and industry is clearly not limited to Tunisia and there have been various initiatives developed to try and close this gap across the World so that students can learn and appreciate the competences required by industry.

One of the more successful, and one that I recommended as an exemplar to the Tunisian Government, is the Graduate Opportunities (GO) programme.

It’s not often that initiatives that originated in Wales are seen as best practice but, in my opinion, this is a successful intervention that could be easily adapted for the encouragement of greater links between industry and universities in Tunisia or any other developing country.

So what is GO Wales?

Simply put, it is a scheme run by the Higher Education Funding Council for Wales that makes it possible for students and graduates to develop their careers in Wales through quality work experience and training opportunities with businesses.

The project contributes significantly to the development of a knowledge economy in Wales enabling businesses to have access to higher-level skills and fresh ideas to support growth and development.

The flagship programme - Work Placements for Employers - offers businesses the opportunity to employ someone with a degree (or studying for a degree) to complete a project while working for a company for around 10 weeks. Placements are primarily aimed at SMEs, as they often do not have the time or resources to develop ideas and new projects and, more relevantly, often do not have the necessary specialist skills to complete a specific task. By hosting a placement, each business receives a choice of subsidised high quality students and graduates with specific knowledge and skills that can add value to the business during a 6-10 week project.

It sounds an excellent scheme but more importantly, it works.

For example, a recent evaluation of GO Wales by the consultants DTZ found that all of the identified objectives for the project are either being achieved or have been achieved. In terms of hard impacts, it has created 1,071 jobs, £2.7 million in wage premiums and £42.4 million of business turnover in Wales over the period 2009-2011.

It has also helped to bring about changes in the perception of the owners of small firms regarding the role of graduates in their business that could create the potential for further benefits in the future. There are more positive attitudes from small firms towards employing graduates, working within SMEs, undertaking further training and development activity, and engaging with universities. And given that more than a third of participating businesses utilising work placements had never previously employed a graduate, this is an excellent outcome for the programme.

However, the one problem identified by DTZ is that not all universities had used the programme effectively to support local businesses. Whilst Cardiff and Swansea Universities had exceeded their targets, other higher education institutions were behind the curve when it came to placing graduates into businesses via GO Wales.

As a result, there still remain some challenges in hitting the output indicators set by sponsors such as European Structural Funds. However, feedback from participants and delivery staff in respect of the operation of the project has generally been very positive and it seems to be making a real difference to those companies that get the opportunity to participate in the scheme.

So will Tunisia adopt this excellent programme?

Well, the final report has been submitted and we had a wide-ranging discussion with government officials and academic leaders in September on how best to create a culture of entrepreneurship amongst young people and small businesses.

Certainly, they could do worse than to adapt a programme from Wales that brings tangible benefits to both groups.

UNIVERSITY MERGERS IN WALES - LESSONS FROM FINLAND?

Last week, I spent some time in Finland working on number of joint projects that have been developed between Turku University, where I have a visiting professorship, and the Global Academy.

During my week there, I had the opportunity to visit Helsinki and the new academic institution known as Aalto University. It was a fortuitous visit, given that Aalto University was created out of a merger, two years ago, between three specialist academic institutions, namely the University of Art and Design Helsinki (1,900 students), the Helsinki University of Technology (14,000 students) and the Helsinki School of Economics (3,200 students).

As such, it seems a relevant case study to examine the impact of university mergers that, as most of you are aware, are seen as the panacea to some of the challenges facing Welsh Higher Education. Talking to various individuals, it became clear that the first issue that was important in terms of the Aalto merger was that it had a specific vision that was linked into a national policy towards innovation and competitiveness.

Its aim, once formed, was to create an institution that would be a world-class rival to Helsinki University, which is regularly ranked amongst the top 100 universities in the world. Unfortunately, there has been a total failure to elaborate a similar national ambition within Wales for its university mergers. Instead, the emphasis on regional economies and efficiencies of scale rather than any significant educational or economic reward.

And even though the academic status of those Welsh institutions currently involved in merger discussions is somewhat different to the Aalto triumvirate, there has been little information on how educational quality could be improved as a result of organisational change, even though this should be a major part of any higher education merger. There have been arguments made, as in the case of Finnish Universities, that the diversity of programme offerings would be increased as a result of the merger. However, there is also the danger of rationalisation, rather than specialisation, especially in areas such as business studies where high levels of duplication are likely.

Another key factor in the apparent success of Aalto University is undoubtedly the funding provided by the Finnish Government to ensure that a successful new institution hits the ground running, receiving a one-off cash injection of half a billion euros on the condition that it raises another 200 million euros from the private sector.

In Wales, there seems to be no money available to support the development of further collaboration or merger between institutions, with the Welsh Government suggesting that universities have to show their worth to the public purse from an ever decreasing funding settlement. Another key ingredient in ensuring that Aalto University succeeded from its first day of operations was that the new management was able to identify and satisfy the skills needs of the key stakeholders in their region and ensure broad external support.

Again, this has not been the case in Wales, with an increasing number of organisations supporting the independence of certain institutions over any proposed merger. Indeed, the ability to come up with a compelling story so that stakeholders would buy into the concept of a merged institution has been one of the real successes of Aalto University, enabling key reforms to take place over a short period of time.

This has enabled the institution to deal directly with issues that would undoubtedly be faced by Welsh institutions. These include increased workload for staff as the merger develops, higher levels of bureaucracy, fears of redundancy, lost of academic identity for the smaller partners; disruption of teaching styles as mass lecturing takes the place of student-oriented learning and geographical distances between campuses. Of course, Aalto was designed in order that a multi-disciplinary innovation culture could be developed across all three institutions where science, arts and business could merge to create a truly innovative world-class university.

Has anyone yet made a similar case be made for any merger within the Welsh university sector? If not, then why go ahead with an expensive and time consuming exercise that could instead be enhanced through further collaboration and increased sharing of services. In fact, have those in favour of greater rationalisation created an overwhelming argument for actual organisational merger or it is largely symbolic, given the distances between various campuses?

These are serious questions that need addressing by those calling for the further merger of higher education institutions in Wales. Certainly, if they wished to strengthen their case, it would be not bad thing if they were to visit Finland to examine the challenges faced by universities not only in planning a merger but in dealing with its consequences afterwards.

Western Mail column, March 31st 2012.

HOW APPLE IS ORGANISED - LESSONS FOR OTHER ORGANISATIONS?

Should Universities be organised like Apple?

In fact, could you imagine a higher education institution being managed without a single committee?

I could.

WILL EUROPEAN REGULATIONS SCUPPER WELSH HIGHER EDUCATION POLICY?

Yesterday evening, I received a phonecall from a good friend asking me if I had read the Sunday Times that day.

I hadn't and so he directed me to a story which, if true, could have serious implications for one of the Welsh Government's flagship policies.

Unfortunately, due to the Sunday Times' web policy, I cannot provide the necessary link to the story (which may be why no-one seems to have picked up the article in the Welsh press).

Essentially, the story suggests that the Welsh Government will have to pay the difference in fees for thousands of EU students wishing to study at English.

According to the Sunday Times, "The loophole allows Europeans to exploit a decision by the Welsh government to pay any fees above £3,465 for students from Wales who attend courses in England from next year".

It would seem that under EU laws, Wales is not permitted to offer a better deal to its own students than it offers to those of any EU state outside Britain.

This potential problem had been picked up by the Scottish Government which, like Wales, had considered paying fees for its students to study at universities in England. However, as a source quoted in the newspaper noted:

“Our legal advice was that if we were to start paying for students from Scotland to study in England that would be considered a breach of EU law unless we paid for other EU students as well.”

The suggestion therefore is that tens of thousands of EU students could demand that the Welsh Government pays the difference in fees (around £5.5k per annum) for them to study at all English Universities. For example, this would give some EU students a £16k scholarship to study at institutions such as Oxford, Cambridge and Imperial, three of the top ten universities in the World.

It sounds an incredible turn of events and I cannot believe this could happen. Of course, one can only assume that the legal implications of the policy must have been throughly considered by Welsh Government officials and the Higher Education Funding Council for Wales over the last 12 months since its announcement. It is also worth finding out the view in Scotland and I will ask a few friends with links to the Scottish Government to try and discover more later today.

Nevertheless, the story does seem credible and with changes to fees being implemented in less than a year's time, clarification is needed quickly from the Welsh Government over this issue as Welsh students will already be considering where they will be studying, with a significant number already having chosen universities in England.