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Christiansen-Gnaydn GUI Collaboration Today 17 Pages

July

2012

Importance of Perpetual Government-University-Industry

(GUI) Collaboration Today

By

Bryan Christiansen, Senior Lecturer

and

Prof. Dr. hsan Gnaydn, Rector

Gmhane University, Gmhane, Turkey

Tel: +90-531-226-2075

[email protected]

July 22, 2012


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ABSTRACT

Globalization of the 21st century has changed economic and other realities far beyond theexpectations of most individuals. The competitive landscape continues to be reinvented due tosuch factors as accelerating globalization, changing demographics, rapid technological

advances, shorter business / product life cycles, innovation, and productivity. This articlefocuses on why there is a need for perpetual Government-University-Industry (GUI)collaboration, especially in advanced economies, and some options on how to achieve iteffectively. The article commences with an introduction to the realities of contemporaryglobalism that have raised the need for this collaboration, and the body then outlines thecurrent status of GUI collaboration in the worlds four largest economies: China, India, Japan,and the USA. There is a model example of ideal GUI collaboration in the Discussion sectionfor reference. The conclusion synthesizes the earlier discussions and provides suggestions forconsideration regarding optimum GUI collaboration, most notably a list of seven BestPractices provided by Massachusetts Institute of Technology in the USA.

Keywords: University-Industry collaboration, hypercompetition, knowledge transfer,contemporary globalization, research & development, innovation


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Introduction

Collaboration between industry and academia is very important to create scientific

knowledge or to develop solutions for production-sourced problems (Kaymaz & Eryiit,

2011). There is a long history of University-Industry relationships, such as the National

Research Council in the USA which united scientists in research universities with industry to

assist with efforts in World War I (Furman & MacGarvie, 2007). A more recent example can

be found in Canadas Natural Sciences and Engineering Research Council (NSERC) which

works with local institutions like world-class McGill University (McGill University, 2012).

However, such collaboration in geopolitically very important nations such as Poland

or Turkey (Friedman, 2009) has not yet developed as much as needed to create a truly

competitive advantage in contemporary globalism (GE, 2012). There is even strong evidence

that such efforts are sometimes lacking in advanced economic entities such as Canadas

Quebec Province (Board of Trade of Metropolitan Montreal, 2011). Due to the six significant

drivers mentioned below which are outside the realm of government control (IBM, 2008) in

an era of hypercompetition, it is imperative for countries to expand beyond the traditional

university-industry model to includeperpetual Government-University-Industry (GUI)

collaboration for competitive advantage todaythe so-called Triple Helix (RIETI, 2012)

that will hereafter be referred to in this article as the GUI Model:

Accelerating globalization Changing demographics Rising environmental concerns Evolving societal relationships Threats to social stability and order Expanding impact of technology


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The Japanese Case

One leading example of the GUI Model can be found in Japan, a country with a very

long history of close cooperation between government and industry more than most other

nations, and this has expanded to include academia. The Ministry of Education, Culture,

Sports, Science and Technology (MEXT) cooperates heavily with the Ministry of Economic

Trade and Industry (METI) and top national universities such as the University of Tokyo

(Todai). Todai Research engages in a wide variety of activities including the study of particle

physics, medicine, archaeology, and financial markets (University of Tokyo, 2012) that is

shared with Japans Research Institute of Economy, Trade & Industry (RIETI), a think tank

established in 2001 to conduct empirical and theoretical research for national policy-making.

Examples of such research include the study of ageing and retirement in Japan, the

industrial output of China, firm productivity, or global governance in trade and investment

(RIETI, 2012). RIETI also works closely with another major governmental institution

established in 1958, the Japan External Trade Organization (JETRO), which promotes mutual

trade and investment between Japan and the rest of the world. Over the past 12 years, JETRO

has shifted towards promoting Foreign Direct Investment (FDI) into Japan to help small- and

medium-sized Japanese firms maximize their global export potential (JETRO, 2012). The

GUI Model has been one major factor helping Japan to be the 3nd largest economy in the

world (US$4 trillion) behind the USA and China (NationMaster, 2012)despite the huge

differences in population and natural resources.

It is worth noting that as of 2008, the latest year available for reliable figures, Japan

had the 4th highest percentage of total Research & Development (R&D) expenditures in the

world against Gross Domestic Product (GDP) at approximately 3.5%, following Israel,

Finland, and Sweden, respectively (NISTEP, 2012, p. 16).


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Example of Japanese GUI Collaboration

Source: RIETI, 2004


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The USA Case

Still the largest and most technologically powerful nation in the world (CIA Factbook,

2012), the United States began its involvement in university-industry collaboration during the

Industrial Revolution. The Bayh-Dole Act of 1980also known as the Patent and Trademark

Law Amendments Actwas a landmark event in such collaboration as it gave universities the

power to control their inventions resulting from federal government-funded research (United

States Patent and Trademark Office, 2012). Major US research universities such as Harvard,

Massachusetts Institute of Technology (MIT), and Stanford were some of the major

benefactors of this Act at the time, and it is largely believed Bayh-Dole was a major factor in

the competitive revival of the US economy during the 1990s (OECD, 2000).

Although the GE Global Innovation Barometer still lists the USA a leading nation

regarding university-industry collaboration, there is strong evidence the US is now falling

behind other economies in terms of business- and government-funded university research.

The Washington, DC-based think tank, Information Technology and Innovation Foundation

(ITIF), reports that during the period 20002008 the US ranked only 18th in the world in the

growth of government-funded university research, and only 23rd in terms of business-funded

research. ITIF also reports nations such as Austria, China, Israel, Korea, and the UK

significantly continue to outperform the US in these two areas of GUI collaboration.

Research and development drives innovation, and in turn innovation drives long-term

economic growth that creates jobs and improves living standards. Early-stage research is of

particular importance to innovation, and most of this research activity is conducted at

universities which expands the knowledge pool from which the private sector draws ideas and

innovation (Atkinson & Stewart, 2011). Therefore, the US must improve its current GUI

collaboration if it wishes to retain its position as the world leader economically and,

ultimately, politically.


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Number of patent applications from universities in US and Japan

Toshiya Watanabe 15

27 2829 30

32 34

4044

48 5151

5151

22

63

57

59

72

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Disclosure US

Patent Application. US

Disclosure JP

Patent Application. JP From AUTM Licensing Survey2004(US) and MEXT(JP)

Source: T. Watanabe, University of Tokyo


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The China-India Cases

These two demographic and economic giants rate differently regarding university-

industry collaboration. While China is considered an above-average nation in this regard,

India is considered below-average (GE, 2012). It is important to highlight these two nations

due to their size and growing influence in the world. China, now the worlds second largest

economy after the USA (NationMaster, 2012), works with foreign (and domestic) institutions

such as the UKs University of Liverpool to contribute to the Chinese national innovation

system (Jin, Wu, & Chen, 2011), although such international collaboration is not unique

(Durham University, 2012). IBMs Blue Battle competition launched in 2009 with 25

engineering universities in India represents another excellent example of international GUI

collaboration, as is the computer giantsBattle of the Brains event conducted by the ACM

International Collegiate Programming Contest (IBM, 2012). The latest contest was won in

May, 2012 by the St. Petersburg State University of IT in Russia, followed by the University

of Warsaw in Poland, and Moscow Institute of Physics and Technology in Russia,

respectively (ACM-ICPC, 2012).

Perhaps one of the most recently famous results of GUI collaboration rests in India

with the invention of the Tata Nano, a passenger vehicle launched in 2008 which was touted

as the worlds cheapest car (Tata Motors, 2012). This was an entirely new value proposition

within Business Model Innovation (University of Cambridge, 2012). There are many

conflicting comparisons between China and India regarding their economic futures, but one

distinct advantage resides in India: the English language. One commonly used foreign

language is needed to follow technological and scientific developments around the world

(en, 2012), and that language remains English. Chinas university graduates still lack

adequate English language skills (Farrell & Grant, 2005), and this may ultimately inhibit the

countrys long-term university-industry collaborationparticularly on the international level.


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Process of international University-Industry Collaboration

Source:Journal of Knowledge-based Innovation in China, 2011


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Discussion

The global economy is developing into a system of region-states and trading blocs

such as the Baltic Corner (Estonia, Latvia, Lithuania), BRIC (Brazil, Russia, India, China),

and CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa) that will vie

for economic supremacy in the coming years (Ohmae, 2005; Allen, 2011). In fact, the BRIC

economies together are rapidly approaching the range of the G-7 nations (Canada, France,

Germany, Italy, Japan, United Kingdom, USA) in terms of total size (Goldman Sachs, 2011).

The indications here should be self-evident. In addition to the six significant drivers by the

IBM Institute for Business Value outlined above, there are five Global Forces that demand

closer andperpetual GUI collaboration today (McKinsey Quarterly, 2010):

The Productivity Imperative: Developed-world economies will need to generatepronounced gains in productivity to power continued economic growth.

The Global Grid: The global economy is growing ever more connected. Thisexpanding grid is seeding new business models and accelerating the pace of

innovation.It also makes destabilizing cycles of volatility more likely.

The Great Rebalancing: The first half of the 21st century will be the first time in 200years when emerging-market countries shall contribute more to growth than the

developed ones.

The Market State: The often contradictory demands of driving economic growth andproviding the necessary safety nets to maintain social stability have put governments

under extraordinary pressure.

Pricing the Planet: A collision is shaping up among the rising demand for resources,constrained supplies, and changing social attitudes toward environmental protection.


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GUI Model Example

Source: Nangia & Pramanik, 2011


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Conclusion

Clearly, a paradigm shift in thinking is required regardingperpetual GUI

collaboration. Innovation and productivity remain the primary determinants of long-term

national growth (GE, 2012; Drucker, 2002); therefore, closer attention needs to be paid to

such collaboration efforts with special consideration given to the impactand value of such

efforts. TheMITSloan Management Review from the Massachusetts Institute of Technology

(MIT) in the USA outlined in 2010 a list ofseven Best Practices for Industry-University

Collaboration that should be considered within the realm of the GUI Model above, which

should be tailored to fit aparticular countrys culture, legal infrastructure, and bureaucratic

tendencies. These Best Practices include (Pertuze, Calder, Greitzer, & Lucas, 2010):

Define the projects strategic context as part of the selection process Select boundary-spanning project managers with three key attributes:

o In-depth knowledge of the technology needso Network across functional and organizational boundarieso Make connections between research and opportunities for product applications

Share with the university team the vision of how the collaboration can help thecompany

Invest in long-term relationships Establish strong communication linkage with the university team Build broad awareness of the project within the company Support the work internally both during and after the contract until the research can be

exploited

Effective GUI collaboration involves full commitment by all concerned to create

mutually beneficial outcomes that are shared equally (Betts & Santoro, 2011). The

Switzerland-based World Economic Forums Global Competitiveness Reportis an excellent


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reference detailing the relative strengths of factor-, efficiency-, and innovation-driven

economies such as Bangladesh, Colombia, and Canada, respectively, and how effective GUI

collaboration can assist in the continued development of their economic fortunes. The US-

based Milken InstitutesInnovation Scorecard: Country Innovation Profiles 2012 also

provides an authoritative list of 22 countries with their respective rankings in university-

industry collaboration efforts. Both reports can be combined to determine gaps in national

GUI collaboration schemes for improvement. For those countries with fledgling or non-

existent GUI programs, the following is the minimum suggested for any such endeavors to

build up to the GUI Model Example provided above:

Leverage Best Practices across industries for improved performance Promote a culture of learning between universities, business, and government Facilitate knowledge transfer across all participants involved Collaborate with foreign teams and experts and include them in domestic teams Review commercial technologies, markets, and research for future activities Develop effective communication and trust between all participants Establish solid commitment from top management down through all levels

Reviewing case studies of GUI-related programs such as the Information Sharing Forum

(ISF) in Malaysia, the Northern Gulf Project in Australia, and the Information Security

Practice Alliance (ISPA) in Korea can be combined with the above five guidelines to develop

successful, emerging GUI programs. Additionally, it is suggested that interested entities also

review Americas Cooperative Research and Development Agreement (CRADA) as a model

to link government and industry in cooperative research work (USDA, 2012).


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