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 bryanchristiansen@gumushane.edu.tr

July 22, 2012

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July 2012 ABSTRACT Globalization of the 21st century has changed economic and other realities far beyond the expectations of most individuals. The competitive landscape continues to be reinvented due to such factors as accelerating globalization, changing demographics, rapid technological advances, shorter business / product life cycles, innovation, and productivity. This article focuses on why there is a need for perpetual Government-University-Industry (GUI) collaboration, especially in advanced economies, and some options on how to achieve it effectively. The article commences with an introduction to the realities of contemporary globalism that have raised the need for this collaboration, and the body then outlines the current 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 section for reference. The conclusion synthesizes the earlier discussions and provides suggestions for consideration regarding optimum GUI collaboration, most notably a list of seven Best Practices 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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July 2012 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 include perpetual 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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July 2012 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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July 2012

Example of Japanese GUI Collaboration

Source: RIETI, 2004

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July 2012 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 2000 2008 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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July 2012

Number of patent applications from universities in US and Japan

18000 16000 14000 12000 10000 8000 6000 4000 2000 0

27 28 29 30 32 34 22 48 40 44 51 51 51 57 51 72

Disclosure JP Patent Application. US Disclosure US

63 59

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

From AUTM Licensing Survey2004(US) and MEXT(JP)

Toshiya Watanabe

Patent Application. JP
15

Source: T. Watanabe, University of Tokyo

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July 2012 The China-India Cases These two demographic and economic giants rate differently regarding universityindustry 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 giants Battle 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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July 2012

Process of international University-Industry Collaboration

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

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July 2012 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 and perpetual GUI collaboration today (McKinsey Quarterly, 2010): The Productivity Imperative: Developed-world economies will need to generate pronounced gains in productivity to power continued economic growth. The Global Grid: The global economy is growing ever more connected. This expanding 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 200 years when emerging-market countries shall contribute more to growth than the developed ones. The Market State: The often contradictory demands of driving economic growth and providing 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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July 2012

GUI Model Example

Source: Nangia & Pramanik, 2011

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July 2012 Conclusion Clearly, a paradigm shift in thinking is required regarding perpetual 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 impact and value of such efforts. The MITSloan Management Review from the Massachusetts Institute of Technology (MIT) in the USA outlined in 2010 a list of seven Best Practices for Industry-University Collaboration that should be considered within the realm of the GUI Model above, which should be tailored to fit a particular 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 needs o Network across functional and organizational boundaries o Make connections between research and opportunities for product applications Share with the university team the vision of how the collaboration can help the company 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 Report is an excellent

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July 2012 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 USbased Milken Institutes Innovation Scorecard: Country Innovation Profiles 2012 also provides an authoritative list of 22 countries with their respective rankings in universityindustry collaboration efforts. Both reports can be combined to determine gaps in national GUI collaboration schemes for improvement. For those countries with fledgling or nonexistent 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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July 2012 U.S. Department of State (2012). US-India Higher Education Cooperation: Innovative Models of University-Industry Collaboration. Retrieved from: http://www.state.gov/p/sca/rls/rmks/2011/175672.htm United States Department of Agriculture (USDA) (2012). Partnering. Retrieved from: http://www.ars.usda.gov/business/docs.htm?docid=771 United States Patent and Trademark Office (2012). 35 U.S.C. 200 Policy and objective. Patent Laws. Retrieved from: http://www.uspto.gov/web/offices/pac/mpep/documents/appxl_35_U_S_C_200.htm University of Cambridge (2012). Boosting Indias Global Advantage Through UniversityIndustry Collaboration. Judge Business School. Retrieved from: www.india.jbs.cam.ac.uk/news/events/downloads/090312_mumbai.pdf University of Tokyo (2012). Todai Research. Retrieved from: www.u-tokyo.ac.jp/en/todairesearch/

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