Why does industry find universities difficult to deal with, when funding research or licensing intellectual property? And vice versa. Many people have an opinion on where the fault lies, some of them passionately expressed.
Some interesting thoughts on university/industry relations have recently appeared on the personal blog of Professor Anthony Finkelstein, Dean of Engineering Sciences at University College London. Prof Finkelstein identifies some major issues and some minor ones. The major issues can be summarised as:
- the familiar, linear model of technology transfer is not best suited to university/industry relations. The linear model assumes that the university will undertake early stage work and develop some IP, then hand it over to industry to develop it further and bring commercial products to market. Prof Finkelstein seems to be arguing for a more integrated relationship between universities and industry.
- there is a plethora of funding models in universities, and these models are difficult to understand and navigate, with complex administrative requirements. EU Framework projects would seem to be a prime example of this complexity.
- many of the funding models, and interactions between industry and universities generally, are built around the concempt of a discrete project, with a work programme, deliverables etc. Prof Finkelstein considers that this model is not best suited to university/industry interactions. As he puts it: “University research is, at the risk of over-simplification, best suited to serving the strategic needs of business rather than the tactical or operational requirements.”
IP Draughts is interested in this prognosis, but impatient for the doctor to write out a prescription that he can take down to the chemists. What would an industry/university interaction look like if the clutter that currently exists and impedes such interactions were removed? How would we ensure that the model protects the funder’s interests and doesn’t become one where the university is left to get on with whatever research it wants to do, freed from the constraints of milestones, deliverables and a linear approach? Is the new model to be based on contracts – some kind of strategic, collaborative, joint venture agreement – or on a grant-based approach, similar to HEFCE funding?
We also wonder whether the strategic approach that Prof Finkelstein is suggesting is better suited to certain types of industry interaction, and certain types of research-intensive university. We can imagine how a strategic collaboration between a global software company and UCL, to develop the next generation of computer technology, might work. We are less sure how it works when an SME wants its local university to design a widget for machinery used in a food production line, to a strict deadline and budget. Unless non-strategic collaborations are to be banned, there will continue to be a need for multiple types of industry/university interaction, including project-based interactions.
IP Draughts views the problem rather differently. First, the university needs to develop an efficient, skilful team of contract negotiators. Historically, many of the complaints about contracting with universities were caused, or exacerbated, by a poor-quality contracts team. Although the quality of such teams has improved dramatically in the last 20 years, it takes an age to change reputations in a university, particularly when the team is part of the central administration, one of whose tacit roles is to be the institutional scapegoat. A linked issue is that when a university starts to tighten up on contractual arrangements, after many years of neglect, it will meet resistance. It takes time to change behaviours. Some but not all university academics, who may feel no particular loyalty to the university’s central administration, may side with the funder and fuel their sense that the university is difficult to deal with. If, instead, the academic sides with the contracts team and explains to the funder why the university’s priorities and needs are not the same as those of a commercial company, the funder’s sense of a difficult negotiation may be diminished.
The leading UK universities nowadays largely have competent contract teams, but more could be done at a senior level (Vice Chancellor, Deputy Vice Chancellors and Heads of Department) to develop clear and adhered-to policies on “walk away” positions on detailed contract terms. The acid test for such a policy is whether a Vice Chancellor is willing to use up negotiating credits with his senior professors by insisting on adherence to the policy, in the face of threats by a professor to walk away to another university. (Yes, we have encountered this, and in one memorable case the academic fetched up at another of our client universities, so the problem didn’t go away.) One of the problems that industry has with universities is that they don’t know what the ground rules are, or whether there are any, and an impression is sometimes given that if you keep saying no to the university, eventually it will give in, after months of frustrating prevarication. It is simpler in the USA, where industry knows that universities will take a standard approach to contract terms, backed up by the legislative force of the Bayh-Dole Act. (Incidentally, we don’t agree with all of the contract terms that US universities require, but as a general approach it has much to commend it.)
The other main improvement that we would recommend is greater openness and communication about the different priorities and objectives of universities and industry, respectively. By being aware of these differences, funders and universities may become less frustrated by some of their interactions with each other. To find a workable solution that meets everyone’s needs, you have to know what those needs are.
They often include the following:
- (a) The industrial company may act rationally or irrationally, intelligently or stupidly, but it is governed in all cases by the profit motive. (b) Companies are usually hierarchical organisations where strategy is set from the top and filters down through the ranks. (c) Decisions are often taken based on imperfect knowledge and a weighing up of identified risks; it is often considered better to take a decision and stick with it (within limits) rather than to spend too much time worrying about whether it is the perfect decision.
- By contrast: (a) universities are, at least in the UK, charities that must act for the public good, where it is more important to get the technology used by the public than to maximise profits. (b) Universities are collectives of one-man-bands and cottage industries, with very little hierarchical control. University administrators, while responsible for protecting the university’s legal and contractual interests, have only a limited relationship with academic departments and individual academics. Academics are not always aware of, or compliant with, the contract-related policies of the university. (c) Academics are curiosity-driven and independent. This is usually a good thing, but it can conflict with a company’s desire to get a task done on time and to specification. We have encountered academics who have caused their university to sign a 3 year research agreement, then a year later have asked the research contracts department to get them out of the contract, because they have found something more interesting to do.
A theme of the above comments is consistency. It is no good having a policy if the policy is abandoned when the funder complains loudly; this only encourages complaints. If the policy if immutable, the funder knows that it is pointless moaning about it and the perception of difficulty is reduced. This point applies to both internal and external complaints – by the funder to the university, and by the academic to the Vice Chancellor. This is true of general contract terms, as mentioned above. It is also true in relation to the pricing of university research. UK Government policy now requires universities to charge the full economic costs of research, known by the acronym FEC. It is no good having a policy of this kind, if universities find ways of getting around it, eg by allowing their academics to perform the same project as private consultancy, where FEC rules don’t apply.
In summary, some differences of expectation and outlook are probably inevitable. Competent contract management, unity of purpose within the university, and clear communication of objectives can all help to make industry/university interactions harmonious.