Higher education systems and industrial innovation : January 1998 to 31 May 2001

Co-ordinator of project SESI : Eric Verdier - LEST (France). Partners : Alice Lam - CBS (United Kingdom) ; Christoph Buechtemann – CRIS (Germany) ; Helena Lopes - DINAMIA (Portugal) ; Lorenz Lassnigg - IHS (Austria) ; Jean-Michel Plassard - LIRHE (France)132 p.The objective of the research was to gather empirical evidence about efficient ways of organising the linkages and interfaces between higher education institutions (including research units) and private sector firms in order to spur industrial innovation. One of the project's principal aims was to combine two dimensions which are often considered separately : firstly, the construction of the competences and the professionalities of the actors involved in innovation, and, secondly, transfers of knowledge from higher education to firms and vice versa. Five European countries (Austria, France, Germany, Portugal, UK) were selected in order to provide, at least by way of an initial hypothesis, national systems that were sufficiently disparate from the point of view of the resources "offered" to companies, be it in terms of institutions, organisations or actors. It was essential to include the United States. Indeed, the relations between higher education and companies which have evolved in that country are undoubtedly an international point of reference Three sectors were chosen in each country as being representative of the new challenges emerging for the relationship between higher education and industry in key sectors where generic technologies are tending to develop, albeit in different ways. The investigations within more than 40 firms form the empirical basis of this project. The main results could be summarized as follows :1.The type of skills and competence profiles required of R&D workers are now more demanding in multiple dimensions, particularly in the combination of technical disciplinary expertise with a broad range of business, management and social skills. Emerging evidence suggests that firms are developing 'extended internal labour markets' (EILMs ) through closer links with key universities. The social networks embedded in such EILMs facilitate training and rapid transmission of evolving (uncodified) knowledge. 2. The sample of multinational firms we have selected enables us to take stock of the moves towards industrial rationalization taken by firms seeking to develop their technological globalization strategies by exploiting a diversity of cognitive resources. Preparation for the recruitment and integration of young graduates play crucial roles in the absorption of knowledge. 3. We found six coherent types of science industry relations that we describe precisely. These results further confirm the criticality of research agendas compatibility, favouring two different ways of collaborating associating an industrial partner and an academic one. 4. The analysis identifies four main types of intermediate actors : those actors who are the medium for an economic relationship between the firm and the HERS; the "gatekeepers", who work for a firm or a HERS ; the hybrid actors have been through the process of aligning the practices, rules and values of their "home" system (industry or academia) with those of their partner ; those who are involved in the trilateral network but are independent or on the road to being independent of the partners. 5. Labour-market entry of graduates is one of the factors which allows us to introduce all the signalling/human capital/network problematics and relate it to the emergence of an new form of labour market which combines the mechanisms of the internal and external markets. In spite of this diversity of practices, however, we maintain the hypothesis that it is possible to identify dominant forms of these relations which differ from one country to another. 6. Nevertheless the report insists on the increasing human capital mobility in high tech sectors and supply some evidence of an emerging European innovation systems. 7. Considering a US-Germany comparison, we infer that in IPR matters, German public research institutes – representative of the European continental situation - are facing a dilemma: they need to provide more pre-development type services for industry, involving stricter IPR claims from corporate partners and they also need to retain IPR in core areas of expertise in order to prevent a "bleeding out" and remain a partner for industry in the future.Finally the report provides different policy formulations and recommendations. We underline that for firms, the main objective is to resolve the problems posed by the transition from knowledge to competences. With an OLM of PhD level, the firms, especially very small ones, enable to have easier access to a suitably trained workforce. By promoting the circulation of knowledge, these markets help to reduce the previous conceptual gaps and to promote the creation of greater absorptive capacities at firms, as well as sustaining the spirit of mutual trust and reciprocity in which these networks were founded.At the national level, the lessons learned by public policy makers will be dealt with them in the generalfollowing order :- The United Kingdom, where the policies and regulations are typically market oriented is undergoing a process of specialization.- In France and Germany, where the relations between Science and Industry are facing fairly similar challenges, the scenario tends to alternated between radical change and a process of accommodation.- Austria and Portugal, which have rather different technological and industrial structures, but are both facing the special challenge of adapting the small scale national systems of innovation to the European Union and world-wide competition in general