Networks, sneak-outs and reservoirs of expertise
By David Docherty, Chief Executive, Council For Industry and Higher Education
The modern wealth of regions will flow from their intellectual capital. Tomorrow’s successful enterprise cities, regenerated regions and innovation towns will only be so because of an endless flow of talented graduates and restive researchers tied into knowledge-intensive businesses based or working in the locality. As Gordon Moore, co¬founder of Intel said of the Silicon Valley phenomenon – ‘The most important contribution Stanford makes to Silicon Valley is to replenish the intellectual pool every year with new graduate students.’
Students and researchers form the personal, business and social networks vital to the entrepreneurial energy of a region. They give it identity, share ideas, business¬plans and battle-stories, attract cluster-capital when they are recognised as a centre of growing expertise and, when successful themselves, become the investment community of the future. In HSBC ‘s recent report, The Future of Business: The Changing Face of Business in 21st Century Britain they found that that strong personal networks (26%) were more important to business leaders than financial backing (18%), or even having a good business idea (16%). And that one in three business leaders spends time out of the office consulting for other firms, volunteering or working in academia. These networks are the new localism when it comes to economic regeneration.
Dr. Hermann Hauser, co-founder of the hugely¬successful Amadeus Capital, talks of the power of ‘sneak-outs’ – i.e. businesses formed by graduates, but not based on university IP ¬as being the vital component of regional success. Stanford measures itself as much on the consultancy it offers to such sneak¬outs as it does to spin-outs or more traditional university-IP transactions. So irrespective of whether policy makers wish to use the cluster word, or enterprise zones, or economic eco-systems, knowledge-creation, development and implementation is the sine qua non of success.
HSBCs report pointed to seven supercities – Newcastle, Leeds, Liverpool, Brighton, London, Glasgow, Bristol – all of which have highly-successful universities committed to re-balancing the economies in which their cities are located. For example, HSBC noted that Brighton could “change the traditional national and regional powerbases in the UK because of [its] proximity to the one thing that does not depend on natural resources: knowledge”. The report describes Brighton as “…the deregulation capital of the UK [where] 82% of entrepreneurs, many based in the so-called MDMA industries (marketing, design, media and advertising), believe that regulations and work¬related legislation is a threat to their new entrepreneurial activities”…so making Brighton an “alternative economic and innovation powerhouse”.
Developing high-quality professional and technical skills are, and always will be a prime requirement of universities, but the innovative-localism cannot be built on skills alone.Vital regional economies need reservoirs of expertise. If a skill can be defined as a repeatable process in a predictable environment, an economy built on such narrow talents, will hardly be suited for the rigors of convergence in media, service engineering, gene therapy, nanotech and de-carbonised manufacturing necessary for supercities or, indeed, super anything.
It is time for a new covenant between businesses and universities that responds actively to the connected, networking era and the collective responsibility for growth. For example, three universities in the supercities – Glasgow, Bristol and Kings – have adopted an open-IP relationship with business, in which they will make the vast bulk of their IP freely available to businesses. Building on this initiative, creating genuinely powerful entrepreneurial networks that use cutting edge social business tools like LinkedIn, Facebook and the Library of Alexandria is the logical next step.
Irrespective of whether policy makers wish to use the cluster word, or enterprise zones, or economic eco-systems, knowledge-creation, development and implementation is the sine qua non of success.
We must be very careful not to overlook the roles of major industrial businesses co-locating within universities and creating new cultures that break through historic divisions of the academy and business research. So Jaguar Land Rover in Warwick, Boeing in Sheffield, Lloyd’s Register in Southampton, Siemens in Lincoln, and the BBC in Salford are all strong examples of businesses taking a hard, practical, profit or mission-driven view of university knowledge and backing it to be a source of major competitive advantage. The lessons learned for big companies and their supply chains about culture and new forms of practice can and should be applied to smaller businesses as they scale up.
These examples all build on historic regional capability, but equally universities have a significant role in re-clustering a region as traditional industries die -as the University of Hertfordshire is doing with biotech and Abertay successfully did with the games industry. The CIHE is working with Brighton and Sussex universities, the Arts and Humanities Research Council and two thousand creative, digital and IT (CDIT) businesses in the Brighton area attached to the Wired Sussex network on a project called the Brighton Fuse which aims to map the drivers of regional success and initiate major change-management programmes that will provide a clear evidence base for the role of universities, but also be the basis for a tool-kit that other regions may use.
Regional growth is an immensely complex beast, and if there were easy policy answers they would have been globally implemented. Instead, we live with complexity. But in that complexity, one thing should be clear – a university intertwined in the business DNA of a region is indispensable to any growth strategy, and we need practical and policy focus on maximising it.
David Docherty is Chief Executive of the Council For Industry and Higher Education, and Chairman of the Digital Television Group, which is the industry body for digital television in the UK.
