The Regional Pertinence of University-Generated Knowledge

8/2/2019 The Regional Pertinence of University-Generated Knowledge

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Robert Huggins

Cardiff School of Management,

University of Wales Institute, Cardiff

Presentation at the Universities, Graduates and Innovation -The Regional Impact of Higher Education Conference

Cardiff, 17th June, 2008

The Regional Pertinence of University-Generated

Knowledge
http://www2.uwic.ac.uk/


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University-Generated Knowledge and RegionalDevelopment

As knowledge becomes an increasingly important part of

regional innovation and development processes, the roleof universities has come to the fore of regionalinnovation and economic development policy.

Universities and other higher education institutions(HEIs) have come to be regarded as key sources ofknowledge utilisable in the pursuit of economic growth,with knowledge and technology transfer attaining a

more important role within universities.

However, it is often difficult to ascribe improved regionalcompetitiveness to developments in knowledge-based

infrastructure.


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The Transfer and Commercialisation of University-Generated Knowledge

The transfer and commercialisation of university-generated knowledge is alsotaking a stronger role within government policies at a number of levels (e.g.Lambert Review).

Many governments and their agencies are turning their attention to the role ofHEI knowledge commercialisation in developing innovative, sustainable andprosperous regional (and national economies).

However, regional contexts, and the universities located in them differ,suggesting that the relevance of these processes in both economic and policyterms will differ across regions and institutions.

In economic terms, regions may differ in their dependence on the highereducation sector as a generator of both income and innovation.

In policy terms, there is an underlying assumption that the knowledgegenerated by universities can be best made use of by networking it regionally(or locally), when increasing evidence suggests that the best use of knowledgeis made by linking it globally (or least non-regionally/locally).


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This Presentation

The objective of this presentation is to provide

an initial (quantitative) exploration of some ofthese issues in the context of the 12 UK regions,covering regional differences in the:

Wealth-generating capacity of the highereducation sector.

Knowledge-generating capacity of the highereducation sector.

Knowledge networks within which universitiesparticipate.


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Value Added and Productivity

In a corporate context, Value Added is the wealth created by a company.

Value Added = Sales less Costs of bought-in goods and services.

Company Value Added can be calculated from a companys accounts by

adding together operating profit, employee costs, depreciation and

amortisation/impairment charges.

Calculating Value Added for the Higher Education: adding together surplus,employee costs, and depreciation.

The combined Value Added of firms and other organisations can be

aggregated as the Gross Value Added of a region or nation (similar to Gross

Domestic Product).

Productivity, or more correctly in this case labour productivity, refers to the

Value Added generated per employee.


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Rank Higher Education Institution

Value Addedper FTE()

1 London Business School 70,332

2 St George's Hospital Medical School 60,352

3 University of Cambridge 60,125

4 King's College London 57,312

5 University College London 54,443

6 Imperial College London 54,230

7 Royal College of Music 54,0578 City University, London 51,587

9 London School of Economics and Political Science 51,512

10 Royal Veterinary College 50,399

11 Kingston University 49,735

12 University of London 49,456

13 Birmingham College of Food, Tourism and Creative Studies 48,949

14 School of Pharmacy 48,88315 Royal Academy of Music 48,718

16 University of Surrey 48,344

17 London School of Hygiene & Tropical Medicine 48,309

18 London South Bank University 47,187

19 Institute of Cancer Research 46,943

20 Royal Holloway, University of London 45,967

University Productivity Value Added per Full-Time Equivalent Employee


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Value Added per

FTE ()139 Lancaster University 34,727

140 University of Abertay Dundee 33,895

141 Glasgow School of Art 33,778

142 Liverpool Hope University 33,615

143 Sheffield Hallam University 33,522

144 College of St Mark & St John 33,316

145 Bath Spa University 33,310

146 Buckinghamshire Chilterns University College 33,155

147 University of Winchester 32,580

148 Writtle College 32,538

149 University of Plymouth 32,036

150 University of Sunderland 31,723

151 Cumbria Institute of the Arts 30,693

152 Leeds College of Music 30,092

153 University of Wales, Aberystwyth 29,849

154 Royal Agricultural College 29,591

155 Trinity College Carmarthen 29,376

156 Central School of Speech and Drama 28,166

157 University of Chester 28,034

158 Conservatoire for Dance and Drama 770

University Productivity Value Added per Full-Time Equivalent Employee


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Value Addedper FTE

()

29 Cardiff University 43,403

48 North East Wales Institute of Higher Education 40,870

68 University of Wales Swansea 39,274

85 University of Wales, Lampeter 38,225

86 University of Wales, Bangor 38,098

88 Swansea Institute of Higher Education 38,058

100 Royal Welsh College of Music and Drama 37,378

115 University of Wales Institute, Cardiff 36,390

118 University of Glamorgan 36,160

119 University of Wales, Newport 36,065

153 University of Wales, Aberystwyth 29,849

155 Trinity College Carmarthen 29,376

University Productivity in Wales Value Added per Full-Time EquivalentEmployee


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University Value Added and Productivity

University value added and productivityappears to be related to geographyplace seems to play a role.

The performance of universities is relatedto both internal capabilities and externalforces.

Are these differences relevant at theregional level?


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Region

Number ofHEIsper

Region

PopulationperHEI

(000s)

Value Addedper

FTE()

Total HEValueAdded(000s)

Contributionto

RegionalGVA (%)

North East 5 511.7 38,624 511,966 1.32

North West 14 489.0 37,181 1,174,995 1.06

Yorkshire and the Humber 10 506.4 36,991 1,004,509 1.22

East Midlands 9 478.5 37,409 736,900 0.99

West Midlands 12 447.1 40,183 899,526 1.01

Eastern England 9 615.7 48,016 913,116 0.83

London 39 192.8 47,371 2,558,439 1.30

South East 17 480.2 39,982 1,595,976 0.90

South West 13 389.8 37,056 712,005 0.80

Scotland 19 268.1 39,539 969,618 1.07

Wales 11 269.0 38,577 578,773 1.36

Northern Ireland 2 862.2 42,488 269,142 1.02

UK 160 40,759 1.03

University Contribution to Regional Gross Value Added


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10 000

12 000

14 000

16 000

18 000

20 000

22 000

24 000

0.7 0.8 0.9 1 1.1 1.2 1.3 1.4 1.5

Higher Education Contribution to Regional Gross Value Added (%)

Gro

ssValueAddedp

erCapita2006()

University Contribution to Regional Gross Value Added and Regional GrossValue Added per Capita


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10 000

12 000

14 000

16 000

18 000

20 000

22 000

24 000

0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90

Higher Education R&D Expenditure (HERD) a Proportion of Total Regional R&D

Expenditure (GERD)

GrossValueAdded

perCapita2006(

)

Higher Education R&D Expenditure and Regional Gross Value Added perCapita


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Region

Cumulative portfolio ofHE active patentsas a proportion

of regionalpatent

applications

HE Spin-offs per NewVAT registeredcompany 2006

(000s)

North East 0.48 43.0

North West 0.20 23.9 Yorkshire and the Humber 0.43 29.6

East Midlands 0.39 21.1

West Midlands 0.31 13.2

Eastern England 0.22 8.2

London 1.07 20.7

South East 0.31 34.7South West 0.17 8.0

Scotland 1.28 25.6

Wales 0.95 62.6

Northern Ireland 1.18 10.5

UK Average 0.52 23.1

Higher Education Contributions to Regional Patenting and New Firm FormationActivities (2005/06)


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Universities and Regions

Regional economic and innovation performance

is inversely related to university dependence. Universities in less competitive regions also

produce less wealth.

This implies a potential problem weakeruniversities with a responsibility for developingweaker regions.

But do they commercialise less knowledge?

Are problems related to knowledge supply ordemand?


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Region

Contract Researchper FTE

Employee2005-06

ConsultancyContractsper FTE

Employee2005-06

IP Income per FTEEmployee2005-06

North East 2,080 1,636 37

North West 1,226 577 287

Yorkshire and the Humber 2,271 381 33

East Midlands 1,152 339 87

West Midlands 2,634 586 378

Eastern England 2,331 757 209

London 3,549 930 129

South East 1,865 977 207

South West 1,801 1,145 290

Scotland 2,617 1,054 444

Wales 1,572 845 99

Northern Ireland 1,351 242 18

UK Average 2,153 780 191

Higher Education Knowledge Commercialisation Activity (2005/06)


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Region

Internationally Co-authored articlesper FTE Employee (annualaverage 1999-2003)

Collaborative researchinvolving both publicfunding and fundingfrom business per FTEemployee2005-06

% of CommercialisationIncome Generatedfrom each HEI'sRegion

North East 0.13 3,844 21.9%

North West 0.18 2,352 35.1%

Yorkshire and the Humber 0.13 1,040 29.8%

East Midlands 0.12 2,358 25.5%

West Midlands 0.13 1,148 24.4%

Eastern England 0.33 2,605 23.3%

London 0.25 1,348 23.6%

South East 0.26 1,880 23.0%

South West 0.15 902 18.2%

Scotland 0.27 3,196 22.6%

Wales 0.12 4,348 8.4%

Northern Ireland 0.14 1,737 59.9%

Higher Education Research Activity and Commercialisation Income(2005/06)


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20000

30000

40000

50000

60000

70000

80000

0 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000

Collaborative Research & Commercialisation Income per FTE Employee

ValueAddedperFT

EEmployee

University Productivity and Income from Collaborative

Research and Commercialisation


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20000

30000

40000

50000

60000

70000

80000

0 20 40 60 80 100 120

% of Knowledge Commercialisation Activity in Region

ValueAddedper

FTEEmployee

University Productivity and % of Knowledge Commercialisation Activity UndertakenWithin The Region


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20000

30000

40000

50000

60000

70000

80000

0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000

Number of FTE Employees

ValueAddedpe

rFTEEmployee

University Productivity and Institution Size


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University Productivity and Commercialisation

University productivity is positively related to knowledge

commercialisation capabilities.

University productivity is notrelated to knowledgecommercialisation undertaken within a respectiveuniversitys region.

Larger universities tend to have higher productivityrates.

Demand for university knowledge is predominantly non-regional (suggesting demand side limitations in somecases).

Who are the key partners and clients within university

knowledge networks?


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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

East

Midlands

South

East

West

Midlands

Yorkshire Scotland North

West

London Wales East of

England

South

West

North

East

Other Public Sector

Public Sector Research Establishments

SMEs

Large Domestic Firms

Multinational Enterprises

Knowledge Networks - Strongest Relationships with Partners/Clients During theLast 3 Years for Collaborative Research, Contract Research and Consultancy


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010

20

30

4050

60

70

80

90

100

WestM

idlan

ds

North

West

North

East

South

West

EastofEn

gland

Wales

Scotl

and

South

East

Lond

on

EastMi

dland

s

Yorkshir

e

% of Links outside theregion

% of Links in the region

Knowledge Networks - Strongest Relationships with Partners/Clients Within andOutside the Region


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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%100%

Links Welsh

HEIs have in the

Region

Links Welsh

HEIs have

outside the

Region

International

Links

Other PublicSector/Government

Departments, Authorities

or Agencies

SME

Large Domestic

Enterprise

Multinational Enterprise

The Knowledge Networks of HEIs in Wales - Strongest Relationships withPartners/Clients Within and Outside the Region


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Final Remarks (1)

There is significant variation in the wealth and knowledge

generation capabilities of universities across UK regions.

Weaker regions are more dependent on their universities for income

and innovation, but often these universities under-perform in

comparison to counterpart institutions in more competitive regions.

Knowledge commercialisation activity is a source of productivity

advantages for universities, but many of these advantages are

accrued via networks beyond the region of location.

Markets (or networks) for knowledge in under-competitive regions

appear to possess demand-side weaknesses.


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Final Remarks (2)

The capability of universities to stimulate regional demand for

knowledge is probably limited.

Universities have their own bottom-lines to consider.

Universities alone cannot shoulder the burden for transforming the

innovation capabilities and knowledge economies of their regions.

If universities are to continue to play a regional economic

development role it is vital that knowledge transfer and networks

initiatives are fully supported to ensure sustainability.

The onus being placed on universities to become the bases of

commercialisable knowledge in many regions is probably too heavy.

Documents

The Regional Pertinence of University-Generated Knowledge