How best to make SMEs aware of the collaboration opportunities that exist?

In general, universities are good at collaborating, on a national and international basis, with each other, government agencies and larger firms on research projects. Whilst there are formal incentives and mechanisms to support these collaborations, many are dependent on personal relationships between academics and partners established over extended periods. The effort required to build up this social capital pays dividends, not just in better project outcomes but now also in impact cases. Many reports, not least Lambert Review (2003) and Wilson Review (2012), have highlighted the importance and challenges of Business-University collaborations. However, these are still dominated by relationships with larger organisations. But why should universities collaborate with smaller firms anyway?

There is no denying small to medium-sized enterprises (SMEs) are important. They provide over half the jobs and generate nearly half of the turnover in the private sector. Perhaps more importantly, they have created the overwhelming majority of the new jobs in our economy. With growth being such an important political and economic issue in developed economies, it is not surprising that recent UK Government reports have focused on the role of universities in supporting growth in SMEs.

Lord Heseltine’s report ‘No stone unturned: in pursuit of growth’ (2013) stated, “All our universities need to learn from them [our world leading universities] to develop their knowledge transfer activity to the level of the best internationally. Local chambers and trade bodies should actively link their members into their local, or relevant, research base to help them address their innovation challenges.” Lord Young’s report ‘Growing Your Business’ (2013) stated, “I would like to see universities at the heart of clusters of innovative businesses. Knowledge transfer between local businesses, universities and the research councils will be a key driver for growth.” Lord Young has proposed that universities and their business schools in particular, should be ‘anchor institutions’ and recommended a ‘Small Business Charter’ to promote collaboration with SMEs.

The real challenge is how to collaborate. There are already some specialist schemes, like Knowledge Transfer Partnerships (KTPs), and other consultancy activities. The most recent ‘Higher Education – Business and Community Interaction Survey 2011-12’ (2013) highlighted a significant increase of 11% in activity benefitting SMEs – albeit from a lower base.

The key to making progress is to recognise the sheer scale of the issue. There are nearly five million SMEs in the UK being 99% of businesses. The tried and tested model of individual academics building the social capital required for successful collaboration is simply not scalable. This has led to the development of intermediaries located within Higher Education Institutions (HEIs) with a remit to appreciate the capabilities of the research communities and promote this to SMEs and others. This role does not fit neatly into existing university structures both in terms of job descriptions and progression. Indeed, funding such posts is also problematic and many intermediaries are on fixed-term contracts. So the very social capital required to build the networks that can result in collaboration is vulnerable.

We know that SMEs will interact with universities if they can see the business case, have trusted relationships and the relevant knowledge is visible (‘Higher Education SME Interaction Working with SMEs’ Council for Industry and Higher Education, 2012). Intermediaries play a critical role in demonstrating the business case, building relationships and translating knowledge to SMEs.

We are beginning to see the structures emerge that can deliver this. At the University of Leeds we have developed 14 themed sector hubs. From ‘Cultural and creative industries’ to ‘High value chemical manufacture’. They are supported by over £6 million of investment and provide strategic gateways to developing partnerships with industry, including SMEs, and other partners. By working together they can develop practical solutions to real needs based on world-class research.

We know that universities are here to stay and could become the ‘anchor institutions’ envisaged by Sir Tim Wilson. But universities must treat knowledge exchange and the intermediaries engaged in it as core activities. Perhaps Lord Young’s proposed ‘Small Business Charter’ might just be a turning point.

This blog was first published on the National Centre for Universities and Business website.

Professor Nigel Lockett FRSA

Professor of Enterprise at Leeds University Business School