Universities and business collaborating for success in the next industrial revolution.
The starting gun has sounded on a New Industrial Revolution. Policy and investment decisions taken in the next five years will position economies for success (or failure) in that race. Smart manufacturing – which combines advanced scientific knowledge and business models based on design and support of products and services – will be as important to growth in the New Industrial revolution as steam was to the First and mass production to the Second. Therefore innovation and knowledge-creation are fundamental factors of production.
There are many exciting initiatives:
● Jet engines created using Computer Aided design, leased to an aircraft manufacturer, and whose life-cycle is monitored digitally to support long-term maintenance.
● Bioinformatic solutions, such as ‘Lab-in-a-pill’ technologies, that could transform the treatment of bowel cancer, and which contain sensors to monitor bodily fluids for the disease and then transmit the information to a computer.
● Second generation bio-fuels using non food-stuffs such as husks or stems, or industrial waste such as woodchip.
● Low carbon engine technology that develops lighter fans to reduce fuel consumption, simulation technology for virtual engineering also creating new, affordable high temperature alloys to improve fuel efficiency.
These examples, a handful taken from the thousands currently being worked on in university and industry labs, illustrate the need for close and systemic interactions between manufacturing businesses and universities. Given that some of the world’s best smart manufacturing businesses are based here, and the UK university system is ranked second only to the United States, should policy-makers be worried? Yes. Because manufacturing businesses are worried on the UKs behalf.
In response to these concerns, the Council for Industry and Higher Education (CIHE) convened a task force of senior industrialists, vice chancellors and research leaders to explore solutions to the challenges facing manufacturing in the UK.
In its report, Powering Up, it made three core recommendations about joining up policy and practice. First, that the Coalition and devolved administrations should promote the co-ordination of the range of current economic initiatives to promote advanced manufacturing. In particular, they should explore Advanced Manufacturing Enterprise Zones that reward knowledge-based entrepreneurship and ensure that universities are at the heart of these development challenges.
Second, universities should open their digital doors and use Web 2.0 networking technologies to offer advanced manufacturing entrepreneurs and businesses systematic access to university research, rather than lock knowledge away in patents that often lead nowhere commercially.
Glasgow University’s Easy Access IP deals, where the university has taken a decision to make at least 95% of their IP available for manufacturing businesses, particularly those in the West of Scotland, points the way to a more fluid method of managing IP.
And finally, global manufacturing should contribute to contribute to local entrepreneurship by collaborating with universities to aggregate and increase the quality of ideas in their supply chain, particularly in supporting graduate-rich SMEs building knowledge-intensive businesses.
Smart Manufacturing and Universities
The UK’s universities must be the intellectual powerhouses to drive the New Industrial Revolution.
In Ric Parker’s phrase, they must ‘top up the hopper’. But, of course, they cannot do so without strategic, secure and long-term partnerships with global advanced manufacturing businesses, entrepreneurs and innovators. This partnership should be based on the following four principles.
Create a collaborative culture that revels in shared success, with co-location or virtual networking, long-term and often rolling contracts, easily accessible support resources including laboratory facilities, trained and dedicated staff – both academics and business people – who understand research and business and can translate.
Think Big, Think Small
The challenge for such partnerships is simultaneously to think big and build long-run relationships with major industrial partners, whilst at the same time helping to develop the capacity of innovation-rich SMEs. The former is exemplified by the Systems Engineering Innovation Centre (SEIC). Established in 2002, the SEIC is a structured partnership between Loughborough University, the East Midlands development agency and BAE Systems to create a centre of excellence in systems engineering. The Centre offers access to a range of facilities including research and synthetic environment laboratories, virtual engineering capabilities, office accommodation, conference facilities, a lecture theatre, an exhibition area and a highly integrated communications infrastructure.
One of the keys to success of the collaboration is co-location – academics work side by side with BAE staff and experience the unique, complex and high-risk industrial challenges of the defence and security industries.
Small, graduate-rich, innovative manufacturing firms need a more organic level of support, as exemplified by BioCity in Nottingham. BioCity Nottingham is a not-for-profit company established in 2003 by Nottingham’s two universities and the RDA to develop the bioscience and healthcare cluster within the East Midlands. It works as an incubator, offering laboratory and office space for SMEs that have up to 80 employees, and offers practical mechanisms such as flexible tenancy agreements – allowing companies to increase or decrease the amount of space they need as they find their feet.
Crucially, BioCity includes companies not typically found in single-sector incubators, such as a patent agent, a PR firm, regulatory affairs consultants and a web design company. As a result, BioCity has created a more effective start-up environment by recognising the value of different kinds of companies interlinking and supplying each other.
This model of open, organic innovation is of vital importance as universities interact with others in advanced manufacturing enterprise zones, and seek to partner with major businesses to increase the knowledge-intensity of smaller firms. But we need to transform the IP model of universities really to generate and power the new industrial economy.
Develop an open-innovation business approach that reduces the friction around intellectual property exploitation. In a recent survey 56% of businesses cited potential conflicts with regards to IP as a barrier to interaction with universities. In England, universities have spent nearly £300m on patent protection and specialist lawyers in the past ten years, and when fully-costed, have not seen a return on that investment, despite the occasional highprofile success. By contrast, their consultancy and collaborative income in the same period was around £10bn. Universities should protect the minority of their IP that is valuable, ensure business has as much access to the rest as possible and be fundamentally measured on their contribution to business, rather than on spin outs.
However, it’s not enough just to make the IP available. Universities must work to create Web 2.0 social networks of entrepreneurs and use advanced communication tools to ensure that manufacturing business leaders know and understand the research emerging from departments.
Increase the overall ability of businesses to absorb university research by being realistic about the level of knowledge within a business and working with companies to increase their knowledge through a range of open fora, databases, short courses, workshops, technical advice, and business planning.
International Competition and Smart Manufacturing
We have become used to concerns about India and China overtaking us as a manufacturing nation, but others are developing their own models.
Brazil’s government, for example, insists that any business that exploits its oil and gas reserves invests one percent of net turnover in research and development, and the government tops this up with a special research tax. This put over half a billion into advanced manufacturing research and development in 2009, half of which went into universities and research institutes.
If we are to meet the range of international competitive developments, the UK must rigorously explore ways of aligning our knowledgebased institutions, without the dirigiste policies of our competitors.
In a revolution, you can lead or you can follow.
If the UK is to lead it must address systematically the challenges facing it, including the role of government in procuring high end manufacturing, support for advanced manufacturing clusters, promotion of the right university research culture for smart manufacturing, and tax and planning policies that support innovation in the sector.
The tens of thousands of jobs that manufacturing businesses in the UK are currently creating still can end up in China…or Brazil. Therefore businesses and universities need policy makers to understand the vital importance of their collaborations, and support them through clear and consistent policy initiatives.
Global businesses – as well as local manufacturing entrepreneurs – require the highest quality research and graduate talent, and it is to this latter theme that our Task Force will turn in the next few months in its Manufacturing Talent 2030 report.