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February 2011 Discussion paper

Discussion paper - Group of Eight€¦ · Discussion paper. ROLE OF UNIVERSITIES IN THE NATIONAL INNOVATION SYSTEM PAGE 2 February 2011 The Group of Eight Group of Eight House Level

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Page 1: Discussion paper - Group of Eight€¦ · Discussion paper. ROLE OF UNIVERSITIES IN THE NATIONAL INNOVATION SYSTEM PAGE 2 February 2011 The Group of Eight Group of Eight House Level

ROLE OF UNIVERSITIES IN THE NATIONAL INNOVATION SYSTEM PAGE 1

February 2011

Discussion paper

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February 2011

The Group of Eight

Group of Eight House

Level 2, 101 Northbourne Avenue

Turner ACT 2612

www.go8.edu.au

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Contents

Executive summary 5

Introduction 6

Innovation 7

Innovationdrawsonthepotentialofpeople 8

Innovationsystems 10

Differentrolesofuniversitiesandbusinesswithintheresearchsub-system 11

Therealityofinnovationsystems 14

The role of universities 16

Importanceofinternaldiversitywithinuniversities 18

Universitiesandcommercialisationactivities 19

Businessdemandsonuniversities 20

Diversityamonguniversities 22

TheroleoftheGroupofEightuniversities 24

Some conclusions 26

Attachments 29

Attachment1.Thehealthinnovationsystem 29

Attachment2.Sourcesofideasorinformationforbusinessinnovation 32

Attachment3.Innovation–ActiveBusinesses 33

Attachment4.CarnegieClassificationofInstitutionsofHigherEducationintheUSA 34

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Executive summaryInnovationisthedeliberateintroductionofchangetoaddvalueandimproveperformance.Itdrawsontheknowledge,skills,understanding,experience,curiosityandimaginationofpeopleastheydisplaythesewithinaparticularcontextandapplythemthroughtheidentificationofopportunitiesandthesolvingofproblems.

Overrecentyearsgovernmentshavebeenplacingmoreemphasisoninnovationasasourceofnationalcompetiveness.Governmentsnowassesstheirinvestmentsacrossmanyareasintermsofthecontributionthatsuchinvestmentsmaketoincreasinginnovation.Thishasbeenespeciallysignificantforeducationandinparticularforthedevelopmentofpoliciesforuniversitiesbecauseuniversitiesperformresearchaswellasprovidelearning.Themeasuresgovernmentsusetoassesstheperformanceofuniversitiesfrequentlyincludeindicatorsofresearch-relatedengagementwithbusiness,orofthelevelofpatenting,licensingandstartups.

Assessinguniversityperformancebyfocusingonjustsomeofthedirectservicesoroutputsthatuniversitiesprovide,oronnarrowaspectsoftheirindividualservices,seriouslyunderestimatesthecontributionsthatuniversitiesmake.Thiscanleadtomisleadingperceptionsofwhatinnovationis,orofhowinnovationprocesseswork.Usinginappropriatemeasuresofuniversityperformancehasthepotentialtodistortuniversityoperationsandstrategies,totheharmandimpairmentofnationalwellbeing.

Oneofthemostimportantfunctionsofuniversitiesistoprovidealearningenvironmentwhichreleasesthelatentpotentialitiesoftheirstudentsandprovidesthemwiththeabilitiestheyneedtopromoteinnovation,inwhateversectoroftheeconomytheysubsequentlywork.Universityresearchcanhelpsupportthislearningenvironmentandproduceoutcomeswhichcomplementandsupportbusinessresearchandinnovation.

Thestrengthandwellbeingofouruniversitiesiscriticaltonationalinnovationandtheoveralleffectivenessofournationalinnovationsystem.However,universitycommercialisationactivitiesprovideapoormeasureoftheimportanceofuniversitiesbecausetheydonotreflectthemyriadofwaysinwhichbusinessmakesuseofuniversityresearch.

Improvingtheperformanceandcontributionofuniversitiesrequiresuniversityleaderstothinkbroadlyandtoinnovateinresponsetosociety’schangingdemandsandtheincreasedcomplexityofthechallengesthatAustraliadoesandwillface.Thiswillleadtodiversificationasdifferentuniversitiesspecialise,focusandrespondtonewlyemergingchallengesandopportunities,includingthosepresentedbythechangingstudentpopulation.However,theyneedtodothiswithoutmovingbackfromtheirfocusonexcellence,onmeritandonfreedomofintellectualinquiryandpublicdebate.

Aspartofaninterconnectedinnovationsystem,universitiesandbusinessareinterdependent.TheybothmakeessentialcontributionstothewellbeingofAustralia.Inworkingmorecloselytogethertheycanbenefiteachotherinawaythatcanonlystrengthenthenation’sdevelopment.Forsuchengagementtowork,however,itisimportantthatbothsectorsnotonlyrecognisebutrespectthecontributionoftheother.Acknowledgingtheimportanceofinnovation,thebreadthoftheinnovationconceptandthemultiplewaysinwhichuniversitiescontributetoinnovationaswellasthebreadthoftheirresponsibilitiesisonewayofpromotingthismutualunderstandingandprovidingthebasisforstrongercooperation.

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IntroductionOverrecentyearsgovernmentsaroundtheworldhavebeenplacingmoreemphasisoninnovationasasourceofnationalcompetiveness.Oneconsequenceofthishasbeenthatgovernmentsassesstheirinvestmentsacrossmanyareasintermsofthecontributionthatsuchinvestmentsmaketoincreasinginnovation.Thisapproachhasbeenespeciallysignificantforeducation.

Becauseinnovationflowsfromthecreativity,knowledgeandcompetenciesofpeople,providingahigherqualityeducationforfutureworkersisseenasanimportantstrategyforinvigoratingthenationaleconomy.Thisrequiresaneducationsystemthatiseffectiveatalllevels,fromprimaryschoolstopostgraduatetraining;asystemwhichsuppliespeoplehavingtheacademic,technicalandtradesskillsthenationneeds;andasystemwhichcoversalldisciplines.

Thedemandforeducationtosupporthigherlevelsofinnovationhasbeenespeciallyapparentinthedevelopmentofpoliciesforuniversities.Thisisbecauseuniversitiesperformresearchaswellasprovidelearning.Researchisoftenseenasthemostimportantdriverofinnovation,especiallyoftechnologicalinnovation.Forthisreasonthemeasuresgovernmentsusetoassesstheperformanceofuniversitiesfrequentlyincludeindicatorsofresearch-relatedengagementwithbusiness,orofthelevelofpatenting,licensingandstartups.

InAustraliathislinkbetweenuniversitiesandinnovationhasreceivedastructuralmanifestationinthegovernment’screationofaDepartmentofInnovation,Industry,ScienceandResearch(DIISR).Thisdepartmentcombines(amongotherthings)responsibilitiesforindustrypolicyandprogramswithuniversityresearchfunding.DIISRsharestheCommonwealthGovernment’sresponsibilityforuniversitieswiththeDepartmentofEducation,EmploymentandWorkforceTraining(DEEWR).

Thereisnodoubtthatuniversitiesplayanessentialandcentralroleinanyinnovationsystem,orthattheirworkandtheservicestheyprovidearecriticaltomaintainingastrong,flexibleandresilienteconomy.However,therecanbeadangerthatdebatesonhowuniversitiescontributetonationaldevelopmenttaketoonarrowaviewbyfocusingonshorttermanddirectmeasuresofcommercialvalue,ignoringthebroadereconomic,social,culturalandenvironmentalimpactsandtheeffectoftheseonnationalreputationandcredibility.Forexample,Australia’sabilitytoplayaninfluentialroleininternationaldiscussionsonglobalproblemsinnosmallpartreflectsthecontributionAustralianuniversitieshavemadetoidentifyingandanalysingoptionsfordealingwiththeseissues;andtheforeigndirectinvestment(FDI)decisionsmadebymultinationalenterprisestakeintoaccountthestrengthofacountry’spublicsectorresearchsystem,includingitsuniversities.1Similarly,RichardFloridahasarguedthatresearchuniversitiesplayacriticalroleinthecreativeeconomybyhelpingtogeneratethe‘progressive,openandtolerantpeopleclimate’necessarytoattractinnovativebusinessesandstimulatetheirdevelopment.2Infacttherearemanyanddiversewaysinwhichuniversitiescontributetonationalwellbeingbysupportinginnovation,allofwhichareimportantandallofwhichthepolicydebateneedstorecognise.

Assessinguniversityperformancebyfocusingonjustsomeofthedirectservicesoroutputsthatuniversitiesprovide,oronnarrowaspectsoftheirindividualservices,willseriouslyunderestimatethecontributionsthatuniversitiesmake.Moreover,suchanapproachcanresultinmisleadingperceptionsofwhatinnovationisorofhowinnovationprocesseswork.Totheextentthatthisleadstoinappropriatemeasuresofuniversityperformanceithasthepotentialtodistortuniversityoperationsandstrategies,totheharmandimpairmentofnationalwellbeing.Forthisreason,thispaperstartsbyconsideringwhatwemeanbyinnovation.

1. ThemajorUSreportRising above the gathering stormnotedthatamongthecriteriathatmultinationalcompaniesuseindeterminingwheretolocatetheirfacilitiesarethequalityofresearchuniversitiesandthefractionofnationalresearchanddevelopmentsupportedbygovernment.www.nap.edu/catalog/11463.html

2. RichardFlorida(2002).The rise of the creative class.BasicBooks.

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InnovationGovernmentdevelopmentofinnovationpolicyoftentakesplaceinthecontextofscience,technologyandresearchpolicy.Whiletherearemanyreasonsforthis,notleastbeingthesoundmarketfailurereasonsforgovernmentsupportforresearch,thiscontextcanresultinanarrowinterpretationofwhatwemeanbyinnovation.AsemphasisedbytherecentOECDworkoninnovation(initiatedbytheOECD’sMarch2007ministerialmeetingrequestforaninnovationstrategy),innovationisnecessaryacrossallsectorsandforallkindsofactivity.3Innovationisasimportanttothepublicsectorasitistotheprivate;andincreasingtherateofinnovationiscriticaliftheworldistorespondeffectivelyandinatimelywaytosuchglobalproblemsasclimatechange,foodsecurityandenergysustainability.Acleardemonstrationoftheimportanceofinnovation,itspervasivenessandthebreadthofexpertisethatitdrawsonisthatthedevelopmentoftheOECDstrategyinvolvedallOECDdirectorates.

Therearemanydefinitionsofinnovation.Asoneexample,theProductivityCommission,inamajorstudyofpublicsupportforscienceandinnovation,usedthefollowingdefinition:

Deliberative processes by firms, governments and others that add value to the economy or society by generating or recognising potentially beneficial knowledge and using such knowledge to improve products, services, processes or organisational forms.

Improvements may be new to the entity, the industry, the country or the world.4

Moresimply,innovationisthedeliberateintroductionofchangetoimproveperformance.Thiscaninvolvedeveloping(orpurchasing)andapplyingtechnologytocreatevalue.Howeveritcanalsoinvolveothersortsofchange.Forexample,theOECDOslomanual,whichprovidesguidanceonthemeasurementofinnovation,includesnewmarketingmethods,neworganisationalmethodsinbusinesspractices,newworkplaceorganisationandnewexternalrelationsasexamplesofinnovation.5

SurveysofinnovationinAustralia(andinothercountries)consistentlyfindthatdespitetheattentiongiventotechnologicalinnovation,morecompaniesinvestinnon-technologicalinnovationthanintechnologicalinnovation.In2008-09,theproportionofAustralianbusinessesthatintroducedneworsignificantlyimprovedgoodsandserviceswas18.2percent.Theequivalentfigureforoperationalprocessinnovationwas16.3percent;fororganisationalandmanagementprocesses,19.4percent;andformarketingmethods,17.2percent.6Moreover,technologicalinnovationisaslikelytoinvolvethepurchasingorlicensingoftechnology,asitistoinvolvetheresearch-drivendevelopmentofnewprocesses,productsorequipment;andinmostcasesafirmwillneedtoincorporatesignificantnon-technologicalinnovationtofullycapturethebenefitsofanytechnologicalinnovation.Newequipmentwillrequirenewbusinessprocesses,stafftraining,oftennewmarkets,andsoon,ifthefirmistocapturethebenefitsthetechnologyiscapableofproviding.

Inrecognisingthebreadthofinnovationasaconcept,itisalsousefultomakethedistinctionbetweenthemorecommonincrementalinnovation,thelower-risktweakingofexistingsystemsandideasinaprocessofoftencontinuousimprovement;andradicalinnovation,themuchrarergenerationandexploitationofnewopportunitieswhichissubjecttohighlevelsofbothtechnicalandmarketrisk.Thisdistinctionisimportantbecausewhilemostbusinesseswillfocusontheincrementalapproach,buildingonwhattheyalreadyknowandexploitingtheopportunitiestheyhavealreadyidentified,

3. The OECD Innovation Strategy: getting a head start on tomorrow.OECD.2010.

4. www.pc.gov.au/projects/study/science/docs/finalreport

5. www.oecdbookshop.org/oecd/display.asp?CID=&LANG=EN&SF1=DI&ST1=5LGPBVQFQ4G5

6. www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/8158.02008-09?OpenDocument

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radicalinnovationwilloftendependonbreakthroughsinunderstandingandtechnologythatgobeyondcurrentexpectations.Theimplicationsofsuchbreakthroughswilloftentakealongtimetobecomeapparentandtheroutethroughwhichtheyleadtocommercialactivityorothereconomicoutcomesisoftenconvolutedandindirect–butthisdoesnotlessentheirimportance.

Asabroadgeneralisation(withmanyexceptions),thedevelopmentsthatleadtoradicalinnovationwillcomefromuniversitiesandgovernmentresearchagenciesoperatingonlongertimeframesthanbusinessandindependentlyofcurrentmarketexpectationsanddemands.Scientistsattheendofthe19thandbeginningofthe20thcenturieswhostudiedatomicstructuresandthenatureoflightdidnothavealong-termstrategytodevelopmicrochips,lasers,DVDplayersandnewsurgicalinstruments.7However,itwouldhavebeenimpossibletoinventthesethingswithouttheknowledgecreatedbytheseearlyresearchers.Inacompletelydifferentarea,abstruseresearchinnumbertheory,conductedinitsownrightandwithoutanypotentialapplicationinmind,providedthefoundationfromwhichmoreappliedmathematicianswereabletodeveloptheencryptiontechnologywhichsupportsmuchofourfinancialsystemandenablesustousesafelyeverythingfromcreditcardstoemails.

Onefurtherconsequenceofacceptingabroaderviewofinnovationistheneedtoacknowledgethatwhileresearchisanimportantdriverofinnovation,thishastoencompassresearchbeyondtheboundariesofthescience,technology,engineeringandmaths(STEM)disciplines.Improvedunderstandingandknowledgethatderivesfromresearchinthehumanitiesandsocialsciencescanbecriticalinensuringsuccessfulinnovationandthepublicacceptanceofnewtechnologies.Thecultural,legalandethicalissuesassociatedwithbiotechnologyornanotechnologyprovidewellknownexamplesbuttherearemanyothers,suchasroboticengineersworkingwiththeatredirectorstomakeroboticresponsesmoreacceptable(andlessthreatening)topeople.However,theimportanceofnon-STEMdisciplinesgoesbeyondtheirabilitytosmooththepathtoimpactforothertechnologies.

Researchinthehumanities,artsandsocialsciencesisnecessarytocreatetheevidencebaseandfoundationforthedevelopmentofnewapproachesinpolicydevelopmentandimplementationacrossmanyareas,rangingfromthedeliveryofsocialservicestoenvironmentalmanagementandinnovationitself.Similarly,thevaluethatarisesfromdevelopingcontentinthecreativeindustriesrequiresexcellenceinartseducation,trainingandresearch–anditisthecontentthataddsseriousvalueandgeneratesthemarkets,notthehardware.Innovationisaboutputtingnewideastouseandinnovationisasimportantinthesocialandculturaldomainsasitisinthegovernmentandbusinesssectors.

Innovation draws on the potential of peopleUniversitiesprovidelearningopportunitiesdesignedtoreleasetheintellectual,culturalandsocialpotentialoftheirstudents.Thismakesthemcentraltotheinnovationprocess,whichdependstotallyonthecapabilitiesofpeopleandonproductiveinteractionsbetweenpeoplehavingdifferentskillsets,knowledgeandperspectives.Innovationisnotsomethingthatindustriesdo,orfirmsdoorgovernmentsdo.Itissomethingthatthepeoplewithinthoseorganisationsdo,notusuallyasindividualsbutasteamsthatneverthelessdrawuponanddependupontheabilitiesofindividualpeople.Tomakethisclear,itisworthconsideringtheprocessofinnovationwithinanorganisation.

Innovationistheprocessofintroducingchangetoimproveperformanceoraddvalue.Thisrequiressomeonetoidentifytheneedoropportunityforchangeandthenatureofthechangethatisnecessary.Withinanyorganisationtherearemanypeoplewithideasforchange.Theydrawontheirimagination,creativity,enthusiasm,expertise,knowledge,experience,networks,values,andobjectivesinthe

7. Laserswereoriginallyseenasa‘technologywithoutapurpose’or‘asolutionlookingforaproblem’andpracticalapplicationstookyearstodevelop.

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contextoftheparticularenvironmentwithinwhichtheyareworking.Differentpeoplearelikelytohavedifferentviewsonwhatneedstochange,themostappropriatedirectionforchangeorwhichofthevariousoptionsavailablewillprovidethebest,mosteffectiveorcheapestsolution,orthegreatestbenefits.

Ifanorganisationistodrawonthishumanpotentialeffectively,thereisaneedforleadership–someone(orsomegroup)totakecharge,assessthevariousideas,identifythosewhicharemostpracticaland,consistentwiththeorganisation’svisionandstrategicoutlook,makedecisionstoimplementthem.Thequalitiesnecessarytotakeonthisleadershiprolearedifferentfrom(butnotincompatiblewith)thosenecessarytogeneratetheideasforchangeinthefirstplace.

Dependingonthescaleoftheproposedchangeandtheextentoftheintendedinnovation,theleaderwillneedthesupportofpeopleabletoplan.Thiscanbeacomplexprocessbecausewhileallinnovationrequireschangewithintheinnovatingorganisation,mostinnovationsalsorequireexternalstakeholderstochange.Thesuccessofaninnovationcandependonsuppliers,customers,citizensandotherschangingtheirbehaviourstoaccommodatethebenefitsofanewproduct,process,policyorprogram.Incasesoflargescaleinnovation,otherstakeholdersmayalsoneedtoinvestconsiderablesumsthatgobeyondthepurchaseofanewproductorprocess.(Think,forexample,ofintroducingalargeaircraftbeyondthecapabilitiesofexistingairportinfrastructure;orofthecomplementaryinfrastructureinvestmentdecisionsneededtointroduceelectriccars.)

Plansmustbeflexibleandabletorespondtochangingcircumstances.However,theyhavevalueonlyiftherearecompetentmanagershavingtheskills,knowledgeandnetworksnecessarytoimplementthem.Lookedatbroadly,successfulinnovationisaboutsuccessfulmanagement.

Managersareabletoworkeffectivelyonlyiftheyhaveaccesstofinance.Whileinmostcasesthiswillcomefromtheoperatingbudgetoftheorganisation,inthecaseoflargescaleinnovationtheremaybeaneedforexternalfunding.Theavailabilityofexternalfundingdependsonastrongandeffectivefinancialservicessectorstaffedbypeoplehavingtheappropriateskillsandawideenoughperspectivetorecogniseandmangeriskinawaythatdoesnotstiflechange.Externalfundingisespeciallyimportantinthecaseofstart-upbusinesses,althoughevenherethemainsourceoffundingisgenerallyfromthe‘threefs’(family,friendsandfools).8

Withaccesstofinance,managersneedtoacquirethetechnology(andpeopleabletouseit)necessarytoimplementtheagreedplan.Thisrequiresadifferentsetofskillsandknowledge,includinganabilitytoidentifywhattechnologyisavailableandtoassesswhatismostsuitableforthejobinhand.

Accesstotechnologymayinitselfidentifytheneedforimprovementsintheavailabletechnology,leadingtoideasforadditionaltechnologicalinnovationandtheneedforresearchtodeveloptheseimprovements.(Innovationsurveysconsistentlyshowthatcustomersareoneofthemostimportantsourcesofnewideasforinnovations.Theothermajorsourceissuppliers.Incontrasttocustomerswhoidentifyneeds,thesupplierswilloftenpresentnewopportunitiesbasedontheirownimprovementsandinnovations.)Note,however,thatifsomeoneidentifiestheneedforresearch,thistakesusrightbackagaintothestartofthissequence,emphasisingtheiterative,interactiveandpeopledependentprocessesthatarenecessaryifinnovationistotakeplace.

Attheendoftheprocess,therewillusuallybeanevaluationandassessmentleadingtoadditionallearningandnewopportunities–includingforinnovationwithintheinnovationprocessitself.

Inmanywaysthisaccountissimplistic.Inrealitythereisnolinearprocess.Innovation,evenonarelativelysmallscale,involvesmanyinteractionsanditerationswithmuchdebate,confusionandlearning.Therearemanyenvironmentalfactors(or‘frameworkconditions’)suchasthelegalsystem,tax

8. http://startups.com/questions/3243/what-do-the-three-fs-stand-for-and-how-can-that-help-funding

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structures,companyandgovernmentpolicies,etc.,thatcanimpedeorfacilitateinnovation.However,whatthisaccountdoesemphasiseisthatinnovationalwaysdependsonpeople.

Eachandeverystageoftheinnovationprocessdependsonthequalityandtalentofthepeopletakingpart.Thismeansthatthesuccessofanyattempttoinnovatewilldependtoaconsiderableextentonthequalitiesofthepeopleparticipatingintheprocess:notjustontheirknowledgeandexpertise,butalsoontheirabilitytocommunicate,tointeractandempathisewithotherplayers,theirabilitytopersuadebutalsotheirabilitytolisten,learnandtakenuanceddecisionsbasedontheevidenceavailableatthetime.Inshort,innovationrequirespeoplewhoarerationalbutwhoalsomakeuseofcreativeinsights,areabletolookaheadandwhoseeproblemsasobstaclestheycanovercome,notasexcusesfordoingnothing.

Innovationrequiresexcellentandhighlycompetentpeopleacrossallareasoftheinnovationprocess.Eventhemostexcitingandapparentlymarketablenewtechnologywillnotrealiseitspotentialifitdoesnotreceivethesupportofverytalentedpeopleworkingatallstagesoftheinnovationprocessandinallsectors.Technicalexcellencemaybenecessary(althoughinsomecasesitisclearlynot);butitisneversufficientinitselftoachievemarketorcommercialsuccess.

Theimportanceofuniversitiesisthattheyprovidemanyofthethinking,critical,expert,problem-solvingandimaginativepeoplewhocontributetothestrengthofournationalinnovationsystembyworkingacrossallsectorsoftheeconomy.Thechallengeforuniversitiesisthattheyareeducatingpeoplenowforjobsinthefuture.By2020someofthepeoplecurrentlyinuniversitieswillbeworkinginjobsofatypethatdoesnotcurrentlyexistandwhichwemayfinddifficulteventoimagine.Moreover,thereisaglobaltrendforpeopletomovebetweenjobswithincreasingfrequency,whichputsanevengreaterpremiumontheeffectivenessofhighereducationinproducingpeoplehavingbroadgenericskillsaswellasspecificdisciplinaryknowledge.

Toonarrowafocusontheresearchoutputofuniversitiesmissesthepoint–andhasthepotentialtodistortthenatureofuniversityresearchsothatitstartstofocusonrealisingknownopportunitiestotheexclusionofthestrategicallymoreimportantroleofcreatingthenewprospectsthatatthisstagewecannotevenstarttoimagine.

Innovation systemsUniversitiesformonecomponentofthenationalinnovationsystem.Thesystemconceptisimportantbecauseitreflectsthefactthatinnovation,andespeciallyanymajorinnovation,willrequirepartiesfromdifferentorganisationsandsectorstoworktogether.Evenwhenasingleorganisationcomesupwiththeideaandseekstoimplementitwithintheorganisation,thesuccessofthechangemaydependoncustomerorsupplierwillingnesstochange.Inanysubstantialattemptatinnovationtherewillbeothernecessaryinteractionswithpeoplefromwithinawiderangeofdifferentorganisations,fromthoseprovidingresearchorfinancialservices,toregulators,lawyers,IPexperts,marketingagenciesandsoon.Asalreadydiscussed,thisrequireseffectivecommunicationbetweenthepeopleworkinginthesedifferentorganisations.Effectivecommunicationbuildsontrust,understandingandarespectforthevaluethatotherpartiescanaddinwhatcanbeacomplexprocessdependentonmanyspecialisedskills.

Usingtheintellectualconstructofaninnovationsystemprovidesaframeworkfromwhichitispossibletoidentifyandexplorethesignificanceofsomeimportantcharacteristicsofhowinnovationtakesplace.Inparticular,itisapparentthataninnovationsystemhasthecharacteristicsofthesystemsstudiedbycomplexsystemsscience.Amongotherthingsthismeansthatthesystemasawholeisgreaterthanitsparts;itexhibitsemergentbehaviour–thatis,ithascharacteristicsthatitisnot

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possibletopredictfromanaddingtogetherofthepropertiesofitscomponentparts.Complexsystemsaredynamic,changingandevolvinginsometimesunexpectedways;andtheyoftendisplaynon-linearproperties.9

Takentogether,theknowncharacteristicsofcomplexsystemsmeanthatitisnotpossibletopredict,constructormicromanageaninnovationsystem.Thisisanimportantconclusionfromapolicyperspective.Itmeansthattheessentialpolicyresponsestomakingthesystemmoreeffectivehavetoincludethecreationofappropriateframeworkconditionsandtheremovalofimpedimentsorbarrierstotheeffectiveoperationofthesystem.Amongotherthingsthisrequirespromotinglinkagesbetweenthedifferentpartsofthesystem;italsorequiressettingconditionsthatfacilitatethespecialisationanddifferentiationofinstitutionswithinthesystem.Thisallowsthesystemtoevolveasitsindividualcomponentschangeinresponsetotheopportunities,challengesandcompetitionthatwillinevitablyexistbetween(atfirst)similarinstitutions.Competitioncanforceuniversitiestoexperiment,tostartdoingthingsinadifferentwayortodonewthings–inotherwords,toinnovate.

Innovationpoliciesneedtopromoteandfacilitatediversity,notimposeconsistency;andtheyneedtooperatewithdevolveddecisionmakingratherthanacentralcontrol,sothattheprocessesofnaturalselection,asdeterminedbymarketandotherforces,canoperatefreely.10

Almostbydefinition,allpartsofasystemareequallyimportantandthismeansthattheeffectiveoperationofthesystemrequiresallpartstobefunctional.Puttingadditionalresourcesintoonepartofthesystemwillhavenoeffectifthatpartofthesystemisnotthelimitingone.Moreover,theemergentpropertiesofthesystemarearesultofthesynergiesthatarisefrominteractionsbetweenthedifferentelementsofthesystem,eachofwhichhasitsown,complementary,rolesandresponsibilities.Similaritycannotgeneratecreativevaluethroughinteraction,assimilarorganisationsworkingtogetherincreasesscalewithoutgeneratingthecreativetensionsthatleadtogenuinesynergies.

Havingasystemmadeupofspecialisedbutinteractingelementsfacilitatesthecreationwithineachelementofacriticalmassofskillsandexpertise;thedevelopmentofacoherentculturewithineachelement,appropriatefortheprincipalobjectivesofthatelement;andthetailoringofprocedures,managementprocessesandgovernancearrangementsaccordingtothepurposeandobjectivesofeachelement.

Different roles of universities and business within the research sub-system AsanexampleofthespecialisationanddifferentiationthatexistswithinAustralia’sinnovationsystem,itisworthexaminingtheresearchsub-system.Thebusiness,highereducation,non-profitandgovernmentsectorseachperformresearch.However,theyoperateinverydifferentwaysandseekdifferentends.Thisspecialisationenablesthemeachtodevelopandusegovernancearrangementsandresearchmanagementtechniquesappropriatetotheoutcomestheyareseekingtoachieve.

Oneimportantpointisthatbusinesssectorexpenditureonresearchanddevelopmentismuchgreaterthanthatofthehighereducationsector.11In2008-09forexample,theAustralianbusinesssector

9. JDBernal’s(1967:The Origin of Life)definitionoflifeprovidesanexcellentdescriptionofcomplexsystems:lifeisapartial,continuous,progressive,multiformandconditionallyinteractive,self-realisationofthepotentialitiesofatomicelectronstates.

10.Whilethishastobetrueofthesystemasawhole,itisimportanttorecognisethatwithindividualinstitutionstheremaybeaneedforstrongcentralcontrolandstrongleadershiptoachievetheintendedoutcomes.

11.ThisistruegloballyandaccordingtotheOECDclosetohalfoftheworld’sR&Dexpenditureisaccountedforbyonly700firms.Seewww.oecd.org/innovation/strategy

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spent$16.9billiononresearchanddevelopment,thehighereducationsector$6.7billion.12Despitethissignificantdifference,thehighereducationcentredevotedmore‘personyearsofeffort’(pye)toresearchanddevelopmentthandidthebusinesssector(61310pyeforuniversitiescomparedto53 556pyeforbusiness).Therewerealsodifferencesinthecompositionoftheresearchworkforcesofthetwosectors.Forexample,87percentofthehighereducationresearchworkforcewereresearchers(includingacademicsandpostgraduatestudents),comparedto50.3percentforthebusinesssector.Incontrast,32.8percentofhumanresourcesdevotedtoR&Dinthebusinesssectorweretechnicianswith16.9percentclassifiedasotherstaff,whileinuniversitiesthesetwocategoriestogethermakeuponly13percentofthetotaleffort.

Itisevenmoreinstructivetolookatthesocio-economicobjectivesoftheresearchconductedineachsector.Notsurprisingly,94.4percentofbusinessresearchanddevelopmentaimsateconomicdevelopment.Theequivalentfigureforthehighereducationsectoris23.8percent.Thehighereducationsectordirectstheremainderofitsresearchtosociety(49.7percent),theenvironment(7.8percent)andexpandingknowledge(17.9percent).Similarly,thesocio-economicobjectivesofcommonwealthresearchreflecttheresponsibilitiesoftheCommonwealthGovernment–33.6percentgoestoeconomicdevelopment,21.6percenttodefence,21.8percenttotheenvironment,and13.9percenttosociety.

Anotherwaytocomparetherolesofthedifferentsectorsistoconsiderthetimeframeoftheresearchtheyperform.Purebasicresearchaimstoacquirenewknowledgeforitsownsake,sothatanypracticaloreconomicoutcomesarelikelytobeverylongterm,althoughthisdoesnotstopserendipitousdiscoveriesofimmediatepracticalsignificance.13Suchresearchmakesuponly0.5percentofbusinessresearchanddevelopmentandintotalthebusinesssectorisresponsiblefor4percentofAustralia’spurebasicresearch.Incontrast,28.9percentofhighereducationresearchfallswithinthepurebasicresearchcategoryandthehighereducationsectoraccountsfor86.4percentofthenation’spurebasicresearcheffort.

Attheotherendofthespectrum,experimentaldevelopmentaimstoproduce,improveorinstallnewmaterials,products,devices,policies,behaviours,processes,systemsoroutlooks.Workofthiskindplansforclearlydefinedoutcomesandoftenoperateswithinaset,andrelativelyshort,timeframesetbymarketandotherstrategicconstraints.Over60percentofbusinessresearchanddevelopmentexpenditureisspentonexperimentaldevelopmentandthebusinesssectoraccountsfor89.1percentofthenation’sexperimentaldevelopmenteffort.Bywayofcontrast,thehighereducationsector’scontributiontoAustralia’sexperimentaldevelopmentis5percent.

Thesedifferencesbetweensectors,reflectingtheircomplementaryrolesandresponsibilities,arewhatonewouldexpectwithinawellfunctioningsystem.Forthissamereasonthereareverybigdifferencesinthefieldsofresearchthatthevarioussectorsfocuson,whichagainreflecttheoutputsandoutcomestheyaretryingtoachieve.Businesssometimesclaimsthesedifferencesdemonstratealackofresponsivenessamongtheothersectorsastowhatindustryneedsbuttheyratherreflectthatthedifferentsectorscomplementeachother–theydonotduplicatetheeffortofothersectors.Thedifferencesarealsoareminderthattheneedsofgovernmentandsocietyarebroaderthanthoseofbusinessandrequireadifferentbalanceofresearch.

Asisapparentfromthevaryingproportionofresearcheffortdirectedtoeconomicdevelopment,innovationisimportantacrossallareasofactivity.Governmentneedsresearchtostimulate

12.ThedatainthissectionaretakenorcalculatedfromtheABS2008-09 Research and Development all sector summaryat:www.abs.gov.au/AUSSTATS/[email protected]/productsbyCatalogue/07E66F957A46864BCA25695400028C64?OpenDocument

13.Recognisingthatinthelongertermalmostanysignificantadvanceinknowledgewillhavepracticalsignificance,somecommentatorsrefertobasicresearchas‘researchnotyetapplied’.

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innovationandimprovetheeffectivenessofitsdefence,environmentalmanagementorhealthcareresponsibilities,forexample.Theoutcomesofsuchresearchcontributetonationalwellbeinginmanyways,includingbutgoingbeyond,greaterwealth,improvedproductivityandthepotentialforreducingtaxes.Innovationintheprovisionofgovernmentservicesorintheperformanceofgovernment-providedinfrastructurecanhavemajordirectandindirectimpactsonbusinesscompetitivenessandproductivity.14Similarly,academicresearchcanhavemanybroad,intendedandunintended,benefitsforbusiness.Forexample,universityresearchcanprovideinformationwhichfacilitatesthedevelopmentoffreetradeagreementsorwhichleadstotheremovaloftechnicalbarrierstotradeandsocreatenewmarketopportunitiesforwholesectors,notjustindividualfirms.

Inanycase,whilethepurebasicresearchperformedinuniversitiesmaynotmeettheimmediateneedsofbusiness,inthelongertermitisthisresearchthatwillcreatenewbusinessopportunitiesanddevelopconsumerneedsandmarketsthatdonotyetexist.Itisimportantnottounderestimatetheeconomicpotentialthatbasicresearchcanunleash.AsMargaretThatchernoted:

“Although basic science can have colossal economic rewards, they are totally unpredictable. And therefore the rewards cannot be judged by immediate results. Nevertheless, the value of Michael Faraday’s work today must be higher than the capitalisation of all shares on the stock exchange.”15

Appliedresearchandexperimentaldevelopmentareoftenbuildingontheknowledgeandopportunitiescreatedbybasicresearch.Asatriteexample,onehasonlytothinkaboutthebasicresearchthatledtothedevelopmentofelectronics,computersandtelevisionorofvisualdisplayunitsmoregenerallyandwhichmadepossiblemobilephones,theinternetandalltheservicesthatdependonthem.Indecidingtostudythedeflectionofcathoderayssubjecttosimultaneousmagneticandelectricfields,JJThomsonwasnotworkingtoestablishanelectronicsindustrybuthisdiscoveryoftheelectron,whencombinedwithearlierworkbypeoplesuchasFaradayandMaxwell,wasanessentialsteptothetechnologicalworldinwhichwelivetoday.16Itisnotpossibletopursuelongtermeconomicgrowthwithouttestingideas,advancingknowledgeandimprovingourunderstandingofhowtheworldoperates.

Thereisanother,importantdifferenceconnectedwiththeresearchperformedbythedifferentsectors.Bydefinition,experimentaldevelopmentstrivestoachieveasingle,explicitoutputhavingtheparticularcharacteristicsnecessarytoachieveanagreedoutcome.Ingeneralthisoutcomehasbeensetbythebusinessandtechnologydevelopmentstrategiesofthefirmorotherorganisationconductingtheresearch.Theoutputparametersaresetinadvance,reflectinginpartthecapabilitiesofthefirm(orfirms)conductingtheresearch;andanybenefitsthatresultfromtheresearchwhichareadditionaltotheintendedoutputare,inasense,irrelevanttothefirm.17Inanycase,thefirmperformingthisresearchwillnormallyusewhateveroptionsithasavailable,includingtheuseoftradesecretsandformalIPprotection,toretainthebenefitsofresearchwithinthefirm.

Thesituationwithmostuniversityresearchisverydifferent.18Thisisbecausemostresearchperformedbyuniversitiesismultipurpose.Oneindicationofthisisthatthedefinitionofuniversityresearchers

14.Inthiscontextitisrelevantthat16.9percentofAustralianbusinessesemploying19to199personsidentifygovernmentregulationsorcomplianceasabarriertoinnovation.See:www.abs.gov.au/AUSSTATS/[email protected]/Latestproducts/8167.0Main%20Features92008-09?opendocument&tabname=Summary&prodno=8167.0&issue=2008-09&num=&view=

15.Takenfrom:GeorgeWill,"Afirethatneedsstoking",The Australian Financial Review,20January2011,p.46.

16.Faraday’sdisinterestintheimmediatepracticalapplicationofhisresearchisshownbyhispurportedresponsetoWilliamGladstone,thenBritishChancelloroftheExchequer(ministeroffinance),whoaskedFaradayin1850aboutthepracticalvalueofelectricity.Faraday’sonlyresponsewas:‘Onedaysir,youmaytaxit’.Onanotheroccasion,inanswertoaquestionabouttheuseofhisstudiesonelectromagnetism,hesupposedlyrespondedwithBenjaminFranklin’scomment:‘Whatuseisanewbornbaby?’.

17.Althoughthepresenceofsuchspilloversorpositiveexternalitiesprovidesanimportantrationaleforgovernmentsupportofsuchresearch.

18.Oneexceptionhereiswhenauniversityconductscontractresearchfully-fundedbyabusiness.

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includespostgraduatestudents.Anexplicitandintendedpurposeofuniversityresearchistotrainnewresearchers.Moreover,thepurposeofuniversityresearchisnottoadddirectlytothebottomlineoftheuniversitybuttoadvanceknowledgeandprovideusefulinformationthatwillflowbeyondtheboundariesoftheuniversity.

Evenwhenuniversityresearchhasanoutputofpotentialcommercialvalue,itwillnotusuallybetheuniversityitselfthatisresponsiblefortakingittomarket.Thecontextofuniversityresearchwilloftenmeanthatitsresearchhasgenericvaluethatgoesbeyondtheneedsofanindividualfirm.Becauseuniversityresearchdoesnotusuallyaimtoproduceanoutputhavingparticulartechnicalspecificationsreflectingtheneedsandcapabilitiesofaspecificuser,itisgenerallymoreopen-ended.Thismeansthatitisoftenusefulto,orsignificantfor,awiderangeofusers–notleastotherresearchersinotheruniversities.Theoutputsofuniversityresearcharewidelydisseminatedusingformalandinformalmechanismsandtheresearchprocess,outputsandoutcomesinformteaching,togetherprovidinganimportantpartofthelearningenvironmentthatbenefitsallstudents–notjustpostgraduates.Businessreceivesthebenefitsofthiswhenitemploysgraduatesfromwhateverfield.

The reality of innovation systemsAninnovationsystemisanintellectualconstruct,aconceptthatisusefulindrawingouttheneedforcomplexinteractionsbetweenmultipleplayersinordertocreateconstructiveandusefulchange.Theinnovationsystemisalsoasocialconstruct,bothinthesensethattheconcepthasarisenfromtheintellectualactivityofpeoplebutalso,andperhapsmoreimportantly,inthesensethatthesystemresultsfromproductiveinteractionsbetweenpeopleworkingwithinthedifferentcomponentsofthesystem.Ineffectthismeansthatthesystemhasnoconcreteexistence–thereisnosetpathwaythroughadefinedgroupofinstitutionstoachieveeffectiveinnovation.Instead,therearemanyindividualsystemsandeachinnovationdependsonitsownuniquesetofinteractionsbetweenadiversityofplayers.Thisiswhyframeworkconditionsthatfacilitateratherthanimpedeinteractionsandcooperationaresoimportant.Thisisalsowhytheingredientsforsignificantinnovationindifferentsectorscanbesodiverse.

Totakeoneexample,technologicaladvancesacrossmanydifferentfieldscanleadtoinnovationwithinthedefencesector.Advancesineverythingfromlasertechnologytogeneticengineering,materialsscienceandpropulsionsystemsprovideexplicitopportunitiesforimprovingtheperformanceofnationaldefenceforces.WithinAustraliacomplexlinkagesbetweenbodiessuchasDSTO,CSIRO,universities,thedefenceindustryandthedefencedepartment,aswellasothergovernmentagencies,internationalorganisationsandsimilarbodiesinothercountries,formpartofthedefenceinnovationsystem.However,thechangingnatureofwarfareandtheissuescurrentlyimpactingmostonnationalsecuritymeanthatafocusontechnologicalinnovationisnotsufficient.Thedevelopmentoflanguageskillsandlinguistics,thestudyofdifferentcultures,anunderstandingofthefactorsthatimpactonpeople’sbeliefs,attitudesandbehaviours,andadeepknowledgeofethological,politicalandtheologicalissuesindifferentcountriesandculturescanbeequally,ifnotmoreimportant.Understandingthecausesofconflictandhowtoaddressthemiscentralto‘capturingheartsandminds’andcriticaltothegatheringandanalysisofhighqualityintelligence.

Thenetworksofinstitutions,disciplinesandpoliciesthatinteracttoformthedefenceinnovationsystemmayoverlapwithbutwillbedifferentfromthosethatcontributetotheconstructionsectorinnovationsystemortheeducationsysteminnovationsystem.Eachofthesehassomeuniqueandsomesharedcharacteristicsandinstitutions.Innovationindefencerequiresabroadintegrationofmanydifferentdisciplinesandareadinesstochangeprioritiesandapproachesinresponsetotheimprovedunderstandingthatresults,butthisisnotunique.Addressingissuessuchasfeedingagrowingworld

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populationwithshiftingtastes,ensuringenergysecurityorimprovinghealthoutcomesallrequireatrans-disciplinaryapproachthatdrawsuponinstitutionsandpeoplefromallareasofsociety,domesticandinternational.Asystemwhichdoesnotembraceallthesecomponentswillbedefectiveandleadtoperverseoutcomes.

Similarly,theinnovationsystemsthatweneedtoaddressclimatechangeorwhichoperatewithintheservicessector,themanufacturingsectororwithinthepublicsectorareeachdifferentfromeachother.Moreover,thesesystemsarethemselvesmadeupofsubsystems.Withintheservicessector,forexample,thesystemsthatpromoteandfacilitatechangeandincreasedeffectivenessarequitedifferentwithintheeducation(oruniversity)sectorfromthoseoperatingwithinthewholesaleorretailingsectors–althoughallareimportantifAustraliaistodevelopandimprovethewellbeingofallitscitizens.

Thedescriptionsprovidedhereofdifferentinnovationsystemsarebothsimpleandsimplistic,notprovidinganysenseoftherangeofplayers,theirdifferentandoftencompetingobjectivesorrequirementsandorofthecomplexityoftheprocessesthatlinkthem.Attachment1providesamoredetailedbutstillbroadandoutlinedescriptionofsomeofthemajorplayersinthehealthservicesinnovationsystem.

Oneconsequenceofthisdiversityandthemultiform,multifacetednatureofinnovationsystemsisthatthisplacessignificantandbroaddemandsonthenationaleducationsystem,includinguniversities,intermsoftheoutcomestheyachieveandthediversityofexpertiseandknowledgethattheydevelop.

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The role of universitiesUniversitiessupporttheinnovationsystembyprovidingacontinuingsupplyoflearnedpeoplefamiliarwiththemostrecentdevelopmentsintheirfieldswhothenmoveouttoothersectorstoapplytheirknowledge,understandingandtechnicalskills;throughtheresearchtheyperformwhichhasmanydirectandindirectbenefits;andthroughtheiroutreachandbroadercommunityengagementactivitieswhich,amongotherthings,canhelpmaintainanawarenessofemergingpossibilities.However,theydomuchmorethanthis.

ThelegislativebasisfortheCommonwealthGovernment’sfundingofhighereducationissetoutintheHigher Education Support Act 2003.Theobjectivesofthisactare:

a. tosupportahighereducationsystemthat:

i. ischaracterisedbyquality,diversityandequityofaccess;and

ii. contributestothedevelopmentofculturalandintellectuallifeinAustralia;and

iii. isappropriatetomeetAustralia’ssocialandeconomicneedsforahighlyeducatedandskilledpopulation;and

b. tosupportthedistinctivepurposesofuniversities,whichare:

i. theeducationofpersons,enablingthemtotakealeadershiproleintheintellectual,cultural,economicandsocialdevelopmentoftheircommunities;and

ii. thecreationandadvancementofknowledge;and

iii. theapplicationofknowledgeanddiscoveriestothebettermentofcommunitiesinAustraliaandinternationally;

c. tostrengthenAustralia’sknowledgebase,andenhancethecontributionofAustralia’sresearchcapabilitiestonationaleconomicdevelopment,internationalcompetitivenessandtheattainmentofsocialgoals;and

d. tosupportstudentsundertakinghighereducation.

UniversitieshaveanexplicitroleintheculturaldevelopmentofAustraliaandcultureprovidesoneoftheimportantframeworkconditionswithinwhichtheinnovationsystemoperates.Adiverse,opensocietyisnotonlymorecreative,itisalsomoretolerantofdifferenceandmoreopentothetake-upofnewideasandtechnologiesthanamoreclosedsociety.Indeed,amajorfactorimpactingoninnovationsuccessisthepreparednessofconsumerstotakeupnewthings,totakerisksandtotryideas.Inmanycasestheexploitationandimpactofnewtechnologiesdependsmoreonthecreativityofconsumersthanofthosewhodevelopthetechnology.19Consumersseeopportunitiesbeyondthosethattheinventororinitialinnovatorwasabletoenvisage.Indeed,someanalystsarguethatconsumerattitudesaremoreimportantincapturingthebenefitsofinnovationthananabilitytodevelopnewtechnologies.20Inprovidinganexcitingandchallenginglearningenvironment,universitiesfacilitateanopenmindandmanagedrisktakingapproachamongtheirstudents.

Inprovidingtrainingandconductingresearchinareassuchasastronomy,archaeologyandanthropology,orinhistory,politics,philosophyandthefinearts,universitiesarenotonlyaddingtoknowledge,theyarealsohelpingtocultivateasophisticatedsocietythatunderstandsitsownroots

19.AninterestingrecentexamplewasthewayinwhichhackersandothershaddevelopedawholesuiteofinnovativepracticalandartisticusesofMicrosoft’sKinectgamingsystemwithindaysofitsrelease.Seewww.newscientist.com/article/mg20827894.600-inside-the-race-to-hack-the-kinect.html

20.SeeAmarBhidé’spapers,e.g.Venturesome Consumption, Innovation and Globalizationatwww.bhide.net/bhide_venturesome_consumption.pdf

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andplaceinthewiderworld.21Suchasocietydevelopsaselfawareness,understandingandconfidencethatwillsupportanenvironmentwithinwhichitbecomesnotjustacceptablebutnormaltodebate,torecognisethevalueofdifferingperspectivesandtoembracechange.Thisisthekindofsocietythatfostersinnovationandattractsexcellentpeoplefromelsewhere.

TeachingandresearchintheseandotherdisciplinescanalsohelpcreateastrongernationalidentityanddevelopaninternationalprofileforAustraliabasedonitscontributiontoscholarshipandwillingnesstosupportworldunderstanding.Citieswithstrongandvibrantculturalactivitiessupportedbythepeoplewhoappreciatethemattractevenmorecreativepeopleandpromoteinnovation.Universitiescontributeinmanyandvariedwaystothedevelopmentofsuchcities.Indeed,adeficiencyoftheHigherEducationSupportAct’slistingoftherolesofuniversitiesisthatitdoesnotacknowledgetheimportanceofuniversitiesindefiningAustralia’snationalreputationandprovidingnationalcontactpointsfortheglobalacademicandresearchcommunities.

Learningandscholarshipareimportantintheirownright,quiteapartfromanydirecteconomicorotherimpactstheymighthave.Investmentintheseareasreflectsacultivatedsociety,asocietyopentoselfexaminationandquestioning,andasocietypreparedtolookbeyondtheimmediate.Universityeducationprovidesanimportantmeansofselfdiscovery,developmentandfulfilment,independentofanybenefitsthatitmightproduceforwidersociety.However,evenwhenthefocusisontheeconomicreturnofuniversities,itisnecessarytorecognisethediversewaysinwhichsocietycanreceiveaneconomicreturn,quiteapartfromanyserendipitousbenefitsthatmightresultfromundirectedresearch.

Thecreationofcapabilitybydevelopingexpertandskilledpeopleneedsnofurtheremphasis,althoughitisworthnotingthatthisoccursattwolevels–onebeingthroughdisciplinaryspecialisationandprovidingpeoplewithspecificexpertise,theotherthroughthedevelopmentofmoregeneralattributessuchasproblemsolving.Generatingnewknowledgegoesbeyondformalresearchandcanencompassotherformsofscholarshipandtheapplicationofdifferentperspectives.

Again,therearemanywaysinwhichuniversitiesdisseminateknowledgetoparticipantsinotherpartsoftheinnovationsystem.Oneisthroughthetrainingtheyprovidetotheirstudentsbutotherformalandinformalmechanismsarejustasimportant.Preparingtextbooksandcriticalreviews,publishingintheformalandotherliterature,actingaspublicintellectualsbyprovidingpresscommentary,radioorTVinterviews,speakingatconferences,attendingtradefairsandmanyothermechanismsalladdtoknowledgediffusion.Giventhecomplexityoftheinnovationsystemandtheimportanceofinformallinkageswithinthesystem,itisimportantnottodiscounttheseconsiderablecontributionstoinnovationwhilecontinuingtorecognisetheimportanceofconsultancy,secondments,licensing,spin-offsandtheothermechanismsthatusuallyformthefocusofinnovationstudies.

Innovationisnotjustaboutnewproducts,processesandorganisationalchangesbutalsoabouttheapplicationofnewwaysofthinking.Asoneexample,researchhasledtothegeneralunderstandingthattheoperationofnaturalprocessescanhaveahugeeconomicimpact,whetherthroughwaterpurification,pollinationofcropplants,ormaintainingfishstocksbyprovidingnurseryconditions.Thisthinkinghashadmajor,evenifunquantifiable,impactsonenvironmentalpolicyanddecisionmaking.Itisnotpossibletopatenttheconceptofecosystemservicesoreventotracethepathwaysthroughwhichitreachedtheconsciousnessofdecisionmakers.However,thereisnodoubtthattheunderlyingbasisofthisconcepthaspermeatedenvironmentalandresourcemanagementdecision-makingtoproduceimmensebenefits–bothdirectandindirect–throughbetterdecisionsandmoreinformedpolicyandprogramdevelopment.

21.Theyalsogobeyondthis.Forexample,theUniversityofCopenhagenhasnotedthatprivatebusinesshasrecognisedtheusefulnessofanthropologicalperspectivesonproductandmarketdevelopmentandinterculturalcommunication,aswellasmanagementandorganisationaldevelopment.http://antropologi.ku.dk

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Sometimesforgottenisthatknowledgeandunderstandingdonotalwayslosetheirrelevancebecausetheyareold.Indeed,someinformationmayhavevaluepreciselybecauseitisold.Usingtheresultsofcurrentresearchtoinformpolicycanberiskybecausesubsequentworkmightwelldemonstratetheconclusionsoftheresearchtobewrong.Universitiesplayasometimesuniqueroleinstoringandmaintainingknowledgethatotherpartiescandrawuponasitbecomesnecessary.Thisisnotatrivialactivity,evenwiththecurrentcapacityforthealmostunlimitedelectronicstorageofdataandinformation.Thisisbecauseuniversitiesgobeyondthesimplestorageofinformationtoactascustodiansofknowledge.Theyalsomaintainandassessitsutility,significanceandrelationshipwithmorerecentknowledge,analysisandinterpretations.

Importance of internal diversity within universitiesInmanywaysoneofthemostimportantrolesplayedbyuniversitiesisthattogethertheyprovideandmaintainabroadbaseofcapability.Thisprovidesakindofnationalinsurance,inanumberofways.Byperformingresearchandprovidingteachingacrossmanyareas,theyservetomonitordevelopmentsacrossallareasofscience,technologyandotherdisciplines.Otherplayersintheinnovationsystem,includingbusiness,tendtofocustheireffortsmoreinparticulardisciplinesoroutcomeareas,sometimesverynarrowlydefined.Thiscanmeantheymissdevelopmentsinrelatedoradjacentareasthatcanpotentiallyimpactinunexpectedwaysontheirownoperations.

Unlikeabusinessorgovernmentresearchagency,theresearchwithinauniversitydoesnotusuallydependonenterpriseleveldecisionsandstrategies.Rather,auniversitydevelopsandmaintainsdiversitybecauseitsresearchandareasofscholarshipflowfromthedecisionsandactionsofmanyindividuals.Theseareoperatingfromthepositionoftheirowninterests,curiosityandnetworksascolouredbythedecisionsofgrantgivingbodiesandotherfundingagencies.Theresultingmultiplicityofcapabilities,breadthofknowledgeandstrengthofnetworkstogetherformacriticalnationalcapabilitythatgovernmentsorindustrycandrawuponastheyneedandasnewandunexpectedopportunitiesorproblemsemerge.Moreover,thisbreadthofresearchcanbeessentialinidentifyingproblemsthatneedaresponsebutwhichmightnototherwisebecomeapparent–whethertheserelatetoclimatechangeormajortrendsinsocialstructuresandorganisation.

Universitiesareabletomaintainthisdiversitybecause,whiletheyareaccountabletogovernmentforsomeoftheirfunding,atanoperationalleveltheyareautonomous.Oneimportantaspectofthisautonomyisthattheydeveloptheirowncurriculaandtheyawarddegrees.Thisfacilitatesthedevelopmentandmaintenanceofdiversityandthedevelopmentofmultiandinterdisciplinaryapproachestobothcoursedevelopmentandteaching.Equallyimportantisthatuniversitiesmaintainfreedomofexpression.Theyupholdacademicfreedomandtheyencouragedebateandtheinformedchallengingofthestatusquoinacontextinwhichsuchdebatehashighstandardsthatrequirethedebaterstoaddresstheevidenceandtheargumentssupportingdifferentpositionsandperspectives.

Inmanywaysthegreaterthediversityofinformedopinionwithinauniversity,thestrongeritis.Thisisbecausethisdiversitymakesthelearningexperienceitprovidesforitsstudentsmoreeffective.Aresearchuniversityaddsvaluenotbytransmittingknowledgebutbydevelopingthecapabilitiesnecessarytochallengeit.Oneconsequenceofthisisthatuniversitiesneedtobesufficientlylargetoemployacademicsthatspanarangeofdifferentperspectiveswithineachdiscipline.Itisnotenough,forexample,tohaveasingleeconomist.Asoundeducationineconomicsdependsonexposuretothedifferentschoolsofeconomics,alongwithrelatedsubjectssuchaspoliticaleconomyandeconomichistory.Similarargumentsapplytoallotherdisciplines:asinglepersoncannotembodyawiderangeofdifferentperspectives,eventhoughtheymaybeabletodescribethem.

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Scaleisalsoimportantinattractingthemosttalentedplayersinanydiscipline.Inpartthisisbecausealargersizeimpliesagreaterabsolutelevelofresourcesandtheeconomiesofscalethatprovidetheopportunitytoprovideinfrastructureequaltoanyintheworld;butitisalsobecausethereputationofadepartmentorinstitutionreflectsthenumberofstarperformersitcanattract.Excellencefeedsonexcellenceandtheabilitytocompetewithequallytalentedpeople.Alargedepartmentalsoprovidesthepossibilityofnurturinglocaltalentaswellasattractingthebestfromelsewhere.Bydefinition,onlyasmallproportionofthoseactiveinanyfieldcanbetopperformersandittakestimetodevelopareputationasaleaderwithinanydiscipline.Evenaworldleadingdepartmentwillincludeacademicswhoarenottopintheirfield–andneedstodoso–notleast,toprovidethemwithanopportunitytodevelopleadershipstatus.Thismaybeonereasonthatglobalrankingsofuniversitiesoftenfavourlargeinstitutionsbyusinginstitutionalratherthanpercapitaperformanceintheirmetrics.Largerinstitutions,becausetheywillnormallyencompassawiderrangeofdisciplines,arealsomoreabletoadoptthemultidisciplinaryapproachesthatarebecomingincreasinglynecessarytodealwiththecomplexproblemsthatnations–andtheworld–needtoaddress.

Universities and commercialisation activitiesUniversitiesmakeabroad-basedcontributiontoinnovationandtotheresilience,strengthandreputationofthenationalinnovationsystem,thevalueofwhichisdifficulttooverestimate.Atthesametime,theyundertakedirectcommercialisationactivity.Themeasuresgovernmentsandothersusetoassessthiscommercialisationactivitytendtoberathernarrow.Forexample,Australia’sNationalSurveyofResearchCommercialisationgathersdataon:

• Resourcingforcommercialisation

• Intellectualpropertyactivity

• Licensingactivity

• Researchcontractsandconsultancies

• Skillsdevelopmentandtransferactivity- Researchcommercialisationandentrepreneurshipcourses- Researchpost-graduatesemployedinstart-ups22

Thiskindofcommercialisationactivityisimportantbecauseinsomecircumstancesitprovidesthemosteffective(oronly)meansthroughwhichsocietycancapturethebenefitsofresearchperformedwithintheuniversity.Whensuccessful,thiskindofcommercialisationcanhavetheaddedbenefitofprovidingadditionalrevenuetotheuniversity.However,itisimportantthatthepotentialforincreasingrevenueorthecollectionofdatabygovernmentsdoesnotdistortuniversitybehaviour.AstheProductivityCommissionnotedinitsreportPublic Support for Science and Innovation:

… the pursuit of commercialisation for financial gain by universities, while important in its own right, should not be to the detriment of maximising the broader returns from the productive use of university research.23

Universitiesandotherorganisationsreceivingpublicfundingforresearchneedtobeveryclearastowhethertheirprimaryroleistomaximisethenationalreturnsfromtheresearchtheyperformortointernalisethereturnssothatthebenefitsflowtotheuniversity.Inpracticetheydobothbutoftenwithoutanyclearpolicyastohoworwhentheyshouldchooseoneovertheother.Oneconsequenceofthisisthattheythemselvesunderestimatethecontributiontheymaketonationalwellbeing.

22.www.innovation.gov.au/Innovation/ReportsandStudies/Documents/NSRCReport200507.pdf

23.Publicsectorsupportforscienceandinnovationp.XVI

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Anotherpointtonoteisthatuniversitiesdonotusuallycommercialisetechnologythemselves–theytransferittoanotherorganisationtocommercialise.Insomecasesthismightbeaspin-offcompanybutthisapproachtendstobehighriskcomparedtolicensingtechnologytobusinessesthatalreadyhavethecapabilitiesnecessarytouseandcommercialisethetechnologyandwhichhaveexistingdistributionnetworksandotherinfrastructurethattheycandrawupon.Universitiesdonotformcompleteinnovationsystemsinthemselvesbutfeedintoanddrawuponinstitutionsthathavecomplementarycapabilities,informationandmarketlinks.

Business demands on universitiesInnovationisabroadconceptandimportantacrossallareasofactivityandinallsectors.Despitethis,policydiscussionsstilloftenconcentrateoninnovationwithinbusiness.Thisbeingthecase,itisusefultoexaminewhatinnovatingbusinessesseekfromuniversities.TheAustralianBureauofStatisticsreportInnovationinAustralianBusiness,2008-09providessomeusefuldatainthisregard.24

In2008-09,almost40percentofallAustralianbusinesseswere‘innovationactive’,havingeitherintroducedorimplementedaninnovation,havinganinnovationstillunderdevelopmentorhavingabandonedanintendedinnovation.Theproportionofinnovationactivebusinessesvariedwithfirmsize(from32.8percentofbusinesseshavingfourorfeweremployeesto66.7percentofbusinesseshaving200ormorepersons).Therewerealsodifferencesbetweensectors,with30.8percentofconstructionbusinessesbeinginnovationactivecomparedto50.9percentofbusinessesinwholesaletrade.

Discussionsofinnovationandtheroleofuniversitiesoftencentreonthesourceofideasandinformationforinnovation.Attachment2summarisestheABSdatawhich,aswithallsuchsurveys,demonstratesthatpeoplewithinthebusiness,customersandsuppliersarethemainsourceofideas–although,asalreadymentioned,manyofthepeoplecomingupwiththeseideasaredrawingupontheoutcomesoftheiruniversityeducationindoingso.(Apartfromanythingelse,thisrevealsthatinpracticaltermsmarketpullismoreinfluentialthantechnologypushinmostoftheinnovativeactivitiesofbusiness.)

Overall,universitiesorotherhighereducationinstitutionsprovidedthedirectsourceofideasandinformationfor2.6percentofinnovatingbusinesses,althoughtherewassomevariationbetweensectors–from0percentforthefinancialandinsuranceservicessectorto9.4percentforthehealthcareandsocialassistancesector.However,innovatingbusinessesmayhaveindirectlyuseduniversityresearchandexpertisetoamuchhigherdegreethanthesefiguressuggest.Oneindicationofthisisthat27.8percentofinnovatingbusinessesdrewuponwebsites,journals,researchpapersandpublicationsincomingupwithideasforinnovation;and21.6percentusedprofessionalconferences,seminars,meetingsandtradeshows.

Asalreadyemphasised,thedirectandquantifiablecommercialisationactivitiesofuniversitiesmakeuponlyaverysmallproportionoftheimpactthatuniversitieshaveontheinnovationactivitiesofbusiness.25

Alsoofinterestisthatonly3percentofbusinessesidentifiedthelackofaccesstoknowledgeortechnologyasabarriertoinnovation,while27.1percentofinnovationactivebusinessesidentifiedthelackofskilledpersonsasabarrier.Inthiscontext,dataonthesourceoflabourforinnovationshow

24.www.abs.gov.au/AUSSTATS/[email protected]/ProductsbyCatalogue/06B08353E0EABA96CA25712A00161216?OpenDocument

25.Aspreviouslynoted,thebusinesssectorspendsconsiderablymoreonresearchthandoesthehighereducationsector.Businesssectorresearchersareusuallywellawareofrelevantuniversityresearchbecausetheyreadtheliteratureinwhichacademicspublish,usetextbooksandattendconferencesrelevanttotheirownwork.However,universityresearchersmaybemuchlessawareofbusinessresearchandmaynotbeusingsourcessuchasthepatentliteratureonaregularbasistomonitorwhatbusinessisdoing.

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that3.8percentoffirmshaving0-4employeesemploynewgraduatescomparedto12.9percentoffirmswith200ormoreemployees;andthatthefiguresforworkcontractedouttohighereducationorresearchinstitutionsare2.4percentand7.8percentofbusinesses,respectively.

The2006-07ABSsurveycollecteddataontheskillsinnovationactivefirmsusedforinnovativeactivities.AsshowninAttachment3,therewasconsiderablevariationdependingonthesizeandsectorofthefirms.26Theoverallrankingfortheskillsetsinnovatingfirmswereseeking,withranges,wasasfollows:

Informationtechnology35.4percent(Mining22.7toInformation,mediaandtelecommunications61.3)

Marketing33.7percent(Mining18.7to50.1Artsandrecreationalservices)

Businessmanagement31.1percent(Rental,hiringandrealestateservices20.8toFinanceandinvestmentservices42.5)

Financial21.2percent(Retailtrade7.6toMining31.7)

Trades19.3percent(Healthcareandsocialassistance2.1toConstruction43.4)

Projectmanagement10.5percent(Otherservices2.1toInformation,mediaandtelecommunications21.5)

Engineering9.9percent(Healthcareandsocialassistance0.1toMining31.7)

Scientificandresearch8.0percent(Transport,postalandwarehousing0.1toHealthcareandsocialassistance32.6)

Transport,plantandmachineryoperation7.8percent(Healthcareandsocialassistance0toTransport,postalandwarehousing44.7)

Thesedataemphasisethevarietyofskillsthatbusinessesneedtosupportinnovationandthattoonarrowafocusonaparticularsub-set(suchasscientificandresearchskills)canmissthedemandandwhereopportunitiesexist.Itisalsoclearthatuniversitiescontributetotheavailabilityofpeoplehavingmanyoftheskillsetsinhighdemand;andthatbusinesswouldnotbeabletoinnovateifuniversitiesdidnotmaintainthisqualitysupply.ABSdataonshortagesordeficienciesinskillsneededtoundertakeinnovationmakethisevenmoreapparent.Again,whilethereisvariationbetweensectors,theoverallrankingis:Trades(14.1percentofinnovationactivebusinesses);Informationtechnology(7.3);Businessmanagement(5.6);Financial(5.1);Market(4.6);Engineering(4.6);Projectmanagement(3.3);Transport,plantandmachineryoperations(2.9);andScientificresearch(2.0).

Anoverallconclusionisthatwhatbusinessmostneedsfromuniversitiesisareadysupplyofcompetent,talentedandcreativepeopleabletoapplytheirskillsandfurtherdeveloptheirpotentialacrossthewholerangeofbusinessactivities.Atleastsomeofthesepeoplewillmaintainindirectlinkswiththeuniversitythroughtheliteratureandinformalcontacts,drawingontheseassociationsandotherstocomeupwithideasforinnovationwhichtheyareabletodevelopandapplywithinthecontextofaparticularfirm’senvironment,needsandcapabilities.Moreover,ifindividualfirmsaretomoveforwardandrespondtoemergingopportunities,theskilledpeoplethatuniversitiesprovideneedtohaveknowledgeandskillsbeyondthosethatfirmscurrentlyneedbecausethisishowtheygainanddevelopthecapacitytochange.

Universitieshavevaluetobusinessbecausetheyaredifferentfrombusinessandoperateindisparateways.Universitiesdonotaddvaluebyperformingresearchwhichbusinesscanperformforitself–theyaddvaluebydoingwhatbusinesscannotorwillnotdoandthenensuringthatbusinessbecomes

26.www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/8158.02006-07?OpenDocument

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awareofthepotentialopportunitiestheuniversitieshavecreated.Butthismeansthatbusinessitselfhasresponsibilities–tomaintainlinks,bothstrategicandtacticalwithuniversities,tomakeuseoftheopportunitiesthatuniversitiesofferandtokeepuniversitiesinformedofchangingbusinessdemandsanddevelopments.

Perhapsevenmoreimportantistheneedforbusinesstorecogniseitsdependenceonuniversitiesandtosupporttheuniversitiesinfulfillingtheirmanyroleswithinthebroaderinnovationsystem.Thecomplementarynatureofbusinessanduniversityactivitiesandrolesmakestheminterdependentinmanyways.Byworkingtogethertheycanpromoteinnovation,whileincompetitiontheycanweakenthenationalpotentialforproductivechange.

Diversity among universitiesOneoftheimportantcharacteristicsofanyeffectivesystemisthatitfacilitatesspecialisationanddifferentiationamongitscomponentparts.Togethertheseallowthedifferentelementsofthesystemtobecomemoreeffectiveandsoincreasetheefficiencyofthesystemasawhole.Giventhevarietyofdemandsthatbusinessandtheothersectorsoftheinnovationsystemplaceonuniversities,itwouldbesurprisingifdifferentuniversitiesdidnotexhibitthesametrend.Somemightspecialiseonservingregionalorlocalneeds,othersonabroadernationalpurposeandafewmayseektoformorbecomepartofinternationalnetworksandalliances;somemightconcentrateontransmittingandstoringknowledgeandmeetingtheimmediateneedsofbusinessorothercustomers,othersoncreatingtheknowledgeandunderstandingthatdevelopnewopportunities,andothersondevelopingandtransmittingskills.Somemightfocusonundergraduateeducationwhileothersstrivetodeveloppostgraduatecourseworkdegreesortheprofessionalupgradingthatisbecomingmoreimportantaspartoflifetimelearning,andothersconcentrateonpostgraduateeducationbyresearch.Inlinewiththeiroverallstrategy,someuniversitiesmightdecidetoreduceorexpandthedisciplinestheycoverortoalterthebalanceoffacetofaceoronlineteachinginresponsetothevaryingneedsofthestudentpopulation.Asthisdifferentiationproceeds,itwouldalsocreatetheopportunityforusefulcollaborationbetweeninstitutionswhichhavespecialisedindifferentdirections.

Focusingeffortinthiswaydoesnotimplyanyhierarchyofexcellenceorthatoneroleisinsomewaymoreimportantthanorsuperiortoanother.Indeed,excellenceisafunctionofcontextandpurpose,sothatspecialisationisonewayofincreasingexcellencewithrespecttotheoutcomesthespecialisationaimstoachieve.Andasrepeatedlyemphasised,allpartsofasystemareofequalimportance–poorperformanceinanycomponentwilllimittheabilityoftheothercomponentstoperformeffectively.Adoptingasystemsapproachmeanstakingaholisticperspectiveandvaluingtheinterdependenciesthatexist.

Increasingdiversityrecognisesthatasthesectorgrowsitbecomespossibletogainefficienciesthroughspecialisation,accommodatingtothevarietyofnichesthatuniversitiescanandshouldfill.Moreover,suchdifferentiationisanalmostinevitableconsequenceofcompetition;andcompetitionisitselfadriverofexcellence,inacademiaaselsewhere.

Specialisationbecomesevenmoreimportantastherelativenumberofstudentsincreasesandastheproportionoftheworkingpopulationgaininguniversityeducationalsoincreases.Asthispaperhasargued,innovationarisesthroughdifference,notsimilarity.Asystemthatprovidessimilarandconsistentlearningexperiencesandenvironmentsforallstudentsisunlikelytopromotethedifferencesthatresultinprogress.Moreover,anincreasingstudentloadmeansamorediversestudentpopulation.

Individualstudentsmaypreferorneeddifferenttypesoflearningexperience,havedifferentlearningobjectivesandpreferdifferentstylesorkindsofteaching.Studentsatbothunder-andpost-graduate

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levelnowspananagerangegreaterthaneverbefore;manyarepart-timeandhavenon-universitycommitments–includingworkandfamilyresponsibilities.Thisalsomeansthatstudentsarebringingtotheuniversityamuchgreaterrangeofexperience,expertiseandmaturitythanwasformerlythecase–andinmanycasesthestudentshavehadpracticalworkexperiencesbeyondthoseofthepeopleteachingormentoringthem.Moreover,withanageingpopulationleadinglongerandhopefullyhealthierlives,thedemandforpost-retirementpersonaldevelopmentcoursesislikelytoincreaseaslifetimelearningproceedsbeyondtheneedsofwork.Asagroup,universitiesneedtoofferthefullrangeoflearningexperiencesthatstudentsseekorwhichbecomenecessarytoallowallstudentstorealisetheirfullpotential.Aonesizefitsallapproachcannotdothisormeettheveryvariedrequirementsofbusinessintermsoftheskillsandcapabilitiestheyareseeking.

TheUSAprovidesaninterestingexampleofsomeofthediversitythatcanexistwithinauniversitysystemandthepotentialfordifferentiation.In2007theUSAhadaround4,300educationinstitutionsofferingundergraduatedegrees.Ofthese,around600alsoofferedmastersdegreesandperhaps260were‘researchuniversities’.However,accordingtooneestimate,only125universitiescontributedin‘meaningfulways’tothegrowthofknowledge;andtheskeweddistributionofresearchactivityevenwithinthisgroupmeantthatasmallnumberaccountedforaveryhighproportionofthediscoveriesthatflowedfromuniversityresearchwithintheUSA.27Forexample,in2001thetop200universitiesaccountedforaround96percentofallhighereducationresearchexpenditures;thetop100institutionsreceived51percentofthetotalpublicfundingforacademicresearchandthetop20about20percent.28

ThevastmajorityofuniversitiesintheUSAhaveafocusonthetransmissionofknowledgeandthenon-researchaspectsofscholarship.Thisdoesnotmakethemanylessimportantthantheresearchuniversitiesbutenabledthemtoperformanimportantjobwellandofteninawaythatservedtheexplicitneedsoftheirlocalcommunities.Attachment4providesanoutlineofthe2005Carnegieclassificationofinstitutesofhighereducation,whichprovidesyetanotherperspectiveonthediversityofuniversitieswithintheUSA.

SomeoftherecentpolicyinitiativesinAustraliamaywellhelpfacilitatesimilardifferentiationwithintheAustralianuniversitysystem.TheseincludeERAwithitsexplicitfocusonresearchexcellence;theuseofcompactsandthepotentialtheyprovideforeachuniversitytodevelopauniqueandexplicitvisionandmission,reflectingthenicheithaschosentooccupy;andthemovetohavefundingfollowstudents,whichwillcreateincreasedmarketcompetitionandtheneedforuniversitiestospecialisetomeetthewholerangeofstudentneeds.

InhisbookTheGreatAmericanUniversity,JonathonRColehasobservedthatitbecomesmoredifficultforuniversitiestodistinguishthemselvesfromeachotherandsocompeteeffectively,whentheyaresubjecttosignificantgovernmentregulation;andthatthesuccessofthegreatAmericanresearchuniversitiesisbecausetheyhaveoperated‘inarelativelyfreemarketaswellasinafreemarketplaceofideas.’29Giventhebenefitsofadifferentiatedsystem,itwillbeimportantthatotherAustralianinitiatives,suchasTEQSA,donotoperateinawaythatimpedesspecialisationorwhichimpactonuniversityautonomysuchthatitbecomesmoredifficultforuniversitiestorespondtostudentdemandandsociety’sneeds.Atthesametime,itisimportanttorecognisethatTEQSA’sroleinmaintainingconfidencebysupportingqualitywillbecomeevenmorenecessaryinamorehighlydifferentiatedsysteminwhichnewentrantsappearinresponsetoemergingandchangingmarketdemands.

27.JonathonRCole,2009.The Great American University.PublicAffairs,p.6.

28.StephanVincent-Lancrin,2006.What is changing in academic research?EuropeanJournalofEducation,41.ThispaperalsopresentsfiguresfortheUKwherenineuniversitiesrepresenting10percentofallinstitutionsand17percentofpost-graduateenrolmentsreceived47percentofpublicfundingforresearch.Thetopfouruniversitiesreceived29percentofpublicfunding.

29.JonathonRCole2009.The Great American University.PublicAffairs.P.190

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The role of the Group of Eight universitiesTheGroupofEightuniversitiesareawareofthepressuresonthewholeuniversitysystemtochangeandhavealreadydiscussedwhatthismeansfortheirowninnovationtrajectory,giventheircurrentstrengthsandthedemandsplacedonthem.Asaresultoftheseinternaldiscussionstheyhaveidentifiedtheirroleasthatofresearchintensiveuniversitiesbuildingnationalinnovativecapability.Theyhaveidentifiedfiveunderlyingprinciplesthatsupportthispositionandwhichareconsistentwiththeargumentspresentedinthispaper.Underlyingeachoftheseprinciplesisacommitmenttoexcellencebasedonprovidingalearningenvironmentsupportedbytheconductoffundamental,disinterestedresearchandtheprovisionofworldclassfacilitiesabletoattractthemosttalentedpeoplefromaroundtheworld.

1. Go8 universities are responsible for producing advanced human capital, knowledge and know-how that underpins Australia’s innovativeness

TheGo8universitiesproducemanyofthegraduateswhotakeupleadershiprolesinAustraliaandoverseas,aswellasmostofAustralia’stopqualityuniversityresearch,particularlythebasicresearchthatunderpins,ofteninquitesubtleways,majorinnovation.Theuniversitiesprovideawiderangeofgeneral,professionalandspecialistcoursesatundergraduateandpostgraduatelevelsandplayaspecialroleintheformationofresearch-trainedgraduatesandthedevelopmentofpost-doctoralscholars.

2. Go8 universities play a leading role in helping to understand complex phenomena and solve complex problems

Addressingthewickedproblemsfacingcontemporarysocietyrequireslargescale,crossdisciplinaryapproachesandsophisticatedmodelling.TheGo8universitieshavetheresearchcapabilitiesacrossabroadrangeofdisciplinesandtheconsiderablemultidisciplinaryexperiencenecessarytosupportAustralia’scontributiontotheseproblems.

3. Go8 universities open and forge significant international knowledge networks for Australia

TheGo8universitiesplayaspecialroleinlinkingAustraliatotheworld’sknowledgeproductionsystembecauseoftheirinternationalreputationandthelinkstheyhaveestablishedwithsomeofthebestresearchersandresearchgroupsoverseas.TheirparticipationinthesenetworkshelpsraisethestandingofthewholenationalinnovationsystemandprovidesasoundfoundationforAustralianparticipationininternationalactionsdirectedatglobalproblems.

4. Go8 universities contribute highly trained people, expertise and instrumentation which helps build and develop Australia’s capacity for high quality education and innovation capacity

Go8universitiessupplymostofthescholarlyworkforceforAustralia’suniversitysystem,withsome70percentofdoctoralgraduatesfromGo8universitiestakingupacademicpositions.TheGo8universitiesalsosetthestandardwithinthenationalsystemofhighereducationandresearchandprovidepathwaysforstudents,collaborativenodesforresearchandadvancedscholarship,andprofessionaldevelopment.

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5. Go8 universities (along with CSIRO and other publicly funded national research agencies) provide the scale of capability (expertise + quality infrastructure) that forms the foundation of Australia’s knowledge competitiveness.

ManyofAustralia’sleadingresearchinfrastructurecapacitiesincludingopticaltelescopes,highperformancecomputersandsynchrotron,arefoundatGo8universities.

ThesefiveprinciplesreflectthecurrentsituationandstatusoftheGo8universitiesandtogetherprovideafirmfoundationfromwhichtheycandevelopinresponsetotheissuesidentifiedinthispaper.However,theirabilitytogrowinawaywhichenhancesthesignificantcontributionstheyalreadymaketoAustralia’sinnovationsystemwillrequireappropriatepolicysettingsandprogramswhichrecognisetheimportanceofwhattheyachieveandprovidetheresourcesnecessaryforthemtoachieveit.

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Some conclusionsUniversitiesworktoreleasethepotentialoftheirstudents,providingtheeducationtheyneedtoworkinbusiness,governmentandallothersectorsofthecommunity.30Universitiesarealsocriticalcomponentsofthenationalresearchsystem,performingresearchwhichsupportsdirectlyandindirectly,andacrossavarietyoftimescales,thewellbeingofthenation.Universitiesalsoaddvalueasinstitutions,independentlyoftheirroleineducationandresearch,byprovidingastorehouseofknowledgeandcapabilitiesthatothersectorscandrawuponastheyneedthem.Justasimportantisthatuniversities,throughtheirresearchandcommunityengagementactivities,playaroleindefiningandgeneratingournationalidentityand,throughtheinternationalsignificanceoftheirresearchandeducationservices,contributetotheinternationalreputationofAustralia.

Inconsideringthevariousrolesplayedbyuniversities,thediversityofoutputstheyproduceandtheoutcomesthattheyachieve,itisimportanttorecognisethattheseareallinterdependent.Ineffect,eachuniversityisasub-systemwithintheoverallinnovationsystem.Itisnotpossibletochangethewayauniversityworkstoproduceonekindofoutputwithouthavinganeffectontheothers.Developingpoliciesandprogramsforchangeinuniversitiesrequiresanholisticapproachwhichacknowledgestheinterdependenciesandcomplexrelationshipsthatexistamongtheverywiderangeofservicesthateachoffers.

Thestrengthandwellbeingofouruniversitiesiscriticaltonationalinnovationandtheoveralleffectivenessofournationalinnovationsystem.Thisalsorequirestheuniversitiestothinkbroadlyandtoinnovateinresponsetosociety’schangingdemandsandtheincreasedcomplexityofthechallengesthatAustraliadoesandwillface,whilenotmovingbackfromtheirfocusonexcellence,onmeritandonfreedomofintellectualinquiryandpublicdebate.

Inacceptingthecriticalimportanceofuniversities,policyanalystsneedtoacceptthattheinnovationsystemdependsasmuchonrealisingthepotentialitiesofpeopleasitdoesonnarrowlydefinedresearchoutputsinscience,technology,engineeringandmaths.Thecreativenessandrisk-takingpropensityofconsumersaremajorcontributorstonationalabsorptivecapacity,aremajorfactorsinbeingabletoexploitnewtechnologiesandessentialforaneffectiveinnovationsystem.Customersandconsumers–whetherproximateorultimate-aretherealdriversofaninnovationsystem.Universitiescanplayanimportantroleinprovidinganeducationthatpromotesopenmindedness,apreparednesstotakecalculatedrisksandanunderstandingthatchangecanmeanprogress.

Theindependence,autonomyandselfregulatorynatureofuniversitiesprovidethesoundandnecessarybasefromwhichtheycanrespondtothechangingandcomplexdemandswhichbusiness,government,societyandstudentsplaceonthem.Asagroup,universitiesrecognisetheneedtoinnovate,toimprovetheirperformanceandtodothisinawaythatenablesthemtomaintaintheirstandards,inbotheducationandresearch.Iftheyaretodothiseffectively,theywillneedtospecialiseandthiswillrequirethemtodivergefromasingleorstandardmodelastheydifferentiatetomeettheneedsofthedifferentnichesthatexistwithinthehighereducationanduniversitymarkets–andwhichwillbecomeincreasinglydistinctasthestudentloadincreases.

Oneoftheproblemsthatuniversitiesconfrontisthatsomesectorscantakeanarrowviewofthepurposeofuniversities.Inparticular,businesssometimeshasasetofnarrowexpectationswhichignorethebroaderandimportantrolesofuniversitiesinservingsocietyasawhole.Usefulandproductivedebateaboutthepurposeofuniversitiesneedstotakeplacewithinaframeworkofrealisticexpectationsratherthananarrowsectoralperspectivewhichleadstoimpracticaloridealisticdemands.

30.Inthisroleuniversitiesareanimportantexportindustryintheirownright,providingeducationservicestointernationalstudents.

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Agraduateleavingauniversitywillnothavetheknowledgeandskillsnecessarytobefullyeffectiveinafirmbecausethetechnology,proceduresandprocessesthatsupportafirm’sactivitiesarelocaltoeachfirmandrequirein-housetraining.Auniversitycananddoesensureitsgraduateshavetheabilitytobenefitfromin-housetraining,andeventoprovideconstructivecriticismofin-houseprocesses,butitcannotandshouldnotmeettheparticularneedsofeachofAustralia’snearly2 millionseparatebusinesses.Moreover,auniversityhastheresponsibilitytoequipitsgraduateswiththeknowledgeandskillsthatbusinessesdonotyetunderstandthattheyneed;andwhilethedisciplinesthatuniversitiessupportextendbeyondthosethatbusinessmayseeasrelevant,itisnecessarytorecognisetheimportantgenericoutcomes,ratherthanspecificdisciplinaryknowledge,thatcanarisefromanyhighercourseofstudy.

Aswellasexpressingconcernthatuniversitiesdonotproducepeoplewiththeparticularskillstheyrequire,businesssometimesobjectstothenatureandqualityofuniversityresearch.Again,thisignoresthebroaderpurposeofuniversities,thattheyservesectorsotherthanbusinessandthattheirpurposeistocomplementnotduplicatebusiness.Inparticular,businesscomplaintsaboutuniversityresearchfailtorecognisetheneedforuniversitiestoserveanationalpurposebyoperatingonatimeframewhichextendsbeyondtheimmediateneedsofbusinesstocreatecapabilitiesandopportunitiesforthefuture.Inthiscontextitisworthnotingthatattemptstoforecasttechnologicalfuturesnormallyfailintworespects–theyidentifybreakthroughsthatneveroccur(nuclearfusionhasbeen20yearsawayeversincethe1950s);andtheymisssomeofthemostimportant,commercialandsociallysignificantdevelopmentsthatactuallyhappen(suchastheinternet).Predictingthefutureisdifficultbutuniversitieswork,notjusttohelpcreatethefuturebutalsotoensurewehavethecapabilitytorespond,nomatterwhatthefuturethrowsup.

Noneofthisistosaythatuniversitiescannotimprovetheirperformance.Theycanandmust.However,aspartofabroaderinnovationsystem,theyneedthesupportofotherpartsofthissystemiftheyaretoinnovateinawaythatbettersupportstheoperationofthewholesystem.Partofthissupportneedstocomefromawiderrecognitionofthedevolvednatureofuniversitiesandabroaderunderstandingthatthisformspartoftheirstrength,reflectingtheirfreedomofinquiryandtheirabilitytogowhereopportunityandcuriosityleadthem.Businessandgovernmentshouldnotexpectuniversitiestooperateasasingleenterprisehavingcentralcontrolbecausethiswouldleadtoasignificantnarrowingofnationalcapabilitywithpotentiallyseriousconsequencesforfuturenationaldevelopment.

Oneproblemwiththedevolvednatureofuniversitiesisthatitmakesitmoredifficultforbusinessestoidentifywheretheymightfindthecapabilitiestheyareseeking.Thereisoftennocentral,comprehensiveregisterofcapabilitiesorevenofcurrentresearchprojectsorofthespecialisedskillsavailable.Thisisnotalwaysasbigahurdleasitmayseembecausebusinesseswhichperformresearchusetherelevantliteratureandareawareofwheretherelevantresearchistakingplaceandofwhoisconductingit.However,thisdoesnothelpthebusinessseekingtechnicaladvice,specialisedscientificservicesoraccesstosophisticatedresearchequipment.NeitherdoesitassistpolicyanalystsseekingtoidentifywhetherAustraliaislackingincapabilitiesthatarebecomingmoreimportantfromanationalperspective.TheGo8universitiesareaddressingthisproblemthroughthedevelopmentofapubliclyavailabledatabase(Australia’sKnowledgeGateway)oftheuniversities’researchcapabilities.

Therearealreadymanylinksbetweenuniversitiesandbusinessbutthereseemsoftentobeaviewthatitisuptotheuniversitiesalonetodeveloptheselinksandtoestablishthenetworksthattogethermakeforaneffectivesystem.However,thiscannotbeaone-wayprocess.Whilebusinesswilloftenseekoutlinkswithauniversityforaspecifiedpurpose–suchascontractresearchonadefinedproblemtobecompletedbyaspecifiedtime–businessseemslessinclinedtodevelopstrategicengagementswithuniversities.Suchengagementisnotcostfreebutongoingengagementbuildingonawiderangeofactivitieshasthepotentialnotonlytodevelopabetterappreciationofeachother’sroles

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andresponsibilitiesbutalsotoleadtoagreaterresponsiveness.Thereisawidevarietyofactivitiesthatcansupportstrategicengagement.Theyincludemembershipofeachother’sgoverningbodies,participatingintechnicalandotheradvisorypanels,formalandinformaldiscussionsatdepartmentallevelofresearchplansandtechnicalneeds,two-waysecondments,jointappointments,internships,visitinglectures,promotingvisitstoindustry,andsoon.

Aspartofaninterconnectedinnovationsystem,universitiesandbusinessareinterdependent.TheybothmakeessentialcontributionstothewellbeingofAustraliaandinworkingmorecloselytogethertheycanbenefiteachotherinawaythatcanonlystrengthenthenation’sdevelopment.Forsuchengagementtowork,however,itisimportantthatbothsectorsnotonlyrecognisebutalsorespectthecontributionoftheother.Acknowledgingtheimportanceofinnovation,thebreadthoftheinnovationconceptandthemultiplewaysinwhichuniversitiescontributetoinnovationaswellasthebreadthoftheirresponsibilitiesisonewayofpromotingthismutualunderstandingandprovidingthebasisforstrongercooperation.

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Attachment 1

The health innovation systemTheAustralianhealthinnovationsystemencompassesallthoseinstitutions(andthepeopleworkingwithinthem)involvedininitiating,developinganddeliveringeducation,trainingandresearchtoimprovehealthservicedelivery.Thesearespreadacrossthegovernment,private(includingforeign-owned),highereducationandnon-profitsectors.Thesystemalsoincludestheconsumersofhealthservices,variousregulatoryagenciesandthebodiesresponsibleformonitoringandevaluatinghealthservicedelivery.Thesystemhasstrongandeffectivelinkswithoverseasorganisations,bothformalandinformal.Frameworkpoliciesandinfrastructure,includingtheIPsystem,alsohaveamajorimpactonhowtheoverallsystemoperates.

Atthecommonwealthlevel,theDepartmentofHealthandAgeing,theNationalHealthandMedicalResearchCouncil,HealthWorkforceAustralia,theDepartmentofInnovation,IndustryScienceandResearch,theAustralianResearchCouncil,andtheDepartmentofEducation,EmploymentandWorkplaceRelationseachhasvaryingperspectivesandinterests.

Atstateandterritorygovernmentlevel,healthauthoritiesarekeyplayers,asareofficesresponsibleforscience,medicalresearchandrelatedmatters.Thereisalsosomelocalgovernmentinvolvementinhealthservices.

Universitiesplayacriticalroleinundergraduateandpostgraduateeducation,andresearch.MedicalResearchInstitutesalsoarecriticaltotheundertakingofresearchanditstranslationtohealthservices.

OtheragenciesliketheAustralianMedicalCouncilandstateandterritoryprofessionalregistrationboardshaveaninterestandexertinfluence.Theprofessionalassociations,includingmedicalspecialistcolleges,likewiseplayanimportantrole.Charitableorganisationsplayastrongroleinthepublicprofileofmedicalresearchinthecommunity,insupportandfundraising.

Health education, research and service delivery: funding sources

Hospitals & clinics

Commonwealth • NHMRC • DoHA • Medicare

State

Industry

Health insurance fundsPublic • Fees • Donations

Medical Research Institutes

Commonwealth • NHMRC

Industry

Public

Universities

Commonwealth • NHMRC • ARC • DEEWR • DIISR

State

Industry

Public

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Health research, teaching and care: where it happens

Healtheducationandresearchactivitiestakeplaceinuniversities,largeandsmallmedicalresearchinstitutes,publichospitals,privatehospitals,super-clinicsandsmallerhealthcentresandinthespecialistandgeneralpracticeswheremedicalandotherhealthstudentsworktogainpracticalexperienceinhealthcaredeliveryandhealthresearch.Theprivatesectoralsoplaysanimportantandinsomecasespre-eminentroleinperformingresearchandespeciallydevelopment.

Hospitals & clinics

Applied research

Translation

Education: undergraduate

Education: HDR

Health care delivery

Medical Research Institutes

Basic research

Applied research

Translation

Education: HDR

Universities

Basic research

Applied research

Translation

Education: undergraduate

Education: HDR

Identifying research needs

Theprocessofidentifyinghealthresearchneedsiscomplex.Muchresearchflowsfromresearchalreadybeingundertaken–followinglinesofenquiryandexperimentation,ortryingalternativeapproaches,andthroughthinkingandscientificdiscussionamongstresearchers.Suchresearchmayreflectscientificopportunitiesratherthanparticularhealthpriorities.Muchresearchalsoarisesfromclinicalcases,whereexistingtreatmentsareinadequateoralternativesandimprovedtechniquesareexplored.Dependingonthenatureoftheresearch,ethicalorotherapprovalsmaybenecessaryandtheapprovalbodiesformanimportantpartoftheinnovationsystem.

Someresearchcanbelongterm,basedonunderstandingthefundamentalprocessesbehindadisease;otherresearchcanaddressmoreshorttermissues.Oftenagenuinesolutiontoahealthneedwillrequireacomplexmixtureofbasic,strategic,appliedanddevelopmentalworkacrossdifferentdisciplinesandtimeframes.Forexample,itcanbepossibletoattempttodevelopavaccinebeforethereisanyunderstandingofthemolecularandphysiologicalbasisforthedisease;oritispossibletodevelopstrategiestoreducethediseaseincidence,ifitsmodeoftransmissionisknown,evenwhenthereisnounderstandingofhowtotreatthedisease.

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Translating research outcomes

Thetranslationofresearchfindingstopatientcare,andtoteachingundergraduateandpostgraduatestudents,isacriticaloutcomeofresearch.

Medical Research Institutes

Research

Universities Hospitals & clinics

Teaching

Medical Research Institutes

Research

Universities Hospitals & clinics

Teaching

Clinicaltranslationalresearchtakesplacepredominantlyinuniversities,embeddedinthehospitalsandclinicsbutisnotastraightforwardprocess.Foronereasonoranothertherecanberesistancetoresearchfindings(fromhealthpractitioners,otherresearchers,orpatients);andobtainingthenecessaryregulatoryapprovalforputtingthefindingsintopracticecanbeexpensive,complexandtimeconsuming.Moreover,theremayongoingrequirementstomonitorandcontinuouslyevaluatetheinterventiononcehealthprofessionalsdoapplyitandtheadministrativestructuresinvolvedintheseprocessesarealsopartsoftheinnovationsystem.

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Attachment 2 Sources of ideas or information for business innovation31

Employment size (persons)Total

0-4 5-19 20-199 200 or more

Withinthebusinessorrelatedcompany

57.4 61.7 69.8 82.6 60.7

Clients,customersorbuyers 38.9 39.5 39.0 39.8 39.2

Suppliers 32.2 27.2 31.5 23.1 30.2

Competitorsandotherbusinessesinthesameindustry

29.9 29.9 33.6 36 30.4

Consultants 12.7 20.1 27.3 46.1 17.5

Universitiesorotherhighereducationinstitutions

2.9 2.2 2.2 6.4 2.6

Governmentagencies 3.8 4.6 3.6 8.3 4.1

Privatenon-profitresearchinstitutions 0.9 1.1 1.1 3.5 1.0

Commerciallabs/R&Denterprises 1.4 2.0 0.5 3.3 1.5

Websites,journals,researchpapers,publications

28.1 29.3 22.6 17.3 27.8

Professionalconferences,seminars,meetings,tradeshows

19.3 23.5 25.1 23.9 21.6

Industryassociations 15.4 19.7 24.7 20.2 18.1

31.www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/8158.02008-09?OpenDocument

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Attachment 4 Carnegie Classification of Institutions of Higher Education in the USA33

Numbersinbracketsarethenumberofeachinstitution.

Doctorate-granting Universities

Doctorate-grantingUniversitiesarethoseinstitutionsthatawardedatleast20doctoratesin2003–04.TheseUniversitiesarefurtherclassifiedbytheirlevelofresearchactivity,asmeasuredbyresearchexpenditures,numberofresearchdoctoratesawarded,numberofresearch-focusedfaculty,andotherfactors.

ResearchUniversities(veryhighresearchactivity)(96)

ResearchUniversities(highresearchactivity)(103)

Doctoral/ResearchUniversities(83)

Master’s Colleges and Universities

Master’sCollegesandUniversitiesarethoseinstitutionswhich“awardedatleast50master’sdegreesin2003–04,butfewerthan20doctorates.”

Master’sCollegesandUniversities(LargerPrograms–awardingatleast200Masters-leveldegrees)(346)

Master’sCollegesandUniversities(MediumPrograms–awarding100–199Mastersleveldegrees)(190)

Master’sCollegesandUniversities(SmallerPrograms–awarding50-99Mastersleveldegrees)(128)

Baccalaureate Colleges

BaccalaureateCollegesarethoseinstitutionsatwhich“bachelor’sdegreesaccountedforatleast10percentofallundergraduatedegreesandtheyawardedfewerthan50master’sdegrees(2003–04degreeconferrals).”

BaccalaureateColleges–Arts&Sciences(287)

BaccalaureateColleges–DiverseFields(360)

Baccalaureate/Associate’sColleges(120)

Associates Colleges

Associatescollegesaredefinedasinstitutionswhose“highestdegreeconferredwastheassociate’sdegreeorifbachelor’sdegreesaccountedforlessthan10percentofallundergraduatedegrees(2003–04degreeconferrals).”

Associate’s–PublicRural-servingSmall(142)

Associate’s–PublicRural-servingMedium(311)

33.Takenfrom:http://en.wikipedia.org/wiki/Carnegie_Classification_of_Institutions_of_Higher_Education

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Associate’s–PublicRural-servingLarge(144)

Associate’s–PublicSuburban-servingSingleCampus(110)

Associate’s–PublicSuburban-servingMulticampus(100)

Associate’s–PublicUrban-servingSingleCampus(32)

Associate’s–PublicUrban-servingMulticampus(152)

Associate’s–PublicSpecialUse(14)

Associate’s–PrivateNot-for-profit(114)

Associate’s–PrivateFor-profit(531)

Associate’s–Public2-yearCollegesunderUniversities(55)

Associate’s–Public4-year,PrimarilyAssociate’s(18)

Associate’s–PrivateNot-for-profit4-year,PrimarilyAssociate’s(20)

Associate’s–PrivateFor-profit4-year,PrimarilyAssociate’s(71)

Special Focus Institutions

SpecialFocusInstitutionswereclassified“basedontheconcentrationofdegreesinasinglefieldorsetofrelatedfields,atboththeundergraduateandgraduatelevels.Institutionsweredeterminedtohaveaspecialfocuswithconcentrationsofatleast80percentofundergraduateandgraduatedegrees.InsomecasesthispercentagecriterionwasrelaxedifaninstitutionidentifiedaspecialfocusontheCollegeBoard’sAnnualSurveyofColleges,orifaninstitution’sonlyaccreditationwasfromabodyrelatedtothespecialfocuscategories.”

Theologicalseminaries,Biblecolleges,andotherfaith-relatedinstitutions(314)

Medicalschoolsandmedicalcenters(57)

Otherhealthprofessionschools(129)

Schoolsofengineering(8)

Othertechnology-relatedschools(57)

Schoolsofbusinessandmanagement(64)

Schoolsofart,music,anddesign(106)

Schoolsoflaw(32)

Otherspecial-focusinstitutions(39)

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The Group of Eight

Group of Eight House

Level 2, 101 Northbourne Avenue

Turner ACT 2612

www.go8.edu.au