The Role of Research in National and International Economic Development

Dr. Ian Carter

Director of Research and Enterprise

University of Sussex, UK

Lynne Chronister

VP for Research and Economic Development

University of South Alabama, USA

INORMS

Washington DC

April 2014

Outline

I. Direct and Indirect Impacts on the Economy- Education/human capital impact- Construction/production- Induced Impacts- Direct Financial impact- Research impact

II. Research, Innovation, and Impact

III. Building an Innovation Ecosystem for Economic Development

In the U.S. high tech firms in their communities

account for the creation of 4.3 jobs to each

high-tech job they established vs 1.4 jobs from

manufacturing

2011 – North American incubators assisted

~49,000 start-up companies that provided

~200,000 full-time employees & generated

almost $15 billion in revenue

Our Universities

• Sussex:- 12 academic schools, covering science and medicine, social sciences, arts

and humanities- 2,100 staff (560 academic staff, 270 research staff)- 13,000 students, of which 1,000 postgraduate research students- £180 million income ($270m), of which c£50 million research income ($75m)

• South Alabama:- 8 academic schools, covering science and medicine, engineering,

computing, social sciences, arts and humanities, 3 hospitals - 5,500 staff (over 1,000 academic and research staff)- 15,400 students, of which 3,000 postgraduate research students- $960 million income, of which $42 million research income

I. Direct and Indirect Impact on the Economy

• Human Capital • Construction / Renovation / Maintenance• University payroll• Direct local spending • Knowledge creation• Development of new products and technologies• Improvement of existing technologies• New Business development/start-up ventures • Research Parks and Incubators

What is Impact?

• Journal Impact Factors and article citation rates- UK: 4% of researchers; 6% of articles; 12% of citations; 16% of highly-cited

[BIS/Elsevier]

• “Economic Impact”- Gross Expenditure on R&D (GERD) as %age of GDP- UK:1.8%; EU 2%; EU target 3%; US 2.8% [OECD]

- UK: 61% Business; 27% HE; 9% Government [BIS]

- UK: 10 companies represent 34%; 50 for 56%; 40% is non-UK in origin [CIHE/UK~IRC]

• Socio-economic Innovation- Economic, Social, Public policy, Cultural, Environmental, Quality of life,

Education

Economic Development through People

• Graduates into the workforce- What skills, knowledge and behaviours are relevant?

• Support of innovators- Access to expertise and facilities

• Skills enhancement- Provision of continuing professional development

• Advisors to businesses, governments, and NGOs- Enhancing policy development and environmental knowledge

II. Research, Innovation, and Impact

Innovation Flow Chart

RESEARCH

INNOVATION

DISSEMINATION

TRADE SECRET

NEW KNOWLEDGE

APPLICATION

INVENTION

ECONOMIC (and other) BENEFITSOCIETAL (and

economic) BENEFIT

INNOVATION

e.g. health, welfare, workforce

development

Evolving Role of Universities in Economic Development

• Inventions• Education

&Research

• Partnerships• Commercialization

• Local, Regional, National and International

• Economic Development

Why do we do research?

• ‘…the real and legitimate goal of the sciences is the endowment of human life with new inventions and riches’

Francis Bacon, Novum Organum, 1620

•‘Intellectual enquiry is worthwhile for its own sake’David Willetts, UK Minister for Universities and Science, 2010

• Governments are interested in research because it:- fosters global economic performance, & specifically the country’s economic

competitiveness;- increases the effectiveness of its public services & policy;- enhances quality of life, health & creative output of its citizens.

Because …

If you do not engage in research,

discovery and creativity, tomorrow

will look just like today!

What is Innovation?

‘A new way of doing something’

‘The translation of ideas / intellectual property (from anywhere)

into socio-economically productive activities’

‘Invention is the first occurrence of an idea for a new product or

process, while innovation is the first attempt to carry it out into

practice’

Types of Innovation

• Technology innovation• OECD innovation types:

- Process, Product, Marketing, Organisational

• Policy innovation• Innovation in socio-cultural behaviours

• Overlapping, but different, perspectives on innovation:- Commercial, Governmental, Research Base

Smart Homes of the Future

Cars of 2030

Artificial Knees/ Leg Prosthetic

The Relationship of Research to Impact

Research

→ Research outputs

→ Knowledge Transfer / Exchange activities

→ Socio-economic activity

→ Socio-economic impact

Chicken or Egg?

• Is knowledge exchange part of the research process?• Or is research part of the innovation process?• Governmental desire to support / initiate economic development

- Interventions that are not research- Danger of individuals and institutions acting as if the activities are research- These are service contracts, with contractual deliverables

• Ground-breaking research and innovation both require flexibility

and freedom to react- Not a standard purchase of a commodity- Overhead involved in measurement of the immeasurable

III. Building an Innovation Ecosystem for Economic Development

Building the Mechanisms for Economic Development:

Application-based / translational research focus

Build Infrastructure to exploit research outcomes

Technology transfer

Entrepreneurship programs

Research parks/Incubators

Funding mechanisms

Gap Funding

Angel Investment

Company Founders

AngelsStrong

Academic Ties

Research Organization MembershipsMultiple

Directorships

Mentoring

Entrepreneurs

U.S.A Support Ecosystem

The Competing Perspectives

• Corporate Perspective- Effect on the bottom line- New product / service / process

development- Customer acquisition and retention- Competitive position- Rate of return- Timescales short to medium term; can

depend on size and sector

• Research Base Perspective- Translation into practice

research supply chain;

innovation in the research process- Plurality of dissemination and impact- ‘Impact’ in teaching, research, economic,

social, cultural, societal areas- Timescales are often long

• Governmental Perspective- National (industrial) competitiveness- Employment- Tax returns- Economic effects (macro and micro)- Social cohesion effects- Standard of living- Investment for the future- Policy development- Timescales theoretically long; but

sometimes driven on a shorter term, e.g. political / election / funding / ministerial cycles

Geographic Challenges or Opportunities?

• Is university-supported economic development constrained by

geography?

• How can international economic development be supported?

Questions and Discussion