ESSAY REVI EW
University Knowledge Production and Innovation:Getting a Grip
Arjan van Rooij
Published online: 17 May 2014
� Springer Science+Business Media Dordrecht 2014
Abstract Today universities are increasingly seen as motors of innovation: they
not only need to provide trained manpower and publications to society, but also new
products, new processes and new services that create firms, jobs, and economic
growth. This function of universities is controversial, and a huge and still expanding
literature has tried to understand it. The approach of this paper is integrative; it uses
the existing literature to answer a number of straightforward questions about the
creation of innovations with university knowledge production: how does this hap-
pen, to what extent, and if it is desirable. In this way this article grounds the issue.
Creating innovation with university knowledge production is relevant, justified and
important but this has not been, is not and will not become the core function of
universities. The existing literature, in other words, overestimates the importance of
university knowledge production - in general, and for innovation in particular.
Keywords Universities and society � Universities and innovation �Academic entrepreneurship � Academic capitalism
In many ways the laboratory is a remarkable invention: to construct a building, to put
instrumentation and other equipment in it, and to let people work on ‘‘research’’ has
profoundly changed what universities do and what they want to do. However, is
research only driven by research, a goal in itself, or does it, and should it, have value
outside the laboratory? These questions are urgent today as universities are
increasingly called upon to help solve practical issues and to boost innovation, and
ultimately to create economic growth - a particular kind of value indeed. This article
A. van Rooij (&)
Faculty of Science, Institute for Science, Innovation and Society, Radboud University Nijmegen,
Mailbox Number 77, PO BOX 9010, 6500 GL Nijmegen, The Netherlands
e-mail: [email protected]
123
Minerva (2014) 52:263–272
DOI 10.1007/s11024-014-9254-1
tries to get a grip on these issues. We focus in particular on economic value (i.e.
innovation) and, consequently, on the natural and engineering sciences as these fields
are commonly thought to hold the greatest potential for such value creation.
We draw together a diverse set of studies from economics, history and policy to
construct answers to two sets of straightforward questions about the economic value
of university knowledge production.1 First, we simply assume that there is value to
be had and ask how it comes about, in which direction it flows and what levels of it
have been reached. Second, we take a step back and ask if innovation is something
universities should (want to) do and ask what kind of value should be created.
Ultimately, the question is whether or not we - as academics, policymakers,
companies and/or tax payers - should care about the particular value university
knowledge production creates through innovation, and if so, why?
The approach of this paper is integrative: it juxtaposes key contributions from diverse
fields and constructs patterns in the relations between university knowledge production
and innovation. In this way we end up with a remarkably coherent picture on the role of
university knowledge production in innovation. This coherence typically remains below
the surface of full reviews because the literature is so voluminous; it also remains from
view in many empirical contributions because the literature is so fragmented.
We also end up with a deceptively simple point. University knowledge production
creates innovation but this has not, is not and will not become the core function of
universities. The simplicity of this point, in turn, grounds the literature; there is much
less to do about the value of university knowledge production than suggested by the
literature.2 University knowledge production is not that important for innovation.
Mechanisms of Value Creation: Knowledge as Product or as Capability?
How does university knowledge production generate value outside the university
laboratory? The straightforward, yet crucial answer is that there are several different
channels through which university knowledge production travels in the process of
creating value (Salter and Martin 2001; see Table 1). An illustrative study of the early
1980s focused on the value of British radio astronomy; it concluded that the economic
benefits were limited; according to the radio astronomers themselves, and according to
industry, the most significant effect was the provision of trained manpower for high-tech
industries. Postgraduate radio astronomers acquired generic knowledge of advanced
electronics and computers that could be put to use in a wide range of industries. Some
postgraduate radio astronomers found employment in the telecommunications industry
to work on the design of antennas. Others started to work in the medical devices business
where they used their knowledge to separate signal from noise (Martin and Irvine 1983).
Studies in this vein have led to consistent results. First of all, university knowledge
production contributes to the education of young people; once they leave the university,
1 We prefer to use the term ‘‘knowledge production’’ as a broad reference to what laboratories do. For a
discussion of the differences between different types of laboratories, see Van Rooij (2011).2 To further emphasize this point, we preferably cite older literature over newer literature. In addition,
because this is a short paper, we also cite selectively.
264 A. van Rooij
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they may deploy their knowledge in various ways that helps them do their job and,
perhaps, also to innovate. In addition, the results of academic knowledge production
often find their way to businesses and other stakeholders through publications. Direct
personal contacts are also crucial and are often not formalized by contracts or by other
means (Gibbons and Johnston 1974; Onida and Malerba 1989; Martinelli et al. 2008).
One study summarized such findings under the title ‘‘talent, not technology’’ (Salter et al.
2000); university knowledge production builds a generic capability that other actors can
build on but that rarely delivers specific innovations directly.
Similarly, studies of knowledge production networks show that firms build
networks with universities to gain strategic access to the cutting edge of knowledge
production, to keep up-to-date, and to be able to tap into promising fields if
commercially interesting; in other words, firms mostly do not build such networks to
develop a specific product or process innovation (Laredo 1995; Feller et al. 2002).
For example, an investigation of the British Alvey program, a public-private
collaborative venture in computer technologies that ran from 1983 to 1989, found
that the program increased ‘‘luxury R&D’’ and ‘‘insurance R&D.’’ Firms extended
their effort in core technologies with projects that would not have been undertaken
in the absence of the Alvey program, and in relatively far away fields that might
become important to the firm in the medium or long term (Quintas and Guy 1995).
Direction of Value Creation: Science-Based Industry, or Industry-BasedScience?
Industries such as chemicals and electronics are often portrayed as science-based;
the technologies they use, and the products they make, are based on an
Table 1 Value
creation channels: A
summary
Publications
Instrumentation
Patents
Designs
Design methods
Contract research
Spin-offs
Consultancy
Joint laboratories
Informal exchange
Trained personnel
Teaching cooperation
Source Callon 1992;
Martin 1996; Salter
and Martin 2001
University Knowledge Production and Innovation 265
123
understanding of the underlying principles. Academics often use this argument to
enhance the status of their particular type of knowledge production (Kline 1995) but
it underestimates the complexities of developing a practical, working technology.
The relations between any laboratory knowledge production and innovation are
not straightforward (Quinn 1959). Innovation relies on more than laboratory
knowledge; it needs marketing skill to determine where the most interesting markets
are and what customers on these markets want, it needs management skill to deal
with unexpected results, frictions between laboratory and other departments, and so
on; in short, integration of laboratory knowledge with other types of knowledge is
crucial (Teece 1986). Laboratory knowledge generates value only after it has been
integrated into a product or a service (See Van Rooij (2007) for an empirical
illustration of this point.).
This need to integrate knowledge complicates innovating from academic
knowledge production. Where exactly the boundaries of academic knowledge
production and other types lie has been the subject of intensive debate and this
boundary shifts over time (Van Rooij 2011). Typically, however, universities
produce (partial) answers to why and what questions; academics are interested in
how phenomena can be explained, and, by doing so, produce data and the tools
necessary to gather that data (Lintsen 2006). Typically, moreover, this knowledge is
produced separate from a specific context or site of application. Compare such a
laboratory to an ideal type R&D laboratory in industry: this laboratory will work
particularly for the firm it is part of, and on problems relevant to that firm. Business
functions such as marketing and strategy will guide knowledge production to topics
relevant to the firm (even if such guidance is often contested between functions, see
Hounshell (1996); Homburg 2003). Academic knowledge production tends to
produce knowledge that is generic and produced without a strategic sense of where a
market could be found.
In this perspective, the (relative) success of academic knowledge production in
sectors such as instrumentation and pharmaceuticals is not surprising. Academics
will know the market for instrumentation as they are part of it themselves.
Advanced measurement kit can also be sold as a service from existing laboratories.
In pharmaceuticals, innovation hinges, in short, on finding active compounds and
proving that they work; the basic orientation of academic knowledge production
works relatively well here.
There is a second issue complicating the role of academic knowledge production
in innovation. More often than not, the fundamental principles become clear only
after a working technology has been produced and usually after further investiga-
tions into the matter have taken place; understanding usually follows utilization. In
this sense, academic science is of limited value when developing technology
because it lags behind the technological frontier (Scranton 2006).
This lag between technologies and understanding has consequences for the
knowledge production programs at universities in subjects that are (potentially)
relevant to industry; sometimes universities follow industry. Before the First World
War, German academic electrical engineering drew its personnel and its ideas
mainly from industry; it was an ‘‘industry-based science’’ (Konig 1996). In the
1950s and 1960s, knowledge production at universities lagged knowledge
266 A. van Rooij
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production in industry in key fields such as polymers and catalysis; industry
laboratories were better equipped than university laboratories, and lacked the rigid
disciplinary-based organizational structure of universities that prevented such
subjects from being taken up there (Homburg 2003: 27–28). Similarly, Stanford
University’s program in solid state physics contributed to the development of
Silicon Valley but that program drew heavily from industry for personnel and
priorities (Lecuyer 2005). The value of universities, then, is not a one-way-street
from universities to industry; the opposite route is just as important.
Levels of Value Creation: Rising, but Significant?
To what extent does university knowledge production generate value outside the
university laboratory? It is important to note when this question emerged. The idea
of science being fundamental to technology got a tremendous boost from weapons-
development projects during the Second World War. This prompted an unprece-
dented expansion of R&D laboratories in the public and private sphere in the belief
that new technologies would surely follow (Hounshell 2004), even if reality was
much more complex (Edgerton 2004). By the late 1960s, particularly economists
took aim at the perceived causality between science and innovation - to find it did
not exist (e.g. Mueller 1962; Langrish et al. 1972). Against this backdrop both
private and public spending on knowledge production dropped sharply in the 1970s
(Hounshell 1996: 50–51; Homburg 2003: 43–47).
More recent research into the level of value creation has rebalanced the picture.
Econometric studies have shown that not all innovations are built on university
knowledge production but that important innovations are. In addition, university
knowledge production has an impact in some sectors, including instrumentation,
pharmaceuticals, and biotechnology, but not in all (Jaffe 1989; Cohen et al. 1998).
Still, one key study in this vein found that, in the United States between 1975 and
1985, 10% of all innovations in a few key industries such as chemicals and
pharmaceuticals could not have been developed without academic knowledge
production (Mansfield 1991). So 90% of the innovations could have.
The scale of the university system should also be kept in mind here. In 1963, Derek
de Solla Price famously noted that 80 to 90% of all scientists that ever lived were alive
in his age (De Solla Price 1963). The teaching function of universities has also
expanded. In 2000, approximately 100 million people were enjoying higher education,
a two-hundredfold increase since 1900; particularly since 1945, and again since 1960,
have enrollment numbers increased sharply (Schofer and Meyer 2005).
Universities have evolved into very large organizations. To get a sense of their
efficiency in value creation, inputs and outputs should be compared; such analysis is
rare but instructive. In the late 1990s, universities accounted for 3–5% of all patents
while they spent 17% of the total R&D budget (Pavitt 1998). A study of 54
American universities found the levels of value creation to be varying widely and
only seven universities to be ‘‘relatively efficient’’ when inputs and outputs were
compared (Anderson et al. 2007). Similarly, the expansion of the teaching function
does not seem to have been driven by demand for advanced skills in the labor
University Knowledge Production and Innovation 267
123
market (Schofer and Meyer 2005). In this perspective, the levels of value created
with university knowledge are not that spectacular.
What Kind of Value? And Value for Whom?
At this point, we can take up a fundamental issue; if we think about university
knowledge production as giving or creating value, a key question is: what kind of
value? This question is quickly followed by a second one: value for whom?
The preceding sections of this article, like the literature on which it is based, have
taken a rather narrow perspective on the issue of value; on the whole, we are talking
about economic value: the practical, utilitarian and ultimately monetary value
created by university knowledge production. University knowledge production
should lead to new products, better treatments for serious illnesses, better planning
tools etc. However, university knowledge production creates many other kinds of
values as well; it creates scientific value (it adds to the stock of knowledge), it has
educational value (it contributes to teaching young people), it creates cultural value
(it adds to the prestige of nations) and so on (Callon 1992; Martin 1996). The
defining characteristic of a university is its ability to pursue different kinds of value
at the same time (cf. Geiger 1990).
The dominance of economic value is rooted in the (additional) validity university
knowledge production gets through this kind of value: universities contribute to
innovation, innovation contributes to economic growth, and economic growth
contributes to the wellbeing of society (Kline 1995). Hence, universities have a
crucial role in society. Since the late 1960s, policymakers have fueled this fire by
emphasizing the need for the renewal of the economy through innovation.
Knowledge production was no longer viewed as a motor of progress but as a source
of strategic opportunities (Blume 1986); universities should interact with businesses
to provide the knowledge they need to innovate. In the 1970s, this was framed with
‘‘demand pull’’ over ‘‘science push’’; in the 1990s, the ‘‘innovation system’’
approaches similarly underlined the need for interaction (Godin and Lane 2013).
The narrow perspective on value creation has some serious consequences. First of
all, it tends to emphasize the natural and engineering sciences stronger than the
social sciences and the humanities. Although the humanities may create economic
value, they are not commonly thought of in this way (and little research has been
done on this). The narrow perspective also neglects the traditional functions of
universities, and the expansion of those functions over the past 40 years, while
economists have consistently shown that students and publications are important
value creation channels. Finally, the narrow perspective simplifies innovation to a
transfer process instead of an integration process. Universities that emphasize value
creation shoot themselves in the foot: the level of practical utility attained by a
typical university compares poorly to the time, energy and money put into it, while
the link between the knowledge produced and the value created remains indirect.
When there is not enough innovation, and there is of course never enough
innovation, the blame falls on university laboratories (Tait and Williams 1999).
268 A. van Rooij
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The ‘‘Entrepreneurial University’’ or the ‘‘McUniversity’’?
In this perspective, the question is whether university knowledge production should
(strive to) create innovation. Here, we have to deal with two flourishing but opposing
bodies of literature; the literature that embraces economic value creation as a valid and
necessary job for universities and the other that rejects it. Strong metaphors are used on
both sides; we have the image of the ‘‘entrepreneurial university’’ (going back to
Etzkowitz, 1983), producing knowledge directed towards value creation, and the
‘‘McUniversity,’’ producing knowledge like a production-line commodity (Parker and
Jary 1995). Both denounce the ‘‘ivory tower,’’ the idea that university knowledge
production is essentially an intellectual endeavor, governed by its own rules and
standards (see Shapin (2012) for a discussion). Both these streams of literature, in other
words, make a strong historical claim that universities have changed and no longer
(only) produce disciplinary-based knowledge, in disciplinary-based departments,
leading to peer reviewed publications in disciplinary-based journals.
A problem with this debate is that it is unclear whether the historical idea of the
university’s evolution is valid, and to what extent. Around 1900, for instance,
American land grant colleges explicitly aimed at helping local industry (Geiger
1986) while engineering sciences like electrical and chemical engineering provided
the tools to use science to solve practical problems (Rosenberg and Nelson 1994).
The research unit, as an organizational device, has also been used to accommodate a
variety of tasks and objectives simultaneously (Geiger 1990). Studies that tried to test
the different models of the entrepreneurial university have also come up with mixed
results (see Hessels and Van Lente (2008) for an overview).
A more balanced position argues that university knowledge is relevant to
industry, and should be so, but that a division of labor should be respected.
Universities excel in producing knowledge to understand phenomena, not in
producing designs or products; the work necessary to take an idea out of the test
tube and into the market should be left to firms (Rosenberg and Nelson 1994).
Similarly, the ‘‘Triple Helix’’ model suggests that firms, universities and govern-
ments should work closely together to boost innovation performance of a local,
regional or national economy (Etzkowitz and Leydesdorff 2000). However, frictions
may occur exactly at the interface between universities and firms. The debate on
university patenting starts at this point. The enactment of the Bayh-Dole Act in the
US in 1980 allowed universities to patent the results of federally funded knowledge
production and triggered extensive investigations of university patenting (Grimaldi
et al. (2011) for an overview). Patenting may facilitate the transfer from universities
to firms but writing a patent is not like writing a research paper. Patenting,
moreover, asks hard questions about what should be patented and commercialized
and under which circumstances (Packer and Webster 1996).
University Knowledge Production and Innovation
This paper has tried to get a grip on university knowledge production and
innovation. We can conclude that the links between university knowledge
University Knowledge Production and Innovation 269
123
production and innovation are heterogeneous; for some sectors of the economy, and/
or some pockets of university knowledge production, these links are important and
here university knowledge production can have a direct impact. Even so, the direct
economic value of university knowledge production does not seem to be very
substantial, particularly when the scale of the university system is taken into
account.
From this perspective, the key issue at stake shifts; the role of university
knowledge production in innovation is essentially a question about the role of
universities in societies. The ivory tower of independent, detached or even
otherworldly academics producing the knowledge they think needs to be produced
no longer fits a university churning out thousands of students, doctorates and
publications each year, and consuming a fair share of public money in the process of
doing so. At the same time, it seems unlikely that every university will become a
hothouse of innovative activity full of heroic entrepreneurs producing next-
generation technologies that will change the world.
A contemporary university needs to juggle different missions at the same time:
teaching, knowledge production and innovation. Recognizing the differences would
help. The traditional model of the university remains important for the provision of
trained manpower through teaching and for maintaining a pool of knowledge
through publishing; these activities create practical and utilitarian value as well but
in an indirect way. Universities can play a direct role in value creation processes by
patenting, creating spinoffs or otherwise but only in addition to their traditional
missions. If we need more innovation and entrepreneurship, look to the knowledge
integrators, not the knowledge producers. Ultimately, universities can only help
others produce innovation. In this sense much of the literature is overdone; it over-
estimates the importance of university knowledge production.
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