Socioeconomic Institute – University of Zurich

1. Socioeconomic Institute – University of Zurich Six Countries Programme Conference ‚The Future of Research‘,Rotterdam, 21-22th April 2005 Parallel Session 1, 21th April 2005 ‚Entrepreneurial Universities‘ – Lessons from Swiss Universities of Applied Sciences Beat Hotz-Hart(in co-operation with Andreas Reuter-Hofer) Swiss Federal Office for Professional Education and Technology OPET Socioeconomic Institute – University of Zurich beat.hotz@bbt.admin.ch; andreas.reuter@bbt.admin.ch homepage: http://www.soi.unizh.ch/chairs/hotz/index/html Hotz-Hart

2. Table of Content • Entrepreneurial Public Research Organisations (EPRO): its meaning and trends in Europe • Situation in Switzerland: the example of Universities of Applied Sciences • Lessons from Swiss experience on UAS and implications for successful EPRO • Summary and outlook into the future Hotz-Hart

3. 1. Entrepreneurial Public Research Organisation: its meaning • University reform of organisational setting according to managerial principles • Customer orientation and marketing of R&D findings, of competences and infrastructure • Adjustment of employment contract of R&D personel • Creating independent KTT-Offices with a broad portfolio of services • Build up of its own portfolio of licences and investments • Extending joint finances in teaching and R&D with business sector Hotz-Hart

4. ... and its major success factors as a ‚Business Model‘  ,Entrepreneurial‘ = market-oriented! • Customer focus / driving forces behind innovation • Need for stronger science-based knowlegde / fusion technologies by firms • Need for extensive external enabling services by firms • More outsourcing and flexibility, acquisition of exclusivemarket-orientedexternal knowlegde and expertise by SMEs (‚Open innovation‘, Chesborough) • Excellent base of human capital and knowledge • High flexibility • International network Hotz-Hart

5. Trends in Europe: Stronger differentiation of institutions • Build up and expansion of KTT-Offices at Universities and Universities of Applied Sciences • Creation of independent KTT-organisations close to Universities • Build up and internationalisation of large scale R&D-Institutions • Expansion of R&D-service provider in the private sector (KIBS) • etc. Hotz-Hart

6. Private R&D services Universities of Applied Sciences(incl. their KTT-offices) Autonomous KTT-organisations with own R&D-capacities andstrong relationship to university Trends in Europe: Attempt to classify important examples Degree of freedom of R&D FH Schweiz: less than 20% by firms; total R&D contracts?, 5 spin-offs, 5 license agreements Low (commercial focus) GWT Dresden: 79% by firms, total R&D contracts:100% Big ResearchInstitutes in R&D GermanFhG: more than 30% by firms, total R&D contracts: 60% High (no commercial focus) KTT by naturalscience-oriented Universities Imperial College London: 20% by firms; total R&D contracts: more than 40%, 50 spin-offs, 60 license agreements Financing R&D privat public Hotz-Hart

7. Private R&D services Universities of Applied Sciences(incl. their KTT-offices) CantonalUniversities 2. Situation in Switzerland Degree of freedom of R&D Low (commercial focus) Big ResearchInstitutes in R&D Autonomous KTT-organisations with own R&D-capacities andstrong relationship to own university High (no commercial focus) ETH Zurich and Lausanne Financing R&D public privat Hotz-Hart

8. Situation in Switzerland: The ,political‘ view • Performance contract KTT • Practical orientation • ,Transformer‘ of basic research • Political solution of EPRO Scientific System Economic System ... The Example of Switzerland (2) – The ,Political‘ View ETH MNE UAS SME Knowledge-Transfer Cant. Univers. Hotz-Hart

9. ETH FH County Univers. Situation in Switzerland: The ,true‘ story is more complex! Scientific System Economic System SME MNE Spin-offs privat R&D services Start-ups Knowledge-Transfer Hotz-Hart

10. Situation in Switzerland: Empirical Evidence in 2002 Swiss Fed. Inst. of Technology UAS County Universities Source: CEST Hotz-Hart

11. Applied Research: Technology Development Product Development Market Sales Market Sales Explanation (I): Basic research-oriented innovation processes ,Classical‘ approach Free Basic Research Universities for Applied Sciences ETH and Universities Private R&D Services The new mode Knowledge-orientiented basic research proactiv, targeted basic research Product and Process Development reactiv, targeted basic research Hotz-Hart

12. Market Sales Explanation (I): … and its consequences proactiv, targeted basic research Product and Process Development Free Basic Research reactiv, targeted basic research Private R&D Services ETH and Big Universities Universities for AppliedSciences • Customer focus: need for … • stronger science-based knowledge / fusion technologies by firms • extensive external enabling services by firms • Customer focus: need for … • extensive external enabling services by firms • exclusive market- oriented knowledge InstitutionalConsequences! Hotz-Hart

13. Empirical Evidence: Outsourcing of R&D expenditure acc. Economic sector und recipient, 2000, in mio CHF • important role of private R&D-services • major EPRO-competition from abroad Strongly science-based Hotz-Hart

14. Empirical Evidence: Major clients of innovation agency, CTI, according to project contracts Hotz-Hart

15. Explanation (II): the impact of Bologna – Relationship between teaching and R&D Bachelor Master • UAS mainly teaching • Related to practical and a_R&D • No research on top level needed • Missing incentives for staff with aR&D interests • Mainstream in the eyes of Unis • Teaching including R&D • Active R&D on top level needed • Strong staff with R&D-potential • Links to companies • Knowledge base and competences finned out • Growing separation of aR&D from top level research • Customer focus: Second best solution as partner in transfer of scientific knowledge • Scientific knowledge base and competences are renewed regularly Customer focus: First best solution as partner in transfer of scientific knowledge Hotz-Hart

16. Explanation (III): Education, Labour Market and Competition in R&D Teaching on tertiary level Economic System Start-ups Universities Spin-offs Flow of research-trainedhuman capital Firms private R&D services UAS Competition in KTT Hotz-Hart

17. 3. Lessons from Swiss Experience on UAS • Driving forces behind innovation and research are interrelated ! • Innovation depends on basic research and a strong science-based knowledge • Fusion technologies • Political vision of UAS in danger with respect to R&D and KTT • Bologna weakens science base of UAS • Service activities of top universities in KTT are increased • Firms look for internationally oriented first best-solutions with public or private partners • Increasing competition of UAS through private services and increasing number of academics  Natural selection of autonomous RTOs brings best results on successful EPRO-Business Model Hotz-Hart

18. Implications for Successful Business Model on EPRO • Competition pressure through …. • growing supply in KTT from private side • foreign institutes in basic research with potential for transfer increases • Strength of RTOs is based on basic research • Customer focus by looking for institutional partners in science-based knowledge transfer • Its own strong human capital base • Specialisation and focussing needed -> Build up of new institutions • Overall supply of servicesneeded (enabling customers!) Hotz-Hart

19. Summary and outlook • Growing differentiation between universities and R&D-institutions • Growing differentiation within research based top universities • Increasing supply of private services in R&D • Intensified international competition amongst the best EPRO • UAS lose relevance in R&D -> Trend towards teaching universities • R&D of major research institutions focuses more on basic research Hotz-Hart