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Partnering with universities in innovation ecosystems: How to unlock more value

Businesses partner with higher education to foster innovation

As many corporations look to open innovation to augment their internal R&D efforts, universities have become essential partners. Indeed, collaborations with colleges and universities have become de rigueur for businesses that want to get and stay ahead of the competition, with Silicon Valley, Kendall Square in Cambridge, Massachusetts, and Block 71 in Singapore among the most visible innovation ecosystems where universities are essential stakeholders.

Recent research by MIT Sloan Professor Fiona Murray, and her colleagues—Lars Frølund a visiting fellow at the MIT Innovation Initiative and Max Riedel, a consultant on university relations for Siemens AG in Munich, Germany—suggest that there are several scenarios that drive these connections, such as a desire to discover new talent, a need to solve short- and long-term problems, or simply a wish to supplement an existing knowledge base. And university collaborations are an important mechanism for corporations seeking to open up new avenues of engagement with a broader innovation ecosystem.

Yet, while these partnerships are growing in popularity, they have also proven to be challenging, says Murray, who adds that the results of their four-year research project show the process can be frustrating because of a mismatch in university and corporate cultures. “Universities offer companies a wide and at times bewildering array of faculty, programs, and other modes of engagement. Even when the formats for interaction are established, there is often a profound mismatch in the expectations and goals for joint engagement.”

So, what can the interested parties do to make these collaborations successful? According to Murray and her colleagues, a systematic rather than ad hoc approach is critical. Murray explains in an ad hoc approach, collaboration partners are most often chosen based on personal experience and the networks of the researchers and engineers in the company, which can lead to collaborations that aren’t synergistic—putting a heavy workload on certain departments, resulting in delays in the process. However, a more strategic approach can alleviate this situation. Still, businesses and universities alike have found that transitioning from an ad hoc to a strategic model can be demanding because there are a variety of players on each side who want to have a seat at the table, including business units, R&D, individual labs, and centers.

In an effort to understand how to optimize these complex relationships, Murray, Frølund, and Riedel recommend that companies consider these six fundamental questions:

1.) What business goals drive your university partnerships? The researchers suggest five categories of goals: short-term, incremental problem-solving; talent identification and hiring; long-term development of new technologies and solutions; systematic exposure to startups; and publicity and political influence.

2.) What are the key focus areas of your university partnerships, and how are they selected to ensure alignment with your business goals? To ensure that university collaborations are properly aligned with the company’s business goals, the selection process for such partnerships should be as rigorous as a comparable internal process.

3.) Who are your primary university partners, and by what criteria are they chosen? The criteria for selecting these partners include familiarity and fit, location or proximity, the reputation of the university, legal framework, and culture.

4.) What collaboration formats match your focus areas and business goals? A variety of formats are available and choosing the right one can make or break the partnership. The research says ultimately, successful partnering isn’t about choosing a particular collaboration format, but about systematically prioritizing and reprioritizing different formats in response to changing business goals.

5.) What people, processes, and organizational structures support your university partnerships? Determining whether structures are centralized or decentralized is key. Either way, the overall reporting structure needs to reflect the goals of the relationships. And, it’s important that the primary business goals (and the particular choice of who, where, and how) shape the choices.

6.) What key performance indicators are most useful for evaluating your university partnerships? The metrics of success must ensure that what is measured is aligned with the business goals. Metrics include cash investment, number of joint projects initiated per year, and the number of ideas that turn into product development.

Murray and her colleagues believe that working through these six questions can help companies develop a strategic perspective on their partnerships, setting up companies and universities for more effective, successful interactions.

Fiona Murray is the William Porter Professor of Entrepreneurship at MIT Sloan and Codirector of the MIT Innovation Initiative. Find out more about how innovation impacts your company’s growth in Murray’s MIT Sloan Executive Education program, Innovation Ecosystems: A New Approach to Accelerating Corporate Innovation and Entrepreneurship.