Universities and their approach to innovation precincts

Posted September 19, 2018

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SGS Economics adn Planning University Innovation Hospital

Universities play an integral role in innovation precincts across Australia. In this article, we discuss three key factors universities should consider when establishing an innovation precinct.

Over the last few years, we have spent significant time working with universities to scope out and assess potential innovation precincts in central city, suburban and regional locations. University innovation precincts can be defined in a variety of ways but at their essence, they are a university (and/or hospital) anchoring a tightly confined geographic precinct providing:

  • A clear home for targeted research activities, building on strategic direction
  • Research infrastructure and other facilities for shared use
  • Explicit collaboration opportunities for industry and other partners to undertake/commercialise research
  • Programs to ensure that the linkages between precinct members and partners further afield are actively developed, and
  • Opportunities for researchers, graduates and undergraduates to test their research and entrepreneurial skills.

Australia is on its own journey in terms of the development of innovation precincts. Resisting the urge to copy prescriptions from overseas, we have been working with universities to identify and develop important initiatives around innovation precincts that shape their success. An earlier publication, we outline what makes innovation precincts successful in Australia: From alleys to valleys: Creating innovation precincts through inclusive policy.

Clearly universities play an integral role in innovation precincts across Australia. However, our experience tells us that to establish a successful innovation precinct universities should consider a range of factors:

1) Innovation precinct development proposals need direct patronage from university executive leadership

Universities compete for students, researchers and funding in a hotly contested environment. In turn, a university’s strategy must precisely articulate what it focusses on and how it does so with limited resources. University strategy is just as much about what it ‘does’ as what is ‘does not’ do. Increasingly this means that universities need to specialise in certain activities if they are to be successful. This translates to innovation precincts as well. To successfully develop an innovation precinct, universities need to clearly answer the following questions:

  • What are you excellent at? (research strengths)
  • How is this excellence relevant to external parties? (research partners)
  • Who are these external parties and how might they wish to transact with the university? (research collaboration)
  • What does an innovation precinct need to accommodate to sustainably leverage these strengths and partnerships? (research-led innovation).

To answer these questions requires engagement and leadership across the highest echelons of university leadership.

2) Innovation precincts should not be seen as property development or infrastructure development projects

Innovation precinct proposals in Australia are often seen as property or infrastructure development projects, i.e. in isolation from the university’s core business of researching and/ or educating. We are often asked to perform strategic and economic appraisals of innovation precinct proposals, where the location, size and suite of facilities within a proposed precinct are not well-scoped, with little thought given to the:

  • Clarity of focus of research activities that will be performed within the precinct
  • Domestic and/ or global positioning that will be required to attract research collaborators to the precinct
  • Role of geographic co-location in successfully attracting and enabling research collaboration/ commercialisation, and
  • Programs and services that will be required to ensure that clear innovation outcomes are actually generated.

While property and infrastructure considerations are important for innovation precinct delivery, conceptualising innovation precincts as property and/ or infrastructure projects is equivalent to “putting the cart before the horse”.

3) Innovation precincts require operational funding if they are to leverage external funding

Innovation precinct proposals across Australia are seen as a way to leverage additional external funding to resource the university’s research efforts. While this is clearly an opportunity, little thought is given to what university funding is required in the short, medium and long term to operate the innovation precinct.

Research and research commercialisation activities are often cited examples of ‘market failure’ by economists; meaning that without market intervention, there is likely to be underinvestment in these activities. So who is going to pay? Government has a clear role here, but in the absence of committed government funding for an innovation precinct, it is likely that the university will need to invest in innovation precinct operational funding at least in the short term.

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Andrew McDougall

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