How does academic research really benefit business?

AcademicResearchCompanies’ ability to innovate often depends on acquiring knowledge from external sources and integrating it with their internal research and development. Interactions with universities allow companies to embed scientific knowledge in their internal innovation processes.

On the Edward Elgar blog, Dr Federica Rossi and Professor Aldo Geuna explore the most effective ways that research can help business. They also shed light on some key issues, which challenge commonly held ideas about how knowledge transfer occurs.

The social sciences have a key role in regional knowledge transfer

A lot of interactions between companies and universities focus on providing solutions to legal, logistic, marketing, management and organizational problems. This concerns mainly companies and universities based in the same region, because business problem-solving (for example, problems that have to do with human resource management, marketing, legal compliance, and so on) builds upon detailed knowledge of the socioeconomic and legal-institutional context in which the firm operates.

Interactions between more distant universities, however, are more likely to concern technological issues. Companies that collaborate with distant universities are often larger and tend to invest more, since technology-focused projects are usually more expensive than those focused on the solution of business problems.

Theoretical academic knowledge is particularly valuable to business

According to a survey of company inventors, collaborations that involve direct interactions between industry researchers and academics lead to more valuable inventions, as well as interactions where universities transfer theoretical knowledge and scientific principles. The latter is an unexpected result, since the theoretical knowledge developed by academics is believed to be far from having an impact on industrial innovation processes.

What does this mean for universities?

  1. Universities should focus on enabling academics to interact with industry instead of insisting on regulating all interactions between academics and companies.
  1. Universities should exploit their business problem-solving competences to support the needs of local businesses and to strengthen intra-regional collaborations.
  1. Universities should continue to put their resources into producing the high level knowledge that very few other organizations in the economy are capable of generating. Their key source of competitive advantage resides in the development of advanced, cutting edge theories and methods.

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