How do changes to university funding impact knowledge exchange?

Dr Abhijit Sengupta, Dr Andrea Filippetti and Dr Alex Chaix shared insight in this panel discussion, chaired by the CIMR’s Dr Federica Rossi.

Policy interventions have played a key role in turning knowledge exchange engagement into a core university mission. At the same time, public funding for academic research and education has shrunk in many countries, prompting universities to increasingly rely on private sources of income.

In Wednesday’s CIMR Debate in Public Policy, chaired by Dr Federica Rossi, panellists explored the impact of changes in funding sources on universities’ knowledge exchange engagement.

The impact of changes in university funding on knowledge exchange profiles

Dr Abhijit Sengupta (University of Surrey) kicked off the session by sharing the findings of a paper written with Dr Federica Rossi exploring how changes to university funding have impacted knowledge exchange profiles.

Using the dynamic capabilities framework, the researchers examined how universities strategically realign their knowledge exchange profiles in response to changes to their financial environment. They found that when knowledge exchange income becomes more important for an institution’s finances, universities become more engaged in leveraging and learning, building on and specialising in existing expertise. Conversely, when research income becomes more important financially, universities are encouraged to diversify their research portfolio and develop new capabilities.

These changes are diluted for universities with a broader research base and to some extent for those with greater overall resources, but are nevertheless important to consider for researchers and university managers alike. The findings suggest that if there are policies in place which encourage private income sources, universities will become more specialised and more risk averse.

The economic nature of knowledge, or why do we need public research

Abhijit was followed by Dr Andrea Filippetti (CNR, Rome), who shared insight into the impact of public versus private funding sources on research activity. Since the 1980s, we have seen a trend for public research and development to decrease, while privately funded research and development has increased.

Andrea argued that the context of funding has significant implications for society, technological development and economic growth. In a paper written with Birkbeck’s Professor Daniele Archibugi, he argues that publicly generated knowledge and privately generated knowledge have different economic characteristics, especially when it comes to excludability.

The difference arises from the purpose of public versus private research. The main purpose of privately funded knowledge is to contribute to profits, whereas the main purpose of public research is to contribute to the advancement of knowledge and social welfare. Privately funded knowledge is therefore more likely to involve industrial secrecy, intellectual property rights and excludability in production associated with firm-specific technical knowledge.

To some extent, Andrea argues that this shift is inevitable, as private funders are operating in a different context where profits are required, however the increased rivalry and excludability this engenders has an adverse effect on innovation.

A practitioner’s point of view on changes in funding and changes in approaches taken by the university sector

The presentations were followed by discussion from Dr Alex Chaix (UKRI). Working at the interface between universities, knowledge exchange and policy making, Alex offered a practitioner’s perspective on the changing approaches taken by the university sector.

Alex highlighted that for researchers, commercialisation is a means to an end and commercial routes allow institutions to realise the broader impact of their research. This was demonstrated recently with the COVID-19 vaccine development, where the manufacturing power of industry supported the work done by public research.

Alex argued that collaboration between the public sector and business is necessary to lead the COVID-19 recovery through research. An understanding of how knowledge exchange funding affects research and knowledge outputs is useful to move policy decisions forward.

The debate prompted a lively Q&A from the audience, who questioned whether the sources and the means of funding provision ought to be considered alongside aggregate funding and how the findings presented in the debate impact specialist institutions compared to those with a broader knowledge base.

The recording of the workshop is available here