The Entrepreneurial University: An Institutional Innovation

Jonathan Ortmans, President, Public Forum Institute

Entrepreneurship is increasingly recognized as central to economic growth. We observe entrepreneurial innovation driving growth in a number of economies such as Israel, Ireland, Turkey, India and China. Universities, particularly research universities, are an important component of any innovation economy. Universities have long been instrumental in developing much of the innovation that benefits our lives. A key question, therefore, is how well universities are prepared to support the transition to a more entrepreneurial economy. The various successful experiences from around the world show that shaping entrepreneurial universities requires commitment to institutional innovation.

Last June, the Kauffman Foundation and the Max Planck Institute gathered university leaders to discuss The Future of the Research University. At this conference, a consensus seemed to emerge: universities can only effectively become incubators of entrepreneurship and innovation if they themselves practice entrepreneurship. For example, Arizona State University’s (ASU) Michael Crow turned this institution into a force for innovation by reconceptualizing a large public university as an academic enterprise. Today, ASU competes for research funds, bright students and faculty and it strives to be responsive to the changing needs of its local and global constituencies. It collaborates with other academic institutions, business and industry, much like a private enterprise.

This “reconceptualization” involved several non-traditional university arrangements. Transforming ASU involved abolishing academic departments, creating new ones, and even helping to found entirely new academic disciplines. This is not surprising. The idea of universities explicitly fostering entrepreneurship in business is quite radical. Traditionally, universities have preferred to partner with government and to shield themselves from private industry. However, as Carl Schramm, Robert Litan and Lesa Mitchell point out, universities have always played, even if implicitly, a vital role in promoting entrepreneurship and growth: they produce and disseminate new knowledge, and they train the scientists who make the groundbreaking discoveries, the engineers who turn those discoveries into new products or processes and the businesspeople who bring those innovations to the marketplace. We observe this highly-dependent relationship in many of our country’s vibrant regions such as Silicon Valley, whose engine is Stanford University. It is estimated that about half of the start-ups in the Valley have their roots in the university.

A few other universities have transformed their role in an innovation economy with success, but they implemented different strategies to redesign the university-industry relationship. George Mason University (GMU) has become a “global university.” To embrace this new paradigm, GMU uses a wide range of technologies and communication strategies to link individuals, localities, national units, multi-national businesses, and trans-national regions. Alan Merten, President of GWU, explains that “a global university does not exist in the ivory tower of yesterday. It is an entity with ever-growing and reciprocal linkages to other entities of equal influence and growth potential, including corporations, domestic and foreign municipalities, and governments.”

And there are good examples from outside the United States. Erasmus University in Rotterdam aims to foster a culture of entrepreneurship in Dutch society in part through a new education curriculum that trains students in entrepreneurship, an initiative similar to the Kauffman Campuses in the U.S.  Government policy which is so important in many economies, has helped universities around the world embrace their role in economic development. For example, national R&D policy has helped to make Israel’s universities entrepreneurial since it has encouraged collaboration between academic and applied research by, for example, supporting consortia from industry and academia, which have bred collaboration, knowledge exchange, and entrepreneurship. In Europe, the Lisbon agenda has been supporting open coordination among economies trying to nurture innovative and entrepreneurial behavior. Many European universities have decided to expand their missions to economic growth.

University leaders’ efforts to support the world’s burgeoning culture of entrepreneurship highlight the challenges, as well as the opportunities, that universities face in the transition toward a more entrepreneurial economy. What works best may depend on a number of factors, including the university's research strengths, the nature of the related industries, especially in my opinion the nature of the region, etc. At the end of the day, while there is no magic bullet, a great part of the success in becoming an entrepreneurial university is clearly the extent to which the university can connect with the broader market of ideas in society and the business community. Growth and innovation demand universities that compete to impact the economy through an entrepreneurial culture.  How a university does this is less important; what matters is that it continues to make the global melting pot interesting and innovation rich.  If you have good examples, let us know.
 

Jonathan Ortmans is a senior fellow at the Kauffman Foundation where he focuses on public policies to promote entrepreneurship in the U.S. and around the world. In addition, he serves as president of the Public Forum Institute, a non-partisan organization dedicated to fostering dialogue on important policy issues.

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