University – Industry Collaboration for Value Addition

Excerpts from the Uva Wellassa University Convocation address 2018 delivered by Prof. Ananda Jayawardane, Director General, National Science Foundation, Senior Professor in Civil Engineering, University of Moratuwa and Former Vice-Chancellor, University of Moratuwa.

I have noted that over a relatively short history of 13 years, UWU has earned great reputation as an enterprising university in Sri Lanka with its vision to become the centre of excellence for value addition to the national resource base in Sri Lanka. I was really fascinated to see some of the core values of the university - entrepreneurship among all, interdisciplinary degree programmes and goal orientation. The key focus of the university is to carry out project based research with the theme of ‘Value Addition’, rather than conducting arbitrary research, and the modern entrepreneurial university concept with a strong science and technology focus offering flexible and interdisciplinary courses in order to meet the social, scientific and technological needs for national development indeed inspired me.

In this backdrop, at a time when the university is striving to be a modern entrepreneurial university with “Value Addition” as a focus, moving away from silos of knowledge and embracing an interdisciplinary and multidisciplinary culture without friction or segregation, and at a time when the graduates turn a new chapter in their lives with the newly acquired qualification, moving from a learning environment to a more practicing and enterprising environment, I thought that it is appropriate to choose the topic “University-Industry collaboration for value addition” for my convocation address.

I will address this under 5 subtopics

1. Value addition status of our economy;

2. The need for university-industry collaboration;

3. The university preparedness and good practices;

4. The need for alignment of players and facilitation; and

5. Our collective role

1. Value addition status of our economy

In order to generate wealth for our country, we need to sell our products and provide our services outside our country and earn forex, and reduce importing products or services in an open economy not adopting any protectionist measures or enjoying subsidies, thereby saving our forex. This means that our products and services must be globally competitive. Selling them even within our country is a great challenge if they cannot be provided competitively, in other words if they can be obtained more economically through imports under the open economic policies.

Are we competitive globally? Yes, in some but not in many. We have some success stories. For example, our electronic sensors are used by the world’s best car brands, our apparels are worn by the world’s top athletes in Olympics, our surgical gloves are used by the world’s top surgeons, our tyres are used in the world’s best aircrafts, our software and algorithms are used in the world’s leading stock exchanges, in doing over one billion eBay transactions per day, and several other similar stories. But the point is that this is not enough. Our trade deficit increases.

We cannot be happy about the “Value Addition” that we provide to our goods and services. It is through value addition to products and services that we can generate more wealth. Value addition takes place with knowledge and technology. For example, look at your smart phone. We are paying for value addition through the knowledge built in.

We are striving but not making significant headway in this value addition game. We have not been improving in our value added high tech products over decades and according to World Bank statistics in 2016, in Sri Lanka it stands at 1% of all exports. In India it is 7%, Thailand 22%, Malaysia 43% and Singapore 49%.

Despite our ambitious plans and strategies already set, such as Cabinet approved Science, Technology & Innovation Strategy for Sri Lanka in 2010 outlining many areas to be addressed, our governments have failed to meaningfully address the issues, invest finances and make a conducive environment. For example, according to the National Science Foundation published Sri Lanka Science, Technology and Innovation Statistics 2015, our R&D investment is 0.106% of GDP, the lowest in the region; it is 0.63% in India, 1.3% in Malaysia, and 2.2% in Singapore. Sri Lanka has only 6117 scientists in all fields and only 944 PhDs. It is 106 full time equivalent for a million population. In China, it is 1036, in Malaysia 2261 and in South Korea 7087. If we consider our patents which is an indicator of knowledge creation, in 2015 we obtained only 262 patents, while Malaysia obtained 7700.

Even for our long standing agriculture field we have not done a significant value addition or application of modern technology. We have plucked and processed Tea more or less the same way for many decades and have only marginal value addition in the product range, losing our competitiveness to countries like Kenya. We produce the best natural rubber in the world but are losing competitiveness due to low technology used in tapping and processing, due to substitution by synthetic rubber and due to diminishing production. There is no significant value addition in products except in the solid tyre industry; instead, we export raw rubber and import erasers. We produce the best Cinnamon in the world but import many value added products including medicines and perfumes. In this backdrop, the firm resolve of UWU on “Value addition” to our natural resources base and carrying out research targeting industry issues, and producing enterprising graduates must be truly commended. I earnestly believe that the UWU and its graduates will play a leading role in overcoming these challenges.

2. The need for university-industry collaboration

Today, the universities cannot be considered as halls of knowledge and learning if they are producing graduates and postgraduates and carrying out research and knowledge creation in an ad hoc way. Despite the academic freedom enjoyed in the universities for academics to work and carry out research in their own areas of academic pursuits, there is increasing global pressure for the universities to have stronger partnerships with the industry, to produce graduates targeted for industry needs, to carry out research to solve industry problems and to develop and transfer cutting edge technologies for industry competitiveness. In fact, research and development investment in the universities are now increasingly targeted for outputs and soon there will be no funds allocated for ad hoc research where research benefits are not targeted for social and economic prosperity.

There are many examples of very fruitful university industry partnerships and university driven industry clusters. For example, Silicon Valley where over 2,000 tech companies are doing their innovations is a Stanford University initiative. Most pharmaceutical corporations world over work very closely with universities for drugs development and testing. Many developed countries and increasingly developing countries get the services of university experts to do their research and development with many mutual benefits. In Japan, such collaborations are identified as Need-Seed, where industry needs are addressed by the university academics identified as Seeds. In Sri Lanka too such fruitful collaborations are evolving with many spill over benefits. For example, University of Moratuwa (UOM) collaborates with the industry in many ways and similar initiatives are already existing or evolving in other universities too including UWU.

3. The university preparedness and good practices

The most influential factors for effective university–industry collaboration is the University Vision, incorporation of that vision in the Strategic Management Plan and the successive top management commitment for its realisation. For example, the UOM vision is “to be the most globally recognised knowledge enterprise in South Asia”. We need to inculcate in the minds of the university community and other stakeholders including the industry that we would like to be a “knowledge enterprise”, meaning that the university focus is not only teaching and research but also many enterprising activities with outward orientation, taking risks without breaking regulations, leveraging generated funding, proactive development and implementation of policies and projects with positive influence.

The biggest strength of the UOM is the use of many different mechanisms for effective university-industry collaboration as briefly explained below.

A forum for university-industry dialogue

This is where every academic department is supposed to meet the industry once every 6 months to discuss many aspects for mutual benefit. At UOM we call it Department Industry Consultative Boards (DICBs). The composition of the DICB is 50% department academic staff including industrial training and 50% industry partners representing key employers and strategic organisations.

An external commercial arm

The UOM has an external commercial arm - UNI Consultancy Services (UNIC). This is an entity registered under the Company Registrar as an Association Limited by Guarantee with voluntary membership limited to academic staff of the University.

Accounts are audited by an independent audit firm and the university maintains an arm’s length relationship with this entity. One important advantage of UNIC is that it can bid for projects using resources in and out of the university. When the university human resources are used an agreed percentage of any payment made to university academics should be given to the university as a donation.

Industry funded R&D laboratories

This is a mechanism where the industry invests for research by providing funds to the university to establish research facilities, pay for staff and meet other expenses to carry out research and development which has immediate commercial potential. The university provides expertise, space and research students where relevant. The UOM has been very successful with such collaborations in a range of technological developments. From the point of view of the industry, such collaborations provide solutions to problems that the industry is not equipped to answer by itself without the help of the multidisciplinary expertise available at the university.

They expose industry researchers to new research trends, advanced technical and analytical approaches and novel experimental techniques. They can identify improvements in processes and develop new products driven by new technologies and help to meet the challenges of the price competitive, and quality conscious global market.

From the point of view of the university, such collaborations provide increased recognition to the University, opportunities for academics to disseminate knowledge gained through research programmes, capacity building for academics on handling real industrial problems and additional income to the technical staff. Furthermore, they facilitate more effective utilization of laboratory equipment, upgrading of laboratory facilities, opportunities for undergraduates and postgraduates to conduct strategic research, obtaining research grants under public-private partnership and opportunities to attract high quality research students to pursue research leading to PhDs.

Industry funded endowed chairs

Our universities have strategic areas which need a real push and a champion to lead. Such champions are difficult to draw from academic staff specifically in new areas. This is where the industry support can be obtained to establish endowed positions with high remuneration to attract external champions for limited tenure. UOM has benefitted significantly by two such endowments initially to establish a chair for entrepreneurship and subsequently to broad base it to cover both innovation and entrepreneurship.

These initiatives have led to change the university culture to embrace innovation and entrepreneurship as key areas with enhanced efforts by staff and students, rapid increase of university start-ups and spin-offs, establishment of “The Enterprise” – the universities innovation and entrepreneurship incubator and several other initiatives towards realising the university vision.

4. The need for alignment of players and facilitation

Productive and fruitful university-industry collaboration takes place in a positive and conducive environment. Otherwise, spurts of individual initiatives will soon die due to frustration, constraints and lack of support from the system. Creation of such a conducive environment is broadly referred to as the creation of an eco-system. Such as eco-system needs alignment of players, avoidance of bottlenecks, put in place facilitating incentives, lubricating available mechanisms and many others. Do we have such an eco-system? In my view we still do not. Instead we have many barriers and bottle necks, some of which of course can be overcome leveraging provisions and with innovative thinking. However, we might need to respond to lot of audit queries and COPE inquiries when the system does not have clear provisions.

We are aware that in a competitive world people work for rewards and recognition except for a few who will still work with their conscience for a cause and not expect rewards. What are the incentives for university academics to have effective university-industry collaboration? Do they contribute to their promotion? Do they contribute to the academic work load? Do they affect your university salary? No they do not. However, there are several other benefits in different ways such as reputation building of involving academics, additional remuneration, new case studies for your teaching, ideas and facilities for your research, more research students etc. They are indirect and not all academics are motivated to take such initiatives outside their normal duties.

It is however, heartening to note that several actions are being taken by the UGC to establish more effective university-industry collaborations through the establishment of university business cells. The latest World Bank project AHEAD is also addressing this aspect by providing funds and incentives for such collaboration while the World Intellectual Property Organisation (WIPO) project is facilitating enabling an intellectual environment coordinated by the Coordinating Secretariat of Science and Technology (COSTI), National Intellectual Property Office (NIPO), NSF and universities. Despite these efforts, if we look at international practices, a very important function of a university is technology transfer and in order to facilitate this, every university has a fully-fledged technology transfer office. These tech transfer professionals have formed the Association of University Technology Managers (AUTM) comprising more than 3,200 members who work in more than 800 institutions around the globe with the mission to support and advance academic technology transfer globally (www.autm.net).

The university system needs flexibility and autonomy in some aspects. Creation of new strategic entities, new types of cadre to manage university business cells or entities, their flexible ways of recruitment, flexible accountability as research and development cannot always be successful leading to commercialisation, risk tolerance in inventing and in innovation and so forth. Are we ready to meet an industry need in a timely manner among the other in house duties of academics? Are we prepared to address issues in an inter-disciplinary and multi-disciplinary perspective for more realistic solutions?

This is where, the alignment of all players are needed if we are serious about effective university-industry collaboration.

5. Our collective role

The most important way for effective university-industry collaboration is the facilitation of the eco-system. This is where different payers – individual universities, University Grants Commission, Ministry of Higher Education and other relevant ministries, the Treasury, Department of Management Services, National Procurement Agency and instruments such as national policies, institutional priorities facilitate a common goal with appropriate incentives and compulsion. We also need to be open to interdisciplinary collaboration. Today, due to the complex nature of issues and solutions we need in an advanced society and industry, it is not possible to identify solutions in our own silos of expertise. We need to collaborate with individuals and teams having multidisciplinary capabilities, first to understand the true nature of the areas to be addressed and then to develop realistic solutions looking from all angles and all perspectives.

For example, when we do research and develop solutions for “Value Added” agriculture, the experts in UWU should collaborate with the Department of Agriculture, say Moratuwa University where modern technological inputs can be developed such as drone technology and precision agriculture, microbiologists, genetic experts, farmers, technology developers, industry and end users. How many projects can we count with such interdisciplinary collaboration?

These efforts should also be facilitated by institutions like National Science Foundation, where I currently work in ensuring such interdisciplinary team work targeting specific outcomes leading to commercialisation and practical application. It is heartening to see the dedication of the UWU in correctly identifying the vision, goals and strategies to produce entrepreneurs, carry out outcome based research and focus on value addition. It is clearly a challenge for us to realise this vision and I am sure the top management, the Vice-Chancellor with his vision guided by the University Council, Senate and the Faculties, and the industry supported by the alumni of the university will do their utmost to ensure the realisation of its vision and goals.

Our success can be judged not only by the number of graduates we produce and the number of academic publications our academics contribute, but also the true Value Addition we can talk about which has made our industries truly competitive. While the university will strive to do the best for you the key message for the graduates passing out today is that it is your performance mainly that will demonstrate the extent of Value Addition that we realise and the impact on the competitiveness that you make in the global market.