The Eco-System of Innovation: where universities fit into the GBA

Figure: Triple helix of innovation
Source: EU Twinning-Project “Renewables Development in Ukraine” report 2018

An influential piece of writing published earlier this year by Zhuo Zelin of the South China Normal University raises pertinent questions about the role of universities in shifting the GBA economy along the stages of development. From economies based on trade, through industry, service and finally driven by innovation – this final stage is where the work of universities becomes especially relevant.

Zhuo refers to the triple helix model of regional innovation which depicts the way interactions between universities, enterprises and government – all three together – propel this fourth stage of high-quality economic and social development. His position is that the GBA remains in the lower stages of trade and industry-based manufacturing because the eco-system of top-quality research output and integrated collaboration with enterprises and government has not yet been established to enable that outcome.

Zhuo also draws on ideas from Regional Innovation Systems Theory that says a network of players – firms, research institutions, governments and other support organisations (such as chambers of commerce, incubators, industry associations) – are all needed for a region to become innovative. All these players act to create a local context that allows the transfer of knowledge, human capital to build and collaboration to happen.

In turn, that local context is impacted by access to natural resources, geo-political circumstances, cultural and social values, even globally. We are very clearly seeing examples of this in the cascading effects internationally of the Tariff War, destabilisation caused by American government intervention in research and education, effective nationalisation of top-tier universities such as Harvard and curtailment of academic freedom, and uncertainties regarding immigration and visa protections in that country.

What we are currently witnessing from America is precisely the antithesis of the networking thesis and capital requirements of building innovation that we are all working towards in the GBA. The world’s best and the brightest individuals that had aspired to study, apprentice, practice and contribute to the top universities and laboratories in the United States are looking elsewhere as research funding dries up, their visa status becomes precarious, and they are being made to feel unwelcome. Laboratories and academics are being courted by other countries and institutions.

A case in point is the invitation received by Professor Ardem Patapoutian to relocate his laboratory to “any city, any university he wanted” in China with a guarantee of funding for the next 20 years. New York Times reported on this Nobel Prize-winning scientist, whose laboratory – researching new ways to manage pain – lost its federal grant in the recent Trump administration cuts to science and research. Within hours of posting to social media that the funding losses would damage scientific progress and push talented researchers offshore, Patapoutina received the earlier mentioned email invitation to transfer his lab to China. He had himself been an immigrant to the U.S. from Lebanon as a student and had been the beneficiary of an eco-system of research excellence – his loyalty thus remains with his current home, and so he declined the offer.

The same New York Times report, however, confirmed the professor’s hunch – international post-graduate student applications to U.S. universities have dropped, local post-graduates are seeking positions overseas, and the countries, such as China, who invest in scientific research will rise as the new leaders in technology, engineering and other scientific endeavours if they can build the required eco-system.   

Currently, the GBA has a number of advantages for its innovation journey: 1. A strong vision of economic and social development, 2. Policies to achieve this development through innovation, 3. The required resources to innovate, and 4. these earlier mentioned geopolitical circumstances contributing to China’s competitiveness to attract human and knowledge capital. How the triple helix model will manifest for universities, government and enterprises in the GBA is not so clear. 

There are enterprise-led models that have the challenges of short-term profit motives putting downwards pressure on research investment; government-led models that can be disadvantaged by regulatory rigidity; and a rosy view of university-led models that are thought to be the most sustainable due to the knowledge-based capital development rationale: they are uniquely placed for original research and to develop talent, and have a manner of working which, if done strategically, incentivises collaboration across institutions and disciplines for knowledge creation.

Researchers in China note that the region has a way to go to reach the ideal. The university-government collaboration in Guangdong has been reported as not being particularly strong over the last 15 years and remains in decline, but university-industry networks in the GBA are beginning to trend towards a university/enterprise collaboration model of innovation. Another concern is the existence of a silo or split between top research universities and technical institutions which undermines that particular cross-over collaboration; valuing different forms of knowledge without judgement might alleviate this and facilitate the application of research output as a step towards commercialisation. Case studies have shown that conflicting agenda internal to universities and hindrances to the smooth transfer of technology are also problematic.

Figure: The “Triple Helix of Innovation” in detail: academia, business, government.
Source: EU Twinning-Project “Renewables Development in Ukraine” report 2018

Under the triple helix model each entity has a particular role. Governments are there to support innovation through policy and the supply of public goods for university-industry collaboration. This was indeed found in Zhou’s study: the 13th Five-year plan produced policies and legislation to encourage universities to collaborate with industry and commercialise research output. Key Research and Development programs have been articulated with expansionary research funding established. The governments in the GBA have an active role in promoting university-led innovation. Keen on policy initiatives, entrepreneurship and research commercialisation are encouraged by local authorities. Intellectual property protection measures are also key, as are tax incentives, such as the 15% in Hengqin.

This all accords with theory; but unique to the GBA context, the government has had a stronger hand at guiding research priorities and agenda, often through structural incentives such as faculty promotions, commercialisation and research evaluations being linked to policy direction. This research guidance is also exhibited in certain universities and disciplines targeted for support. Hong Kong and Macau universities are encouraged to collaborate with mainland universities to establish national laboratories. Zhou highlights the greater intervention and control by government in the GBA through financial, land and human resource provision. The difference between national- and local-level government intervention accords with the longer-term national interests vs the immediate local development needs. That macro-micro comparison is also reflected in basic research at the national level vs applied research and industry collaboration at the local level.

At the industry level, Zhou describes the GBA as a mixed bag consisting of leading enterprises which dominate the innovation landscape, SMEs and startups. The leading enterprises are the ones which collaborate with research universities, often creating joint laboratories, combining respective talent, innovation capabilities, technological resources and agile commercialisation knowhow. The SMEs, however, struggle to innovate without the funding, talent, technology and support of their bigger brothers. Their innovation tends to be incremental. They might contract universities for solutions to particular technological or process problems. Startups are often supported by universities in incubators or technology parks, many of which arise from university research projects.

Figure: Detailed processes in the “Quintuple Helix of Innovation” Source: EU Twinning-Project “Renewables Development in Ukraine” report 2018

Research universities in the GBA, although large and well ranked, are not achieving the levels of innovation outcomes in collaboration with industry and government as institutions outside the region. Part of this might be the imbalance between industry and university development in the GBA: universities are yet to catch up with enterprise development. Zhou found that innovation is not currently led by universities here but by the enterprises, and that governments are also playing a larger role than would accord with a balanced helix.

To elevate the innovation role of the research universities in the GBA, misaligned incentives such as publish or perish demands and university ranking criteria may make way for rewards being given to those researchers who would better focus their talents to apply their research, and to do cross-industry/cross-disciplinary research. We may need to rejig the rewards, incentives and promotion systems inside universities – innovate there – before these institutions can benefit from the new global leadership opportunities that the GBA is being presented with by current geo-political forces.

Such a university-level innovation would focus on that old bridge between the theory and application, from the know-how to the doing, from knowledge for knowledge’s sake to answering the so-what question of relevance and to the tangible gifts to the community at large. By Leanda Care, MDT