It is a timely piece of research given the imperative for the nation to become more innovative as we seek new opportunities following the decision to leave the European Union.
Not surprisingly, the report emphasised that Wales remains in a relatively weak position with regard to the traditional metrics of research and innovation performance such as the percentage of GDP expended on R&D investments by firms.
In addition, it showed that businesses are more likely to look to suppliers, clients and customers rather than seek external sources of innovation such as ideas from universities. This is despite the fact that there is high quality of research in Wales albeit within a relatively small research base.
Nevertheless, the use of European funding to develop specific programmes to support greater links with universities has increased collaborative research links with businesses although it is enormously disappointing that the main mechanism for encouraging academic-industry links – namely the Higher Education Funding Council Wales Innovation and Engagement Fund – was cancelled back in 2014.
Compare this with the situation in England where £40m was allocated to English universities in 2017 to support greater support for universities to collaborate with businesses.
Fortunately, there is a commitment by the UK Government to increase this funding to £250m by 2020-21 and as this will result in consequential funding for devolved administrations, it is vital that the Welsh Government uses it to specifically support the efforts of Welsh universities to work with industry.
Of course, even if the funding becomes available, higher education may need to change its approach to working with the business community. In fact, the report notes that not only did businesses comment that higher educations tend to be too risk averse and too intolerant of failure, but universities themselves acknowledged a poor alignment between their own culture and the corporate culture of both Welsh and international businesses
Therefore, much needs to be done to ensure that we make the most of our higher education sector to drive the competitiveness of the Welsh economy and the report makes a number of important recommendations.
First of all, there must be a new national innovation compact between government, universities, businesses and other key stakeholders in Wales, building on the work of the Be The Spark initiative which has led to high-quality communication, excellent relationships and the alignment of interests in entrepreneurship policy.
Secondly, as high-quality research at the frontiers of knowledge makes a vital contribution to long-term economic development and to attracting and retaining companies, the Welsh Government should increase funding for research. This should be backed by the provision of a permanent funding stream to support Welsh university-business interactions which should promote collaborative projects with business and industry. The new Development Bank for Wales should also be encouraged to work with various bodies to ensure that the investment into SMEs in Wales is leveraging university and UK innovation and research funding.
In terms of helping industry, Welsh government, universities and business leaders should co-develop innovation growth hubs to support and promote business ‘hot-spots’, driving productivity for economic benefit. These should build on the recent blueprint of the Cardiff University/IQE Compound Semi-Conductor Centre Joint Venture as this will increase the confidence of firms in the benefit of investing alongside universities.
Many small firms lack the knowledge about what universities can offer as well as guidance about which academics and departments to approach to help solve their problems. To deal with this, universities, industry and the Welsh Government should work together to create a one-stop, mobile enhanced portal for companies to have clear and direct routes into the academic base. This should not just about gaining access to research but also for graduate work experience, equipment and funding. Indeed, universities must start working systematically with employers to understand their skills needs including co-designed curricula, life-long reskilling, and continuous professional development as this provide a platform for broader and deeper relationships with firms.
Therefore, this excellent report presents a real opportunity for Wales to make the most of its higher education sector for the benefit of the Welsh economy. Certainly, there is no reason why the Welsh Government cannot implement the recommendations as soon as possible so that we develop a more systematic and integrated way of joining up universities, businesses and government and ensure that Wales becomes the competitive, innovative and productive nation we all want it to be.