Having worked within various business schools across the UK for over a quarter of a century, I cannot emphasise enough the importance of research in creating an understanding of not only the overall economy but, more importantly, in giving individual organisations the support they need to create wealth and employment in our society.
Despite this, it would seem that this important element of business education has been diminishing over the last five years.
According to the Association of Business Schools, there was a total decrease in research income for business and management research from 2010/11 to 2015/16. Of course, some would say that this is not surprising given that it is probable that overall research spending has been reducing in universities. However, the reality is that total research income for higher education has actually increased by a third to nearly £6 billion.
Whilst there has been a decrease of 8 per cent in the overall income to business schools, other subjects have flourished. For example, research funding for physics has increased by 30 per cent, mathematics by 26 per cent and civil engineering by 20 per cent. As a result the proportional share of the university research income by business and management has decreased by 30 per cent since 2011.
Wales has seen one of the largest decreases in research funding for business schools, dropping by 41 per cent since 2010-11. As a result, it only accounts for 2 per cent of all business research being undertaken in the UK, with Cardiff University accounting for two thirds of the £1.3 million attracted to Wales in 2015-16.
Why has this happened given that business research in UK universities should be seen as critical to the economy by both policymakers and businesses?
The UK research councils have reduced funding by 18 per cent over the six year period whilst UK government backing has gone down by 28 percent.
But what is most worrying is that the amount of funding from UK industry has decreased by 29 per cent since 2011-12, which suggests that the private sector is seeing less value in working with business schools to understand its problems and challenges.
In fact, perhaps the biggest challenge facing business school research is how it can become more relevant to the organisations they want to study over the next few years. Fortunately, some of this decrease in UK funding has been compensated through involvement in various EU programmes.
This has seen its share increase by 22 per cent although this has fallen recently and given the recent Brexit vote, there seems to be uncertainty in the sector about how whether funding will continue. Indeed, a recent survey that, since the vote to leave the EU, up to a third of business schools expected to lose research funding from European sources over the next year.
But paradoxically, there may also be opportunities for business schools to grow their research capacity as a result of the policy developments by the UK Government to combat some of the negative aspects of Brexit.
For example, the recent Industrial Strategy has emphasised the need for improving competitiveness, skills and productivity, areas that should be of direct interest to most business school academics.
In particular, the increased focus on commercialisation of ideas from the laboratory to the marketplace could see greater collaboration between business schools and science and engineering departments in the UK, replicating some of excellent practice seen in world-class institutions such as MIT in Boston and Stanford University in California.
Given that research in science and technology subjects has seen funding increase since 2010/11, there is a real opportunity for increased partnerships across disciplines to support the government’s objectives in technology transfer from universities to industry.
The question is whether the current focus by business schools on traditional subjects such as marketing, finance and human resource management is enough and whether greater investment in areas such as entrepreneurship and innovation is something that should be pursued by departments of business and management across the UK.
Certainly we all know that the UK economy will need to become more agile and productive as we enter the uncharted waters following Brexit and if industry is to make its mark in this brave new world, then business schools must develop applied research that is relevant to its needs and ensure that the UK economy remains competitive over the years ahead.
More importantly, they must be supported in doing so and given the dire amount of funding being attracted to Wales for business research, this may be something that Welsh Government, with other partners in the private and civic sector, may wish to focus on in the future.