University-industry cooperation: the way for Lesotho?

By Dr Thimothy M. Thamae, Ret’selisitsoeI. Thamae&Dr LeboliZ. Thamae

There is an increasing trend among universities worldwide to do more than traditional teaching and research by engaging directly with actors in the industry. However, the following important question remains for a typical university in a Least Developed Country (LDC) like Lesotho: which strategies are suitable for a poor university in a poor country to commercializeits research outputs, particularly when domestic industry is weak and not knowledge-based,and imported foreign industry may not be expecting anything from local knowledge providers?

In order to address that question, let us first define what is meant by LDC and discuss its constraints for university performance. The United Nations defines LDC as a country that exhibits the lowest indicators of socio-economic development and has the lowest Human Development Index ratings of all countries in the world (UNCTAD, 2013). A typical university in this country will be characterized by lack of resources for commercialization. This has a lot to do, not only with a lack of financial muscle of the host country, but also with prevailing ignorance of the benefits of this path. As a consequence, such a university has very limited options to engage fully in the kind of even the basic research that is taken for granted elsewhere.

This reality, together with the fact that mos tLDCs universities were initially formed for the purpose of mainly manning bureaucratic government ministries, contribute to their classification as a “teaching universities”. A teaching university concentrates its efforts on undergraduate teaching and typically gives little attention to research. In fact a teaching university phase is considered to be the youngest phase of university development, followed by a “research university” phase and a more developed “entrepreneurial university” phase. An entrepreneurial university encompasses the activities of the other two university regimes but goes farther to encourage and support its staff members to engage in entrepreneurial activities.

Thus, with the present interest in university-industry cooperation and commercialisation worldwide, an LDC university is faced with hard choices. It lacks the tradition of research and innovation that have characterised universities elsewhere. Then, if it is such a struggle just to do basic research, how would such a university go further to establish itself as an entrepreneurial university where knowledge is not only created but also commercialised? In the absence of analyses of the unique situation and opportunities facing such a university, options seem limited. However, let us consider the existing constraints, opportunities, and the development paths.

Universities in the LDCs, especially in Africa, have been established and maintained through government subventions and donor funding.  Although the funds have been fluctuating over the decades and are rarely considered enough, these sources of funds have been credited for, at least, keeping these universities running. So our point of departure begins with a reasonable assumption of a university that has enough resources, both capital and human, that will at least enable it to initiate a relationship with industry, even if from truly humble beginnings. Also, even the poorest countries such as LDCs always have relatively wealthy, motivated and dynamic entrepreneurs and businesses which have financial resources and are willing to take risks.  From our observations, the existence of these two factors are enough to kickstart a slow, iterative, nonlinear process of feedbacks and loops between the three different stages, that will lead to well established university-industry cooperation and high levels of innovation in the long run.

The first question is that of who should initiate university-industry cooperation. While industry sometimes takes the initiative, the present drive behind university-industry cooperation is due to efforts of the universities or individuals within them. In fact, other scholars see the present increase in university-industry relationship as being the result of changing norms and cultures within the universities themselves rather than changes in the business behaviour. Universities that previously shunned direct cooperation with industry and hardly engaged communities are often viewed as elitist by the external establishment. Therefore, it is not a surprise when these industries and communities are often sceptical of the universities which now want to approach them.

Paradoxically, while they hesitate to initiate, industry actors do not generally reject university initiatives. Actually, in the absence of government actors in between, universities and industry are often purely motivated by the perceived benefits, normally economic (or prestige on the part of the university), and they will each gain from cooperation over societal benefits.  That said, sustaining a good relationship may require a patient nurturing of trust over a long time. Indeed only when enough trust has been built do flow of information and resources between the partners smoothen.

In the LDCs, source of funds is the most challenging component. This is not because funds are not available, but research and innovation are rarely a priority. Yet, crafting good policies alone without provision of seed funding will never lead to fruitful results. On the other hand, industry will be either unwilling or incapable of funding such research and development initiatives alone. The only remaining option is that of both the university and the industry funding the research and commercialization activities together. This is feasible but tricky. The university will have to start by spending a certain amount of its own funds in research and development of designs, artefacts or anything demonstrable no matter how small and insignificant. This is the most critical step of the entire process. It is important to note that although academic approach is often concerned with generalities and theories, industry is more concerned with specific artefacts. Bringing one piece of artefact and showing its potential if it were to be further developed will do more to arouse a typical entrepreneur’s interest than bringing a 100-paged proposal. Thus from the start, universities should emphasise on projects that will produce tangibles within a reasonable period of time over those that emphasise theory.

In addition, studying entrepreneurs’ interests in what they are already doing, and strategically bringing their attention to possible improvements almost always captures their attention. The funding is not necessarily in the form of money.  Industry can also provide some of its equipment for testing of new ideas in old processing lines and through the expertise of its skilled workforce. On the other hand, universities can also contribute in the form of research time spent by its staff members, and access to some research equipment. In the process, a symbiotic relationship is likely to develop in which the outcome would never be achieved by any one of the entities acting alone.

Given lack of advanced research technology in LDCs, most of the work can be an adaptation of technology from elsewhere. This strategy has worked well for China and other economic newcomers. Instead of reinventing the wheel, adapting existing technologies from advanced economies is the first step leading to locally invented products over time. Even if the work is novel, absence of developed legal and other institutional framework such as intellectual property laws and technology transfer offices mean that spin-off companies and use of trade secrets become the best options.

Furthermore, relying on students and fresh graduates to participate in university-industry cooperation has proven beneficial. This is because young people are known for their ability to challenge the status quo, which is a necessary attitude for innovative activities. In the words of Venkataraman (2004, Journal of Business Venturing,Vol. 19, page 163), “educational institutions are a magnet for the society’s brightest youth. Scepticism is a precondition for change. Since youth are inherently sceptical of the status quo, their presence in large numbers creates just such an environment. The students’ desire to ‘‘be their own person’’ is now supported by the focal point institution full of novel ideas. This is an explosive combination!”

While intermediary institutions such as Technology Transfer Offices (TTOs) and intellectual property policies may be desirable, universities should not wait until they have these in place before they begin. Instead, these issues can be allowed to evolve along with the entire process. In fact putting too much emphasis on formalizing academic entrepreneurial activities may be counterproductive. Empirical studies show that most of university entrepreneurial activities, which are no less important, come in numerous forms and occur outside the university intellectual property system through informal networks. However, in the long run, TTOs are very important as they normally tend to develop a deeper understanding of both the academics and industry actors and often work as intermediaries to bridge their divergent thinking lines.

Any success stories at the inception stage open various opportunities. If any businesses developed at the inception stage begin to bring money back to the university and to private sector investors, success begins to reinforce itself in many ways. First, since these pioneering parties are beginning to benefit from the fruits of their joint cooperation, they are even more willing to invest back into research, thus increasing the university’s capacity. Also, the government (which is often reactive), seeing opportunities for job creation through a thriving private sector, begin to develop legal framework and institute funding mechanisms. As a result, universities that adopt economic development as their main mission make it easy for government to justify public spending on them. Ultimately, the beauty of setting example is as Einstein once put it, “setting an example is not the main means of influencing others; it is the only means.”

Dr ThimothyThamae is a Senior Lecturer in the Department of Chemistry and Chemical Technology, NUL

Mr Ret’selisitsoeThamae is a lecturer in the Department Economics, NUL

Dr LeboliThamae is a Senior Lecturer in the Department of Physics and Electronics, NUL