UK business schools and university-business engagement: opportunities to support a national innovation strategy

There are significant opportunities to build on the large range of research collaborations and knowledge exchange partnerships between business schools and businesses in the UK. This would help expand and enhance university-firm partnerships to address the grand challenges facing our economy and our society.

Improving our ability to benefit from the world-leading knowledge and expertise in our universities is critical to our ability to meet some of the major economic, social and environmental challenges we face.

Ongoing developments in science, technology, medicine and engineering, from discovery to application, provide many of the answers; from vaccines to energy-saving light bulbs, early diagnosis of cancer to faster trains. But invention is not innovation. The adoption and utilisation of new technologies, products, services, processes, actions and ideas is driven by the behaviour of people as consumers and as employees.

As social scientists, business and management studies (B&MS) staff in business schools teach and research the dynamics of individual and collective decision-making of people as employees and consumers. From the factors that lead to the adoption of new technologies, practices and processes in firms to improve productivity or successfully export, to how well corporations treat people and the environment, to the factors that make individual consumers eat less or recycle more.

Because of their scale and scope, and their specialist expertise and extensive links with the corporate world, business schools have the capacity and capability to complement the work of other social scientists and STEM experts to jointly-address many of these grand challenges. But given the scale of these challenges, this interdisciplinary collaboration needs to happen more often and more effectively.

What are the opportunities to enhance the role of business schools in connecting others on campus with the business world? What follows is a summary of findings from analysis of a range of data and evidence to understand the different ways in which business schools currently collaborate with business, and opportunities for growing the range, depth, impact and benefits of this engagement in the context of a challenging environment.

The latent potential of UK business schools: scale, scope and specialisation

First, the sheer scale and scope of business schools and the wide range of existing connections and collaborations between business schools and businesses across the UK present a strong foundation to build on.

Fuelled by the significant growth in demand for management and business programmes, business schools have evolved to become the largest multidisciplinary concentrations of social scientists with the widest range of business engagement partnerships on university campuses.

UK business schools employ over 16,500 staff and run the most popular degree subject in the UK, with 412,815 student enrolments in 2019-20 (HESA). This is more than those taking medicine and dentistry, physical sciences, maths and computer science combined, and more than double those taking engineering and technology courses. The collective revenue is estimated to be over £4bn, 82% of it from student fees, and over half of it, on average, going to other parts of the host university.

The large teaching portfolio is matched by research on and with businesses and both involve business engagement. This operates across a wide range of channels, including student internships and projects, faculty consulting and research, executive programmes sponsored by firms and professors of practice in the classroom, small business support and entrepreneurship activities. The variety of types of business engagement is where we find a great deal of potential for business schools to play a stronger role in helping other parts of universities connect with firms.

Business schools and businesses: from supply-driven to demand-driven engagement

Blue sky (or ‘supply-driven’) research that is disconnected from the market and stakeholders is still an important dimension of university-based research. UK business schools are world-class and bring thought leadership from around the world to apply to local challenges. But a great deal of teaching and research is ‘demand-driven’ in partnership with businesses, including student projects and internships, executive education, consulting and direct support for and research with particular types of sectors and firms.

The benefits of engagement are clearly articulated by firms working with business schools across the country and validated by the income that these schools earn, for example from executive programmes. 4% of UK schools earn over 20% of their income from executive programmes, which includes outliers such as LBS, earning over £50mill from this source (and Harvard, over $200mill). But 68% of schools earn between 1% and 10% of their income from such programmes which often fund professors of practice, client managers or ex-business specialists and create spillovers for other forms of engagement.

A key element of successful engagement is the process of identifying areas of complementarity, where the integration of knowledge and expertise from two or more partners fills gaps and creates new capabilities. Business schools can act as a bridge between campus and business, partly because they understand the business world and have developed specialisms which mirror the functional divisions of firms: Accounting and finance, marketing, human resource management (HRM), industrial relations (IR) operations management, international business studies, entrepreneurship, management of technology and innovation (MOTI). B&MS faculty are subject specialists and speak the language of their counterparts in firms.

When we break down research grants into these specialist areas, we find that HRM, IR and MOTI dominate. People-issues and the management of new technology and innovation processes are key areas of applied research.

Research grants awarded to UUK institutions for research related to business, management and accounting by subject area (2015-2020)

This underpins the co-production of knowledge and expertise to help shape businesses, improve productivity, the well-being of employees or the environmental impact of a firm. There are many examples and exemplars of this, and a brief examination of the history of UK management research would show how it has been central in transforming practice, in areas like lean production, value-based marketing or responsible supply chains.

The Chartered ABS established the Small Business Charter (SBC) precisely to do this;  the charter is currently held by 42 business schools with proven track records of supporting SMEs (over 18,750 in fact) with training, mentoring and introducing new processes and technologies. This network of schools is now the foundation for delivering the government’s ‘Help to Grow’ management programme.

Different shapes and sizes: a wide portfolio of business engagement

With over 130 business schools, the UK hosts a wide portfolio of organisations spanning different kinds of engagement with different kinds of firms, local, national and international. Enhancing their role as bridges to business engagement for other academics requires a better understanding of this variety and a more targeted approach to encouraging collaboration.

A cursory analysis of different rankings lists provides a starting point for grouping schools in terms of their revealed focus, in terms of business engagement[i]. 5 general types appear:

1. All-rounders engaged in a broad range of engagement activities. Such as: Oxford, Imperial, UCL, Cambridge, Manchester, Strathclyde, Sheffield, Edinburgh, Nottingham, Cranfield, Leeds and Southampton. Half of these (in italics) feature in the top-15 in terms of research income earned by the University business school.
2. Large-firm collaborators lead the rankings in terms of income from contracts, consultancy and/or CPD with larger enterprises. For example, in this category, Reading (Henley), LBS, City, Warwick also have high research incomes relative to Cranfield, Glasgow and Loughborough.
3. SME-focused, which have relatively high levels of contracting income, consultancy and CPD activity directed at small firms, include Aston, Ulster, Liverpool, Lancaster, St. Andrews and Salford.
4. CPD (Continuing Professional Development)-focused include the Open University, Portsmouth, Anglia Ruskin and Solent.
5. SME CPD-focused, which specifically focus on small firm training and teaching but less dominant in type 3 above, include Exeter, Westminster, Central Lancs., Essex, Birmingham City, Teesside, Kent, York, Bedfordshire.

Alongside the evidence showing the sheer scale, scope and reach of business schools, this simple analysis shows how they have evolved a degree of alignment with the varied challenges facing UK businesses.

The innovation challenges for firms vary depending on size, sector and location. Different support is needed for start-ups and spinouts and this is a strong focus for many universities and business schools. But there is a much wider range of knowledge exchange and collaboration with established SMEs and larger firms, the effects of which are more difficult to track, but are significant.

Enhancing the role of business schools in an innovation strategy

Given their scale and scope and the relevance of the knowledge and expertise they host, what should be done to enhance their role as leads or facilitators of wider university engagement with businesses?

Scale-up. A simple starting point is to scale-up existing activities and schemes, with a strong track record of engagement. This can be done by improving awareness of current engagement schemes and more precise funding incentives. Bridging mechanisms such as KTPs and accelerator initiatives, secondments to and from businesses and/or business organisations are effective in particular contexts for expanding business engagement activities and bridging between disciplines.

Focus more on practice. Research that supports the improvement of management capabilities and firm-level processes and behaviours in the UK should be promoted. Applied, co-produced research can help change the behaviour and practices of management groups, employees or consumers. It is often a central driver for contracted research or executive teaching programmes but ‘research on business’ often dominates above ‘research with business’ in some schools and with funders.

Take a portfolio approach. The UK business school ecosystem offers a wide portfolio of expertise and connections, with different combinations of funding, engagement and knowledge exchange channels for different firms and specialist functions in firms (HRM, marketing, operations management, operations, finance and accounting etc.). Research centres, hubs and networks of engaged experts that are structured as ‘hybrid models’, incorporating business partners, secondments and interns, alongside non-academic support staff who focus on engagement, translation and impact can help effectively bridge the divide. There is an opportunity for institutions to join up themselves to work together and build on their strengths to support the breadth of business and sectors across the UK. Reducing the concentration of research funding (the top-10 schools received 41% of the £223.6mill allocation in 2019/20) might also help.

More funding, targeted at the key challenges. Despite its scale B&MS receives a very small proportion of public sector research funding, significantly less than other social sciences disciplines per member of staff. The 2021 edition of the Chartered ABS report on research funding for UK business schools also shows that the share of all B&M research income from the UK central government has fallen from 29% ten years ago to a low of 19% in 2019/20, so other funders and the private sector are shaping the agenda.

More funding, jointly with business and STEM partners would help. But funding overall should take account of: (1) sector-related priorities (aerospace, retailing, advanced manufacturing, creative industries etc.), (2) function-related priorities (as above) and (3) cross-cutting themes, such as innovation, sustainable business models or well-being at work. The major challenges facing businesses sit within and across these areas and they provide for a specific interface to combine and co-create problem-led knowledge and capabilities.

We already have a large, high-quality portfolio of engaged business schools across the UK, co-producing research with firms and supporting innovation which underpins not just better productivity and competitiveness, but inclusivity and sustainability. Given the increasingly challenging global environment, it is time to harness this portfolio and the intellectual capital of B&MS even more closely to supporting our wider economy and society.

Professor Simon Collinson is Deputy Pro-Vice Chancellor at the University of Birmingham.

The author acknowledges the significant contribution of Dr Alex Wilson of Loughborough University, to the data analysis and the above insights and conclusions.

[i] This analysis involved a weighted scoring of 57 business schools using school-level data and HEBSIS data at the host university level, including ‘total value of CPD’, ‘total value of contract research’ across SMEs and non-SMEs and school-level research income.