Why the rush to replace Universities with Innoversities…?

Ireland, or at least the government, is in the grip of a frenzy around entrepreneurship. From local government, through the higher education system, to the highest in the land, hardly a day goes by without some new band jumping on the wagon. We are being flogged with the mantra that we must start up, become entrepreneurs, be self-employed, yadda yadda yadda. It’s a diversion of resources, built around a self-perpetuating meme. The SME sector is really important, in Ireland and in Europe. In Europe, as of 2012, SMEs accounted for over 99% of all companies, employing just under 90m people. They account for 66% of total employment and for about 58% of total output.  However, when we think of SME’s in Ireland we think of small and medium-sized companies. The SME definition is companies with less than 250 employees, €50m in total turnover. This is by Irish standards a fairly substantial enterprise. In Ireland, SME account for 68% of total employment. Thus, it makes sense, to some extent, to ensure that SMEs as a sector are in rude health. What it may not make sense to do is to pour more and more scarce resources into creating startups and micro enterprises, in pursuit of a problem that doesn’t exist.

The issue however is not so much SME’s as a group but as the makeup of them. And here we are not badly off. To hear ministers and educationalists we might think Ireland to be a SME desert, when nothing is further from the truth.

First, in Ireland, we have fewer large employers than in the EU as a whole. We therefore should put resources into ensuring that companies can transit from S to M to L(arge). As things stand this is evidentially not happening. Lets have less focus on S and more on M and L.

Second, we are fairly well represented in the startup sectors that matter. Micro companies are defined  as those with less than 10 employees. The proportion of all companies which are micro and in the services sector,  at about 7% of all (non holding) companies, are relatively large in Ireland. The EU average is about 5%. Curiously, despite the notion that we are overrun with construction subbies, these micro construction companies only account for about 1% of all (non holding) companies in Ireland, less than half the European average. We have a larger percentage of all companies in the micro industrial sector than in the EU as a whole.

Third, we are not short of startups.  The EU business demographics database suggests that while we are not prolific in new companies, with about 6% of the existing company stock being added to each year, nor were we that horrific in company deaths, with even in 2011 only a number equivalent to 5% of the stock closing. So we are adding about 1% of companies per annum, as of 2011. From the Global Entrepreneurship Monitor, an international annual survey of same, we see similar news. Although I have concerns about the percentage of Irish start-ups which seem to be driven by the TINAE’s, those for whom There Is No Alternative but Entrepreneurs, the fact remains that we have a healthy startup culture.  Compared to the OECD average in Ireland we are more likely  to believe we have the skills needed to be entrepreneurs, have a greater likelihood   to be owner-managers, have more graduates as percentage of entrepreneurs   (but less school leavers),  have older and therefore more experienced owner-managers, are more likely to have immigrants as entrepreneurs, are more likely to be in the high-tech or consumer services sectors at startup (but much less so in business services), are more likely to be offering unique products and services, and to be export orientated.

Given all this, one wonders why the frantic push? In particular, given the cuts in state support for higher education over the last half decade, why are the higher education institutions rushing to reconfigure themselves as innovation campuses, entrepreneurial universities, etc etc? Instead of universities we are creating innoversities. Why? The role of the higher education system is to provide skills, general and specific, to people as part of their education. Good practice is, when faced with fiscal constraints, to focus resources on the core business in order to survive. The core business of our universities and even our Institutes of Technology, is not to be part of the state supra and infra structure driving forward that which does not need to be driven but which needs to be consolidated. And yet “innovation is the third core of UCD” ;  TCD is “forging an entrepreneurial campus” ; NUIM sees its mission as “central to innovation, economic growth”… one could go on. A read of the “about us “ pages of the Irish universities shows a major part of the education sector is now in whole or in large part captured by the meme that it’s about Entrepreneurial and innovation activities. That entrepreneurship maybe cannot be taught should make us stop and think; how have the universities gotten sucked into this? For every euro spent on setting up innovation bootcamps, incubators, start-up academies, the shebang whole parallel to the existing state system, monies are not spent on the core mission. Libraries are cut, academic and support staff not replaced, conference and fieldwork travel curtailed, student fees increased and so forth.  Universities are happy to spend almost anything it seems on things and persons related to innovation and entrepreneurship; but try getting someone replaced in the Library.  Irish universities spend 1.8b per annum, a large part of it from the state (but not as much as people think). They are chasing the dragon of entrepreneurship for no good reason. Whether it is because it is more fun for the university managers to hang out with cool startups and government ministers than with fusty academics, a cynical ‘go with the flow’ on the government obsession with entrepreneurship in the hope of some institutional sweeties, or god forbid a wholesale buy into the evidentially false idea that there is a problem, time and money is being diverted from the creation of a well-educated graduate cohort.

JjbecherWe need to stop and think again. We are never going to have ‘Stanford by the Liffey”; for one we don’t have the weather. For another, we don’t have a massive, decades in the making, world-class innovation/entrepreneur ecosystem. For a third, the 40:60 undergraduate /postgraduate or 5:1 faculty student ratio which Stanford enjoys is never going to come to the Irish higher education system. For a fourth, the Stanford spend is approx 50% the TOTAL spend on all Irish universities, and it has an endowment of €18b. Aping Stanford is as useful as SFI funding an investigation of phlogiston.  Lets have the university sector deliver quality teaching and learning experiences to its target population ; lets empower and somehow fund it to include critical thinking, qualitative and quantitative skills , critical reading and hermeneutics, logic, presentation and communication skills as part of the core embedded experience of all students. Lets make it that every student takes a combination of arts, humanities, science, rather than diving into a silo or worse yet forcing them into the business school to get learned up on how to become an entrepreneur. Lets reward formally students who engage in debates, form clubs, do charity drives. Lets allow students to determine a large part of how they learn. That, combined with the natural curiosity of the young and hopefully in combination with some specific skills garnered will, I suspect, be both more socially and economically beneficial. But it wont be as much fun for the managers.

This is a version of my column in the Irish Examiner of  12 July 2014

This is a version of my column for the Irish Examiner 5 July 2014.

3 thoughts on “Why the rush to replace Universities with Innoversities…?

  1. Pingback: Ninth Level Ireland » Blog Archive » Why the rush to replace Universities with Innoversities …?

  2. Pingback: Disruptive Innovation and Irish Universities post-Leporte | Brian M. Lucey

  3. Eoin Costello

    Hello Brian,
    I enjoyed your tongue in cheek piece, your frustration is palpable. I felt that on behalf of the entrepreneurship agenda in our country I should reply. We have met in the past when I was Treasurer of the Trinity Business Alumni and you were our liaison with the TCD Business School. I know first-hand that you are sincere in your motives and aspirations for students of TCD and the citizens of Ireland.
    Having worked on all sides of the business of startups (https://www.linkedin.com/in/eoinkilliancostello) I have a deep personal interest in the role entrepreneurship plays in a developed economy and am well aware that we are currently in the hype phase (http://www.gartner.com/technology/research/methodologies/hype-cycle.jsp) of the embracing of an entrepreneurial culture in Ireland. Change in this respect is long overdue, our culture is not forgiving of the type of failure entrepreneurship often involves and this has to change.
    I was struck by your title for this piece “Why the rush to replace Universities with Innoversities…?”. You will be aware from the work of Mintzberg and Rose (2009) that third level educational establishments don’t do ‘rushing’, their study of strategic change at McGill University from 1829 to 1980 finds little evidence for radical change being a common behaviour of tertiary education institutions. While public facing documents and the ““about us “ pages of the Irish universities “ may indeed contain worthy aspirations to the need for an entrepreneurial culture, the reality suggested by the McGill study is that “ strategic revolution may be unlikely in universities, steady incremental change seems to be endemic”.
    On your first point about focussing on creating large employers, to draw on the analogy from education, this is akin to saying let’s focus all the education system’s resources on getting more PhD students and stop spending resources on the improving the pipeline of primary and secondary students that ultimately become those same PhD students.
    In terms of your view that “being flogged with the mantra that we must start up, become entrepreneurs, be self-employed, yadda yadda yadda. It’s a diversion of resources,” – this view is not borne out by the facts. The detailed “Evaluation of Enterprise Supports for Start-Ups and Entrepreneurship” report completed by Forfas (http://www.scribd.com/doc/233807531/Enterprise-Evaluation-of-Start-Ups-and-Entrepreneurship-supports-Publication-FORFAS-Ireland) earlier this year found that the majority of programmes funded made more than adequate returns for the money invested and are certainly not a waste of resources.
    The importance of startups in a modern economy can’t be underestimated Brian. As identified in the 2014 Action Plan for Jobs two thirds of all new jobs are created by startup businesses (not SME’s, the jobs are created by high impact startups that create jobs as they transition through S status and do not want to be labelled S as they are more ambitious than settling for having a 5 person company). The fact that startups (led by each new generation of entrepreneurs) are such an important source of innovation is underpinned by the substantial amount (http://bit.ly/W6a4Kb) being invested in corporate venturing and corporate startup accelerator programmes by the multinationals.
    “What it may not make sense to do is to pour more and more scarce resources into creating startups and micro enterprises, in pursuit of a problem that doesn’t exist.”
    The problem that exists is that while yes, we have a lot of startups, and indeed SMEs are the predominant indigenous corporate entity in Ireland, we do not have enough companies that scale from startup to become large scale employers. Those that do scale are often lost to rapidly growing, integrated startup hubs like Silicon Valley, New York or London.
    “The core business of our universities and even our Institutes of Technology, is not to be part of the state supra and infra-structure driving forward that which does not need to be driven”
    I respectfully disagree Brian, in my blog post (http://bit.ly/W6aa4u) I make the case that it is in our national interest that our academic institutions be at centre of the drive for strong entrepreneurially focussed ecosystems rather than the country be excessively dependent on foreign multinationals. The reality is that if the national/international conditions no longer suit the operations of the multinational it will exit the ecosystem in which it was keystone (for example Dell moving assembly to Poland).
    Furthermore inaction on making our third level institutions more entrepreneurially focussed is not an option in light of the National Strategy for Higher Education to 2030 (Hunt Report 2011 p. 16) which finds that:
    “Diversifying funding sources (for institutes of higher education) should be linked to a more responsive and open engagement with key stakeholders, particularly students and enterprise, and a drive to find new ways to link higher education research and innovation capacity to the needs of the public and private sectors.”
    “That entrepreneurship maybe cannot be taught should make us stop and think;
    Let’s reward formally students who engage in debates, form clubs, do charity drives. Let’s allow students to determine a large part of how they learn.”
    I agree Brian, there are no ‘jobs for life’ anymore, we all need to become more entrepreneurial in our approach to our learning and our careers. Entrepreneurial capability development is a ‘learning by doing’ activity. As the study you reference (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2412932) finds ‘The overall conclusion is that while formal entrepreneurship education is valuable when raising startup money, real-world practical knowledge is even more valuable’.
    In my role as programme manager at DIT Hothouse I am seeking to implement some of the key recommendations of my Dissertation (http://bit.ly/1wp3tWc) in this respect by facilitating those collaborative activities that can enable our students to ‘learn by doing’ in working directly with startups. Collaborative activities such as networking student internships (http://bit.ly/1wp3E3Z) and student projects from the DIT student body with Hothouse startups ( http://bit.ly/1wp40HD ) or organising student tours to Hothouse (http://bit.ly/1wp40HD) all help bring about culture change needed in our next wave of young adults on which our economic future depends. Let’s give our students programme credits for completing such activities.
    “we don’t have a massive, decades in the making, world-class innovation/ entrepreneur ecosystem… a Stanford by the Liffey”
    Even Stanford had to start somewhere. Recent successes aside Stanford tech transfer/industry engagement began with a small pilot office in the 1970s and did not make a real impact for almost 20 years. In any case the reality is that there are 4 universities in Dublin, ultimately it may not be TCD that makes the running to be the “Stanford by the Liffey” you describe. It could be DCU, the evolving Dublin Technological University or UCD that rise to the challenge of helping make Dublin a global hub for tech startups.
    I would ask Brian that rather than curse the darkness join those that are lighting a candle and help be part of the solution, you have enormous credibility in Ireland’s policy making circles, we would be delighted to have your support.
    Eoin Costello
    http://www.startupireland.ie – Making Ireland the land of opportunity for startups that want to take on the world!
    Mintzberg, H. & Rose, J. (2009) Strategic Management Upside Down: Tracking Strategies at McGill University from 1829 to 1980. Canadian Journal of Administrative Sciences / Revue Canadienne des Sciences de l’Administration, 20(4), 270 290.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s