The Roles of Universities in Regional Development

By Maria Lindqvist

Over recent decades, the role of universities has evolved from their traditional focus on education and research to increasingly active participation in regional development processes. Universities are also becoming important actors in regional innovation systems, although their strategies and activities vary across institutions and regions.

Various types of higher education institutions have different foci in their activities. Polytechnics and university colleges have historically had a strong focus on education, often directed towards regional needs for competence in the private or public sector. Traditional universities, on the other hand, have often had a stronger focus on research activities, ranging from basic research to applied research in collaborative projects. In this article, I refer to these collectively as universities. However, there are large differences between universities, including size, range of disciplines, balance between research and education, international commitment and the type of region they are located in.

Increasing expectations for collaboration

The role of universities has evolved over time. They are no longer simply involved in producing and providing knowledge through education and research, but are also becoming increasingly involved in regional development. In a Nordic context, this development is illustrated by the establishment of new universities outside metropolitan areas from the 1960s onwards. The level of education and research intensity of these newer universities is usually lower than in old universities, but the expectations on them concerning involvement in regional development tend to be high.

Over the past two decades, there has been a general increase in demand for universities to become involved in external collaboration, often considered their third role, mission or task, in addition to education and research. Today, most Nordic countries have introduced formal obligations for universities to engage in external collaboration to disseminate knowledge, promote the social impact of scientific and cultural activities, stimulate commercialisation of research and increase the quality of education and research. In Iceland, the third role is not explicitly mentioned, but universities are increasingly co-operating with firms and other actors in the wider society. Internationally, this development has resulted in the so-called triple helix model of regional development, with universities, public agencies and businesses as key actors.

Academic research has identified a number of functions of universities in regional development, including direct economic impact, capital investment, influencing the regional milieu, creation of human capital and knowledge, transfer of existing knowledge, technological innovation, regional leadership and production of knowledge infrastructure. Below, various roles of universities in regional development are presented, ranging from passive, to increasingly strategic roles.

The apparent roles of universities

Without specific strategies to support regional development, a university still plays a passive role. It has a direct economic impact on a region in terms of purchases, investment and employment. This economic impact varies according to type of university and region. A medium-sized university may have an important role as employer and economic actor in a small region, whereas a large university in a metropolitan area may have a less obvious economic impact. A university may also have indirect economic multiplier effects on other sectors. A study of the Greater Stockholm area, for example, indicates that 70 per cent of the total income of the Royal Institute of Technology (KTH) is spent in the region and that every job at KTH generates an additional 0.4 jobs in the region. In most regions, the presence of a university also has indirect location effects, by contributing to the image and attractiveness of a region to potential students, employers and investors.

The traditional role of universities is to create knowledge and develop human capital through education and research. Even today, the main function of universities is to develop human capital through education of students and researchers. Access to relevant competence has traditionally been an important issue for regional stakeholders. According to a recent study by Nordregio, approximately 60 per cent of the students and 70 per cent of the researchers remain in their study region after graduation. However, there are important regional variations, with the highest retention rates in metropolitan areas.

To keep students in the region, it is important to provide them with the necessary skills to find suitable jobs after graduation. As a result, many universities now invite regional stakeholders to participate in the development of educational programs; for example on boards of education, through problem-based learning or as lecturers and associate professors. To engender a positive attitude towards higher education, many institutions have also become involved in the development of broader regional education infrastructure, ranging from secondary schools to lifelong learning and vocational training. In terms of research, many universities have combined basic with applied research, often in collaboration with large industrial companies in specific disciplines.

Beyond the third role

Over time, the so-called third role has evolved, and now includes a broad range of functions supporting collaboration with the wider society. Interactions between universities and society may range from informal contacts to strategic collaborations. A low level of interaction is a one-way transfer of knowledge and technology, for example, through conferences, research articles and commissioned research. Even if these functions are provided without a specific strategy for regional development, they may have a positive impact on general attitudes towards universities and facilitate future recruitment of students, staff and researchers. This may be of particular importance in regions lacking a tradition of higher education.

Inspired by the US in the 1980s, many Nordic universities have undertaken various activities to stimulate commercialisation of knowledge and research findings. Examples of activities have been development of more professional management of intellectual property (e.g. licences and patents) and provision of internal support structures to stimulate spin-off and start-up companies among students, staff and researchers, such as innovation offices, advisory services, incubators and science parks.

The concepts of clusters, innovation systems and triple helixes developed during the 1990s, and many universities became increasingly involved in collaborative activities, including joint research projects and the development of shared facilities such as research centres and test laboratories. These activities are related more closely to knowledge dissemination and open innovation than to commercialisation activities based only on intellectual property rights.

During the past few years, the concept of the engaged university has developed from the third role, illustrating the increasingly strategic and conscious role of universities in regional development. In the Nordregio study, including eight case studies, it is argued that universities in various regions are taking active roles in regional development processes. In the small peripheral municipality of Hornafjordur, for example, the regional research centre of the University of Iceland has an important role in regional cluster development. In the Swedish region of Värmland, Karlstad University is increasing its involvement in regional development, in close collaboration with regional agencies and prioritized cluster organisations. In the Norwegian Nordland region and North Denmark, universities participate in formal partnerships for regional development. Even in the larger metropolitan area of Stockholm, the need to collaborate with other actors and participate in regional development is becoming increasingly important for universities to attract students and researchers to the region as well as to gain access to external funding.

Future challenges

In the aftermath of the economic crisis, and to meet the challenges of globalisation, pressure on limited resources and an aging population, the EU has launched the Europe 2020 strategy for smart, sustainable and inclusive growth. One of the three priorities is to develop an economy based on knowledge and innovation. This involves improving the quality of education, strengthening research performance, and promoting innovation and technology transfer throughout the EU.

To implement the Europe 2020 strategy, the EU flagship initiative Innovation Union and Regional Policy Contributing to Smart Growth in Europe 2020 launched the concept of smart specialization, supporting interaction between policymakers, business, and education and research institutions at the EU level, as well as at the national and regional levels. The concept of smart specialization can be seen as a new type of regional specialization, including diversification into related areas, regional collaboration and global outreach. According to Innovation Union, the biggest challenge for the EU and its member states is to adopt a more strategic approach to innovation, whereby innovation becomes an overarching policy objective. In this context, it is important to have a broad understanding of the concept of innovation, including not only scientific or technology-based products (goods or services) or processes, but also such areas as new marketing methods, service innovation and consumer-driven or social innovations.

In the process of developing regional specialisation strategies, universities have an important role to support innovation by providing knowledge, human capital and global connections. It is becoming increasingly important for university management to balance the demand for an international reputation for high academic quality in education and research, with the role of participating in regional entrepreneurship and innovation activities. From a regional policy perspective, this could be supported, for example, by the formation of regional partnerships, stimulation of cluster development, creation of regional attractiveness and multi-sector policy initiatives.

However, for efficient implementation at the regional level, there is a need for supporting policies at the national level. Today, there are conflicting expectations for universities. Academic incentives and research policies tend to prioritise funding of scientific research, while regional, business and innovation policymakers expect participation in applied development. Consequently, there is a need for national cross-policy funding and evaluation systems, taking the different roles of universities into account.

Back to Nordregio News Issue 2, 2012