Measuring the contribution of higher education to innovation capacity in the EU. Executive Summary

There has been a massive expansion of higher education in recent decades as part of attempts to create workforces with the skills to be able to compete successfully in the context of the knowledge based economy. This emerging context demands new kinds of skills and approaches from workers to feed into industries that are evolving rapidly. Economic strength in the knowledge-based economy is driven by innovation, taking existing resources and assets and using them to do new things better and increase overall welfare levels. Whilst innovation is necessary across government, business, and civil society, universities are at the heart of attempts to improve the overall knowledge capital endowments that provide the feedstock for innovation as well as a proving ground for future innovators. At the same time, there is widespread unrest that universities are failing to respond to these new demands and are continuing to act as ‘ivory towers’ outside of rather than driving forward society (Galan-Muros, 2016). Particular concern lies on perceptions that universities have tended to expand their existing activities rather than to create new courses, pedagogies, and learning environments that best meet these needs. Where universities contribute effectively to innovation, then they can create whole new industries and sectors, and transform the fortunes of particular places. But at the moment, these conflicting narratives make it hard for policy-makers to determine whether universities (and indeed, which kinds of universities) are a boost to or a drag upon innovation capacities. A key challenge for European policy-makers is therefore distinguishing the extent to which universities are realising their potential to contribute to the emergence of the knowledge-based economy. By distinguishing which institutions are and are not realising this potential, policy-makers can developed a more nuanced set of engagement stimuli that can help to maximise this contribution and optimise the returns that European societies receive for their substantial public investments in higher education. This means that are providing the necessary education and knowledge base to deliver the ambitions of Europe 2020 and support Europe’s transition towards a successful, just and sustainable economy. This requires dealing with the uncertainty of the extent to which universities’ contribute to supporting the development of the emerging knowledge economy. Here we define ‘innovation’ as the result of the set of activities by which different kinds of knowledge are combined to create solutions and interventions to solve problems, ultimately making society a better place (a form of Schumpeterian perspective). Those societal improvements may be through: (a) raising competitiveness and creating new markets and sectors, (b) improving the delivery of public services, particularly to vulnerable social groups, or (c) reducing our environmental impacts. We seek to understand the extent to which universities are supporting ‘innovation’ as here defined to distinguish between good and bad performances, as the first step in a process by which policy-makers actively intervene to improve the performance of universities overall.