The Impact of University-Firm Knowledge Links on Firm-level

Productivity in Britain Richard Harris and Cher Li

University of Glasgow University of Strathclyde

This work contains statistical data from ONS which is Crown copyright and reproduced with the permission of the controller of HMSO and Queen's Printer for Scotland. The use of the ONS statistical data in this work does not imply the endorsement of the ONS in relation to the interpretation or analysis of the statistical data. This work uses research datasets which may not exactly reproduce National Statistics aggregates

Overview

• This study uses data from the UK Community Innovation Survey for 2007 to consider – (i) which firms engage with HEI’s in terms of both

sourcing information and/or cooperating for innovation activities; and

– (ii) whether involvement with HEI’s impacts on productivity (directly and indirectly through innovation activities).

• Also consider role of graduate employment in terms of (i) and (ii)

Percentage of enterprises sourcing knowledge from HEI’s in Great Britain 2006, by industry

62.761.2

50.848.748.1

41.237.4

36.135.1

34.132.932.0

30.528.628.027.827.026.9

25.724.724.423.923.322.3

21.019.118.818.418.117.717.116.816.716.615.915.615.314.6

13.611.7

3.3

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0

Air transport (62)Clothing (18)

Sale of motors (50)Support to transport (63)

Hotels & restaurants (55)Water transport (61)

Cultural services (92)Land transport (60)

Wood products (20)Retail trade (52)Real estate (70)

Other mining & quarrying (14)Fabricated metals (28)

Renting equipment (71)Construction (45)

Paper products (21)Furniture (36)

Wholesale trade (51)Printing & publishing (22)

Leather & footwear (19)Recycling (37)

Food & beverages (15)Rubber & plastics (25)Post & telecoms (64)

Non-metalic minerals (26)Other business services (74)

Other transport equipment (35)Textiles (17)

Machinery & equipment (29)Distribution of water (41)

Basic Metals (27)Computer software (72)

Office machinery & computers (30)Electrical machinery (31)

Motor vehicles (34)Radio, TV equipment (32)

Chemicals (24)Precision instruments (33)

Electricity, gas, hot water (40)R&D (73)

Extraction (11)Coke & petroluem products (23)

UK average = 22.8%

70.4

62.761.2

50.848.748.1

41.237.4

36.135.1

34.132.932.0

30.528.628.027.827.026.9

25.724.724.423.923.322.3

21.019.118.818.418.117.717.116.816.716.615.915.615.314.6

13.611.7

3.3

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0

Air transport (62)Clothing (18)

Sale of motors (50)Support to transport (63)

Hotels & restaurants (55)Water transport (61)

Cultural services (92)Land transport (60)

Wood products (20)Retail trade (52)Real estate (70)

Other mining & quarrying (14)Fabricated metals (28)

Renting equipment (71)Construction (45)

Paper products (21)Furniture (36)

Wholesale trade (51)Printing & publishing (22)

Leather & footwear (19)Recycling (37)

Food & beverages (15)Rubber & plastics (25)Post & telecoms (64)

Non-metalic minerals (26)Other business services (74)

Other transport equipment (35)Textiles (17)

Machinery & equipment (29)Distribution of water (41)

Basic Metals (27)Computer software (72)

Office machinery & computers (30)Electrical machinery (31)

Motor vehicles (34)Radio, TV equipment (32)

Chemicals (24)Precision instruments (33)

Electricity, gas, hot water (40)R&D (73)

Extraction (11)Coke & petroluem products (23)

Percentage of enterprises sourcing knowledge from HEI’s in Great Britain 2006, by region and sector

20.6

22.5

19.5

22.2

22.5

21.4

21.9

24.9

22.5

23.2

21.7

21.9

22.7

22.8

23.8

25.6

26.6

26.7

27.1

27.1

27.4

27.8

16.0 18.0 20.0 22.0 24.0 26.0 28.0

EAST

EM

SW

WM

YH

LON

WAL

SCO

SE

NE

NW

services sector production sector

Percentage of enterprises sourcing knowledge from HEI’s in Great Britain 2006, by size

4.5

21.0 22.519.6

29.8

3.9

17.8

24.3

34.6

41.4

0.05.0

10.015.020.025.030.035.040.045.0

0-9employees

10-19employees

20-49employees

50-199employees

200+employees

services sector production sector

26.5

22.5

28.3

24.4

14.7

16.7

14.5

15.9

10.0

12.0

14.0

16.0

18.0

20.0

22.0

24.0

26.0

28.0

30.0

Product innovation (2004-06) Process innovation (2004-06) Exported (2006) Foreign-owned (2006)

% w

ho

are

gra

du

ates

yesno

Overall 17.9% of workforce estimated to be graduates in 2006

Percentage of Workforce with degrees by certain activities in GB

Variable definitions used in CIS-ARD merged dataset for 2006 (cont.)

Conclusions• Linkages with HEI’s for knowledge/cooperation is

significant – on average nearly 23% of firms did so in 2006– More so in production sector, larger enterprises, and NW, NE,

SE and Scotland• Some 17.9% of workforce were graduates in 2006

– More prevalent in innovative, internationalised firms• In terms of use of HEI’s:

– Exporters (+); foreign-owned (-)– Novel innovators (+); patenting (+); product innovators in

manufacturing (-)– Those undertaking extramural R&D & cooperation (-)

• Less need for universities?– Higher absorptive capacity (+) , especially external knowledge– When risks associated with innovation high (+); lack of

qualified personnel (+)

• In terms of impact on productivity:– UK-owned firms sourcing knowledge from HEI’s

benefited– Foreign-owned firms in manufacturing sourcing

knowledge from HEI’s had lower productivity• Technology-sourcing FDI?

– Firms with no graduates had lower productvity• For those with graduates, inverted U-shaped

relationship with productvity

– Larger manufacturing firms more productive• Some evidence that larger service sector firms have

lower labour productivity