The role of universities in economic development

Three or so years ago a delegation from a major European city was on a visit to Dublin. The mayor was there, several city officials, a couple of businesspeople, two (if I recall) members of parliament for that city, and some others. Their hosts were an Irish state agency. I was invited to address the visitors over dinner, the topic being what Irish universities have done to support economic development.

So I told them a little about the Irish university system, and I described what we were doing to support the economy: from teaching those who would become skilled graduates in important fields, through managing incubation centres, through linking with industry R&D labs, to spinning out companies. I gave some examples from my own university, DCU. I summed up by saying that the two critical ingredients that enabled universities to play this role were (a) the capacity to compete with universities in an inward investor’s home country by having recognised centres of real world class excellence, and (b) strategic autonomy and the ability to be entrepreneurial and innovative. It was clear from the discussion that the universities from our guests’ city would need to be reformed fundamentally for them to be able to do any of this.

Afterwards the mayor, an extremely affable man with a good sense of strategy and a pleasant witty manner, came to thank me for my talk and for the very interesting insights I had provided (he said). I expressed my appreciation and asked him whether he would look again at the conditions under which his universities operated. He looked staggered at the question, and answered emphatically that he certainly would not, that they needed to know their place as agencies of government and not get any notions that they could autonomously develop their own strategies. I told him that he must therefore expect to see the long-term decline of his city (which he had described over dinner) continue.

The idea of universities as educational agencies following a national plan is not an unusual one in Europe, and indeed there are occasional shades of it here in political discourse. The Universities Act 1997 gave universities in Ireland a degree of autonomy, but more than once I have heard politicians musing that this may have been a step too far and should be revisited. But in fact the autonomy of universities – and by this I mean autonomy beyond what we have now – is a vital ingredient for national success and in particular for stimulating the local economy. For example, the role of DCU is generating economic activity in the North Dublin and Fingal area is pivotal. And more generally, universities have been indispensable in virtually every recent bid to persuade major global companies to locate R&D in Ireland. Universities need to be able to move fast in taking decisions and need to be able to deal effectively with corporate and other partners.

Even when our costs have moderated a little due to the recession, investments in Ireland by companies setting up call centres or basic manufacturing units will not return – those days are over. Our hope for the future lies in much higher value investments and successful indigenous start-ups. These require successful and autonomous universities. Our future as a country is tied up in this. We must get it right.

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Tags: economic development, foreign direct investment, R&D, research and development, university autonomy

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