Finance and entrepreneurial Activity

1. EUEREK Finance and entrepreneurial Activity Gareth Williams

2. Financial Indicators of entrepreneurialism Sources of income Mechanisms of income (line item budgets, formulae; student fees, competitive bidding; commercial contracts etc) Internal resource allocation procedures

3. Very wide range of income sources in case study institutions Fees: 0% - 94% Research: 2% - 63% Government core funding: 17% - 78% (including private 0% - 78%) Extremely difficult to make firm generalisations

4. Percentages of income from various sources Case study institutions and national averages

5. Finance can enable and stimulate entrepreneurial activity Finance can discourage and obstruct entrepreneurial activity Finance monitors and records entrepreneurial activity Finance does not initiate entrepreneurial activity

6. Shortage of money encourages entrepreneurialism The decrease of the state funding was an important reason also at the ULA to start to seek external funding (Finnish case study) When the budget funding decreased and the demands for universities increased, it was the only way to make extra resources(Finnish case study) Money is important, as it is the tool that allows you to carry out activities(Spanish case Study) Lack of money forces new ideas to come forward. (Swedish case study) A high proportion of the School’s research grant income is actually acquired by people who are not tenured staff, and therefore those people are entirely supported out of the research grant that they can get. If they can not attract research grants, they do not get paid.(UK case study

7. Shortage of money inhibits entrepreneurialism I mean universities today can’t really afford to seek external funding unless it clearly promotes the achievement of the universities’ objectives (Finnish Case study) It is difficult to talk about more entrepreneurial missions and strategies in a severely underfunded public system which has marginal chances for either international funding or funding from the industry(Polish case study) The lack of opportunities and financing for entrepreneurs provided by local government (mentioned as one of the inhibitions to entrepreneurialism in one Spanish case study) We need support for projects when we are trying to get them started (ibid) If I had to say one word it would be ‘money’, getting the required investment is really linked very much on maybe this traditional over-reliance on student fee income. That limits our marketing (English private university) A lack of money, and that links to what we charge in terms of doing our research in the region because sometimes we don’t … charge enough. ….. we often subsidise what we do when perhaps we should be making a profit.(UK case study)

8. Institutional financial regulations and resource allocation procedures are important Who earns the money? How is it distributed internally? Who controls its use? How are spending decisions taken?

9. Incentives are important We have more prohibitions to make revenues than instruments to make revenues(Finnish case study) the academic post as an almost fully safe, non-competitive working environment: working contracts guarantee employment (Polish case study) In the area of incentives, it is clear that it would help a lot if successfully landing large projects or patents obtained could count as merits in the academic career race (Swedish case study) funding allocations to academic Schools related directly to the earnings they bring to the University, thus increasing the incentive of generating additional revenue(UK case study) The School … allocates the whole overhead to the department, thus encouraging the department to negotiate hard with the awarding authority for high overheads,(UK case study) Some in the University are said to believe that consultancy activities are only filling the pockets of individuals rather than bringing any added value to the University more broadly (UK case study)

10. Institutional entrepreneurial activity is encouraged when Core Income from government is tight but not inadequate for survival (Finland, Sweden,England) Governments promote and support 3rd mission activity (Finland? Sweden, England) A significant part of any income earned goes directly or indirectly to individuals and groups that take the risks and do the work (England) A commercial culture is acceptable to sufficient numbers of academic and other staff (England) Individuals are not allowed to enter the private ‘black market’ (Poland) Subject areas where academic research is commercially or socially valued (LSHTM, KTH)

11. Institutional entrepreneurial activity is discouraged when : Core income from government is too generous (Spain?) Core income is inadequate for investment and risk taking (Several private universities, Poland, Moldova) Financial regulations too burdensome (Sweden, Finland, Poland) Traditional academic culture dominant (Poland, Finland, Sweden, Spain)

12. Some problems with external finance: limitations of academic freedom; uncertainty of future income the requirements of external financiers and demands for continuous reporting and controlling set too many limits and influence very much the functioning of researchers ….. You may have to accept funding which is not cost-effective and includes many conditions (Finnish case study) financial risks attached to the present system of external funding …….A whole unit was financed around one person who, in the end, did not show up (Swedish case study) it continues to be important to diversify the sources of the School’s income to provide greater stability and to protect it from policy changes of some [of] its current significant funders (UK case study)

13. Final thoughts (1) In an ‘entrepreneurial’ university Central management of institution can act entrepreneurially (Nottingham) Individual entrepreneurial income generation can be encouraged (LSHTM, UPV, KTH) *********************************************** In nearly all the case study institutions a tension is detectable between traditional academic values and l commercial entrepreneuriavalues. Few interviews reported that academic staff enjoyed acting entrepreneurially except in order to further their research

14. Concluding questions of definition Finance highlights the problems of definition What should be counted as entrepreneurial income? Is anyone who bids for money for a research project being entrepreneurial? Is anyone who bids for money for a new course being entrepreneurial? OVERALL THE CASE STUDIES SUGGEST THAT THERE HAVE NOT BEEN FUNDAMENTAL CHANGES IN THE FINANCIAL PROFILES OR ACADEMIC WORK OF THE CASE STUDY UNIVERSITIES IN THE PAST TEN YEARS