Universities and knowledge co-creation with Industry and society

Intellectual Capital disclosure and third mission in Italian Universities

Roberto Mavilia, Roberta Pisani

The objective of this paper is to analyze the evolution in the role of Universities and to focus our attention on the new role of universities in the current socio-economic environment.

Over the centuries, numerous and different historical, social, cultural, political, economic and environmental factors have influenced the development of universities, leading to a variation in their role.

Universities were originally entities that devoted themselves exclusively to research and teaching. Over time, universities have been asked to change their role. We thus witness the emergence of the entrepreneurial character of universities which is configured in activities such as networking and a greater interest in sustainability and social engagement.

This led to the fact that, in addition to teaching and research, a third mission for universities has emerged. This third mission has been recognized by universities in their ability to connect with their external environment, to understand their needs and expectations and to find adequate answers to give to society, in a continuous exchange.

Universities have long been social institutions. Over the centuries, numerous and different historical, social, cultural, political, economic and environmental factors have influenced the development of universities, leading to a variation in their role.

In fact, in Europe in the Middle Ages, universities were part of the restoration movement of ancient culture. This movement started from the schools born inside cathedrals. This movement was born under the patronage of the Church but ended with a shift from its initial field and led to what can be called the first “university”. (Frondizi et al., 2019). The goal of these institutions was, therefore, the transmission of truth and knowledge. At that time, the university was born as an autonomous, private and non-governmental institution.

Soon, however, political and clerical powers understood and recognized the importance of these institutions which have been able to attract students and professors from all over Europe. This process was by far accentuated during the Renaissance.

During the same period, universities lost their total control over scientific knowledge. This loss proved even more profound in the XVIII century, when academies, salons and literary groups became increasingly important.

A new idea of university emerged in the XIX century thanks to von Humboldt, the founder of the University of Berlin.

From what has been said above, this new idea emerged that identifies the specific characteristic of universities, that is the union between teaching and research.

A third phase in the evolution of the idea of university occurred in the XX century in the United States and soon spread to other countries. In 1963, Kerr, dean of Berkeley University, introduced the concept of multiversity. He introduced an idea of a university that was supposed to be able to guarantee public policy objectives through a general improvement of democratic processes and a growing reduction of economic gaps in the social context.

This shows that, in addition to teaching and research, a third mission for universities has emerged. This third mission has been recognized by universities in their ability to connect with their external environment, to understand their needs and expectations and to find adequate answers to give to society, in a continuous exchange.

Today’s socio-economic reality today is based on the concept of “knowledge”. This is the central element of the currently dominant model of the knowledge-based economy and society (Leydesdorff, 2006). Knowledge-intensive elements, such as universities, have become fundamental for economic development (OECD, 1996). The first scholars who introduced this concept were Foray and Lundvall in 1996.

Abramowitz and David in 1996 affirmed that the process of codifying knowledge, or the passage from tacit knowledge to explicit knowledge, has a central role in economics. This central role is given by the fact that it produces “context-free” knowledge that can be used in a greater number of contexts, allowing to improve research (Leydesdor, 2012).

The initial and most well-known theories focused on technology transfer have been developed by Gibbons et al. in 1994. Their studies created a real innovation concerning the knowledge exchange process. This process is referred to as the transition from “Mode 1” to “Mode 2”. Thus, the production of knowledge would transform from a traditional science without immediate results for society (Mode 1) into a system open to those who use this science (Mode 2).

These two methods are pioneers of more recent systems which are characterized by greater dynamisms and with an orientation towards new growth prospects. (Frondizi et al., 2019). It should be noted, however, that these two methods do not include all the theories and perspectives relating to technology transfer.

The triple helix model (Leydesdorff and Etzkowitz, 1996), allowed to overcome some imperfections typical of existing approaches, such as the almost total lack of interaction between stakeholders or the exclusion of some of them during the cognitive exchange (Eztkowitz et al., 2017). This approach is an actualization of the model of the Sabato triangle which is well known in Latin America but less known in Europe and the United States (Sabato and Botana, 1968).

The triple helix model represents a response to political concerns and also represents an attempt to initiate a much broader discussion on the concept of national innovation system (NIS) introduced by Freeman (1987) and Lundvall (1988). The triple helix model analyzes the relationship between university, business and government. The triple helix model states that, in a knowledge-based society, universities can stimulate and foster innovation and economic development. According to the triple helix model, a hybridization of elements coming from universities, industries and governments is necessary to generate new institutional and social agreements in order to produce, transfer and apply knowledge (Eztkowitz et al., 2000).

The vision of the triple helix model includes the process of creative destruction (Schumpeter, 2010), but also the creative renewal that emerges within and between the aforementioned three institutional spheres.

The triple helix model evolved and included a fourth helix. This fourth helix is represented by the media and culture based public and by the civil society (Carayannis et al 2012a). The triple helix model has also come to incorporate a fifth helix which is represented by the natural environments of society (Carayannis et al 2012b).

The triple, quadruple and quintuple helix models are closely intertwined with each other and are interdependent with the policy approach of the third mission (Frondizi et al., 2019). The models based on the third mission state that, in addition to teaching and research, universities should intervene to contribute to local socio-economic development. This is based on the growing belief that the results of academic research and educational skills are crucial for the socio-economic growth of Countries.

All the typical activities of the third mission are carried out in the belief that the prerequisite for the socio-economic development and for the growth of a region is represented by the ability to trigger co-evolutionary virtuous circles between research and education, technology, innovation, business and services in order to promoting the enhancement of the intangibles represented by the social capital in a region (Abatecola et al., 2016).

The activities of the third mission therefore contribute to the transition to an entrepreneurial university (Ranga et al., 2015). In order to better face the challenges of the third mission and, therefore, to be able to encourage the dissemination of knowledge and to make universities a powerful engine for innovation and for economic growth, operative infrastructures have recently been founded or reoriented within universities (Frondizi et al., 2019).

Intangible resources seem more stable than financial resources which are now in decline. These intangible resources may therefore be able to generate the competitive differential of universities and improve their social legitimacy (Kong et al., 2010). Intangible assets can be understood as intellectual capital (Cricelli et al., 2018). It is defined as intellectual material, knowledge, experience, intellectual property, information that can be used to create value (Stewart, 1997).

Various approaches to the use of intellectual capital have been developed over the past decade. Most of the research and analysis on this issue has been carried out in Europe and in particular in Italy since the central Italian government has allocated financial resources based on the performance achieved by public universities (Torri, 2014).

Therefore, it becomes necessary to reinterpret the results achieved by the universities in terms of the social and economic value created i.e. the results of the third mission (Di Bernardino and Corsi, 2018).

The components of the IC can be seen as strategic tools, as they are useful for pursuing the mission and vision of universities (Melián-González et al., 2010). In fact, a high interest in IC practices is a manifestation of the strategic approach of universities, above all to attract further students, researchers and financiers. The different components of the IC could therefore be associated with university performance.

On the other hand, if universities use and upgrade their IC without adopting the reporting models, they will not obtain their social legitimacy (Zambon et al., 2016).

Intellectual capital (IC) research has given less consideration to the public sector which is in fact one of the areas least addressed by this line of research.

Despite this, it must be said that universities are an interesting research area because they are considered critical actors in the knowledge society (Secundo et al., 2015).

Recent literature focusing on intellectual capital (IC) in the public sector has focused attention on the real ability of intellectual capital management methods to create value (Guthrie et al., 2015).

In the field of research on higher education, the literature focuses on universities and the integration of the IC management approach (Jones et al., 2009) with the validation of the intellectual capital reporting models (Leitner, 2004).

A possible way of convergence is represented by the quality assessment system used by universities in order to evaluate the performance of their activities (i.e. accountability) and in order to provide useful advice for the management of universities (i.e. enhancement) (Di Berardino et al., 2018).

Recent researches (Secundo et al., 2015) propose to analyze how intellectual capital can promote the development of a third mission in universities. Some authors (Secundo et al., 2016) adopt the IC framework in order to identify measurements that are appropriate to evaluate the activities of the third mission in terms of performance. Secundo et al. (2017) propose and test the IC maturity model capable of monitoring and managing the third mission, in an integrated manner, as well as research and teaching activities of universities.

These authors developed a general, flexible and comprehensive IC Maturity Model for Universities (ICMM). This framework aims to define and implement IC measurement and management approaches, understood as part of the strategic management of universities. (Secundo et al., 2015). This research approach is based on the third phase of IC research (Dumay and Garanina, 2013), which focused on putting IC approaches into practice rather than theoretical conceptualization. The ICMM model represents a theoretical continuum along which the maturity process can be developed. This process is developed incrementally from one level to the next, with the following steps: data collection, awareness, adjustment of specific indicators, measurement, reporting, interpretation, decision making, strategy and planning. These authors have been able to show how a self-assessment tool can help to gain better knowledge on the use of IC.

In addition, this tool allows to increase the efficiency of university technology transfer offices.

Some guidelines provided by International Agencies aim to monitor the third mission in European universities, linking this new mission to innovation management purposes defining the Third Mission as all activities concerning the generation, use, application and exploitation of knowledge and other university skills outside of academic environment (Molas-Gallart et al., 2002).

Being still in an exploratory phase of the third mission, the ICU reporting framework does not analyze in detail the performance of the third mission. From this, the predominantly qualitative nature of the information required by the ICU emerges, which allows you to explore the phenomenon without having specific insights for the third mission (OEU, 2006).

The objective of this paper is to analyze the evolution in the role of Universities and to focus our attention on the new role of universities in the current socio-economic environment, by answering the following research questions: what are the main elements that led to this transition? How did we come to talk about the third mission of the universities? How can the third mission be evaluated? Can intellectual capital contribute to its management and evaluation? Can the Italian case be an example of best practice? Is there a relationship linking the quality of the third mission in Italy with the main macroeconomic indicators and the main territorial indicators for development policies?

#Intellectual Capital #Italian Evaluation System #third mission #Universities