TOWARDS  THE  ‘NEOLIBERAL’  UNIVERSITY   i    

 

By  Sandra  T.  Roorda  I6044731  

 MA:  Arts  and  Culture  

Arts  and  Heritage:  Policy,  Management,  and  Education  Faculty  of  Arts  and  Social  Sciences  

Maastricht  University  August  2013  

Towards  the  ‘Neoliberal’  University  

 

S u p e r v i s o r :   P h i l i p   L a w t o n  

Higher  Education  and  Innovation  in  the  Knowledge  Economy  

W  o  r  d    C  o  u  n  t  :    1  8  6  1  9  

  ii  

   

Towards  the  ‘Neoliberal’  University  

 

Towards  the  ‘Neoliberal’  University  

 

Higher  Education  and  Innovation  in  the  Knowledge  Economy  

ABSTRACT    

Recent  decades  have  seen  significant  changes  within   the  realm  of  academia,  as  universities  and  similar  public   institutions  of  higher  education  become  steadily   linked   to  economic  development.  These  changes   can   be   understood   as   occurring   within   a   complex   set   of   dialectical   processes,   inextricably  intertwined,   in   part,   with   neoliberal   discourse   and   the   development   of   the   knowledge   economy   and  knowledge  capitalism.  Certainly,  as  a  facet  of  globalization,  the  ascendancy  of  neoliberalism  in  particular  has  proven  catalytic  in  the  paradigmatic  shift  towards  a  knowledge-­‐based  economy,  wherein  knowledge  and   information   effectively   function   as   the   new   capital.   In   turn,   universities   are   thus   regarded   as  veritable  bases  of  knowledge  at  the  heart  of  this  economy  and  are  therefore  increasingly  justified  within  economic  terms.  Moreover,  policy  communities  at  both  national  and  transnational  levels  of  government  are  recognizing  an   integral   role   in  universities   to  potentially  act  as  powerful  drivers  of   innovation  and  economic  change.  Naturally,   this  raises  questions  concerning   the  role  of   the  university  and   its   function  for  modern   society  within   the   context   of   the   developing   knowledge   economy.   In   this   case,   we   aim   to  explore   the   role   of   the   university   within   the   framework   of   recent   policy   touting   the   importance   of  knowledge  and  innovation  and  advocating  the  alignment  between  academia  and  industry.  Of  course,  this  is  not  to  depreciate  either  the  current  or  future  capacities  in  which  universities  and  institutions  of  higher  education  can  act  as  economic  drivers  and  play  an  important  role  in  fostering  economic  growth.  Rather,  it  is  the  fundamental  shift   in  the  way  that  universities  are  redefining  this  role  that  deems  closer  scrutiny.  To   be   sure,   the   attempt   to   align   academia  with   business   can   have   profound   implications   for   the   roles  such   institutions  play   in   our   society.  Our   goal   is   to   adopt   an   exploratory   approach   in   examining   these  roles  and   the  various   issues  and  challenges—both  existing  and  potential—that  universities   face  within  the   context   of   the   developing   knowledge   economy   and  within   an   environment   increasingly   shaped  by  neoliberal   discourse.   By   evaluating   the   wide   range   of   these   perspectives   regarding   the   role   of   the  university,  we  aim  to  synthesize  an   instrumentalist  approach   in   looking   forward   towards   the  changing  nature  of  higher  education  and  the  future  role  of  the  university.    

Keywords:  Higher  Education,  Neoliberalism,  Knowledge  Economy,  Knowledge  Capitalism,  Innovation  

  iii  

 Towards  the  ‘Neoliberal’  University  

Higher  Education  and  Innovation  in  the  Knowledge  Economy          by  

 Sandra  T.  Roorda  

       

 A  Thesis  presented  to  the  

 Faculty  of  Arts  and  Social  Sciences  of  

 Maastricht  University  

 in  partial  fulfillment  of  the  requirements  for  the  degree  of  

       

Master  of  Arts  and  Culture    

in  the  subject  of    

Arts  and  Heritage:  Policy,  Management,  and  Education              

Maastricht  University  Maastricht,  the  Netherlands  

 August  2013  

       

  iv  

                               A  university  is  not  outside,  but  inside  the  general  social  fabric  of  a  given  era.  It  is  not  something  apart,  something  historic,  something  that  yields  as  little  as  possible  to  

forces  and  influences  that  are  more  or  less  new.  It  is  on  the  contrary...  an  expression  of  the  age,  as  well  as  an  influence  operating  upon  both  present  and  future.  

   

-­‐  Abraham  Flexner  (1930,  p.  3)                                          

  v  

TABLE  OF  CONTENTS    

CHAPTER  I:  INTRODUCTION  AND  METHODOLOGY   1  

   

CHAPTER  II:  ON  NEOLIBERALISM  AND  PROCESSES  OF  NEOLIBERALIZATION   7  

CONCEPTUALIZING  NEOLIBERALISM:  TOWARDS  A  CONTEXTUAL  DEFINITION   8  NEW  INSTITUTIONAL  ECONOMICS  AND  NEW  PUBLIC  MANAGEMENT   11      

CHAPTER  III:  ON  THE  KNOWLEDGE  ECONOMY  AND  KNOWLEDGE  CAPITALISM  14  

NEW  GROWTH  THEORY:  KNOWLEDGE  AND  ECONOMIC  DEVELOPMENT   15  CONCEPTUALIZING  KNOWLEDGE:  KNOWLEDGE  AS  CAPITAL   16  TYPOLOGIES  OF  KNOWLEDGE  AND  MODES  OF  KNOWLEDGE  PRODUCTION   18      

CHAPTER  IV:  ON  PROCESSES  AND  SYSTEMS  OF  INNOVATION   22  

CONCEPTUALIZING  INNOVATION:  AN  OUTCOME  OF  KNOWLEDGE  PRODUCTION   22  NATIONAL  SYSTEMS  OF  INNOVATION   25  OPEN  MODELS  OF  INNOVATION   26      

CHAPTER  V:  ON  UNIVERSITIES  AND  HIGHER  EDUCATION   30  

THE  ROLE  OF  ORGANIZED  EDUCATION:  A  BRIEF  HISTORY   31  RECENT  CHANGES  IN  HIGHER  EDUCATION:  TOWARDS  A  METHODOLOGY   33  ACADEMIA  AND  BUSINESS:  PROCESSES  OF  CONVERGENCE   35  THE  ECONOMIC  ROLE  OF  THE  UNIVERSITY:  BENEFITS  AND  CONTRIBUTIONS   38  INSTITUTIONAL  AND  ORGANIZATIONAL  RESTRUCTURING:  CHALLENGES  AND  ISSUES   45  PERSONAL  AND  SUBJECTIVE  CHANGES:  CHALLENGES  AND  ISSUES   50      

CHAPTER  VI:  CRITICAL  DISCUSSION  AND  DEBATE:  FUTURE  OUTLOOKS   55  

   

BIBLIOGRAPHY:  WORKS  CITED   62  

     

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  1  

CHAPTER  I  

Introduction  and  Methodology  

 

 

Recent  decades  have  seen  significant  changes  within  the  realm  of  academia,  

as  universities  and  similar  public  institutions  higher  education  become  steadily  

linked  to  economic  development.  These  changes  can  be  understood  as  occurring  

within  a  complex  set  of  dialectical  processes,  inextricably  intertwined,  in  part,  with  

neoliberal  discourse  and  the  development  of  the  knowledge  economy  and  

knowledge  capitalism.  Certainly,  as  a  facet  of  globalization,  the  ascendancy  of  

neoliberalism  in  particular  has  proven  catalytic  in  the  paradigmatic  shift  towards  a  

knowledge-­‐based  economy,  wherein  knowledge  and  information  effectively  

function  as  the  new  capital.  In  turn,  universities  are  thus  regarded  as  veritable  bases  

of  knowledge  at  the  heart  of  this  economy  (Organization  for  Economic  Cooperation  

and  Development,  1996;  Porter  and  Ketels,  2003;  Kitagawa,  2004)  and  are  therefore  

increasingly  justified  within  economic  terms.  Moreover,  policy  communities  at  both  

national  and  transnational  levels  of  government  are  recognizing  an  integral  role  in  

universities  to  potentially  act  as  powerful  drivers  of  innovation  and  economic  

change:  These  discussions  are  taking  place  against  the  backdrop  that  knowledge  production  and  the  contribution  of  higher  education  to  the  economies,  prestige,  and  standing  of  nations  are  rapidly  transforming  the  once  benign  higher  education  system  into  a  competitive  market  place.  (Kitagawa,  2004,  p.  54)    

Naturally,  this  raises  questions  concerning  the  role  of  the  university  and  its  function  

for  modern  society;  after  all,  schools  and  institutions  of  learning  derive  crucially  

from  the  social,  cultural,  and  political  environments  in  which  they  are  embedded  

(Mautner,  2005).  In  this  case,  we  aim  to  explore  the  role  of  the  university  within  the  

context  of  recent  policy  touting  the  importance  of  knowledge  and  innovation  in  the  

current  economy.  There  is  certainly  neither  a  lack  of  literature  nor  strong  critique  

surrounding  what  appears  to  be  a  polemical—if  not  polarizing—subject.  Of  course,  

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this  is  not  to  depreciate  both  the  existing  and  the  potential  capacity  for  universities  

and  institutions  of  higher  education  to  act  as  economic  drivers  and  play  an  

important  role  in  fostering  economic  growth.  However,  it  is  the  fundamental  shift  in  

the  way  that  universities  are  redefining  this  role  that  deems  closer  scrutiny.  Perhaps  

at  the  ‘heart  of  the  matter,’  as  Clark  (2001)  states,  is  how  universities  are  

responding  to  and  shaping  these  many  forces  that  play  upon  them  (p.  8).  To  be  sure,  

within  the  framework  of  neoliberalism  and  the  development  of  knowledge  

capitalism,  the  various  perspectives  regarding  the  role  and  function  of  the  university  

are,  in  part,  reflective  of  “a  struggle,  not  only  over  the  meaning  and  value  of  

knowledge  both  internationally  and  locally,  but  also  over  the  public  means  of  

knowledge  production”  (Olssen  and  Peters,  2005,  p.  340).  It  is  with  this  in  mind,  that  

in  order  to  examine  the  recent  changes  in  higher  education,  we  can  look  towards  

how  universities  and  similar  public  institutions  are  under  increasing  pressure  to  

adapt  to  these  changing  perceptions  of  the  meaning  and  value  of  knowledge.  Indeed,  

“the  different  perspectives  on  how  knowledge  drives  economic  growth  point  to  

different  challenges  for…  education  systems”  (Rasmussen,  Lorenz,  and  Lundvall,  

2008,  p.  681).  Our  aim  is  to  adopt  an  exploratory  approach  in  examining  these  

various  challenges,  at  numerous  levels,  that  universities  currently  face,  as  the  

changes  in  higher  education  are  assuredly  steeped  in  a  complex  mesh  of  issues.  It  is  

important  for  us  to  bear  in  mind  that  these  issues  arise  within  a  set  of  manifold  and  

dialectical  processes.  As  a  consequence,  a  clear  and  developed  methodology  for  our  

examination  is  quite  necessary.  

 

  Our  examination—this  thesis—consists  of  six  chapters.  While  our  ultimate  

goal  is  to  examine  the  recent  changes  in  higher  education  resulting  from  the  shifting  

roles  of  the  university,  it  is  imperative  that  we  first  establish  a  conceptual  

framework  by  which  we  may  more  fully  comprehend  them.  As  we  have  already  

mentioned  summarily,  conceptualizing  neoliberalism  and  understanding  the  

knowledge  economy  and  knowledge  capitalism  will  prove  key.  Further,  analyzing  

the  concept  of  innovation  within  these  parameters  is  similarly  important.  In  effect,  

our  next  three  chapters  following  the  introduction  will  subsequently  discuss  

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neoliberalism  and  processes  of  neoliberalization,  the  knowledge  economy  and  

knowledge  capitalism,  and  processes  and  systems  of  innovation.  After  establishing  

this  conceptual  framework,  we  may  then  continue  on  to  our  fifth  chapter  in  looking  

more  closely  towards  the  effects  and  potential  challenges  that  this  warrants  

specifically  for  universities  and  institutions  of  higher  education.  Our  fifth  chapter  

can  be  understood  as  a  culmination  of  the  former  three,  as  it  effectively  builds  on  

the  framework  established  in  explaining  neoliberalism  and  the  importance  of  

innovation  in  the  developing  knowledge  economy.  Indeed,  this  integral  chapter  

serves  as  the  crux  of  this  thesis  in  understanding  the  recent  changes  affecting  

universities  and  can  provide  us  with  an  outlook  towards  the  future.  It  is  with  this  in  

mind  that  we  can  then  conclude  with  our  sixth  and  final  chapter,  where  we  may  

consider  a  broader  perspective  on  the  current  state  of  higher  education  and  engage  

in  a  critical  evaluation  of  the  sum  total  of  our  research.    

 

It  is  necessary  for  us  to  begin  by  first  looking  towards  neoliberalism  as  one  of  

the  underlying  mechanisms  driving  the  recent  changes  in  higher  education.  

Understanding  the  discursive—and  arguably  normative—trends  and  practices  

related  to  neoliberalism  (Harvey,  2007;  Peck  and  Tickell,  2002)  can  provide  us  with  

the  initial  infrastructure  from  which  we  may  then  build  our  analysis.  Certainly,  the  

development  and  the  subsequent  ascendancy  of  neoliberal  policy  in  recent  decades  

have  evolved  to  the  point  where  neoliberalism  has  arguably  become  a  hegemonic  

discourse  par  excellence  for  many  OECD  countries.  We  may  effectively  conceptualize  

the  pervasive  effects  of  neoliberalism  for  our  purposes  and  then  introduce  the  

relevant  ideas  behind  new  institutional  economics  (Williamson,  1975;  Coase,  1992)  

and  new  public  management  (Tolofari,  2005)  as  arising  from  processes  of  

neoliberalization  (Foucault,  Burchell,  Gordon,  and  Miller,  1991;  Klein,  1999;  Olssen  

and  Peters,  2005;  Geraldi,  2007).  It  is  our  goal  to  eventually  examine  the  extent  to  

which  current  institutional  behaviors  in  higher  education  are  influenced  by  this  

enterprising  policy  discourse.  

 

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We  will  then  look  towards  understanding  the  development  of  the  knowledge  

economy.  To  be  sure,  one  of  the  most  critical  concepts  underpinning  neoliberal  

discourse  of  recent  decades  involves  the  paradigmatic  transition  towards  a  ‘new’  

economy,  in  which  knowledge  and  information  effectively  function  as  the  new  

global  capital  (Castells,  1996,  1997,  1998),  hence  the  term,  “knowledge  capitalism”  

(Burton-­‐Jones,  1999,  p.  vi).  New  growth  theory  builds  on  this  argument  and  explains  

how  the  increasing  importance  of  knowledge  and  technology  act  as  key  drivers  for  

economic  development  and  how  knowledge,  in  all  its  forms,  currently  plays  a  crucial  

role  in  driving  economic  growth  and  productivity  (Foray  and  Lundvall,  1996;  Soete  

and  Ter  Weel,  1999;  Economics  Online,  n.d.).  The  idea  of  knowledge  as  an  economic  

good  and  further,  the  argument  that  economic  growth  stems  more  from  such  things  

as  knowledge  and  innovation  and  less  from  the  acquistion  of  tangible  capital,  is  

integral  for  our  analysis  (Stigler,  1961;  M.  Friedman  and  R.  Friedman,  1962;  Schultz,  

1963;  Machlup,  1967).  Indeed,  careful  consideration  must  be  given  to  how  this  

affects  the  meaning  and  value  of  knowledge;  in  particular,  understanding  the  

various  typologies  of  knowledge  and  modes  of  knowledge  production  prove  useful  

(Gibbons  et  al.,  1994;  David  and  Foray,  1995;  Adler,  1996;  Stiglitz,  1999;  

Hargreaves,  2000).  After  all,  in  configuring  knowledge  as  a  means  for  economic  

growth,  education  quickly  enters  the  discussion  as  the  potential  means  by  which  to  

cultivate  and  facilitate  such  growth  (Stiglitz,  1999;  Florida,  Gates,  Knudsen,  and  

Stolarick,  2006).  From  a  policy  perspective,  the  subsequent  implications  for  

universities  and  institutions  of  higher  education  could  prove  highly  consequential  

(Olssen  and  Peters,  2005;  Bastalich,  2010).  

 

  Of  course,  if  OECD  economies  are  steadily  driven  by  knowledge  and  

information,  then  the  creation  and  production  of  new  knowledge  and  information  

become  especially  important  and  even  more  so  integral  as  a  source  of  competitive  

advantage  (Lundvall,  2003;  Nonaka  and  Takeuchi,  1995;  Foray  and  Lundvall,  1996);  

in  our  case,  this  calls  for  a  closer  look  at  innovation  and  the  importance  of  its  role  

within  the  knowledge  economy.  Specifically,  we  may  examine  innovation  as  an  

important  outcome  of  knowledge  production  and  further,  the  favorable  conditions  

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and  environment  that  facilitate  and  effectively  nurture  such  an  outcome.  This  segues  

into  the  concept  of  ‘national  innovation  systems’  as  a  premise  to  understanding  the  

linkages  among  the  actors  involved  in  innovation  as  a  key  to  improving  economic  

performance.  Naturally,  universities  and  public  institutions  of  higher  education  are  

viewed  as  one  of  these  key  actors,  in  addition  to  those  in  government  and  industry  

and  the  private  sector,  as  comprised  by  the  so-­‐called  ‘triple  helix’  of  university-­‐

industry-­‐government  interactions  (Etzkowitz,  2003;  Leyesdorff  and  Meyer,  2007).  

To  be  sure,  “the  configuration  of  national  innovation  systems,  which  consist  of  the  

flows  and  relationships  among  industry,  government,  and  academia  in  the  

development  of  science  and  technology,  is  an  important  economic  determinant”  

(Foray  and  Lundvall,  1996,  p.  7).  Certainly,  “in  recent  years,  there  has  been  

considerable  interest  in  what  are  called  the  science-­‐based  industries…  The  claim  is  

that  innovation  and  output  in  these  industries  depends  heavily  on  very  recent  

advances  in  (university)  basic  research,  and  thus  they  provide  the  paradigm  

example  of  how  universities  contribute  to  the  innovation  system”  (Cowan,  2005,  p.  

6).  In  addition,  we  may  argue  that  the  very  perception  of  the  nature  of  innovation  

processes  has  also  changed  significantly  in  recent  history,  in  tandem—or  perhaps  as  

a  result—of  implementing  these  systems  of  innovation.  Broadly  speaking,  

innovation  capability  has  moved  away  from  previously  linear  and  unidirectional  

models  of  innovation  and,  instead,  become  a  more  open  and  interactive  network-­‐

based  model  in  what  Henry  Chesbrough  (2003)  first  termed  as  ‘open  innovation.’  

Such  models  effectively  hinge  on  interaction  across  organizations  and  institutions  in  

both  the  private  and  public  sectors  (Lundvall,  2003).  In  terms  of  our  research,  this  

implies  closer  interaction  between  academia  and  business  and  the  general  

alignment  of  universities  and  industry  firms.  

 

This  leads  us  to  our  fifth  and  crucially  important  chapter  on  universities  and  

higher  education,  where  we  can  examine  more  in  depth  the  changing  relationship  

between  academia  and  business  and  the  emphasis  on  universities  to  contribute  to  

economic  growth.  Certainly,  such  an  emphasis  on  the  economic  role  of  universities  

may  potentially  detract  from  the  more  traditional  notions  concerning  the  cultural  or  

  6  

social  justifications  of  these  institutions.  The  subsequent  developments  and  changes  

that  this  brings  to  higher  education  are  important  for  us  to  consider.  We  can  begin  

by  briefly  outlining  the  role  of  organized  education  from  a  historical  and  

chronological  perspective.  Establishing  this  initial  framework  may  better  lend  us  

insight  into  the  current  roles  of  universities  today.  We  will  then  examine  these  

current  roles  as  tied  to  the  recent  processes  of  ‘convergence’  between  academia  and  

business:  once  both  separate  domains  (Olssen  and  Peters,  2005),  the  two  have  been  

steadily  moving  closer  together  and  are  now  melding  at  various  points  of  contact.  Of  

course,  while  relations  between  university  and  industry  are  not  wholly  

unprecedented  (Romero,  2007),  the  extent  to  which  business  is  now  making  inroads  

into  academe  is  quite  unparalleled  (Mautner,  2005).  Indeed,  of  the  various  trends  

and  developments  that  characterize  recent  changes  in  higher  education,  it  is  this  

‘incursion’  of  the  market  (O’Neill  and  Solomon,  1996)  that  is  perhaps  one  of  the  

most  dominant  forces.  However,  it  is  important  for  us  to  maintain  a  critical  

approach  to  examining  the  changes  that  this  can  bring.  As  we  have  already  

mentioned,  it  is  not  our  aim  to  depreciate  or  denigrate  the  potential  and  the  existing  

merit  good  of  universities  in  contributing  to  both  the  greater  economy  and  society  

at  large.  It  is  with  this  in  mind  that  we  can  explore  both  these  benefits  and  economic  

contributions,  in  addition  to  the  various  challenges  and  issues,  which  may  occur  as  a  

result  of  placing  universities  at  the  forefront  of  neoliberal  and  knowledge  economy  

policy.  

 

  Our  final  and  concluding  chapter  effectively  adopts  a  broader  outlook  

towards  the  recent  changes  in  higher  education  as  the  sum  total  of  our  corpus  

research.  Moreover,  we  can  consider  the  wide  range  of  critique—both  positive  and  

negative—arising  as  a  result  of  these  changes.  Of  course,  as  we  have  repeatedly  

emphasized,  it  is  not  our  aim  to  support  a  singular  point  of  view  in  particular.  

Rather,  our  conclusion  aims  to  evaluate  the  wide  range  of  perspectives  regarding  

the  role  of  the  university  and  synthesize  an  instrumentalist  approach  in  looking  

forward  towards  the  changing  nature  of  higher  education  and  the  future  role  of  the  

university.  

  7  

CHAPTER  II  

On  Neoliberalism  and  Processes  of  Neoliberalization  

 

 

In  an  effort  to  understand  many  of  the  recent  changes  within  the  realm  of  

higher  education,  it  is  necessary  for  us  to  begin  by  looking  towards  neoliberalism  as  

one  of  the  underlying  mechanisms  driving  these  changes.  Understanding  the  

discursive—and  arguably  normative—trends  and  practices  related  to  neoliberalism  

can  provide  us  with  the  initial  framework  from  which  we  may  then  build  our  

analysis.  Certainly,  the  development  and  the  subsequent  ascendancy  of  

neoliberalism  in  recent  decades  have  evolved  to  the  point  where  it  has  arguably  

become  a  hegemonic  discourse  par  excellence  for  OECD  countries.  Indeed,  acting  as  

one  of  the  current  cornerstones  for  many  political  and  economic  practices  of  

western  nation-­‐states,  the  pervasive  effects  of  neoliberalism  have  effectively  

become  part  of  the  ‘commonsense’  way  in  which  we  interpret,  live  in,  and  

understand  the  world  (Harvey,  2007;  Peck  and  Tickell,  2002).  To  be  sure,  these  

widespread  and  normative  effects  are  inextricably  linked  to  globalization  and  the  

paradigmatic  shift  away  from  Keynesian  economics  and  traditionally  Fordist  

societies  during  the  late  twentieth  century.  Such  a  shift  incorporates  several  key  

concepts  integral  to  neoliberalism,  including  the  role  of  the  state  to  create  and  

maintain  an  institutional  framework  largely  characterized  by  open  markets  and  free  

trade,  deregulation,  and  privatization  in  an  effort  to  maximize  entrepreneurial  

freedoms  and  subsequently  improve  the  economic  wealth  of  a  nation.  Indeed,  

globalization—certainly  financial  globalization—coupled  with  the  advent  of  new  

technologies  and  science,  has  proved  catalytic  for  the  super-­‐power  sponsorship  of  

neoliberalism.  As  a  facet  of  globalization,  neoliberalism  is,  similarly,  like  

globalization,  often  defined  by  reference  to  certain  processes  generally  agreed  to  

exist  (Germic,  2009),  although,  of  course,  queries  as  to  whom  or  what  is  responsible  

for  such  processes  is  very  much  up  for  debate  (Ibid).  With  this  in  mind,  and  in  

addition  to  the  continually  developing  nature  of  neoliberalism,  we  may  use  the  word  

  8  

‘neoliberalization’  in  describing  these  evolving  processes  in  an  effort  to  

subsequently  examine  the  resulting  implications  that  neoliberalism  has  for  

institutions  of  higher  education  and  universities.  

 

 

Conceptualizing  Neoliberalism:  Towards  a  Contextual  Definition  

 

Of  course,  the  key  to  beginning  our  examination  lies  with  the  issue  of  first  

defining  and  conceptualizing  the  idea  of  neoliberalism  itself—a  task  which  proves  to  

be  no  small  feat.  For  all  its  ubiquity  and  hegemonic  status,  neoliberalism  is  a  concept  

difficult  to  define.  Much  of  this  is  due  to  the  fact  that  neoliberalism—as  per  the  

processes  of  neoliberalization—has  undergone  a  striking  historical  and  ideological  

transformation  from  its  initial  conception  as  theorized  by  the  German  Freiberg  

School  to  the  so-­‐called  “‘deep  neoliberalism’  of  the  past  decade”  (Peck  and  Tickell,  

2002,  p.  384).  The  disparities  in  defining  neoliberalism  are  made  further  apparent  

when  looking  towards  the  different  explanations  stemming  from  such  veritable  and  

authoritative  sources  as  Friedrich  A.  Hayek  and  the  Mont  Pelerin  Society  (Hayek,  

1944,  1947,  1948,  1960,  1973,  1976,  1978),  Milton  Friedman  and  his  acolytes  and  

collaborators  at  the  University  of  Chicago  (Friedman,  1962,  1963),  the  Marxist  

geographer,  David  Harvey  (Harvey,  2005a,  2005b,  2007,  2010),  and  notable  Nobel  

Memorial  Prize  winners,  including  James  M.  Buchanan  (Buchanan  and  Tullock,  

1962,  Buchanan,  1975),  Paul  Krugman  (Krugman,  1990,  2000,  2007),  and  Joseph  

Stiglitz  (Stiglitz,  2002,  2009)—the  latter,  also  formerly  of  the  World  Bank.  

 

“The  valances  of  the  term,  ‘neoliberalism’  are  multiple,  to  say  the  least”  

(Germic,  2009,  p.  127)  and  over  time,  have  come  to  mean  different  things  to  and  for  

different  groups  and  different  people.  While  we  may  trace  some  of  its  initial  roots  

from  the  interwar  years  and  the  1930s  onwards  (Stedman  Jones,  2012),  the  general  

idea  of  neoliberalism  has  evolved  over  the  course  of  the  twentieth  century,  

eventually  taking  semantic  root  within  much  more  recent  decades.  Moreover,  the  

vast  amount  of  literature—and  thus  the  differing  conceptions  and  the  ensuing  

  9  

debate—regarding  neoliberalism  has  taken  on  a  self-­‐actualizing  quality,  in  that  the  

definition  of  neoliberalism  has  practically  come  to  include  the  fact  that  it  is,  ipso  

facto,  difficult  to  define.  As  “an  academic  catchphrase”  (Boas  and  Gans-­‐Morse,  2009)  

and  described  anecdotally  or  through  the  use  of  such  analogies  as  the  “new  

planetary  vulgate”  (Bourdieu  and  Wacquant,  2001,  p.  2),  or  as  “an  ideological  

‘thought  virus’”  (Beck,  2000,  p.  122),  Jamie  Peck  and  Adam  Tickell  (2002)  cite  that  

“it  is  revealing,  perhaps,  that  such  resorts  to  metaphor  are  not  unusual  in  attempts  

to  develop  proximate  conceptualizations  of  neoliberalism,  the  power  of  which  

would  seem  to  have  become  as  compelling  as  it  is  intangible”  (p.  381).  

 

It  is  essential  for  our  purposes  that  we  recognize  and  acknowledge  these  

inherent  difficulties  in  defining  and  conceptualizing  neoliberalism  and  its  

association  with  modes  of  exogenized  thinking.  That  is,  our  awareness  of  the  

complexities  surrounding  neoliberalism  and  neoliberalization  is  key  to  examining  

and  understanding  its  political,  economic,  and  ultimately  societal  impact  towards  

institutions  of  higher  education  and  universities.  Namely,  of  the  many  divergent  

theories  and  applications  regarding  neoliberalism,  we  must  aim  to  address  and  

examine  those  that  are  pointedly  relevant  to  the  current  state  of  how  universities  

and  similar  institutions  of  higher  education  are  defining  or  redefining  their  role  and  

purpose  within  this  new  institutional  framework.  We  may  therefore  effectively  

conceptualize  neoliberalism  for  our  intents  and  purposes  by  contextualizing  our  

scope  to  the  neoliberal  practices  and  the  associated  discourses  of  new  institutional  

economics  and  new  public  management  consequently  affecting  universities  and  

policies  regarding  higher  education.  Specifically,  our  objective  is  to  examine  the  

wider  networks  and  basic  structures  of  neoliberalism  within  recent  history,  and  

then  focus  on  the  fundamental  shifts  and  the  dominant  patterns  of  restructuring  

that  have  led  to  public  and  institutional  reform  in  many  OECD  countries,  particularly  

in  North  America  and  Western  Europe—the  self-­‐styled  nexus  and  “heartlands”  of  

neoliberal  discursive  production  (Peck  and  Tickell,  2002,  p.  380).  

 

  10  

It  is  perhaps  the  lauded  importance  of  free  trade,  deregulation,  and  open  

markets  that  plays  the  central  role  in  the  economic  and  political  theories  

surrounding  neoliberalism.  Certainly,  David  Harvey  (2007)  posits  that  as  a  set  of  

political  and  economic  practices,  neoliberalism  proposes  the  following:  [H]uman  well-­being  can  best  be  advanced  by  the  maximization  of  entrepreneurial  freedoms  within  an  institutional  framework  characterized  by  private  property  rights,  individual  liberty,  unencumbered  markets,  and  free  trade  [wherein]  the  role  of  the  state  is  to  create  and  preserve  an  institutional  framework  appropriate  to  such  practices…  Furthermore,  if  markets  do  not  exist  (in  areas  such  as  education…),  then  they  must  be  created,  by  state  action  if  necessary.  (p.  22-­23)  

 These  major  characteristics  emerged  during  the  1970s  and  1980s  as  a  forced  

response  to  stagflation1  and  became  aggressively  politicized  throughout  the  Reagan-­‐

Thatcher  era.  Emphasizing  a  profound  antipathy  towards  Keynesian  and  collectivist  

strategies,  neoliberalism  eventually  acquired  a  more  technocratic  form  committed  

to  the  logics  of  competitive  globalization,  as  evidenced  by  the  so-­‐called  ‘Washington  

Consensus’  of  the  1990s.  Further  backed  by  the  sponsorship  of  such  powerful  

financial  organizations  as  the  World  Bank,  the  International  Monetary  Fund  (IMF),  

and  the  World  Trade  Organization  (WTO),  neoliberalism  has  now  become  

transnational  in  its  scope.  Indeed,  globalization,  abetted  by  the  rapid  and  

widespread  diffusion  of  new  science  and  information  technologies,  constitutes  the  

broader  framework  in  which  neoliberalism  is  purported  as  the  key  to  economic  

wealth  in  an  environment  marked  by  global  competition,  international  trade  and  

exchange,  and  cross-­‐border  transactions  in  goods  and  services.  Further,  this  belief  in  

the  market  and  the  emphasis  on  market  values  has  been  translated  to  other  areas  of  

society  previously  viewed  as  typically  being  separate  and  independent—some  

might  even  say  protected,  or  at  least,  insulated  (Olssen  and  Peters,  2005;  Onsman,  

2008)—from  the  demands  and  influences  of  the  market.  In  particular,  “under  

neoliberalism,  markets  have  become  a  new  technology  by  which  control  can  be  

                                                                                                               1  With  simplicity  and  brevity  in  mind,  the  Oxford  Dictionaries  (n.d.)  define  stagflation  as,  “persistent  high  inflation  combined  with  high  unemployment  and  stagnant  demand  in  a  country’s  economy.”  As  we  can  observe,  ‘stagflation,’  is  in  effect,  a  blend  of  ‘stagnation’  and  ‘inflation.’  

  11  

effected  and  performance  enhanced,  in  the  public  sector”  (Olssen  and  Peters,  2005,  

p.  316).  This  application  and  extension  of  the  market  to  the  public  sector  has  

introduced  a  new  mode  of  regulation  and  a  new  form  of  ‘governmentality’  (Foucault  

in  Foucault,  Burchell,  Gordon,  and  Miller,  1991)  with  certain  implications  for  public  

and  societal  institutions.  To  understand  this  ‘marketization’  of  the  public  sector  and  

the  subsequent  impact  for  public  and  societal  institutions  like  universities,  we  can  

look  towards  the  ideas  behind  new  institutional  economics  and  new  public  

management  as  emerging  from  neoliberalization.  

 

 

New  Institutional  Economics  and  New  Public  Management  

 

At  its  most  fundamental,  new  institutional  economics  (NIE)  acts  as  an  

interdisciplinary  and  discursive  framework  (Geraldi,  2007)  to  understand  political,  

legal,  and  social  institutions  in  economic  terms,  with  a  particular  focus  on  

understanding  the  role  of  institutions  in  nurturing  and  stimulating  economic  

growth.  The  literature  surrounding  NIE2  aims  to  explain  such  basic  queries  as  to  

“what  institutions  are,  how  they  arise,  what  purposes  they  serve,  how  they  change,  

and  how—if  at  all—they  should  be  reformed”  (Klein,  1999,  p.  1).  These  key  ideas  of  

change,  purpose,  and  reform  will  prove  integral  to  our  understanding  of  public  

institutions  within  a  neoliberal  framework.  Certainly,  the  neoliberal  theories  of  

institutional  redesign  in  recent  decades  have  involved  a  shift  wherein  market  

techniques  are  systematically  developed  as  a  technology  for  institutional  

governance.  Such  a  shift  stresses  the  concept  of  ‘performativity’  and  places  an  

emphasis  towards  an  input-­‐output  system  that  effectively  replaces  central  

regulation  with  a  new  mode  of  public  management  and  administration  (Olssen  and  

Peters,  2005,  p.  322).  The  common  language  of  these  approaches  further  includes  

such  concepts  as  ‘outcomes’,  ‘accountability’,  ‘purchase’,  ‘ownership’,  ‘specification’,  

                                                                                                               2  For  some  of  the  basic  literature  regarding  New  Institutional  Economics  (NIE),  we  may  refer  to  Oliver  Williamson  (1975),  credited  with  first  coining  the  term,  and  notable  works  by  Coase  (1992),  Davis  and  North  (1975),  Eggertsson  (1990),  and  Pejovich  (1995).  

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‘contracts’,  and  ‘purchase  agreements’  (Ibid).  In  effect,  the  application  of  market  

logic  to  the  public  sector  has  rendered  public  institutions  increasingly  analogous  to  

companies  in  the  private  sector  by  demanding  an  increase  in  accountability  and  

efficiency.  

 

New  public  management  (NPM)  can  be  understood  as  the  means  by  which  

such  increased  accountability  and  efficiency  may  be  exacted  from  the  public  sector.  

Coined  in  the  early  1990s  to  describe  the  changing  policies  of  the  previous  decade  

and  the  application  of  market  and  business  principles  to  the  public  sector,  NPM  is  

characterized  by  marketization,  performance  measurement,  and  managerialized  

accountability  (Tolofari,  2005).  Accordingly,  its  core  dimensions  emphasize  a  new  

set  of  contractualist  norms  and  rules,  clearly  defined  objectives,  hierarchical  

relationships  of  management,  and  an  overall  orientation  geared  towards  

measurable  results.3    

 

To  be  sure,  the  application  of  such  techniques  typically  used  in  the  private  

sector  towards  the  management  of  public  sector  organizations  can  prove  

problematic.  Complexities  may  arise  when  public  institutions  previously  governed  

“according  to  norms  and  values  derived  from  assumptions  about  the  ‘common  good’  

or  ‘public  interest’”  are  effectively  replaced  by  a  new  governance  model  ruled  by  

“quasi  market  or  private  sector  micro-­‐techniques”  (Olssen  and  Peters,  2005,  p.  324).  

Following  this  logic,  such  a  model  reconfigures  universities  and  institutions  of  

higher  education  as  part  of  an  input-­‐output  system  with  an  institutional  stress  on  

performativity,  which  can  be  reduced  to  an  economic  production  function  (Ibid.)  Of  

course,  this  is  not  to  depreciate  both  the  existing  and  the  potential  capacity  for  

universities  and  institutions  of  higher  education  to  act  as  economic  drivers  and  play  

                                                                                                               3  Several  important,  discursive  practices  are  associated  with  new  institutional  economics  and  new  public  management,  including  transaction  cost  economics  (TCE)  or  transaction  cost  analysis,  agency  theory  (AT),  also  known  as  principal-­‐agent  theory,  property  rights  theory  (PRT),  and  public  choice  theory  (PCT.)  While  these  theories  are  often  collectively  represented  as  part  and  parcel  of  NIE  or  NPM,  they  will  not  be  discussed  here  in  detail.    

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an  important  role  in  fostering  economic  growth.  However,  it  is  the  fundamental  shift  

in  the  way  that  universities  are  redefining  this  role  that  deem  closer  scrutiny.  

Namely,  it  is  the  effects  and  the  potential  ramifications  that  neoliberalization  and  

the  associated  discourses  of  new  institutional  economics  and  new  public  

management  bear  for  universities  and  other  institutions  of  higher  education  that  we  

aim  to  examine  and  analyze  critically  in  the  forthcoming  chapters.  

                                                                         

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CHAPTER  III  

On  the  Knowledge  Economy  and  Knowledge  Capitalism  

 

 

One  of  the  most  critical  concepts  underpinning  neoliberal  discourse  of  recent  

decades  involves  the  paradigmatic  transition  towards  a  ‘new’  economy,  in  which  

knowledge  and  information  effectively  function  as  the  new  global  capital  (Castells,  

1996,  1997,  1998),  hence  the  term,  “knowledge  capitalism”  (Burton-­‐Jones,  1999,  p.  

vi).  Indeed,  the  development  of  knowledge  and  the  creation  of  new  information  is  

seen  as  a  key  driver  of  economic  development  (Stigler,  1961;  M.  Friedman  and  R.  

Friedman,  1962;  Schultz,  1963;  Machlup,  1967)  within  the  framework  of  the  so-­‐

called  ‘knowledge  economy.’  The  implications  of  such  a  profound  economic  

transformation  are  marked  by  a  shift  away  from  exclusive  reliance  on  natural  

resources  and  physical  capital  and,  instead,  focus  on  mobilizing  and  expanding  

bases  of  knowledge  and  knowledge  production  (Florida,  Gates,  Knudsen,  and  

Stolarick,  2006).  Additionally  key  for  the  success  of  the  knowledge  economy  is  a  

highly  trained  labor  force  (Stiglitz,  1999),  wherein  new  ‘knowledge  workers’  act  as  

human  capital  (Becker,  1993)  with  the  capacity  for  innovation  and  the  potential  to  

produce  new  knowledge  (Florida,  2005).  While  the  role  of  knowledge  and  

information  has  always  played  an  important  role  for  economies,  and  while  the  

Schumpeterian  idea  of  innovation  (Schumpeter,  1954;  Galbraith,  1952,  1958,  1967;  

Hirschman,  1970)  as  a  major  economic  driver  is  hardly  new,  capitalist  societies  are  

currently  in  an  era  in  which  “the  ability  of  labor,  firms,  regions,  and  nations  to  

produce,  circulate,  and  apply  knowledge  are  fundamental  to  economic  growth  and  

competitiveness”  (Henry  &  Pollard,  2000,  p.  v).  “This  is  reflected  in  [such  trends  of]  

OECD  economies  towards  growth  in  high-­‐technology  investments,  high-­‐technology  

industries,  more  highly-­‐skilled  labor,  and  associated  productivity  gains”  (Foray  and  

Lundvall,  1996,  p.  7).  This  increased  importance  of  knowledge  as  capital  propels  

“‘the  neoliberal  project  of  globalization’—an  outcome  of  the  Washington  consensus  

and  [is]  modeled  by  world  policy  agencies  such  as  the  IMF  and  World  Bank”  (Olssen  

  15  

and  Peters,  2005,  p.  330).  The  emergence  of  such  a  knowledge-­‐based  economy  is  

further  allied  to  concepts  of  the  ‘information  society’  and  the  ‘network  society,’  the  

dynamics  of  which  are  reflected  in  part  by  new  growth  theory.  Aligned  with  similar  

world  policy  agencies,  the  Organization  for  Economic  Cooperation  and  Development  

stresses  the  following:  OECD  analysis  is  increasingly  directed  to  understanding  the  dynamics  of  the  knowledge-­based  economy  and  its  relationship  to  traditional  economics,  as  reflected  in  ‘new  growth  theory.’  The  growing  codification  of  knowledge  and  its  transmission  through  communications  and  computer  networks  has  led  to  the  emerging  ‘information  society.’  The  need  for  workers  to  acquire  a  range  of  skills  and  to  continuously  adapt  these  skills  underlies  the  ‘learning  economy.’  The  importance  of  knowledge  and  technology  diffusion  requires  better  understanding  of  knowledge  networks  and  ‘national  innovation  systems.’  (Foray  and  Lundvall,  1996,  p.  3)  

 With  this  in  mind,  we  may  look  towards  new  growth  theory  in  an  effort  to  

understand  the  increasing  importance  of  knowledge  and  technology  as  key  drivers  

for  economic  development  and  how  knowledge,  in  all  its  forms,  currently  plays  a  

crucial  role  in  driving  economic  growth  and  productivity.  

 

 

New  Growth  Theory:  Knowledge  and  Economic  Development  

 

  New  growth  theory  builds  on  the  argument  that,  in  advanced  economies,  

economic  growth  stems  more  from  knowledge  and  innovation  and  less  from  the  

acquisition  of  tangible  capital;  further,  unlike  natural  resources  and  physical  capital,  

knowledge  is  not  subject  to  diminishing  returns  (Soete  and  Ter  Weel,  1999;  

Economics  Online,  n.d.).  To  be  sure,  in  positing  that  the  investment  in  knowledge  is  

characterized  by  increasing,  rather  than  decreasing,  returns  (Foray  and  Lundvall,  

1996),  education  quickly  enters  the  discussion  as  the  potential  means  by  which  to  

cultivate  and  facilitate  such  growth.  Joseph  Stiglitz,  formerly  Chief  Economist  of  the  

World  Bank,  posits  that,  “We  now  see  economic  development…  more  like  education  

in  the  broad  and  comprehensive  sense  that  covers  knowledge,  institutions,  and  

culture”  (Stiglitz,  1999,  p.  5).  Certainly,  the  possibilities  of  education-­‐related  

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externalities  are  of  key  importance  when  considering  the  developing  knowledge  

economy.  By  highlighting  the  role  of  education  in  the  creation  of  human  capital  and  

in  the  production  of  new  knowledge  (Olssen  and  Peters,  2005),  new  growth  theory  

has  effectively  fixated  policy  gaze  on  “universities  and  their  relations  with  other  

knowledge  producers  within  the  wider  economy”  (Bastalich,  2010,  p.  846).  Indeed,  

“in  this  view,  investments  in  research  and  development,  education  and  training,  and  

new  managerial  work  structures  are  key”  (Foray  and  Lundvall,  1996,  p.  7);  such  

concepts  will  prove  integral  to  our  understanding  of  neoliberal  globalization  and  its  

effects  on  education  policy.  The  transformation  of  knowledge  production  and  its  

“legitimation”  (Olssen  and  Peters,  2005,  p.  20)  and  the  shift  towards  a  knowledge-­‐

based  economy  further  necessitates  “a  profound  rethinking  of  education  as  

emerging  forms  of  knowledge  capitalism,  involving  knowledge  creation,  acquisition,  

transmission,  and  organization”  (Ibid).  

 

 

Conceptualizing  Knowledge:  Knowledge  as  Capital  

 

  Understanding  the  dynamics  of  knowledge  capitalism  requires  

understanding  some  of  the  very  fundamentals  of  knowledge  itself  and  thus,  by  

extension,  the  nature  of  knowledge  transfer  and  knowledge  distribution.  As  one  of  

the  premier  forms  of  global  capital,  knowledge  is  paradoxically  often  one  of  the  least  

implicitly  understood  of  economic  resources  (Burton-­‐Jones,  1999).  Indeed,  the  

concept  of  knowledge  and  its  application  within  the  field  of  economics  by  means  of  

the  Schumpeterian  framework  so  provided  by  new  growth  theory  (Soete  and  Ter  

Weel,  1999),  renders  some  of  the  properties  of  knowledge  as  markedly  different  

from  other  market  goods.  While  we  have  already  introduced  the  idea  that  investing  

in  knowledge  is  typically  characterized  by  increasing,  rather  than  decreasing,  

returns,  there  are  additional  characteristics  specific  to  knowledge  that  we  must  

consider.  For  instance,  the  new  global  knowledge  economy  further  differs  from  

traditional  economies  and  models  of  neoclassic  growth  in  terms  of  the  “scarcity-­‐

defying  characteristics  of  ideas”  (Stiglitz,  1999,  p.  8),  as  knowledge  is  abundant  and  

  17  

exponentiates  itself  (A.  Toffler  and  H.  Toffler,  2006).  Further,  “knowledge  can…  spill  

over  from  one  firm  or  industry  to  another,  with  new  ideas  used  repeatedly  at  little  

extra  cost.  Such  spillovers  can  ease  the  constraints  placed  on  growth  by  scarcity  of  

capital”  (Foray  and  Lundvall,  1996,  p.  11).  Knowledge  also  differs  from  many  other  

market  goods,  in  that  it  has  many  of  the  central  properties  of  a  global  public  good  

(Stiglitz,  1998,  1999)  and,  like  a  public  good,  is  both  non-­‐excludable  and  non-­‐

rivalrous—at  least  in  theory.  To  be  sure,  in  regards  to  non-­‐rivalry,  “knowledge  in  its  

immaterial  or  conceptual  forms—ideas,  information,  concepts,  functions,  and  

abstract  objects  of  thought—is  purely  non-­‐rivalrous  such  that  there  are  essentially  

no  marginal  costs  to  adding  more  users”  (Peters  and  Besley,  2006,  p.  56).  Rather,  it  

is  only  when  materially  embodied  or  codified  that  knowledge  becomes  costly  in  

terms  of  time  and  resources  (Ibid).  However,  technically  and  practically  speaking,  it  

is  important  for  us  to  note  that  knowledge  is  not  entirely  non-­‐excludable.  At  the  

very  least,  it  might  be  considered  an  impure  public  good,  as  knowledge,  to  some  

extent,  can  be  excluded  from  certain  users  (e.g.  via  the  legal  system  and  intellectual  

property  rights,  etc.)  Indeed,  such  excludabilities  are  representative  of  the  

difficulties  in  transforming  knowledge  into  the  object  of  standard  economic  

transactions,  namely  due  to  the  asymmetries  of  information  in  a  knowledge-­‐based  

economy:  To  buy  knowledge  and  information  is  difficult  because  by  definition,  information  about  the  characteristics  of  what  is  sold  is  asymmetrically  distributed  between  the  seller  and  the  buyer.  Some  kinds  of  knowledge  can  be  easily  reproduced  and  distributed  at  low  cost  to  a  broad  set  of  users,  which  tends  to  undermine  private  ownership.  Other  kinds  of  knowledge  cannot  be  transferred  from  one  organization  to  another  or  between  individuals  without  establishing  intricate  linkages  in  terms  of  network  and  apprentice  relationships  or  investing  substantial  resources  in  the  codification  and  transformation  into  information.  (Foray  and  Lundvall,  1996,  p.  11)  

 It  is  with  this  in  mind  that,  in  order  to  engage  in  an  economic  analysis  of  knowledge  

as  capital,  distinctions  may  be  made  between  different  types  of  knowledge  and  how  

knowledge,  as  a  broader  concept  of  information,  is  typically  distributed  and  

transferred  within  the  new  economy.  

 

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Typologies  of  Knowledge  and  Modes  of  Knowledge  Production  

 

  While  knowledge  can  be  conceptualized  within  a  number  of  discursive  

frameworks,  it  is  for  our  intents  and  purposes  that  we  may  broadly  define  two  types  

of  knowledge  integral  to  understanding  the  dynamics  of  a  knowledge-­‐based  

economy:  ‘codified’  knowledge  and  ‘tacit’  knowledge.  Similarly  described  by  

Gibbons  et  al.  (1994)  as  ‘Mode  1’  and  ‘Mode  2’  typologies  and  by  Hargreaves  (2000)  

as  ‘declarative’  knowledge  (‘knowing  that’)  versus  ‘procedural’  knowledge’  (‘know-­‐

how’),  we  may  generalize  knowledge  production  as  occurring  in  these  two  main  

forms.  Put  succinctly,  codified,  or  formal,  knowledge  (associated  with  Mode  1  

knowledge  production  and  declarative  knowledge)  is  explicit  in  the  sense  that  it  has  

been  articulated  and  stored  in  objective  forms;  it  is  easily  transferred  to  others  and  

may  be  readily  generated  through  logical  deduction.  “Explicit  knowledge  consists  of  

facts,  theories,  and  principles  that  are  codified  in  research  journals,  taught  in  

schools,  and  recorded  in  industry”  (Adler,  1996,  p.  2).  It  is  also  worth  mentioning  

that  the  development  of  information  technologies  and  communication  systems  has  

led  to  the  increasing  amount  of  codified  knowledge  being  distributed  through  a  vast  

array  of  communication  networks.  In  contrast,  tacit  knowledge  (associated  with  

Mode  2  knowledge  production  and  procedural  knowledge),  deriving  from  the  

philosophy  of  Michael  Polanyi  (1958,  1966),  typically  represents  knowledge  as  a  set  

of  embodied  skills  or  as  a  stock  of  competencies.  Largely  experiential  in  nature,  the  

production  of  tacit  knowledge  places  an  emphasis  on  practice  and  ‘learning  by  

doing’,  while  focusing  less  on  theory;  as  a  result,  tacit  knowledge  often  proves  more  

difficult  than  codified  knowledge  in  its  transfer  and  diffusion—an  issue,  which  we  

will  later  address  in  more  detail.  For  now,  it  is  important  to  establish  that  both  

typologies  of  knowledge  production  play  an  interactive  and  integral  role  in  terms  of  

knowledge  capitalism.  “The  knowledge-­‐based  economy  is  characterized  by  the  need  

for  continuous  learning  of  both  codified  information  and  the  competencies  to  use  

this  information”  (Foray  and  Lundvall,  1996,  p.  13).  This  implies  that  “the  

accumulation  of  tacit  knowledge  needed  to  derive  maximum  benefits  from  

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knowledge  codified  through  information  technologies  can  only  be  done  through  

learning”  (Ibid).  Indeed,  “by  means  of  education,  the  labor  forces  become  more  

productive  because  individuals  obtain  a  higher  skill  level”  (Soete  and  Ter  Weel,  

1999,  p.  296).  Successful  knowledge  workers  become  increasingly  recognized  as  

possessing  both  codified  and  tacit  knowledge  skills;  workers  thus  require  formal  

education  in  addition  to  the  practical  and  analytical  skills  necessary  to  acquire,  

process,  and  apply  such  codified  and  theoretical  knowledge.  To  be  sure,  education  

becomes  the  cornerstone  for  learning  in  a  knowledge-­‐based  economy,  and  codified  

and  tacit  knowledge  skills  become  the  tool  for  both  individual  and  organizational  

advancement.  

 

  The  creation,  distribution,  and  use  of  knowledge,  facilitated  in  part  by  

information  and  communication  technologies,  is  central  to  both  economic  and  social  

life  (Bastalich,  2010,  p.  846);  and,  knowledge  transfer  and  the  idea  of  the  ‘network  

society’  thus  becomes  inextricably  linked  to  the  new  knowledge  economy.  The  

distribution  and  the  diffusion  of  knowledge  and  information  is  of  particular  

importance  as  “the  success  of  enterprises,  and  of  national  economies  as  a  whole,  

become  more  reliant  upon  their  effectiveness  in  gathering,  absorbing,  and  utilizing  

knowledge”  (Houghton  and  Sheehan,  2000,  p.  11).  The  rapid  development  of  

information  technology  and  the  digital  revolution  have  certainly  played  a  role  in  

accelerating  the  diffusion  of  information  in  a  globalized  knowledge  economy.  “As  a  

consequence,  information  technology  makes  codified  knowledge,  data,  and  

information  much  more  accessible  than  before  to  all  sectors  and  agents  in  the  

economy  linked  to  information  networks  or  with  the  knowledge  of  accessing  such  

networks”  (Soete  and  Ter  Weel,  1999,  p.  299).  However,  this  is  not  to  underscore  

the  importance  of  tacit  knowledge.  While  such  information  technologies  typically  

allow  for  easier  and  less  expensive  access  to  information,  the  need  for  learning  the  

skills  and  stock  of  competencies  to  effectively  and  efficiently  utilize  this  knowledge  

becomes  even  more  crucial.  Particularly,  we  may  recall  here  the  inherent  difficulties  

in  transferring  tacit  knowledge.  Experiential  in  nature,  the  effective  transfer  of  tacit  

knowledge  typically  requires  personal  contact  and  repeated  interaction,  and  the  

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diffusion  of  tacit  knowledge  is  facilitated  by  trust  and  openness.  Strategic  ‘know-­‐

how’  and  critical  competencies,  in  tandem  with  codified  knowledge,  are  developed  

interactively  and  shared  within  an  array  of  both  formal  and  informal  networks  

(Castells,  1996)  and  sub-­‐groups:  The  economy  becomes  a  hierarchy  of  networks,  driven  by  the  acceleration  in  the  rate  of  change  and  the  rate  of  learning.  What  is  created  is  a  network  society,  where  the  opportunity  and  capability  to  get  access  to  and  join  knowledge-­  and  learning-­intensive  relations  determines  the  socioeconomic  position  of  individuals  and  firms  (Foray  and  Lundvall,  1996,  p.  14;  David  and  Foray,  1995).  

 Ideally,  according  to  such  a  model,  social  and  economic  networks  may  effectively  

replace  more  traditional,  vertically  integrated  hierarchies  (Bastalich,  2010;  Castells,  

1996).  Further,  due  to  the  non-­‐rivalrous  nature  of  knowledge  and  the  scarcity-­‐

defying  characteristics  of  ideas,  knowledge  market  transactions  for  (non-­‐patented)  

knowledge  and  information  depend  critically  on  trust,  in  addition  to  repeated  

interactions  and  reputation  (Olssen  and  Peters,  2005,  p.  337),  especially  when  given  

the  asymmetries  of  information.  In  particular,  we  may  observe  that  on  the  supply  

side  of  these  activities,  “knowledge  transactions  within  firms  and  organizations  

require  trust  and  reciprocity  if  knowledge  workers  are  to  share  knowledge  and  

codify  their  tacit  knowledge.  Hoarding  creates  a  vicious  circle  of  knowledge  

restriction,  whereas  trust  and  reciprocity  can  create  a  culture  based  on  a  virtuous  

circle  of  knowledge  sharing”  (Ibid).  

 

Stiglitz  (1999)  posits  that  such  knowledge  principles  carry  over  to  

knowledge  institutions  and  countries  as  a  whole;  to  be  sure,  this  argument  points  

towards  the  value  of  scholarship  and  towards  supporting  educational  structures  in  a  

variety  of  institutional  and  organizational  contexts.  Indeed,  the  dynamics  of  learning  

in  a  knowledge-­‐based  economy  calls  for  “a  fundamental  rethinking  of  the  traditional  

relationships  between  education,  learning,  and  work,  focusing  on  the  need  for  a  new  

coalition  between  education  and  industry”  (Burton-­‐Jones,  1999,  p.  vi).  From  a  policy  

perspective,  the  implications  for  universities  and  institutions  of  higher  education  

could  prove  highly  consequential.  By  highlighting  the  role  of  education  in  the  

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creation  of  human  capital  and  in  the  production  of  new  knowledge  (Olssen  and  

Peters,  2005),  and  the  increased  emphasis  towards  interactive  and  multilateral  

networks  for  knowledge  transactions,  universities  are  becoming  increasingly  

aligned  with  industry.  This  shift  has  potential  repercussions  for  both  universities  

and  industries  in  the  creation,  use,  and  distribution  of  knowledge.  It  is  the  changing  

nature  of  this  relationship  that  we  aim  to  explore.  However,  before  delving  into  

detail  on  the  developing  relationships  between  university  and  industry,  it  is  worth  

examining  further  the  creation,  use,  and  distribution  of  knowledge;  specifically,  it  is  

the  examination  of  knowledge  creation  and  production  that  is  necessary  for  us  to  

consider.  After  all,  knowledge,  in  terms  of  skills  and  competencies,  is  one  of  the  most  

important  factors  for  knowledge  production  resulting  in  innovation.  It  is  with  this  in  

mind  that  we  must  include  a  discussion  on  innovation  and  the  importance  of  its  role  

within  the  knowledge  economy.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

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CHAPTER  IV  

On  Processes  and  Systems  of  Innovation  

 

 

  If  OECD  economies  are  steadily  driven  by  knowledge  and  information,  then  

the  creation  and  production  of  new  knowledge  and  information  become  

increasingly  important  and  even  more  so  integral  as  a  source  of  competitive  

advantage.  Competing  in  the  current  knowledge  economy  requires  constant  

adaptation—and  thus  the  ability  and  stock  of  competencies  to  adapt—to  shifting  

market  demands.  In  regarding  knowledge  as  an  economic  asset,  knowledge  may  

appear  both  as  “an  input  (competence)  and  [an]  output  (innovation)  in  the  

production  process”  (Lundvall,  2003,  p.  2).  To  be  sure,  such  language  recalls  our  

discussion  on  the  nature  of  knowledge  and  the  relationship  between  codified  

knowledge  and  tacit  knowledge.  In  terms  of  production  in  the  knowledge-­‐based  

economy,  “innovation  is  driven  by  the  interaction  of  producers  and  users  in  the  

exchange  of  both  codified  and  tacit  knowledge”  (Foray  and  Lundvall,  1996,  p.  7).  It  is  

this  idea  of  innovation  as  the  output  of  such  processes  and  interaction  (Antonelli,  

1999;  Nonaka  and  Takeuchi,  1995)  that  we  aim  to  explore.  That  is,  we  may  examine  

innovation  as  an  important  outcome  of  knowledge  production  and  further,  the  

favorable  conditions  and  environment  that  facilitate  and  effectively  nurture  such  an  

outcome.  

 

 

Conceptualizing  Innovation:  An  Outcome  of  Knowledge  Production  

 

  It  is  useful  for  us  to  begin  by  conceptualizing  the  idea  of  innovation  and  its  

broader  relation  to  the  knowledge  economy;  further,  the  concept  of  creativity  is  

worth  mentioning  briefly.  Indeed,  the  importance  placed  upon  innovation  within  the  

knowledge  economy  “may  reflect,  in  part,  the  widespread  cultural  fascination  with  

‘creativity,’  originally  promoted  by  management  and  psychology  ideologues  and  

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highly  evident  within  business  culture”  (Bastalich,  2010,  p.  850).  To  be  sure,  notions  

of  creativity  have  also  become  widespread  in  recent  years  as  a  purported  factor  in  

promoting  economic  growth  (Florida,  2005;  Peck,  2005),  with  a  particular  

predilection  towards  urban  policy.  While  this  is  neither  the  focus,  nor  the  aim  of  our  

examination  at  hand,  it  is  nonetheless  worth  noting  the  role—albeit  generalized—

that  creativity  may  play  within  the  innovation  process.  Succinctly  put,  and  for  

simplicity,  we  may  consider  creativity,  especially  from  a  cognitive  perspective,  as  

the  capacity  to  generate  new  and  valuable  ideas  (Rhodes,  1961;  Amabile,  1996;  

Martins  and  Terblanche,  2003).  Of  course,  creativity  and  innovation  are  often  

associated  with  other.  However,  it  is  important  for  us  to  distinguish  between  the  

two;  while  certainly  related,  the  concepts  of  creativity  and  innovation  are  not  to  be  

used  interchangeably.  Rather,  we  may  view  innovation  as  an  implementation  of  

creativity;  indeed,  we  may  view  innovation  as  a  very  particular  kind  of  

implementation  of  a  very  particular  form  of  creativity.  If  creativity  is  associated  with  

the  generation  of  new  ideas,  then  innovation  may  be  understood,  for  instance,  as  the  

process  of  transforming  these  ideas  into  new  products  or  services  (Drucker,  1985;  

Abernathy  and  Clark,  1985;  Tidd,  Bessant,  and  Pavitt,  2001;  Haradgon,  2003;  Im,  

1999).  Creativity  may  be  a  veritable  input  in  part  of  the  innovation  process,  but  in  

terms  of  the  economic  framework  outlined,  innovation  is  the  resulting  output.  

Therefore,  in  understanding  the  nature  of  knowledge  market  transactions  within  

the  context  of  the  knowledge-­‐based  economy,  we  can  focus  on  innovation  as  a  major  

outcome  of  knowledge  production.  

Lundvall  (2003)  cites  two  reasons  for  regarding  innovation  as  an  important  

outcome  of  knowledge  production:  One  is  that  innovation  represents—by  definition—something  new  and  therefore  adds  to  existing  knowledge.  The  second  is  that  innovation  is—again  by  definition—knowledge  that  is  in  demand.  (Innovation  is  defined  as  an  invention  that  has  been  introduced  in  the  market  and  it  thus  represents  knowledge  that  has  proven  its  relevance  for  the  market  economy.)  (p.  8)  

 Certainly,  innovation  can  be  seen  as  the  ability  to  produce  work  that  is  both  novel  

(i.e.  original)  and  appropriate  (i.e.  useful)  (Sternberg,  1999),  and  is  often  associated  

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with  purposeful  change  (Drucker,  1985).  Of  course,  we  must  also  note  that  within  a  

Schumpeterian  framework4,  innovation  may  be  understood  as  part  of  a  process  of  

‘creative  destruction’  (Schumpeter,  1954;  Galbraith,  1952,  1958,  1967;  Hirschman,  

1970),  whereby,  “the  notion  of  creative  destruction  has  by  definition  the  natural  

property  that  new  inventions  make  the  leading-­‐edge  technology  and/or  products  

obsolete,  which  might  force…  [withdrawal]  from  the  market”  (Soete  and  Ter  Weel,  

1999,  p.  295).  Naturally,  such  processes  of  creative  destruction  are  likely  to  lead  to  a  

more  competitive  market  environment.  Indeed,  the  growing  economic  and  policy  

consensus  on  the  importance  of  knowledge  for  industrial  competitiveness  may  

effectively  hinge  on  innovation.  If  this  is  the  case,  it  is  of  particular  importance  for  us  

to  explore  the  means  and  methods  by  which  many  OECD  countries  are  attempting  to  

facilitate  and  drive  innovation.  We  have  already  established  innovation  as  an  

outcome  of  knowledge  production  and  we  have  already  outlined  that  knowledge  

production  is  increasingly  marked  by  a  complex  set  of  relationships  among  different  

actors  producing,  distributing,  and  applying  various  kinds  of  knowledge  (OECD,  

1997).  It  is  with  this  in  mind  that  we  may  introduce  the  concept  of  ‘national  

innovation  systems’  as  a  premise  to  understanding  the  linkages  among  the  actors  

involved  in  innovation  as  a  key  to  improving  economic  performance.5  Further,  we  

may  then  examine  the  concept  of  open  models  of  innovation  in  understanding  the  

developing  nature  and  the  characteristics  of  these  linkages.  To  be  sure,  “the  

configuration  of  national  innovation  systems,  which  consist  of  the  flows  and  

relationships  among  industry,  government,  and  academia  in  the  development  of  

science  and  technology,  is  an  important  economic  determinant”  (Foray  and  

Lundvall,  1996,  p.  7);  moreover,  the  idea  of  ‘open  innovation’  plays  a  role  in  

facilitating  these  flows  and  relationships,  “such  that  newly  developing  technologies  

                                                                                                               4  Specifically,  we  may  consider  here  the  Schumpeter  Mark  I  regime  (Schumpeter  1912,  1942).  5  Of  course,  innovation  systems  may  be  defined  as  regional  or  national,  or  as  sector-­‐  or  technology-­‐  specific  (Lundvall,  2003,  p.  9);  however,  we  will  only  be  referencing  national  systems  of  innovation,  respectively.  This  is  largely  due  to  our  broader  scope  of  OECD  countries  and  the  policy  framework  of  the  national  and  transnational  bodies  of  government  constituting  the  majority  of  this  research.  

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and  products  [benefit]  from  integrating  knowledge  and  expertise  from  multiple  

sources”  (Melese,  Lin,  Chang,  and  Cohen,  2009,  p.  502).  We  must  look  towards  

examining  such  national  systems  of  innovation  and  emerging  models  of  open  

innovation  before  we  move  onto  our  next  chapters  exploring  the  implications  that  

such  configurations  bear  for  universities  and  higher  institutions.  

 

 

National  Systems  of  Innovation  

 

  The  concept  of  national  systems  of  innovation  certainly  has  traceable  roots  in  

intellectual  endeavors  of  centuries  past  (Smith,  1776;  List,  1841),  yet,  its  current  

ideology  is  of  determinately  recent  origins  (Freeman,  1987;  Lundvall,  1992;  Nelson,  

1993;  Patel  and  Pavitt,  1994;  Metcalfe,  1995);  to  be  sure,  from  initial  discussions  

arising  during  the  mid-­‐1980s,  the  idea  of  a  collective  innovation  system  approach  

has  become  greatly  diffused  and  widespread  in  its  application,  particularly  in  the  

current  era  of  knowledge  capitalism.  “Today,  OECD,  the  European  Commission,  and  

UNCTAD  have  absorbed  the  concept  as  an  integral  part  of  their  analytical  

perspective”  (Lundvall,  Johnson,  Andersen,  and  Dalum,  2002,  p.  214);  national  

innovation  systems  are  further  breaking  ground  in  policy  framework  for  the  World  

Bank  and  IMF  and  other  similar  organizations.  In  its  adoption  by  numerous  national  

and  transnational  policymakers,  the  general  consensus  of  such  a  system  of  

innovation  may  be  understood  as,  “the  network  of  institutions  in  the  public  and  

private  sectors  whose  activities  and  interactions  initiate,  import,  modify,  and  diffuse  

new  technologies”  (Freeman,  1987  in  Hubert,  2004,  p.  332).  Within  a  national  

context,  this  of  course  involves  “national  institutions,  their  incentive  structures,  and  

their  competencies,  that  determine  the  rate  and  direction  of…  learning  (or  the  

volume  and  composition  of  change  generating  activities)  in  a  country”  (Patel  and  

Pavitt,  1994  in  Lundvall,  Chaminade,  and  Vang,  2009b,  p.  4).  In  short,  national  

innovation  systems  may  be  understood  as  the  institutional  framework,  often  

created  through  state  action,  to  facilitate  innovation  as  the  desired  outcome  of  

knowledge  production  in  a  knowledge-­‐based  economy:  

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Innovation  and  technical  progress  are  the  result  of  a  complex  set  of  relationships  among  actors  producing,  distributing,  and  applying  various  kind  of  knowledge.  The  innovative  performance  of  a  country  depends  to  a  large  extent  on  how  these  actors  relate  to  each  other  as  elements  of  a  collective  system  of  knowledge  creation  and  use,  as  well  as  the  technologies  they  use.  These  actors  are  primarily  private  enterprises,  universities  and  public  research  institutes,  and  the  people  within  them.  The  linkages  can  take  the  form  of  joint  research,  personnel  exchanges,  cross-­patenting,  purchase  of  equipment,  and  a  variety  of  other  channels.  (OECD,  1997,  p.  9)  

 It  is  this  web  of  interaction  and  the  complex  set  of  multilateral  relationships—in  

effect,  the  system—that  is  meant  to  serve  as  a  source  of  competitive  advantage  in  

driving  innovation  and  facilitating  economic  growth.  Certainly,  we  may  observe  the  

strands  of  neoliberalism  and  also,  certain  tenets  underpinning  the  new  knowledge  

economy,  which  we  so  previously  discussed,  as  dictating  many  of  the  ideas  behind  

national  systems  of  innovation.  The  increased  recognition  of  the  economic  

importance  of  knowledge,  coupled  with  the  increasing  use  of  systems  approaches  

and  new  institutional  economics,  effectively  drives  the  growing  development  of  a  

national  innovation  ideology.  In  turn,  if  such  an  approach  hinges  on  this  ‘web  of  

interaction’  and  the  relationship  among  the  various  actors  involved,  we  may  take  a  

closer  look  at  the  subsequent  innovation  processes  that  ensue.  Indeed,  we  may  

argue  that  the  very  perception  of  the  nature  of  innovation  processes  has  also  

changed  significantly  in  recent  history,  in  tandem—or  perhaps  as  a  result—of  

implementing  these  systems  of  innovation.  At  the  very  least,  innovation  occurs  

within  a  set  of  complex  dialectical  processes  that  deem  further  examination.  

 

 

Open  Models  of  Innovation  

 

  Broadly  speaking,  innovation  capability  has  moved  away  from  previously  

linear  and  unidirectional  models  of  innovation  and,  instead,  become  a  more  open  

and  interactive  network-­‐based  model  in  what  Henry  Chesbrough  (2003)  first  

termed  as  ‘open  innovation.’  As  the  term  suggests,  the  basic  premise  of  open  

innovation  involves  the  ‘opening  up’  of  the  innovation  process.  Such  an  approach  

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advocates,  “establishing  a  broad  ecosystem  whereby  external  parties  are  much  

more  engaged  and  involved  in  conceptualization  and  implementation  of  innovative  

new  ideas  in  a  variety  of  formal  and  informal  matters”  (Munsch,  2009,  p.  48);  

innovation  and  technical  change  do  not  occur  in  a  perfectly  linear  sequence,  but  

rather,  through  feedback  loops  within  this  system  (OECD,  1997).  This  is  clearly  

linked  to  the  network  characteristic  of  the  knowledge  economy  and  the  

development  of  interactions  based  on  trust  and  openness.  While  used  increasingly  

to  explain  and  understand  the  development  of  innovation  across  organizations  in  

both  the  private  and  public  sectors,  open  innovation  arguably  first  gained  

momentum  in  terms  of  practical  application  and  management  for  businesses  and  

private  enterprises  (Scott,  1992,  1996a,  1996b):    In  the  latter  part  of  the  twentieth  century,  companies  began  changing  from  a  closed  innovation  model,  based  on  a  virtuous  circle  of  innovation,  to  a  more  open  model,  which  involved  collaborating  extensively  with  external  agents  and  commercializing  ideas  in  many  different  ways,  such  as  spin-­offs  and  licensing.  (Padilla-­Melendez  and  Garrido-­Moreno,  2012,  p.  418)  

 Indeed,  recent  decades  proved  decisive  for  this  development;  certainly,  a  multitude  

of  social  and  economic  changes  both  within  and  outside  of  the  wider  innovation  

environment  have  made  it  necessary  to  render  innovation  processes  more  open,  

including,  “changes  in  working  patterns,  increased  labor  division  due  to  

globalization,  improved  market  institutions  for  trading  ideas,  and  the  rise  of  new  

technologies  to  collaborate  across  geographical  distances  (Dahlander  and  Gann,  

2010,  in  Huizingh,  2010,  pp.  1-­‐2).  We  may  recall  the  importance  of  the  creation,  

distribution,  and  use  of  knowledge  facilitated  in  part  by  information  and  

communication  technologies  and  the  acceleration  of  this  diffusion  in  a  globalized  

knowledge  economy.  Further,  the  importance  of  open  networks  and  knowledge  

transfer  is  key.  

 

Interestingly,  we  may  also  note  that  this  change  from  a  linear  model  to  an  

interactive  view  of  innovation  and  knowledge  production  “has  also  been  a  way  to  

connect  innovation  and  the  further  development  of  competence.  As  now  

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understood,  the  innovation  process  may  be  described  as  a  process  of  interactive  

learning  in  which  those  involved  increased  their  competence  while  engaging  in  the  

innovation  process”  (Lundvall,  2003,  p.  9).  Open  innovation  thus  effectively  links  yet  

again  to  our  previously  discussed  concepts  regarding  modes  of  knowledge  

production  and  the  dynamic  and  interactive  relationship  between  tacit  and  codified  

knowledge:  “the  concept  of  ‘learning  by  interacting’  points  to  how  interaction  

between  producers  and  users  in  innovation  enhances  the  competence  of  both”  

(OECD,  2000,  pg.  23).  Certainly,  this  recalls  the  tendency  for  knowledge  to  

exponentiate  itself  (A.  Toffler  and  H.  Toffler,  2006)  and  further  solidifies  the  

argument  for  facilitating  knowledge  production—and  specifically  innovation—by  

means  of  an  open  and  network-­‐based  model.  

 

Open  innovation  tends  to  treat  research  and  development  (R&D),  

particularly  within  science  and  technology  (S&T)  bases,  as  an  open  system.  “At  its  

root,  open  innovation  assumes  that  useful  knowledge  is  widely  distributed,  and  that  

even  the  most  capable  R&D  organization  must  identify,  connect  to,  and  leverage  

external  knowledge  sources  as  a  core  process  in  innovation”  (Chesbrough,  

Vanhaverbeke,  and  West,  2008,  p.  2).  Of  course,  open  innovation  is  not  merely  an  

outsourcing  of  R&D  activities,  but  rather,  an  integration  of  both  internal  and  

external  competencies,  facilitated  by  both  inbound  and  outbound  knowledge,  and  

resulting  from  the  collaboration  between  a  range  of  various  actors  and  participants  

(Buganza  and  Verganti,  2009).  Ideally,  open  innovation  is  thought  to  generate  a  

number  of  shared  benefits  (Wallin  and  von  Krogh,  2010),  including,  but  not  limited  

to  such  things  as  access  to  unique  knowledge  external  to  an  institution  or  firm,  

reduced  costs  of  innovation,  shared  risk  in  product  and  service  development,  better  

adaptation  of  products  and  services  to  customer  and  market  needs,  and  faster  time  

to  market  for  products.  Within  a  national  innovation  system,  such  collaborations  

and  partnerships—and  their  potential  benefits—may  take  place  across  a  variety  of  

sectors  and  amongst  a  number  of  organizations  and  institutions,  both  within  the  

public  and  private  sector.  “The  common  idea  is  that  the  specificities  of  knowledge  

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production  reflect  unique  combinations  of  technological  specialization  and  

institutional  structure”  (Lundvall,  2003,  p.  9).    

 

Naturally,  institutions  of  higher  education  and  similar  centers  of  public  

research  become  increasingly  important  as  potential  partners  and  collaborators  for  

innovation.  After  all,  as  innovation  is  crucial  to  the  competitiveness  of  economies,  

then  learning  is  crucial  to  innovation  (Rasmussen,  Lorenz,  and  Lundvall,  2008).  “In  

national  systems,  the  education  and  training  system  is  among  the  most  important  

for  explaining  national  patterns  and  modes  of  innovation”  (Lundvall,  2003,  p.  9).  It  is  

this  idea,  coupled  with  the  aforementioned  reconfigurations  of  technological  

specialization  and  institutional  structuring,  that  we  aim  to  examine  in  our  next  

chapter.  Namely,  we  can  look  towards  the  various  roles  that  universities  and  

institutions  of  higher  education  have  come  to  play  in  the  developing  knowledge  

economy  and,  in  turn,  how  such  institutions  are  currently  defining—or  perhaps  

redefining—these  roles.  

                                             

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CHAPTER  V  

On  Universities  and  Higher  Education  

 

 

We  may  begin  by  positing  that  universities  and  institutions  of  higher  

education  have  a  vital  role  to  play  in  the  economy  (Nelson  and  Phelps,  1965;  

Schultz,  1979)  as  veritable  bases  of  knowledge  and  knowledge  production  (Florida,  

Gates,  Knudsen,  and  Stolarick,  2006);  further,  we  can  approach  this  idea  from  a  

number  of  different  perspectives.  In  the  age  of  knowledge  capitalism,  the  various  

positions  regarding  the  role  and  function  of  the  university  are,  in  part,  reflective  of  

“a  struggle,  not  only  over  the  meaning  and  value  of  knowledge  both  internationally  

and  locally,  but  also  over  the  public  means  of  knowledge  production”  (Olssen  and  

Peters,  2005,  p.  340).  We  have  already  outlined  some  of  the  basic  ideas  surrounding  

the  nature  of  knowledge  and  resulting  modes  of  knowledge  production  in  our  

previous  chapters—however,  these  ideas  are  rooted  within  the  context  of  the  

developing  knowledge  economy,  and  thus  largely  conceptualized  from  a  market  

perspective.  Of  course,  the  ‘meaning  and  value  of  knowledge’  have  long  been  

approached  within  a  number  of  discursive  frameworks  that  are  markedly  different  

from  those  deriving  from  current  neoliberal  discourse  surrounding  the  knowledge  

economy.  As  we  have  alluded  to  in  earlier  chapters,  this  is  perhaps  most  apparent  

within  the  realm  of  higher  education,  as  universities  and  similar  public  institutions  

of  learning  are  under  increasing  pressure  to  adapt  to  these  changing  perceptions  of  

knowledge  and  knowledge  production.  To  be  sure,  “the  different  perspectives  on  

how  knowledge  drives  economic  growth  point  to  different  challenges  for…  

education  systems”  (Rasmussen,  Lorenz,  and  Lundvall,  2008,  p.  681).    

 

In  an  effort  to  understand  these  challenges,  it  is  perhaps  best  to  begin  by  

tracing  the  development  of  the  university’s  growing  economic  role  in  OECD  

countries,  and  what  many  academics  describe  as  a  paradigmatic  shift  of  the  

university  from  a  sequestered  ‘ivory  tower’  of  learning  to  the  so-­‐called  

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‘entrepreneurial  university’6  (Slaughter,  Sheila,  and  Leslie,  1997;  Etkowitz,  Webster,  

Gebhardt,  and  Terra,  2000;  Clark,  2001;  Etkowitz,  2003,  2004;  Lazzeroni  and  

Piccaluga,  2003;  Barnett,  2003;  Gassmann,  Enkel,  and  Chesbrough,  2010).  Certainly,  

the  concept  of  the  ‘paradigm  shift’  has  been  one  of  the  overarching  themes  in  our  

research,  with  particular  regard  to  recent  decades;  in  this  case,  starting  from  a  

similar  historical  and  chronological  perspective  can  also  prove  useful.  By  outlining  

the  changing  meanings  and  values  of  knowledge  and  learning  within  the  context  of  

higher  education,  we  may  then  establish  a  framework  for  explaining  current  trends  

and  practices  in  the  way  that  universities  and  other  institutions  of  higher  education  

are  defining  and  justifying  their  institutional  existence.  This  can  provide  insight  into  

understanding  the  various  roles  of  the  university,  and  eventually,  lend  to  a  critical  

discussion  on  the  potential  issues  and  concerns  that  may  subsequently  arise.  

 

 

The  Role  of  Organized  Education:  A  Brief  History  

 

At  their  most  fundamental,  we  may  argue  that  “schools,  colleges,  and  

universities  are  institutions  organized  for  the  main  purpose  of  transmitting  

knowledge  and  facilitating  learning”  (Rasmussen,  Lorenz,  and  Lundvall,  2008,  p.  

691).  That  the  core  mission  of  these  institutions  is  to  effectively  serve  as  veritable  

bases  of  knowledge  and  learning  is  difficult  to  dispute.  Rather,  it  is  the  perceived  

meaning  and  value  of  that  knowledge  and  the  intended  purposes  of  that  learning,  

which  characterize  the  nature  of  institutionalized  education.  Namely,  questions  as  to  

                                                                                                               6  Of  course,  the  terms,  ‘ivory  tower’  and  ‘the  entrepreneurial  university’  are  rife  with  both  semantic  and  emotive  meaning,  which  is  perhaps  telling  in  itself.  Indeed,  the  ‘ivory  tower’  is  perhaps  one  of  the  most  classic  and  succinct  of  all  denigrations  regarding  traditional  academe:  “the  rhetorical  device  used  here  is  to  apply  a  label  (ivory  tower)  which  is  rich  in  negative  connotations,  activating  the  cliché  of  academics  as  other-­‐worldly,  unaccountable  recluses  who  pursue  interests  of  no  concern  or  consequence  to  anyone  but  themselves”  (Mautner,  2005,  p.  108).  Similarly,  the  concept  of  the  ‘entrepreneurial  university’  is  often  negatively  associated  with  “capitalist  regimes”  (Barnett,  2003),  which  may  “violate  the  ‘soul’  of  academe”  (Banja,  2000):  “if  the  university  becomes  business,  then  it’s  no  longer  a  university”  (Ibid).  To  be  sure,  the  connotations  and  the  potentially  contentious  nature  of  both  these  terms  are  important  for  us  to  bear  in  mind  as  we  continue  with  our  analysis.  

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what  is  being  taught  and  why  it  is  being  taught  prove  critical.  This  is  especially  

apparent  if  we  are  to  consider  the  general  evolution  of  organized  education:  “the  

early  history  of  organized  education  was  closely  connected  to  religious  institutions,  

but  the  modern  concept  of  schools  and  schooling  was  shaped  by  the  Enlightenment  

and  the  emergence  of  nation-­‐states”  (Ibid).  Further,  “the  states  that  evolved  during  

the  nineteenth  century  generally  shared  two  features:  a  steadily  growing  

commitment  to  national  policies  for  mass  schooling  and  a  steady  increase  in  the  

share  of  children  and  young  people  participating  in  basic  schooling”  (Araya  and  

Peters,  2010,  p.  163).  To  be  sure,  during  the  modern  era,  education  effectively  

became  an  integral  part  of  a  common  cultural  framework  for  many  Western  nation-­‐

states  (Ramirez  and  Boli,  1987).  This  development  bore  clear  sociopolitical  

connotations,  as  education,  citizenship,  and  social  development  became  closely  

interwoven  themes  in  a  political  discourse,  connecting  mass  schooling  to  political  

progress  (Ibid).  Of  course,  many  assign  an  arguably  more  utopian  role  to  the  

university,  if  not  idealist  (Habermas  and  Blazek,  1987;  Jacoby,  1999,  2005;  Peters  

and  Freeman-­‐Moir,  2006;  Stojanov,  2012)—that  is,  a  Kantian  notion  of  learning  for  

the  sake  of  learning  (Olssen  and  Peters,  2005).  This  humanistic  ideal  may  be  traced  

to  Wilhelm  von  Humboldt  (1767-­‐1835)  and  the  German  Idealists  and  came  to  serve  

as  a  central  feature  for  many  veritable  theorists  of  education:  The  most  prominent  of  them  is  probably  John  Dewey  who  emphasizes—not  unlike  Humboldt—the  intrinsic  value  of  education  as  unlimited  development  and  flourishing  of  the  potentials  and  capacities  of  the  single  human  person:  a  development  and  flourishing  that  is  to  be  understood  according  to  both  Humboldt  and  Dewey  as  an  end-­in-­itself—and  not  primarily  as  a  tool  for  the  achievement  of  extrinsic  economic  or  political  goals  of  a  given  society.  (Stojanov,  2012,  p.  1)    

Assuredly,  such  sentiments  do  not  necessarily  hold  true  within  the  parameters  of  

organized  education  discussed  thus  far.  Readings  (1996)  recalls  these  writings  of  

Humboldt  and  the  German  Idealists  and  instead  posits  that  the  modern  university  

system  considered  universities  as  uniquely  placed  to  provide  a  sense  of  national  

culture  and  foster  social  and  national  cohesion;  at  the  very  least,  we  could  say  that  

by  studying  and  teaching  such  things  as  the  social  and  cultural  history  of  a  nation,  

this  culture  is  extended  through  time  (Cowan,  2005,  p.  1).  Indeed,  by  the  dawn  of  the  

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20th  century,  some  further  argue  that,  “the  aim  of  educational  policymakers  was  to  

create  culturally  homogenous,  loyal,  and  productive  mass  citizens”  (Rasmussen,  

Lorenz,  and  Lundvall,  2008,  p.  691;  Meyer,  1977;  Ramirez  and  Boli,  1987).  This  

might  be  construed  as  an  overly  harsh  and  simplified  evaluation  concerning  the  role  

of  education,  yet  the  point  to  be  made  is  that  schools  and  institutions  of  learning  

derive  crucially  from  the  social,  cultural,  and  political  environments  in  which  they  

are  embedded.7  It  is  imperative,  therefore,  that  these  environments  be  examined  

and  drawn  upon  as  an  interpretative  resource  (Mautner,  2005,  p.  97).  This  can  

prove  critical  to  understanding  the  shifts  in  more  recent  history  and,  specifically,  the  

changing  relationships  between  academia  and  business.  

 

 

Recent  Changes  in  Higher  Education:  Towards  a  Methodology  

 

Recent  decades  have  certainly  seen  universities  across  the  globe  undergoing  

substantial  changes  (Ibid),  driven  by  a  number  of  social,  cultural,  and  political  

contexts,  specific  to  their  environments.  Indeed,  in  our  case,  these  changes  must  be  

understood  as  occurring  within  a  complex  set  of  dialectical  processes,  inextricably  

intertwined,  in  part,  with  neoliberal  discourse,  the  development  of  the  knowledge  

economy,  and  processes  of  innovation.  To  be  sure,  “in  recent  years,  there  has  been  

considerable  interest  in  what  are  called  the  science-­‐based  industries…  The  claim  is  

that  innovation  and  output  in  these  industries  depends  heavily  on  very  recent  

advances  in  (university)  basic  research,  and  thus  they  provide  the  paradigm  

example  of  how  universities  contribute  to  the  innovation  system”  (Cowan,  2005,  p.  

6).  Within  these  parameters,  the  justification  of  the  university  system  hinges  on  the  

applicable  knowledge  that  it  ‘feeds’  to  innovators  (Ibid).  In  maintaining  that  

                                                                                                               7  We  may  refer  again  here  to  the  work  of  Schumpeter,  who  states,  “It  is  absurd  that  we  can  derive  the  contour  lines  of  our  phenomena  from  our  statistical  material  only.  All  we  could  ever  prove  from  that  is  that  no  regular  contour  lines  exist…  We  cannot  stress  this  point  sufficiently.  General  history  (social,  political,  and  cultural),  economic  history,  and  industrial  history  are  not  only  indispensable,  but  really,  the  most  important  contributors  to  the  understanding  of  our  problem”  (Schumpeter,  1939  in  Lundvall,  2008,  p.  3).  

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universities  are  important  players  in  systems  of  innovation,  there  are  therefore  

clear  implications  that  universities  have  an  economic  role  to  play;  thus,  their  

support  can  be  justified  by  economic  arguments.  Naturally,  such  an  emphasis  on  the  

economic  role  of  universities  may  potentially  detract  from  the  more  traditional  

notions  concerning  the  cultural  or  social  justifications  of  these  institutions.  The  

subsequent  developments  and  changes  that  this  brings  to  higher  education  are  

important  for  us  to  consider.    

 

Parker  and  Jary  (1995)  suggest  a  three-­‐layer  model  as  a  generalized  

methodology  by  which  to  examine  the  developments  and  changes  in  higher  

education—a  framework  influenced  by  Clark  (1983)  and  Becher  and  Kogan  (1992).  

Such  an  approach  considers  these  three  ‘layers’  of  change  to  be  ‘national-­‐structural,’  

‘organizational,’  and  ‘professional-­‐subjective’:  At  the  national-­structural  level  we  are  referring  to  a  series  of  structure  and  policy  changes,  which  form  general  constraints  on  all  higher  education  institutions…  At  the  second  level—internal  to  higher  education  organizations—there  have  been  changes  in  the  contexts  within  which  teaching,  administration,  and  research  take  place…  Our  third  level  is  the  action,  subjectivity,  motivation,  and  goals  of  academics  themselves.  (Parker  and  Jary,  1995,  p.  320)    

Our  examination  can  thus  incorporate  these  first  two  levels  of  analysis  more  fully,  

although  we  may  allude  summarily  to  the  latter,  mainly  for  conceptual  

completeness.  Ultimately,  it  is  important  to  acknowledge  that  these  multiple  

dimensions  of  change  are  indicative  of  the  many  challenges,  at  numerous  levels,  that  

institutions  of  higher  education  currently  face:  There  are  repercussions  on  all  elements  of  the  classic  triad  of  teaching,  research,  and  administration,  and  in  various  strata  of  organizational  practices.  Overarching  and  elusive  concepts  like  institutional  culture,  image,  professional  identities,  and  academic  value  systems  are  affected  as  much  as  the  more  hands-­on  aspects  of  governance  and  financial  management.  (Mautner,  2005,  p.  98)    

Assuredly,  the  changes  in  tertiary  education  are  steeped  in  a  complex  mesh  of  

issues.  It  is  with  this  in  mind  that  we  may  loosely  refer  to  these  three  layers  of  

national-­‐structural,  organizational,  and  professional-­‐subjective  change,  in  

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conjunction  with  those  concepts  previously  discussed  thus  far.  That  is,  we  may  

further  organize  our  examination  of  the  changes  in  higher  education  within  the  

contexts  of  neoliberalization,  the  knowledge  economy  and  modes  of  knowledge  

production,  and  innovation.  

 

 

Academia  and  Business:  Processes  of  Convergence  

 

  Among  the  various  trends  and  developments  that  characterize  recent  

changes  in  higher  education,  the  ‘incursion’  of  the  market  (O’Neill  and  Solomon,  

1996)  is  perhaps  one  of  the  most  dominant  forces.  Once  regarded  as  two  separate  

domains  (Olssen  and  Peters,  2005),  academia  and  business  have  been  moving  closer  

together  and  are  now  melding  at  various  points  of  contact.  Of  course,  while  relations  

between  university  and  industry  are  not  wholly  unprecedented  (Romero,  2007),  the  

extent  to  which  business  is  now  making  inroads  into  academe  is  quite  unparalleled  

(Mautner,  2005).  Furthermore,  the  focus  on  science  and  technology  bases  as  the  

infrastructure  for  eventual  wealth  generation  has  practically  become  paramount,  

leaving  many  to  also  wonder  at  the  fate  this  may  bring  other  academic  disciplines  

outside  the  realm  of  innovation.8  Certainly,  “the  insertion  of  the  university  into  the  

innovation  system,  and  thereby  into  the  market  sphere”  (Cowan,  20005,  p.  12),  

                                                                                                               8  Much  of  current  policy  and  practice  hinges  on  innovation  being  a  key  factor  for  economic  growth.  As  a  result,  there  is  marked  interest  in  the  science  and  technology  bases  of  universities  as  veritable  sources  in  facilitating  such  growth.  In  addition,  “as  public  sector  funding  in  other  areas  is  cut,  there  will  be  an  increasing  onus  on  universities  to  demonstrate  the  public  and  economic  benefit  of  spending  on  science,  technology,  and  research”  (Kitson,  Howells,  Braham,  and  Westlake,  2009,  p.  4-­‐5).  To  be  sure,  this  brings  to  light  many  concerns  regarding  other  academic  disciplines  outside  the  realm  of  science,  technology,  and  innovation,  including,  but  not  limited  to  the  humanities  and  social  sciences.  “In  particular,  focusing  on  science,  technology,  and  engineering  fails  to  account  for  the  many  other  contributions  from  other  disciplines…  For  instance,  research  has  shown  the  importance  of  interactions  between  business  and  the  social  sciences,  which  are  especially  important  for  innovation  in  the  service  sector”  (Ibid).  Of  course,  the  creative  arts  and  design  can  similarly  be  brought  into  such  a  discussion.  However,  it  is  neither  our  aim  to  examine  these  disciplines  in  detail,  nor  our  goal  to  include  them  in  the  body  of  research  at  hand.  Rather,  we  may  acknowledge  that  these  issues  arise  and  that  they  deem  much  consideration  for  further  and  potential  research.    

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leads  to  questions  concerning  the  role  of  the  university.  As  we  have  established,  this  

so-­‐called  ‘marketization’  of  education  and  similar  institutions  in  the  public  sector  is  

effectively  linked  to  processes  of  neoliberalization.  Complexities  may  arise  when  

public  institutions  previously  governed  “according  to  norms  and  values  derived  

from  assumptions  about  the  ‘common  good’  or  ‘public  interest’”  are  effectively  

replaced  by  a  new  governance  model  ruled  by  “quasi  market  or  private  sector  

micro-­‐techniques”  (Olssen  and  Peters,  2005,  p.  324).  Moreover,  at  a  national-­‐

structural  level,  this  application  and  extension  of  the  market  is  increasingly  

implemented  through  state  action.  It  is  important  to  acknowledge  the  part  played  by  

governments  and  the  parliaments  in  which  they  command  majorities;  after  all,  such  

governing  bodies  initiate,  support,  and  sustain  changes  in  the  sectors  of  higher  

education,  not  only  by  creating  the  requisite  regulatory  framework  and  allocating  

budgets,  but  also  by  often  promulgating  a  pro-­‐market  education  agenda  (Mautner,  

2005,  p.  98;  Cowan,  2005).  From  an  economic  perspective,  we  may  consider  several  

general,  interlocking  factors  that  combine  to  steadily  align  universities  with  the  

market:  First,  widening  access  (or,  as  critics  would  have  it,  ‘massification’)  without  a  matching  increase  in  government  funding  produces  budget  shortfalls.  Second,  because  of  budgetary  constraints,  commercial  funding  streams  are  becoming  more  important,  whether  generated  through  spinout  companies,  consulting  contracts,  or  sponsorship  deals,  and  this  leads  to  “the  spread  into  universities  of  norms  and  institutional  forms  characteristic  of  commercial  society”  (O’Neill  and  Solomon,  1996,  p.  82).  (Mautner,  2005,  p.  98)    

We  may  recall  here  the  neoliberal  application  of  market  logic  to  the  public  sector  

that  has  effectively  rendered  many  public  institutions,  including  universities,  

increasingly  analogous  to  companies  in  the  private  and  commercial  sectors.  

Certainly,  universities  face  growing  pressures  due  to  the  purported  massification  of  

university  education,  increasing  costs  of  research,  and  a  general  decline  in  funding  

from  central  governments.  Particularly,  this  decrease  in  public  financing  has  placed  

an  emphasis  on  the  ‘exploitation’  and  commercialization  of  university  research  and  

similar  academic  endeavors  (Florida,  Gates,  Knudsen,  and  Stolarick,  2006;  Mould,  

Roodhouse,  and  Vorley,  2009;  Padilla-­‐Melendez  and  Garrido-­‐Moreno,  2012);  

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additionally,  we  may  note  that  the  decline  in  public  funding  has  led  to  a  general  

increase  in  the  percentage  of  university  research  financed  by  industry  (Lazzeroni  

and  Piccaluga,  2003).  As  a  result,  we  may  broadly  posit  that,  “the  role  of  the  

university  has  changed  in  the  last  twenty-­‐five  years  with  the  emergence  of  a  ‘third  

mission’  (teaching  and  research  being  the  first  two)  that  is  concerned  with  the  

commercialization  and  transfer  of  academic  activities  to  the  economy”  (Mould,  

Roodhouse,  and  Vorley,  2009,  p.  139).  Universities  may  typically  adopt  this  view,  

both  because  it  makes  their  work  economically  relevant,  and,  as  a  way  to  bolster  

their  budgets  (Florida,  Gates,  Knudsen,  and  Stolarick,  2006,  p.  2).  

 

  Of  course,  with  this  trend  in  higher  education  towards  “the  adoption  of  a  

free-­‐market  or  corporate-­‐business  perspective”  (Webster,  2004,  p.  85  in  Mayr,  

2008,  p.  30),  comes  a  parallel  trend,  whereby  knowledge-­‐intensive  industries  are,  

conversely,  placing  an  increased  reliance  on  universities  and  similar  institutions  as  

veritable  bases  of  knowledge  and  knowledge  production:  Instead  of  seeing  current  changes  in  the  higher  education/business  relationship  exclusively  as  a  case  of  (one-­sided)  “colonization/appropriation”  (Chouliaraki  and  Fairclough,  1999,  p.  93),  they  are  perhaps  more  adequately  conceptualized,  as  Kleinman  and  Vallas,  (2001)  argue,  as  a  process  of  convergence.  (Mautner,  2005,  p.  98)    

Georghiou  and  Metcalfe  (2002)  echo  similar  sentiments  and  posit  that  within  recent  

decades,  the  division  of  labor  amongst  the  main  organizations  involved  in  

knowledge-­‐intensive  sectors—particularly  those  associated  with  scientific  and  

technological  research,  such  as  private  corporations,  public  research  centers,  and  

universities—have  become  increasingly  subtle,  as  their  collective  activities  

increasingly  overlap.  Such  convergence  processes  are,  in  no  small  part,  driven  by  the  

network  characteristic  of  the  developing  knowledge  economy.  Additionally,  we  may  

recall  the  previously-­‐discussed  modes  of  knowledge  production  and  the  perception  

that  processes  of  open  innovation  are  neither  unilateral,  nor  linear;  certainly,  “the  

activities  of  basic  research  and  development  have  and  need  innumerable  

connections  [and]  the  increasing  complexity  of  science  and  technology  [is  associated  

with]  uncertainty  and  risks  in  the  development  of  new  products  and  processes”  

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(Romero,  2007,  p.  233).  Institutions  of  higher  education  and  similar  centers  of  

public  research  thus  become  increasingly  important  as  potential  partners  and  

collaborators  for  open  innovation.  The  concept  of  knowledge  exchange  is  also  

important  here,  as  processes  of  knowledge  exchange  are  similarly  interactive,  

involving  the  interchange  of  knowledge  between  ‘research  users’  and  ‘research  

producers’  (Mitton,  Adair,  Mckenzie,  Patten,  and  Perry,  2007).  Further,  the  success  

of  such  knowledge  exchange  typically  hinges  on  genuine,  multilateral  interaction  

between  all  stakeholders  involved  (Ibid).  In  conjunction  with  the  proliferation  of  

both  public  and  private  actors  engaged  in  research  and  development  activities,  

universities  are  cogently  put  under  demands  and  pressures  to  serve  as  veritable  

“engines  of  innovation”  (Florida,  Gates,  Knudsen,  and  Stolarick,  2006,  p.  2)  and  

facilitate  knowledge  exchange.  In  effect,  new  ties  between  universities  and  business  

are  constantly  being  established,  while  existing  ones  are  strengthened  (Lester,  

2005;  Perkmann  and  Walsh,  2007).  These  ties  are  the  result  of  an  intensified  

exchange  process  between  universities  and  their  commercial  environments  

(Mautner,  2005,  p.  96),  and  this  exchange  invariably  leads  to  new  social  and  

discursive  practices  for  both  (Ibid).  

 

 

The  Economic  Role  of  the  University:  Benefits  and  Contributions  

 

It  is  with  this  in  mind  that  we  may  more  fully  explore  the  multidimensional  

relationship  between  academia  and  business  within  the  general  context  of  the  

knowledge  economy,  and  also  from  the  standpoint  that  universities  can  provide  a  

variety  of  resources  for  industries,  while  further  contributing  to  innovation  and  the  

larger  economy  as  a  whole.  To  be  sure,  it  is  this  purported  role  that  underpins  many  

of  the  current  changes  in  the  sphere  of  higher  education;  also,  understanding  this  

role  will  lend  us  further  insight  into  the  subsequent  shifts  that  occur  at  the  

organizational  and  personal-­‐subjective  levels  of  universities  and  similar  institutions.  

 

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If  the  fundamental  role  of  schools,  colleges,  and  universities  lies  in  

transmitting  knowledge  and  facilitating  learning,  then  we  must  understand  how  this  

is  translated  into  the  context  of  the  current  knowledge  economy.  Many  who  have  

commented  on  the  university’s  role  in  the  economy  believe  that  the  key  lies  in  

increasing  its  ability  to  transfer  knowledge  and  research  to  industry,  with  a  

particular  emphasis  on  the  transfer  of  intellectual  property  (Florida,  Gates,  

Knudsen,  and  Stolarick,  2006,  p.  2,  Fabrizio,  2006;  Padilla-­‐Melendez  and  Garrido-­‐

Moreno,  2012).  Economic  literature  further  dedicates  attention  to  the  concept  of  

‘research  spillovers’  as  the  sum  of  direct  and  indirect  benefits  determined  by  

research  activities  and  the  production  of  new  knowledge  (Mohnem,  1990;  Caniels,  

2000).  After  all,  as  corpus  evidence  shows,  this  appears  to  be  the  crux  of  the  

matter—certainly  from  a  policy  perspective.  However,  it  is  perhaps  best  to  first  

consider  a  more  fundamental  and  multifaceted  approach  of  the  various  

contributions  that  universities  make  to  the  economy,  such  as  “highlighting  their  

importance  as  sources  of  knowledge,  and  also  their  role  as  sources  of  skilled  

employees,  and  as  the  centers  for  regional  economic  clusters”  (Kitson,  Howells,  

Braham,  and  Westlake,  2009,  p.  5).  We  can  therefore  incorporate  the  potential  

benefits  of  the  university  not  only  within  the  context  of  knowledge  production,  

exchange,  and  innovation,  but  also  in  terms  of  human  capital,  social  capital,  and  

regional  growth  and  development.  

 

Both  local  and  national  economies  can  benefit  from  the  human  capital  

provided  by  institutions  of  higher  education;  indeed,  that  universities  provide  highly  

trained  graduates—and  thus  a  skilled  workforce—is  perhaps  the  least  contested  

way  by  which  academia  lends  to  the  knowledge  economy  (Cowan,  2005,  p.  5).  As  

leading  sources  of  knowledge,  universities  educate  individuals  who  may  then  enter  

the  labor  force.  These  individuals  can  effectively  transfer  both  their  acquired  

codified  knowledge  and  their  tacit  knowledge  to  the  workplace  or  the  greater  public  

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environment.9  Ideally,  this  can  contribute  greatly  to  both  the  stock  of  public  

knowledge  available,  in  addition  to  that  used  by  industry  and  within  the  private  

sector:  By  means  of  education,  the  labor  force  becomes  more  productive  because  individuals  obtain  a  higher  skill  level.  These  skills  can  be  applied  in  both  the  manufacturing  division  and  the  research  department  of  the  firm.  By  employing  skilled  individuals,  labor  productivity  levels  are  expected  to  increase.  This  in  turn  leads  to  higher  levels  of  innovative  activities  in  the  research  department  on  the  one  hand  and  higher  levels  of  production  in  the  manufacturing  division  on  the  other.  Of  course,  these  skilled  individuals  can  also  be  employed  at  the  universities  themselves.  Employing  them  at  universities  leads  to  a  direct  positive  effect  on  the  stock  of  public  knowledge,  while  employing  skilled  individuals  at  firms  or  in  the  business  sector  leads  to  possible  indirect  effects  on  the  stock  of  public  knowledge  through  the  effort  put  in  innovative  activities  at  the  firm  level.  (Soete  and  Ter  Weel,  1999,  pp.  296-­297)    

Furthermore,  the  transfer  of  university  graduates  serves  as  a  highly  effective  

method  of  knowledge  exchange,  “not  least  because  much  of  the…  important  

knowledge  is  tacit,  which  is  exchanged  through  informal  interactions,  rather  than  

codified  knowledge,  which  can  be  transferred  through  less  personal  mechanisms”  

(Kitson,  Howells,  Braham,  and  Westlake,  2009,  p.  9).  We  can  recall  here  the  

importance  of  both  formal  and  informal  networks  in  the  diffusion  of  knowledge.  In  

particular,  the  flow  of  graduates—especially  those  with  advanced  degrees—fosters  

“the  spontaneous  transfer  of  knowledge  and  experiences  accumulated  in  the  place  

where  the  training  has  taken  place;  the  knowledge  which  is  transferred  in  this  way  

is  mainly  tacit  and  spillovers  are  linked  not  only  to  scientific  and  technologic  

competencies  of  human  resources,  but  also  to  the  capacities  of  applying  such  

knowledge  in  business  contexts”  (Lazzeroni  and  Piccaluga,  2003,  p.  42).  Indeed,  we  

may  acknowledge  that  individuals  play  a  crucial  role  in  collaborative  knowledge                                                                                                                  9  We  may  note  here  the  importance  of  academic  publications,  presentations,  and  conferences  as  an  additional  means  by  which  to  transfer  knowledge—in  this  case,  to  the  public,  or,  at  the  very  least,  to  others  in  academe  or  related  fields.  Patents,  of  course,  may  provide  similar  use.  “Scientific  publications  represent  the  most  widely  used  way  by  academics  to  describe  their  work  and  to  establish  priority  in  scientific  discovery,  both  because  they  allow  a  large  diffusion,  and  because  they  are  the  most  widely  used  indicator  to  evaluate  the  quality  of  research  activity  within  the  university  system”  (Lazzeroni  and  Piccaluga,  2003,  p.  43).  

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creation  processes  (Du  Chatenier,  Verstegen,  Biemans,  Mulder,  and  Omta,  2010),  

and,  in  this  case,  the  mobilities  of  students  and  academics  can  further  prove  vital  in  

the  different  processes  of  knowledge  exchange  and  transfer.  

 

  Certainly,  the  ongoing  effects  of  globalization,  coupled  with  various  

challenges  of  the  recent  recession,  are  making  many  key  economic  actors  more  

mobile.  For  instance,  “firms  move  in  response  to  shifts  in  comparative  advantage  or  

recessionary  pressures…  Workers,  particularly  those  that  are  skilled,  move  in  

response  to  differences  in  wages  and  the  quality  of  life”  (Kitson,  Howells,  Braham,  

and  Westlake,  2009,  p.  9).  This  mobility  of  the  factors  of  production  may  improve  

the  collective  efficiency  of  markets;  however,  these  mobilities  can  simultaneously  

lead  to  increased  strain  and  pressure  for  those  places  that  lose  businesses  or  

workers  (Ibid).  With  this  in  mind,  we  may  posit  that  universities  can  effectively  

serve  as  locally  embedded  actors  for  places.  After  all,  universities  may  experience  

both  expansion  and  decline,  yet  they  rarely  move  elsewhere.  The  concept  that  

universities  contribute  at  not  only  a  national  level,  but  also  in  terms  of  regional  or  

local  growth,  is  one  well  worth  mentioning.  

 

  Universities  have  an  important  role  as  locally  embedded  actors;  in  particular,  

we  may  consider  the  reciprocal  relationship  they  have  with  the  human  capital  they  

provide.  As  uniquely  important  local  institutions,  successful  universities—and  by  

extension,  successful  academics—are  potentially  major  recipients  of  both  public  and  

private  funding  for  research  and  development;  this  is  certainly  the  case  as  

convergence  processes  between  academia  and  business  lead  to  more  open  models  

of  innovation.  In  effect,  “universities  are  often  at  the  cutting  edge  of  technological  

innovation”  (Florida,  Gates,  Knudsen,  and  Stolarick,  2006,  p.  2).  With  regards  to  

academic  and  professional  mobilities,  this  in  turn  attracts  faculty,  researchers,  and  

students  to  a  given  university.  Indeed,  in  addition  to  producing  human  capital,  

universities  can  also  effectively  attract  human  capital.  Naturally,  a  region  or  

locality’s  endowment  of  highly  educated  and  productive  people  is  important  to  its  

economic  development  (Jacobs,  1984;  Simon  and  Nardinelli,  1996;  Simon,  1998;  

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Mathur,  1999;  Soete  and  Ter  Weel,  1999);  to  be  sure,  we  can  acknowledge  a  clear  

connection  between  the  economic  success  of  a  region  and  its  human  capital  (Lucas,  

1998;  Glendon,  1999;  Glaeser,  1998,  2000),  as  measured,  in  part,  by  levels  of  

tertiary  education.  Such  notions  give  rise  to  the  concept  of  clustering  and  the  so-­‐

called  cluster  effect  (Rosenfeld,  1997;  Clark,  Feldman,  and  Gertler,  2000;  Porter,  

1998,  2000)  apparent  in  many  regions  exhibiting  economic  growth.  “An  increasingly  

influential  view  suggests  that  place  remains  important…  because  of  the  tendency  of  

firms  to  cluster  together…  More  importantly,  companies  cluster  in  order  to  draw  

from  concentrations  of  talented  people  who  power  innovation  and  economic  

growth”  (Florida,  2003,  p.  4).  In  this  case,  universities  can  act  as  a  locus  of  economic  

activity  by  encouraging  these  “highly  educated,  talented,  and  entrepreneurial  people  

and  firms  to  locate  nearby,  in  part  to  draw  on  the  universities’  many  resources”  

(Florida,  Gates,  Knudsen,  and  Stolarick,  2006,  p.  2).10  Glaeser  (1998)  similarly  posits  

that  the  ultimate  source  for  the  regional  agglomeration  of  firms  stems  from  this  

common  labor  pool  of  skilled  individuals.  

 

Interestingly,  Glaeser  (2000)  also  argues  that  “intellectual  spillovers—idea  

flows  among  individuals  that  are  not  mediated  by  the  market—are  a  linchpin  of  

economic  progress”  (Glaeser,  2000,  p.  101).    Glaeser  goes  on  to  describe  these  

‘nonmarket  interactions’  as  either  classic  externalities—in  our  case,  education-­‐

related  and  often  indirect—or,  “when  one  individual  influences  another  without  the  

exchange  of  money”  (Glaeser,  2000,  p.  102),  which  involves  the  voluntary  

participation  of  both  individuals  (Ibid).  It  is  this  latter  definition  in  particular  that  

fits  well  with  the  network  characteristic  of  the  knowledge  economy  and  the  nature  

of  knowledge  exchange  and  transfer,  which  we  have  described  thus  far.  Certainly,  

such  is  the  case  when  considering  the  experiential  transfer  of  tacit  knowledge.  

Further,  as  we  may  recall,  knowledge  market  transactions  for  (non-­‐patented)  

knowledge  and  information  depend  critically  on  trust,  in  addition  to  repeated  

                                                                                                               10  For  example,  we  may  observe  the  now-­‐classic  cases  of  Stanford  University  and  MIT  as  playing  critical  roles  in  the  development  of  Silicon  Valley  and  the  greater  Boston  Area  (Saxenian,  1994).  

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interactions  and  reputation  (Olssen  and  Peters,  2005,  p.  337),  especially  when  given  

the  asymmetries  of  information  in  the  knowledge  economy.  Trust  and  reciprocity  

are  key  if  knowledge  workers  are  to  share  knowledge;  “hoarding  creates  a  vicious  

circle  of  knowledge  restriction,  whereas  trust  and  reciprocity  can  create  a  culture  

based  on  a  virtuous  circle  of  knowledge  sharing”  (Ibid).  

 

It  may  be  worth  briefly  mentioning  here,  that  there  is  significant  literature  

dedicated  to  the  notion  of  generalized  trust  as  an  important  asset  conceptualized  as  

a  central  part  in  the  broader  notion  of  social  capital  (Coleman,  1990;  Putnam,  1993);  

“in  sum…  many  things  that  are  normatively  desirable  seem  connected  to  social  trust  

and  have  been  attributed  to  social  capital  more  generally”  (Rothstein  and  Uslaner,  

2005,  p.  2).  While  it  is  not  our  aim  to  enter  into  a  detailed  examination  of  social  

capital  and  its  larger  influence  on  economic  development,  it  can  nonetheless  prove  

useful  to  establish  the  role  of  trust  in  facilitating  interactions  and  transactions  

between  different  organizations  and  institutions,  which,  in  our  case,  involves  

business  and  academia:  Some  researchers  [point]  out  that  trust  facilitates  transactions  among  organizations  by  reducing  transaction  costs,  such  as  information  searching,  negotiation,  monitoring,  and  enforcing  transactions;  other  researchers  [find]  that  the  perception  of  partners’  trustworthiness  depends  on  the  amount  and  accuracy  of  information,  the  degree  of  cooperation  and  the  other  factors  that  are  associated  with  transactions  costs;  still  others  [focus]  on  certain  types  of  transactions  and  [analyze]  how  transactions  costs  and  trust  interacts”  (Cai,  2004,  p.  1).    

Interestingly,  education  is  typically  cited  as  one  of  the  standard  predicators  of  trust  

(Rothstein  and  Uslaner,  2005)  and  survey  data  indicates  that  higher  levels  of  

education  can  often  result  in  higher  levels  of  generalized  trust  (Brehm  and  Ranh,  

1997;  Putnam,  1995;  Knack  and  Zak,  2002;  Uslaner  and  Bădescu,  2003).11  Certainly,  

Putnam  (2007)  takes  a  strong  stance  and  posits,  “those  that  are  most  trusting—and  

                                                                                                               11  Of  course,  it  is  important  for  us  to  note  that  these  results  are  typical  of  an  ideal  model  of  education;  after  all,  there  can  be  numerous  entry  barriers  to  higher  education.  Educational  inequality  is  therefore  something  to  bear  in  mind  as  gains  in  education  may,  in  the  short  term,  produce  a  ‘privileged  class’  of  highly  educated  people,  and  so  overall  inequality  may  arise  (Rothstein  and  Uslaner,  2005).  

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trust  others  from  different  social,  economic,  and  ethnic  backgrounds—are  those  

with  the  highest  level  of  education”  (Putnam,  2007  in  Kitson,  Howells,  Braham,  and  

Westlake,  2009,  p.  9).  This  may  very  well  feed  back  into  our  discussion  on  the  

relationship  between  universities  and  human  capital.  In  this  case,  the  human  capital  

provided  by  universities  may  also  prove  vital  in  potentially  promoting  the  trust  

necessary  for  many  of  the  transactions  and  knowledge  exchange  processes  between  

universities  and  business.  

 

While  many  of  these  knowledge  exchange  processes  between  industry  and  

academia  do  have  a  financial  orientation,  typically  following  a  ‘money-­‐for-­‐expertise’  

formula,  they  also  have  a  strong  interpersonal  dimension,  “as  businesspeople  are  

appointed  to  positions  in  university  management  or  on  boards  of  trustees,  for  

example,  or  as  faculty  take  on  consultancy  contracts”  (Mautner,  2005,  p.  96).  For  

instance,  Putnam  (2007)  maintains  that  mutual  trust  aids  the  transfer  and  exchange  

of  knowledge  and  can  reduce  transaction  costs,  “as  those  who  trust  one  another  are  

less  likely  to  need  expensive  contracts  to  interact  with  one  another”  (Putnam,  2007  

in  Kitson,  Howells,  Braham,  and  Westlake,  2009,  p.  9).  Furthermore,  the  necessity  of  

both  formal  and  informal  networks  is  crucial  to  models  of  open  innovation;  this  is  

especially  important  considering  the  proliferation  of  actors  involved  in  research  

development  in  both  private  and  public  sectors  and  the  related  clustering  effects  of  

similar  firms.  

 

Of  course,  facilitating  open  knowledge  exchange  and  successful  nonmarket—

or,  for  that  matter,  market—interactions  between  academia  and  business  can  prove  

problematic;  particularly,  trust  and  reciprocity  may  be  difficult  to  establish.  Indeed,  

the  success  and  openness  of  knowledge  exchange  processes  between  academia  and  

business  is  often  simpler  in  theory  than  in  practice.  This  is  largely  due  to  a  number  

of  barriers  between  universities  and  industry  and  a  general  misalignment  of  the  

missions  and  motivations  for  both.  

 

 

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Institutional  and  Organizational  Restructuring:  Challenges  and  Issues  

 

The  challenges  in  aligning  academia  and  business  are  perhaps  most  

discernible  if  we  are  to  look  at  recent  changes  in  the  institutional  and  organizational  

governance  structures  of  universities;  it  may  be  useful  to  consider  these  changes  in  

terms  of  cause  and  effect.  Simply  put,  the  spheres  of  academia  and  business  are  

steadily  overlapping  in  a  complex  set  of  convergence  processes  that  effectively  link  

universities  and  similar  public  institutions  to  their  immediate  and  commercial  

environments.  As  our  research  demonstrates,  this  may  be  seen  as  a  result  of  

neoliberalization,  as  well  as  a  response  to  adapt  to  the  developing  knowledge  

economy.  Of  the  issues  previously  discussed,  we  may  recall  here  the  neoliberal  

application  of  market  logic  to  the  public  sector  and  the  subsequent  effect  that  many  

public  institutions,  including  universities,  are  now  becoming  increasingly  analogous  

to  companies  in  the  private  and  commercial  sectors.  In  particular,  “under  

neoliberalism,  markets  have  become  a  new  technology  by  which  control  can  be  

effected  and  performance  enhanced,  in  the  public  sector”  (Olssen  and  Peters,  2005,  

p.  316).  This  trend  may  manifest  in  a  number  of  ways:  [This]  exchange  [between  universities  and  their  commercial  environment]  invariably  leads  to  new  social  and  discursive  practices,  such  as  ‘selling,’  ‘advertising,’  or  managing.’  They  are  imported  into  the  academic  domain,  where  previously  the  prevailing  norm  was  characterized  by  non-­utilitarian  knowledge  creation  and  consultative,  committee-­based  governance,  as  well  as  by  its  concomitant  non-­commercial  discourse.  (Mautner,  2005,  p.  96)    

Naturally,  from  an  organizational  perspective,  this  has  potential  repercussions  for  

the  way  that  these  institutions  function  at  an  internal  level.  Specifically,  we  may  

examine  these  repercussions  in  the  contexts  within  which  teaching,  administration,  

and  research  take  place  (Parker  and  Jary,  1995,  p.  320).  Indeed,  the  normative  

effects  of  such  changes  can  be  linked  to  shifts  towards  new  institutional  economics  

and  new  public  management  and  an  overall  rise  in  managerialism12  (Deem,  1998;  

                                                                                                               12  It  is  worth  noting,  that  though  ‘marketization’  and  ‘managerialism’  are  not  the  same  thing,  they  tend  to  be  mutually  reinforcing  phenomena  and  have,  in  fact,  been  referred  to  as  ‘twin  strategies’  (Blackmore  and  Sachs,  2003,  p.  478  in  Mautner,  2005,  p.  98).  

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Trowler,  2001;  Olssen  and  Peters,  2005)  resulting  from  processes  of  

neoliberalization.  We  can  delve  into  these  new  organizational  forms  of  higher  

education  and  then  summarily  introduce  some  of  the  issues  that  subsequently  arise  

at  a  personal-­‐subjective  level.  To  be  sure,  the  restructuring  of  universities  at  a  

fundamental  and  organizational  level  clearly  bears  implications  for  the  very  people  

that  are  part  of  these  institutions.  

 

  Neoliberalism  and  processes  of  neoliberalization  have  introduced  a  new  

mode  of  regulation  and  form  of  governmentality  within  the  realm  of  higher  

education;  this  is  due,  in  no  small  part,  to  increased  state  action  in  implementing  

markets  as  a  new  disciplinary  and  discursive  practice  within  the  public  sector.  In  

this  case,  such  an  extension  of  market  logic  places  an  emphasis  towards  

reconfiguring  universities  as  part  of  an  input-­‐output  system  which  stresses  such  

concepts  as  ‘outcomes’,  ‘accountability’,  ‘purchase’,  ‘ownership’,  ‘specification’,  

‘contracts’,  and  ‘purchase  agreements’  (Jackson,  2003).  “Ron  Barnett  (2000)  utilizes  

Lyotard’s  concept  of  ‘performativity’  to  argue  that  [this]  marketization  has  become  a  

new  universal  theme  manifested  in  the  trends  towards  the  commodification  of  

teaching  and  research  and  the  various  ways  in  which  universities  meet  the  new  

performative  criteria,  both  locally  and  globally  in  the  emphasis  upon  measurable  

outputs”  (Olssen  and  Peters,  2005,  p.  316).  Related  concepts  further  include,  

“clarification  of  purpose  and  role,  task  specification,  and  reliable  reporting  

procedures”  (Jackson,  2003,  p.  232).  Indeed,  central  to  such  approaches  is  a  

particular  stress  on  contract,  which  ostensibly  replaces  central  regulation  with  a  

new  system  of  public  administration  that  demands  an  increase  in  accountability  and  

efficiency.  Moreover,  such  accountability  and  efficiency—and  in  effect,  

compliance—is  extracted  through  systems  that  measure  performance  according  to  

both  externally  imposed  levers  and  internally  reinforced  targets  (Olssen  and  Peters,  

2005,  p.  320).  Concerns  with  problems  of  compliance  and  control  are  typically  

addressed  by  establishing  a  hierarchical  chain  of  command.  As  a  result,  work  

relations  are  often  vertically  structured  as  a  series  of  contracts.  “The  consequence  of  

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such  a  contractualism  is  to  view  all  work  relations  as  principal-­‐agent13  hierarchies,  

thereby  redefining  the  appropriate  process  in  terms  of  outputs,  and  where  services  

are  viewed  in  terms  of  cost  and  quality”  (Olssen,  Codd,  and  O’Neill,  p.  164).  As  we  

may  recall,  this  new  system  of  public  administration  is  effectively  linked  to  the  ideas  

behind  new  public  management  (NPM),  which  is  largely  characterized  by  

marketization,  performance  measurement,  and  managerialized  accountability  

(Tolofari,  2005),  and,  as  a  result,  institutions  in  the  public  sector  are  becoming  

increasingly  reconfigured  and  managed  like  those  in  the  private  sector.  With  this  in  

mind,  Olssen  and  Peters  (2005)  make  an  astute  observation  and  pose  a  crucial  

question:  “When  organizations  are  ruled  by  new  governance  arrangements  and  

models,  under  relations  of  managerialized  accountability,  what  happens  to  the  

presumption  of  trust  that  public  servants  will  act  in  the  public  good?”  (p.  324)  

 

  Universities  and  similar  public  institutions  of  higher  education  certainly  face  

challenges  and  issues  in  the  face  of  these  organizational  changes  and  managerial  

shifts.  Indeed,  there  appears  to  be  no  lack  of  critique  concerning  what  many  view  as  

“the  importance  of  active  resistance  to  what  is  becoming  an  increasingly  hegemonic  

discourse  located  in  managerialist  structural  roots”  (Trowler,  2001,  p.  197;  Clegg,  

2002;  Bollier,  2002;  Harvie,  2004;  Mautner,  2005;  Olssen  and  Peters,  2005).  Rather  

than  take  our  own  immediate  stance,  it  is  perhaps  best  to  outline  a  few  of  the  

general  challenges  and  limitations  of  the  so-­‐called  ‘neoliberal  university’  (Dowling,  

2008;  Peters,  2002;  Germic,  2009)  within  these  new  parameters.  Naturally,  there  

are  potential  dangers  in  university  research  being  subjected  to  commercial  

pressures,  not  least  of  which  can  be  traced  to  some  of  the  divergent  interests  

between  both  universities  and  industry.  Further,  the  emphasis  on  the  veritable  

outputs  of  academia  proves  difficult  to  effectively  measure.  Finally,  with  the  rise  of                                                                                                                  13  Within  the  context  of  political  science  and  economics,  ‘principal-­‐agent’  refers  to  the  separate  parties  of  a  given  situation.  “Any  person  who  has  the…  capacity  to  perform  an  act  may  be  a  ‘principal’  and  empower  an  ‘agent’  to  carry  out  that  act.  Persons,  corporations,  partnerships,  not-­‐for-­‐profit  organizations,  and  government  agencies  may  all  be  principals  and  appoint  agents.  Any  individual  capable  of  comprehending  the  act  to  be  undertaken  is  qualified  to  serve  as  an  agent…  Inherent  in  the  Principal-­‐Agent  (P-­‐A)  relationship  is  the  understanding  that  the  agent  will  act  for  and  on  behalf  of  the  principal”  (Schuler,  2002).  

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managerialism,  and  through  the  ideology  of  entrepreneurialism,  “the  university’s  

particular  place  as  a  critical  forum  is  undermined”  (Barnett,  2003,  p.  73).  This  last  

point  in  particular  brings  to  the  light  the  effects  that  processes  of  neoliberalization  

may  incur  at  a  professional-­‐subjective  level  for  those  within  the  university.  We  may  

examine  these  various  effects  and  their  potential  repercussions  before  moving  onto  

our  final  chapter,  where  we  may  consider  a  larger  outlook  on  the  current  state  of  

higher  education  as  the  sum  of  our  total  research.  

 

  The  growing  demand  for  universities  to  commercialize  and  capitalize  on  

their  research  is  perhaps  one  of  the  more  pressing  issues,  which  we  can  first  

address;  certainly,  there  is  increasing  academic  concern  about  the  expectations  that  

this  places  on  institutions  of  higher  education  (Lawton  Smith,  2003).  We  may  recall  

here  the  ideas  behind  new  institutional  economics  (NIE)  arising  from  processes  of  

neoliberalization.  In  terms  of  higher  education,  the  institutional  stress  on  

performativity  has  increased  pressures  for  universities  to  establish  and  achieve  

targets  in  an  effort  to  provide  relevant  and  measurable  outputs.  Moreover,  in  the  

interests  of  efficiency,  output  production  assumes  a  more  immediate  nature.  

Dasgupta  and  David  (1994)  argue  that  closely  aligning  industry  and  university  may  

therefore  potentially  draw  academic  scientists  “towards  research  enterprises  with  

immediate  short-­‐term  benefits  to  industry,  but  away  from  research  with  broader  

and  long-­‐term  impacts  to  society  and  the  economy”  (Dasgupta  and  David,  1994  in  

Florida,  Gates,  Knudsen,  and  Stolarick,  2006,  p.  3).  Indeed,  the  emphasis  on  such  

modes  of  ‘applied  research’  might  arguably  “[do]  more  to  support  mediated  ideas  

for  rapid  consumption  in  local  contexts  than  enduring  scholarly  contributions  for  

posterity”  (Bastalich,  2010,  p.  855).  To  be  sure,  there  is  often  a  clear  misalignment  of  

time  frames  between  industry  and  academia,  with  businesses  typically  seeking  

more  expeditious  results  than  universities.  Additionally,  mutual  disagreements  on  

the  value  of  knowledge  and  information  can  also  prove  problematic;  further,  

potential  conflicts  in  regards  to  intellectual  property  and  regulations  imposed  by  

universities  or  governments  can  act  as  crucial  barriers  to  interactions  between  

universities  and  industrial  firms  (Bruneel,  2009  in  Kitson,  Howells,  Braham,  and  

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Westlake,  2009,  p.  38).  This  reflects  a  difference  between  their  archetypal  missions,  

as  businesses  are  traditionally  driven  by  profits  and  shareholder  value,  and  

universities  are  traditionally  driven  by  discovering  new  knowledge  (Kitson,  

Howells,  Braham,  and  Westlake,  2009,  p.  38).  The  barriers  to  interacting  with  universities  involve  a  range  of  different  norms  of  incentives  and  institutional  barriers.  Discovering  new  knowledge  and  establishing  priority  for  these  discoveries  among  peers  through  publications  largely  motivates  university  researchers.  Science  remains  an  open  system,  governed  largely  by  norms  set  by  the  scientists  themselves.  In  contrast,  industrial  research  is  likely  to  be  specific  in  orientation  and  firms  are  focused  on  creating  private  and  valuable  knowledge  that  can  be  used  to  create  products  and  processes.  In  this  context,  industrial  firms  operate  in  a  very  different  system  where  capturing  intellectual  property,  both  informal  and  formal,  plays  a  key  role  in  shaping  their  external  engagement,  in  general,  and  work  with  universities,  in  particular.  (Dasgupta  and  David,  1994  in  Bruneel,  D’Este,  Neely,  and  Salter,  2009,  p.  14)    

Indeed,  as  we  may  observe,  a  number  of  the  issues  arising  as  a  result  from  the  

convergence  processes  between  academia  and  business  can  be  traced  to  these  

inherently  different  motivations  between  the  two.  

 

  Another  challenge  lies  in  the  difficulties  of  measurements  and  indicators,  as  

many  of  the  collaborations  between  universities  and  industry  cannot  be  measured  

in  existing  metrics.  This  is  clearly  linked  to  an  emphasis  on  increased  efficiency  and  

the  need  for  measurable  outputs,  in  conjunction  with  the  “increasing  onus  on  

universities  to  demonstrate  the  public  and  economic  benefit  of  spending  on  science,  

technology,  and  research”  (Kitson,  Howells,  Braham,  and  Westlake,  2009,  p.  4-­‐5):  The  transformations  which  are  taking  place  in  universities  and  the  emergence  of  new  functions,  especially  in  the  field  of  technology  transfer  and  in  the  design  of  new  intitiatives  for  territorial  economic  development,  have  determined  an  increase  in  interest  towards  the  precise  identification  of  university  spillovers  and  the  adoption  of  new  performance  indicators.  (Lazzeroni  and  Piccaluga,  2003,  p.  40)    

Within  a  neoliberal  framework,  the  difficulties  in  the  precise  identification  and  

measurement  of  such  spillovers  are  perceived  as  a  risk,  in  that  this  lack  of  objective  

measures  or  performance  indicators  can  inextricably  lead  to  a  lack  of  accountability  

and  effectiveness.  For  instance,  “[while]  technology  transfer  usually  has  tangible,  

  50  

measurable  benefits,  such  as  capital  raised  by  spinouts  or  patents  registered,  

informal  knowledge  exchange  and  the  impact  of  universities  in  building  clusters  are  

harder  to  capture  in  a  single  metric”  (Kitson,  Howells,  Braham,  and  Westlake,  2009,  

p.  38).  Indeed,  it  is  the  very  concept  of  tacit  knowledge  transfer  and  the  role  of  

informal  networks  integral  to  knowledge  production  and  innovation  that  proves  the  

most  difficult  to  monitor.  To  be  sure,  “both  old  and  new  performance  indicators  

have  to  be  defined  in  order  to  monitor  both  positive  and  negative  consequences  of  

[the]  changes  which  are  taking  place  in  university  missions  and  strategies”  

(Lazzeroni  and  Piccaluga,  2003,  p.  38).14  

 

 

Personal  and  Subjective  Changes:  Challenges  and  Issues  

 

With  all  this  in  mind,  we  may  now  arrive  to  our  final  point  to  consider  in  this  

chapter;  namely,  we  can  summarily  introduce  and  address  these  recent  changes  in  

higher  education  in  terms  of  the  subsequent  “actions,  subjectivity,  motivation,  and  

goals  of  academics  themselves”  (Parker  and  Jary,  1995,  p.  320).  After  all,  within  the  

framework  of  neoliberalism  and  under  the  guidelines  of  new  public  management,  

the  restructuring  of  universities  at  a  fundamental  and  organizational  level  clearly  

bears  potential  implications  for  the  very  people  that  are  part  of  these  institutions:  Under  neoliberal  governmentality,  principal-­agent  line  management  chains  replace  delegated  power  with  hierarchical  forms  of  authoritatively  structured  relations,  which  erode,  and  seek  to  prohibit,  an  autonomous  space  from  emerging.  This  shift  in  regulative  modality  constitutes  a  structural  shift,  which  is  likely  to  transform  the  academic’s  role…  The  institutionalization  of  models  of  principal-­agent  chains  of  line  

                                                                                                               14  Piccaluga  and  Lazzeroni  (2003)  present  a  useful  paper  adopting  an  instrumentalist  position  in  outlining  a  methodology  for  analyzing  changes  that  are  taking  place  in  university  organization,  culture,  incentives,  marketing  and  so  on.  Further,  after  identifying  four  very  functional  missions  for  universities,  Piccaluga  and  Lazzeroni  “develop  a  typology  of  scientific  research  spillovers  and  discusses  how  they  are  to  be  measured—again  an  instrumentalist  way  of  looking  at  relationships”  (Lawton,  2003,  p.  4).  While  we  will  not  discuss  this  interesting  methodology  in  detail,  it  is  nonetheless  worth  summarily  mentioning  its  relevance  to  our  research.  For  further  information  on  their  performance  indicators,  please  refer  to  Towards  the  Entrepreneurial  University  by  Andrea  Piccaluga  and  Michela  Lazzeroni  (2003).  

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management  inserts  a  hierarchical  mode  of  authority  by  which  the  market  and  state  pressures  are  instituted.  (Olssen  and  Peters,  2005,  pp.  324-­325)    

To  be  sure,  we  may  recall  that  within  these  parameters,  the  demand  for  increased  

accountability  and  efficiency—and  in  effect,  compliance—is  addressed,  in  part,  by  

establishing  a  vertically  integrated  and  hierarchical  chain  of  command.  As  a  result,  

work  relations—in  this  case,  between  university  management  (the  empowering  

‘principal’)  and  faculty  (the  complying  ‘agent’)—are  often  vertically  structured  

through  a  series  of  contracts.  In  terms  of  the  changes  in  higher  education  at  a  

professional-­‐subjective  level,  this  carries  with  it  the  effect  of  ‘de-­‐professionalization’  

for  faculty  and  academic  staff:  [Such  an  effect  involves]  a  shift  from  collegial  or  democratic  governance  in  flat  structures,  to  hierarchical  models  based  on  dictated  management  specifications  of  job  performance  in  principal-­agent  chains  of  command.  [Further,]  the  implementation  of  restructuring  initiatives  in  response  to  market  and  state  demands  involves  increasing  specifications  by  management  over  workloads  and  course  content  by  management.  Such  hierarchically  imposed  specifications  erode  traditional  conceptions  of  professional  autonomy  over  work  in  relation  to  both  teaching  and  research,  [as]  neoliberalism  systematically  deconstructs  the  space  in  terms  of  which  professional  autonomy  is  exercised.  (Ibid)    

Indeed,  this  notion  of  de-­‐professionalization  hinges  on  a  neoliberal  patterning  of  

power  that  is  established  on  contract.  In  turn,  such  contractualism  is  predicated  on  

the  need  for  compliance  and  accountability,  which  is  exacted  by  the  prescribed  

guidelines  of  new  public  management.  Certainly,  the  concepts  of  “clarification  of  

purpose  and  role,  task  specification,  and  [measurable]  reporting  procedures”  

(Jackson,  2003,  p.  232)  are  at  odds  with  the  traditional  conception  of  

professionalism  as  associated  with  “an  ascription  of  rights  and  powers  over  work  in  

line  with  classical  liberal  notions  of  freedom  of  the  individual  (Olssen  and  Peters,  

2005,  p.  325).  This  rise  of  managerialism  under  new  public  management  affects  the  

idea  of  power  given  to  an  individual  in  reducing  his  or  her  ability  to  make  decisions  

in  the  workplace.  Concerns  have  arisen  that  this  impact  of  neoliberalism  on  the  

nature  of  professionalism  has  thus  restructured  the  identity  of  professionals  to  

become  more  aligned  with  modes  of  managerialism  (Du  Gay,  1996;  Nixon,  Marks,  

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Rowland  and  Walker,  2001).  Within  universities,  so-­‐called  ‘manager-­‐academics’  are  

typically  key  drivers  of  this  development  (Deem  and  Johnson,  2000;  Johnson,  2002;  

Deem,  2003).  Of  course,  some  argue  that,  “we  cannot  assume  that  this  is  in  any  way  

an  automatic  or  linear  process,  or  that  individuals  respond  in  ways  in  which  are  

consistent  or  coherent”  (Halford  and  Leonard,  1999,  p.  120).  Rather,  as  with  much  of  

the  research  we  have  presented  thus  far,  we  can  similarly  view  the  effects  of  

managerialism  as  occurring  within  a  set  of  dialectical  processes:  It  is  dangerous…  to  draw  sweeping  conclusions  about  the  replacement  of  the  traditional  bureau-­professional  organizational  order  in  education  by  a  managerial  one.  Rather,  it  is  better  to  view  the  process  as  a  dynamic  one  in  which  growing  tensions  between  ‘old’  and  ‘new’  are  worked  out  within  particular  policy  and  management  areas  as  different  value  systems  and  interests  of  influence.  (Simkins,  2000,  p.  330)    

 

That  being  said,  while  it  is  certainly  conceivable  that  “new  ‘emergent’  

possibilities  exists,  in  our  view  neoliberalism  constitutes  a  ‘structural  selectivity,’  in  

Offe’s  (1984)  sense,  that  alters  the  nature  of  the  professional  role”  (Olssen  and  

Peters,  2005,  p.  326);  at  the  very  least,  in  terms  of  higher  education,  we  can  posit  

that  this  increase  in  the  power  of  management  may  potentially  lead  to  the  

diminishing  autonomy  of  professional  academics.  This  proves  especially  

problematic  as  performance  criteria  and  targets  are  increasingly  applied  from  

outside  the  academic  role  and  outside  of  the  traditional  realm  of  academia,  due  to  

the  blurring  of  boundaries  between  universities  and  industry.  For  instance,  

knowledge  exchange  processes  include  such  things  as  faculty  taking  on  consultancy  

contracts  and  businesspeople  being  appointed  positions  in  university  management  

or  on  boards  of  trustees.  Further,  the  increased  role  of  ‘commercially  relevant’  

research  and  industry  funding,  in  addition  to  “the  need  for  immediate  financial  

returns  on  research  outcomes,  has  led  to  new  pressures  on  researchers  who  are  

increasingly  tied  financially  to  large,  industry-­‐linked  research  projects”  (Bastalich,  

2010,  p.  846).  The  rising  importance  of  such  “‘managed  research,’  and  the  pressures  

to  obtain  ‘funded  research’  constitutes  further  evidence  that  academic  freedom,  at  

least  in  terms  of  the  academics’  determination  over  research  are  concerned,  are  

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increasingly  ‘compromised’  or  at  least  ‘under  pressure’”  (Olssen  and  Peters,  2005,  p.  

326).  Certainly,  researchers  and  professional  academics  may  face  a  lack  of  

autonomy  in  choosing  research  focuses  and  drawing  conclusions  from  data,  in  

addition  to  other  pressures,  such  as  undue  secrecy  and  similar  issues  regarding  

potential  intellectual  property  rights.  Moreover,  the  blurring  of  boundaries  between  

universities  and  the  private,  for-­‐profit  sector  also  jeopardizes  the  freedom  of  the  

former  to  criticize  the  latter:  “the  hand  that  feeds  is  less  likely  to  be  bitten”  

(Mautner,  2005,  p.  97).  This  has  generated  concerns  regarding  such  things  as  

corporate  loyalty  and  the  implementation  of  disciplinary  measures  against  

employees  or  members  who  criticize  their  universities.  To  be  sure,  we  may  recall  

here  Barnett’s  (2003)  assessment  that,  “through  the  ideology  of  entrepreneurialism,  

the  university’s  particular  place  as  a  critical  forum  is  undermined”  (p.  197).  

   

The  idea  that  the  academic  staff  and  faculties  of  universities  are  being  placed  

under  growing  pressures  to  adjust  to  the  institutional  restructuring  under  the  

guidelines  of  new  public  management  clearly  has  potential  ramifications  for  the  

greater  academic  community  at  large.  Indeed,  it  would  appear  that  academic  staff  

has  the  additional  burden  of  now  maintaining—or  perhaps  balancing—traditional  

academic  values  within  a  new  framework,  coupled  with  certain  funding  mechanisms  

and  policy  discourse,  that  increasingly  emphasizes  the  purported  outcomes  of  

higher  education  in  terms  of  economic  gain.  Certainly,  striking  a  balance  amongst  

the  various  interpretations  concerning  the  role  of  the  university  proves  difficult  and  

is  further  complicated  by  the  recent  deluge  of  manifold  changes  within  the  realm  of  

higher  education.  At  the  very  least,  we  might  question  whether  the  more  traditional  

professional  culture  of  open  intellectual  enquiry  and  debate  is  in  danger  of  

becoming  wholly  subsumed  by  the  more  immediate  and  commercial  demands  of  the  

market.  Of  course,  as  we  have  repeatedly  emphasized,  it  is  not  our  aim  to  support  a  

singular  point  of  view  in  particular;  rather,  it  is  this  very  notion  of  ‘striking  a  

balance,’  which  could  prove  most  useful  in  looking  towards  the  future.  It  is  with  this  

in  mind  that  we  may  now  adopt  a  broader  outlook  towards  these  recent  changes  in  

higher  education  as  the  sum  total  of  our  corpus  research,  and  proceed  with  our  

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concluding  chapter.  Namely,  we  can  evaluate  the  wide  range  of  these  perspectives  

and  synthesize  an  instrumentalist  approach  in  looking  forward  towards  the  

changing  nature  of  higher  education  and  the  future  role  of  the  university.  

                                                                                 

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CHAPTER  VI  

Critical  Discussion  and  Debate:  Future  Outlooks  

 

 

When  considering  the  wide  range  of  perspectives  regarding  the  role  of  the  

university  within  the  developing  knowledge  economy,  we  can  be  certain  that  there  

is  no  shortage  of  critique;  indeed,  the  subject  frequently  fosters  polemical—if  not  

polarizing—debate.  In  contemporary  higher  education  discourse,  the  so-­‐called  

‘neoliberal  university’  (Dowling,  2008;  Peters,  2002;  Germic,  2009)  or  the  

‘entrepreneurial  university’  (Slaughter,  Sheila,  and  Leslie,  1997;  Etkowitz,  Webster,  

Gebhardt,  and  Terra,  2000;  Clark,  2001;  Etkowitz,  2003,  2004)  are  often  contentious  

terms  used  to  described  “an  iconic  representation  of  the  coming  together  of  

business  and  academia,  two  hitherto  separate  but  now  increasingly  intertwined  

social  spheres”  (Mautner,  2005,  p.  111).  To  be  sure,  as  we  have  discussed,  the  

normative  trends  and  practices  surrounding  neoliberalism  act  as  focal  points  

around  which  current  discourses  of  change—both  supportive  and  antagonistic—

crystallize.  On  the  one  hand,  universities  currently  find  themselves  within  a  policy  

culture  dominated  increasingly  by  the  values  and  precepts  of  economic  doctrine  

(Bastalich,  2010),  while  on  the  other  hand,  they  may  seek  to  maintain  the  ideals  

expressed  by  Kant  and  Newman,  of  the  university  as  an  institutionally  autonomous  

and  politically  insulated  realm  of  learning,  where  there  are  “traditional  

commitments  to  a  liberal  conception  of  professional  autonomy,  in  keep  with  a  public  

service  ethic”  (Olssen  and  Peters,  2005,  p.  326).  Interestingly,  Mautner  (2005)  

makes  an  astute  observation  in  that  both  ‘sides’  are  silent  on  issues  that  would  not  

further  their  cause:  Advocates  usually  disregard  the  issue  of  dependence  on  business,  whereas  critics  tend  to  ignore  the  flaws  of  the  traditional  university,  its  inefficiencies,  elitist  power  structures,  and  lack  of  accountability.  (Mautner,  2005,  p.  111)    

Bearing  this  in  mind,  we  therefore  posit  that  there  are  certainly  both  positive  and  

negative  consequences  in  aligning  academia  with  business;  however,  while  

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universities  play  an  integral  role  in  economic  development,  we  should  not  allow  

economic  logic  to  supersede  educational  concerns  (Bastalich,  2010).  Rather,  we  may  

look  towards  finding  a  balance  amongst  the  ways  in  which  universities  can  

contribute  to  the  greater  economy,  while  still  being  allowed  to  maintain  a  traditional  

ethos  of  teaching,  learning,  and  research  dedicated  to  the  general  pursuit  of  

knowledge.  This  balance  can  perhaps  best  be  achieved  by  evaluating  the  changes  

occurring  in  higher  education  at  the  organizational  and  personal-­‐subjective  levels  of  

universities  and  similar  public  institutions  in  particular.  Such  an  evaluative  

approach  may  eventually  lead  to  the  development  of  alternatives  to  current  market-­‐

oriented  practices,  while  also  being  realistic  about  the  context  within  which  

universities  are  able  to  contribute  to  the  economy.  Namely,  our  argument  lies  not  

with  the  fact  that  universities  have  an  economic  role  to  play,  but  rather,  the  methods  

by  which  they  are  configured  and  restructured  to  do  so.  

 

  We  may  recall  that  universities  and  public  institutions  of  learning  derive  

crucially  from  the  social,  cultural,  and  political  environments  in  which  they  are  

embedded;  following  this  logic,  there  is  no  reason  to  assume  that  they  are  therefore  

neither  immune,  nor  susceptible  to  the  simultaneous  demands  of  the  market.  As  we  

have  observed,  universities  are  inextricably  linked  to  the  development  of  knowledge  

capitalism  and  the  shift  towards  a  knowledge-­‐based  economy  in  that  they  can  

effectively  serve  as  veritable  bases  of  knowledge  and  knowledge  production.  

Naturally,  recent  decades  have  thus  seen  universities  attempting  to  adapt,  through  a  

variety  of  mechanisms,  to  the  numerous  changes  wrought  from  such  a  paradigmatic  

shift.  Moreover,  many  of  these  adaptations  and  configurations  are  facilitated  

through  state  action,  as  policy  communities  at  both  national  and  transnational  levels  

of  government  are  increasingly  recognizing  the  potential  of  universities  to  act  as  

powerful  drivers  of  innovation  and  economic  change.  To  be  sure,  the  emphasis  on  

universities  to  play  a  role  in  economic  development  has  become  a  cornerstone  for  

much  of  recent  higher  education  policy  (Organization  for  Economic  Cooperation  and  

Development,  1996;  Porter  and  Ketels,  2003;  Kitagawa,  2004),  advocating  a  closer  

alignment  between  academia  and  business:  

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These  discussions  are  taking  place  against  the  backdrop  that  knowledge  production  and  the  contribution  of  higher  education  to  the  economies,  prestige,  and  standing  of  nations  are  rapidly  transforming  the  once  benign  higher  education  system  into  a  competitive  market  place.  (Kitagawa,  2004,  p.  54)    

In  theory,  there  is  neither  a  total  nor  an  inherently  negative  consequence  to  

employing  universities  and  similar  public  institutions  of  higher  education  as  a  

means  for  economic  development.  Indeed,  we  have  discussed  a  number  of  the  

potential  benefits  and  contributions  provided  by  universities,  not  only  within  the  

context  of  knowledge  production,  exchange,  and  innovation,  but  also  in  terms  of  

providing  human  capital,  social  capital,  and  promoting  regional  growth  and  

development.  Furthermore,  we  have  established  that  these  benefits  can  also  prove  

mutually  beneficial,  as  both  universities  and  private  firms  may  gain  from  the  

convergence  processes  between  academia  and  industry.  This  is  certainly  the  case  as  

universities  and  similar  institutions  in  the  public  sector  face  a  variety  of  financial  

challenges,  including  such  things  as  decreased  government  spending  and  budget  

shortfalls.  However,  as  our  research  indicates,  in  practice,  the  realities  of  steadily  

aligning  academia  with  industry  can  prove  problematic.  As  Mautner  (2005)  is  quick  

to  note,  “Much  as  the  zeitgeist  may  seem  to  dictate  discursive  alignment  with  

business,  it  is  a  strategy  that  can  easily  backfire  and  jeopardize  rather  than  win  

support”  (p.  113).  For  instance,  many  have  expressed  concerns  over  university  

research  being  subjected  to  commercial  pressures,  not  least  of  which  can  be  traced  

to  some  of  the  divergent  interests  between  both  universities  and  industry.  Further,  

with  the  rise  of  managerialism,  and  through  the  ideology  of  entrepreneurialism,  “the  

university’s  particular  place  as  a  critical  forum  is  undermined”  (Barnett,  2003,  p.  

73).  This  last  point  in  particular  brings  to  the  light  the  salient  effects  that  processes  

of  neoliberalization  may  incur  at  a  professional-­‐subjective  level  for  those  within  the  

university.  It  is  our  assertion  that  it  is  the  governing  mechanisms  implemented  

through  neoliberal  discourse,  and  the  associated  practices  of  new  institutional  

economics  (NIE)  and  new  public  management  (NPM)  that  typically  lie  at  the  core  of  

these  problems  in  aligning  universities  with  industry.  

   

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The  challenges  and  the  issues  involved  with  aligning  academia  and  business  

are  perhaps  most  discernible  if  we  are  to  look  at  these  recent  changes  in  the  

institutional  and  organizational  governance  structures  of  universities  within  the  

parameters  of  NIE  and  NPM.  Of  course,  it  is  worth  mentioning  here  the  words  of  

Thrupp  and  Willmott  (2003)  in  that,  “We  are  not  against  management  per  se,  but  

against  managerialist  conceptions  of  it…”  (p.  4).  In  our  case,  implementing  NPM  as  

the  new  managerial  orthodoxy  for  universities  brings  with  it  the  concerns  of  ‘de-­‐

professionalization,’  whereby  an  increase  in  the  power  of  management  can  

effectively  lead  to  the  diminishing  autonomy  of  professional  academics.  Indeed,  it  

would  appear  that  academic  staff  and  university  faculty  now  have  an  additional  

burden  of  maintaining—or  perhaps  balancing—traditional  academic  values  within  

this  new  framework  that  increasingly  emphasizes  the  achieved  targets  and  the  

purported  outputs  of  higher  education  in  terms  of  efficiency,  accountability,  and  

ultimately,  economic  gain.  The  idea  that  the  academic  staff  and  faculties  of  

universities  are  being  placed  under  these  growing  pressures  to  adjust  to  the  

institutional  restructuring  under  the  guidelines  of  new  public  management  clearly  

has  potential  ramifications  for  the  greater  academic  community  at  large.  

Interestingly,  within  the  greater  academic  community  itself,  these  potential  

ramifications  are  also  subject  to  the  polemical  debate  that  this  subject  frequently  

fosters:  Supporters  of  academic  entrepreneurship  tend  to  be  members  of  university  management,  holding  positions  which  give  them  the  power  to  implement  entrepreneurial  policy  as  well  as  promulgate  the  discourse  that  goes  with  it—declaring,  for  example,  that  certain  connotations  of  entrepreneurial  are  the  only  valid  ones  (and  others  ‘simply  wrong.’)  By  contrast,  most  skeptical  and  antagonistic  voices  tend  to  come  from  the  individual  academics  who  are  not  in  such  positions  of  power  as  would  enable  them  to  translate  their  anti-­entrepreneurial  sentiments  into  transformative  actions,  or  promote  their  preferred  selection  of  connotations.  (Mautner,  2005,  p.  112)    

It  would  appear  that  a  misalignment  in  motivations  and  a  difference  in  mission  are  

not  only  apparent  between  academia  and  business,  but  also  inherent  within  the  

internal  and  institutional  realm  of  higher  education  itself.  Furthermore,  in  both  

cases,  this  misalignment  seems  to  hinge,  in  part,  on  power  structures  and  the  

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subsequent  shifts  therein,  which  often  lead  to  conflict.  Ultimately,  we  may  argue  that  

this  can  lead  to  a  common  effect—namely,  an  overall  decrease  in  open  trust  and  

reciprocity.  

 

  It  is  arguably  this  very  loss—both  potential  and  existing—of  generalized  

trust  and  reciprocity  that  proves  most  problematic  when  evaluating  the  numerous  

changes  occurring  within  the  realm  of  higher  education  in  response  to  the  

developing  knowledge  economy.  This  challenge  presents  itself  both  in  the  external  

relations  between  academia  and  business,  and  in  the  internal  relations  within  

universities  themselves.  As  we  have  previously  outlined,  within  the  context  of  open  

models  of  innovation  and  knowledge  exchange,  processes  of  innovation  often  rely  

critically  on  trust;  in  turn,  infringing  on  the  autonomy  and  professional  freedom  of  

academics  and  researchers  could  potentially  compromise  this  trust,  thereby  

negatively  impacting  research  endeavors.  By  the  same  token,  trust  diminishes  

amongst  those  in  the  larger  academic  community,  as  the  concerns  and  the  critiques  

posed  by  individual  academics  in  response  to  new  managerial  practices  appear  to  

have  no  impact  outside  of  the  given  academic  and  research  community:  “Article  

after  article  and  book  after  book  critiquing  the  ‘McUniversity’  (Hayes  and  Wynard,  

2002)  and  ‘academic  capitalism’  (Slaughter  and  Leslie,  1997)  may  be  published,  but  

the  entrepreneurial  juggernaut,  propelled  by  its  powerful  supporters,  rolls  on”  

(Mautner,  2005,  p.  112).  Indeed,  when  policy  advice  is  separated  from  actual  

operations  or  the  practicalities  of  reality,  “the  emergence  of  destructive  sub-­‐cultures  

can  result,  which  in  turn  lead  [to  such  things  as]  the  duplication  of  advice  as  well  as  

increased  distrust  and  disruption  instead  of  the  theorized  would-­‐be  benefits  of  

greater  contestability”  (Olssen  and  Peters,  2005,  p.  324).  

 

  It  is  with  this  in  mind,  that  in  looking  towards  the  future,  we  emphasize  the  

importance  of  trust  in  playing  a  key  role  in  better  developing  the  methods  by  which  

universities  contribute  to  the  economy,  in  addition  to  establishing  the  relationships  

between  academia  and  business.  Naturally,  this  is  perhaps  one  of  the  more  difficult  

approaches,  not  the  least  of  which  is  due  to  its  arguably  intangible  nature  and  its  

  60  

long-­‐term  outlook.  Nevertheless,  the  idea  of  generalized  trust  hinges  on  reciprocity;  

in  this  case,  an  emphasis  on  both  the  mutual  advantages  and  potential  

disadvantages  of  aligning  academia  and  business  and  orienting  universities  with  the  

economy  should  be  taken  into  consideration.  We  might  even  suggest  the  term,  

‘compromise,’  or  perhaps  more  ideally,  consider  the  notion  of  ‘striking  a  balance,’  as  

proving  most  useful  in  looking  towards  the  future  role  of  the  university.  Of  course,  

striking  a  balance  amongst  the  various  interpretations  concerning  the  role  of  the  

university  proves  difficult  and  is  further  complicated  by  the  recent  deluge  of  

manifold  changes  within  the  realm  of  higher  education.  However,  we  argue  that  it  is  

possible  to  develop  alternatives  to  current  trends  and  practices,  while  remaining  

pragmatic  about  the  context  in  which  universities  and  similar  institutions  of  higher  

education  can  contribute  to  the  economy.  Moreover,  developing  these  alternatives  

requires  multilateral  cooperation  and  reciprocal  dialogue  amongst  the  very  

individuals  that  are  part  of  these  institutions.  We  may  refer  here  to  a  suggestion  put  

forth  by  Mautner  (2005):  It  seems  hard  to  understand  why  universities,  with  hundreds  of  years  of  tradition  under  their  belt  and  a  formidable  assemblage  of  intellect  under  their  roofs,  should  not  be  able  to  pursue  a  reform  agenda  independently,  without  playing  to  the  rules  set  by  economically  powerful  external  constituents,  and  without  deliberately  appropriating  the  language  of  the  commercial  sector.  (p.  112)    

 

To  be  sure,  it  is  not  so  much  the  idea  of  universities  adapting  to  their  

changing  environments  that  poses  challenges,  as  it  is  the  methods  and  mechanisms  

by  which  they  are  configured  and  restructured  to  do  so.  Rather,  at  the  ‘heart  of  the  

matter,’  as  Clark  (2001)  states,  is  how  universities  are  responding  to  and  shaping  

these  many  forces  that  play  upon  them  (p.  8).  In  evaluating  these  responses  and  

subsequent  changes,  the  dialectic  between  policy  and  practice,  and  in  turn,  cause  

and  effect,  must  be  examined  and  monitored  closely.  Our  own  attempt  to  do  so  has  

led  us  to  the  conclusion  that  while  there  is  much  work  left  to  be  done  in  analyzing  

recent  changes  in  higher  education  and  the  role  of  the  university,  we  should  be  

mindful  of  allowing  economic  logic  to  supersede  educational  concerns.  Rather,  we  

  61  

may  look  towards  finding  a  balance  amongst  the  ways  in  which  universities  can  

contribute  to  the  greater  economy,  while  still  being  allowed  to  maintain  a  traditional  

ethos  of  teaching  and  learning  dedicated  to  the  general  pursuit  of  knowledge.  

Furthermore,  much  of  this  appears  to  lie  with  affording  professional  academics  a  

relative  measure  of  autonomy  in  an  effort  to  facilitate  and  promote  the  trust  

necessary  for  many  of  the  current  and  emerging  relationships  dictated  by  the  nature  

of  the  developing  knowledge  economy.  Indeed,  it  is  our  position  that  in  the  

continual  evolution  of  both  the  economy  and  higher  education,  the  importance  of  

establishing  reciprocity  within  this  complex  set  of  dialectical  processes  will  

ultimately  prove  integral  for  a  future  outlook  on  the  role—economic  and  

otherwise—of  the  university.  

                                                         

  62  

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