Australian universities should have part of their funding tied to entrepreneurial output and the number of start-ups they incubate, according to a controversial new report commissioned by the Office of the Chief Scientist.
The report said Australian universities “lag behind their international counterparts” when it comes to entrepreneurship education.
“We have come late to the party and are now having to catch up in response to student demand,” the report said.
“Entrepreneurship education in Australian universities is a relatively recent phenomenon, and most universities have only begun to extend their offerings beyond teaching [a] business school subject in the last three to five years.”
The report said that entrepreneurship programs that did exist “struggle with achieving quality or reach (or both)”. They could also lack staff or engagement with the start-up community.
One of the report’s suggestions is for a “formal assessment” of the maturity of university entrepreneurship programs. It proposes the use of a six-stage model for this purpose.
However, the report also cites previously unpublished PwC research from 2013 that ranks Australian universities by the number of successful start-up founders that obtained undergraduate or postgraduate qualifications there.
A more detailed analysis [of the PwC numbers] will be needed to fully understand the forces at play, but there is a clear correlation between universities that rank highly on this scale and the presence of a range of student entrepreneurship programs that are operating in line with best practice (i.e. deliver high quality) and at meaningful scale (i.e. have significant student reach),” the report said.
Perhaps controversially, the report goes on to examine how universities are funded and whether the criteria needs to change to encourage more entrepreneurial programs.
“Funding is [currently] distributed to universities based on a range of measures of university performance, of which research output (as measured by peer reviewed research publications) forms a significant part,” the report said.
“[But] the process by which the government allocates funding to Australian universities does not take account of the impact of research (whether economic, environmental or societal).”
The report claimed this led academics to focus on producing published research instead of “engaging with industry or teaching students”, discouraged applied research and kept research focused on “academic” topics that could be attractive to top journals, “whether or not the research ultimately represents a good investment of taxpayer funds.”
It said that a pair of reviews in train – one by the Australian Council of Learned Academics (ACOLA) and another by Dr Ian Watt AO – provided a “timely opportunity to increase the emphasis of economic impact measures such as start-ups created by staff and graduates, capital raised and jobs created”.
“Incentives linked to funding would also encourage universities to recognise academic staff for engagement in student entrepreneurship activities,” the report added.
Outgoing chief scientist Professor Ian Chubb said Australia “isn’t short of talent but we need to get better at turning our creativity into successful products and services”.
“To be a more innovative country we need to encourage an entrepreneurial mindset at every level of education – starting in schools, continuing in higher study and enduring throughout working lives,” he said.
“In other countries, forward-looking universities are the epicentre of vibrant start-up economies. Universities should be at the core of building a culture of entrepreneurship in Australia.”
ACS President Brenda Aynsley OAM said the ACS "supports the recommendation that there needs to be stronger engagement between universities and the technology startup ecosystem."
"We share the chief scientist's concerns about the significant fall in enrolments in tertiary ICT degrees which has occurred over the last decade in Australia," she said.
“We look forward to working collaboratively with the Australian university sector, the government and other industry bodies to make the connection between the higher education systems and their role in spurring innovation and entrepreneurialism."