In the United States and in Europe, economies are reorienting around regional centers of advanced industry. Spilling across state and national boundaries, these economic hubs include the American Great Lakes and Southern California regions, and the Western European regions around Cologne and Paris; each are anchored by the powerhouses of manufacturing and innovation that already lead global economic circuits. At their core are universities providing intellectual capital and R&D expertise. Amid declining higher education funding from governments on both sides of the Atlantic, growing partnerships between corporations and universities have driven these trends in regional development. Although this increasing interdependence seems intuitive, there are significant challenges to developing effective public-private relationships. Looking a decade ahead, if regional economic hubs are to connect between the US and Europe, universities will need to collaborate to solve their individual challenges and then jointly take leadership in developing transatlantic solutions.
American Corporations Become Investors in Education
Universities in the US have long used private fundraising as an important tool in generating revenue. For several decades, this has included corporate support. However, corporate fundraising has traditionally focused on seeking philanthropic revenue. In the aftermath of the global economic recession, and in an environment of increasing financial accountability, philanthropic donations from corporations have dried up as they have increased accountability and shifted priorities toward long-term business strategy. Campus research parks have been a critical innovation and a fundraising boon, but this adaptation alone is insufficient as corporations are demanding cross campus coordination. Seeking to adjust, American universities are adding corporate relations officers at a dramatic rate, while moving toward holistic engagement, emphasizing mutual benefit and one-stop shopping.
In 2009, Linden Rhoads, Vice Provost of Tech Transfer for the University of Washington, said: “The universities that figure out university-industry relations are the ones that will excel in the next ten years.” In a 2010 survey, 85% of participating universities reported their corporate relations offices were growing. In a repeat 2016 survey, 53% reported growth, with the majority still occurring at larger institutions. Seven years into that decade, an explosion in university-corporate relations continues throughout the US. While revenue is rising with it, generating meaningful interactions with corporations and making the case for investment remain challenges in America’s changing environment.
German Universities Become First Time Fundraisers
Offering an ideal European case study, higher education in Germany is almost entirely funded by the federal government. Yet even here, universities are feeling a financial pinch. In 2014, with tuition already free, all student fees were abolished; a move that left universities with fewer options. In this environment of excellent, free education, the number of students enrolling at German universities has swelled. The Organization for Economic Cooperation and Development’s country note on Germany finds the number of students in postsecondary education increased 28% between 2008 and 2013, but increases in funding haven’t kept pace. Per student expenditure has fallen to a level 10% lower than it was in 2008.
Working to close the gap, German universities are entering earnestly into private fundraising for the first time, and they face substantial challenges, including a lack of alumni databases and even alumni affinity for their alma maters. However, they have a significant advantage in entering corporate relations. Strong federal funding underpins research at German universities, and they also benefit from a tradition in the cooperative education model, which partners universities and corporations to advance student growth. This rich exchange produces quality talent, but it also results in strong institutional connections and alumni in high places. While instituting American fundraising models will take time, German universities can utilize strong corporate partnerships to generate revenue and position themselves more closely to Germany’s own regional realignments.
Partnering across the Atlantic
From both sides of the Atlantic, there is a great opportunity to exchange ideas and traditions to advance universities, their corporate partnerships, and transatlantic relationships, and some of this sharing is already beginning to take place. German universities have a tremendous resource in the fundraising experience of their American counterparts, from organizing advancement offices, to generating alumni affinity and support, and to making artful asks of individuals and corporations. As Claus Weimann, Academic Exchange Officer at the University of Michigan and native of Germany, recently intimated, “Americans wrote the book on fundraising; Germans have only just read the cover.” In America, where 71% of corporate recruiters recently indicated that finding applicants with sufficient practical experience is their greatest challenge in recruiting from higher education institutions, we can learn a much from the German cooperative education model. The University of Michigan, located outside Detroit, is already in its fifth year of a cooperative program, sending students in business and engineering to Germany for three months of work and language study with corporations including Bosch, Bayer, and Audi. Through this collaborative program, the University of Michigan is developing talented professionals ready to join a global workforce while building rich relationships with their corporate partners.
In the next decade, universities in the US, Germany, and across Europe will form close transatlantic collaboratives as corporate trends in selectivity and one-stop shopping will continue. By exchanging faculty and forming R&D partnerships, universities will jointly meet the broader needs of corporations. Success will benefit universities on both sides, as their competitiveness and corporate funding stand to increase mutually. Instead of investing in two or more unaffiliated universities, corporations will invest in the collaborative, increasing their return on investment while working with teams fluent in the challenges on both sides of the Atlantic. By integrating to develop top tier talent and innovate quickly, universities and corporations can recreate higher education and leverage it into regional specializations in high-tech industry. University collaboratives will be the bridges – connecting these empires of innovation and becoming the links that tie together the Western world.