How universities can unlock their entrepreneurial potential

Universities do more than just teach and conduct research – they’re where some of the most audacious ideas are ignited, eventually finding their way into the private sector and our everyday lives. Take Stanford and UC Berkeley, for example, which have become symbols of how universities can power innovation.

The emblematic interaction between Stanford’s Prof. Frederick Terman, Bill Hewlett and Dave Packard did not only lead to the emergence of HP’s success story in Hewlett and Packard’s garage, but also to the very notion of science parks. The Silicon Valley emerged as the reference for symbiotic development of an ecosystem focused on innovation thanks to interactions with Stanford and UC Berkeley. Today, corporations such as the aerospace giant Lockheed Martin, Tesla Motors, smart home product manufacturer Nest Labs, software company NVidia, Apple and Google all have headquarters and research facilities around Palo Alto, the world’s dream destination for any innovation specialist. Personal computers emerged there. And it remains a major research hub for AI and cybersecurity.

France still lagging behind

In France, public authorities have long supported universities in expanding their role beyond education and research. The “third mission” of universities covers all activities performed to impact society or transform basic research into innovation. Recently, the French government boosted these efforts by setting up University Innovation Poles (PUI)), investing €166 million to create 25 PUIs in 2023. But unlocking the full potential of universities in local innovation ecosystems demands a major strategic shift, with universities rethinking how they operate.

Funded by the Deeptech division of Bpifrance (the French agency in charge of funding innovation-related investments), our research shows that activities targeting the development of economic and societal impact are most often side-products mandated in the response to calls for tender about education or research issued by national and European public authorities. It turns out that the “third mission” of universities results in the accumulation of opportunistic projects that neither build a strategy, nor a focal position for the university in the dynamics of an ecosystem. Our research has identified major issues to unlock and key success factors.

If we’re going to release universities’ innovation potential, we’ll need to go beyond the old reflex of improving culture and organisation in research labs, or launching new training programs. Becoming an entrepreneurial university requires tapping into all of a university’s resources – human, technological and physical – toward innovation. In France, there’s still work to be done.

Issues to address and potential solutions

For one, universities need physical spaces that align with the fast pace of innovation. The “third mission” needs totem places dedicated to innovation, fit to host events promoting startups and new technologies, or meetings discussing new solutions transforming life in society. The totem places must offer areas for interactions between academics and practitioners, and coworking spaces for startups. Places like the Université de Bordeaux’s SMART building show what’s possible, and the relevance of hosting all these functions inside the same facilities easily identified inside the business and research community. Similar projects elaborate on fab labs at the the University of Cergy Pontoise. They open up opportunities for students, researchers and the civil society to collaborate.

To foster innovation, universities must break free from their traditional ways of working. To support student entrepreneurship, encouraging collaboration across disciplines is crucial. Coordinating the timetables of different courses will prove to be a headache, but the absence of cross-fertilisation between students can stifle student-led ventures. Students and faculty members face a long list of practical challenges when they try to develop incubation activities or to organise hackathons.

Another challenge is staffing. Universities need skilled professionals to manage incubation programmes, run innovation centres and interact with the local business ecosystem. All these roles can eventually be assigned to traditional faculty members, but they represent original managerial competences that should be staffed with specialised people. These roles do not fit into the standard human resource management patterns framed by research or education. Universities do not know how to pay salaries matching the standards of the market, or cannot propose long-term contracts ensuring service continuity. This applies to engineers supporting the use of technological platforms: wages are most often funded thanks to short-term education or research grants (two to five years). Similar difficulties exist for business developers scouting for the diffusion of research results and tech projects. These roles are fundamental components of the “third mission” but positions are tough to fill and staff is even harder to retain.

Finally, universities need to encourage the participation of faculty members in innovation initiatives. This ranges from creating start-ups to mentoring student entrepreneurs. Unfortunately, these activities aren’t always valued in academic careers. In France, and in many other European countries, individual performance evaluations focus on lectures, administrative duties and track records of publications in peer-reviewed journals, with no points granted for contributions to the “third mission”. This change in assessments could be introduced either by local universities, or mandated by national bodies, but it represents a key success factor to scale up.

Going local

Universities local resources must be adapted to the strengths and weaknesses of local business and innovation ecosystems. Take Université Grenoble Alpes, which runs Biopolis, a biotech hub. Its location near research labs makes it a perfect fit for the region, but replicating this in other areas, like Bordeaux, where similar facilities already exist, would be redundant. Universities need to vary their activities depending on the dynamics of each local ecosystem and existing infrastructures, and offer services that do not yet locally exist.

The perimeter of the university’s strategy must tailor its action plan to local needs rather than follow a one-size-fits-all approach. While some ecosystems may focus on services for deep tech startups, others might require technology platforms, or services tailored to small businesses. Universities like Cercy Pontoise are already pioneering such initiatives.

For these strategies to work, universities need to collaborate with local stakeholders – businesses, associations and public authorities.

In Grenoble, for example, while Biopolis is operated by the Université Grenoble Alpes, part of the site’s premises is used as a venue for exchanges and a showroom run by the MedicAlps cluster, which is dedicated to the region’s medical technology sector.

The risk of spreading too thin

France’s universities are not equally equipped. They demonstrate a true dynamism with numerous initiatives supporting entrepreneurship, but they currently face a sort of glass ceiling: at present, less than 10% of students participate in entrepreneurship programs.

Each university has the potential to be a central force in its ecosystem. A successful “third mission” does not require the whole Stanford-Berkeley model to be reproduced everywhere. The French vision still promotes the idea of generalist universities in each region, small or large. Spreading resources too thin and trying to do too much everywhere lead to diluted impact. Instead, universities should focus on areas where they can truly make a difference, scaling up local initiatives and matching the local ecosystem’s specialisation.

To unlock the scale and impact needed for success, French universities need to avoid scattering their resources, to unlock their administrative processes, to broaden up performance criteria evaluated for faculty members, and to concentrate efforts and budgets on specialised research areas.