When universities get into bed with industry, can academic independence be guaranteed, asks Michael North

Reports last week that failing further education colleges could be taken over by private companies will heighten fears about the extent to which business is getting into bed with education.

The reports come hot on the heels of the announcement by Ruth Kelly, Education Secretary, of a ?6.5 billion carrot for institutions that run more courses for the benefit of employers in addition to widening participation. The moves are a response to concerns that education is not linked tightly enough to industry and to economic needs. Industrial research spending in universities fell from ?236 million to ?2 million between 2002 and 2004, according to The Research Yearbook .

Moreover, compared with the US, where industry gave about $4 billion (?2.3 billion) for universities' research and development in 2003 and 2004 combined, the UK is yet again a minor player.

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Robert Jackson, former Tory Higher Education Minister and now a Labour MP, argues in this month's Prospect magazine that the Government must take a back seat in a mixed-economy partnership between higher education, the Government and industry. But others are concerned that increasing amounts of money from industry could compromise universities' independence.

Glenn Rikowski, senior lecturer in education studies at Northampton University, says, for example, that the further education White Paper could lead to "struggles over the heart and soul of the FE sector". "Only a simpleton would expect this White Paper, or the schools White Paper of October 2005 or indeed any White Paper, to blurt out that 'companies will take over failing colleges' or schools," he says, "but the White Paper does seem to offer such openings for the private sector." Rikowski suggests that the White Paper makes it possible for failing colleges - thought to represent about 2 per cent of the sector - and a potentially larger number of "coasting colleges" to be taken over by private companies if their provision does not improve within a year. He adds that if views such as Jackson's prevail in Government, private companies could be invited to bid for contracts to run higher education departments, faculties or whole institutions.

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So far, though, the talk about involving business in education has been limited mainly to funding of research or the provision of foundation degrees. One of the industries with much to gain from this overlap is information technology, and leading companies are vying with one another to invest in the sector. At the end of last year, computer giant IBM signed "a memorandum of understanding" with Manchester University. Manchester will receive advice and consultancy from the firm and will allow IBM to tap into its research capacity and graduate pool. The level of IBM's investment is not obvious - "it's not about money, it's about interactions between people", says John Perkins, dean of the faculty of engineering and physical sciences - although the firm has made its first ?14,000 Faculty Award to fund a project in the School of Informatics.

Microsoft has a team of six working with the Government and universities on the design and delivery of information and computer technology foundation degrees. Microsoft Research in Cambridge, which employs 75 researchers, recently announced that it would provide e2.5 million (?1.7 million) for new research proposals, as well as e1.8 million to fund 22 student scholarships through its European PhD programme.

Robert Mighall, a former Oxford University academic who now works as a brand consultant with London firm Lloyd Northover, says involvement in higher education allows the two companies to "get back to their roots" at the heart of creating ideas and intellectual property.

Mighall, who worked on Manchester's rebranding, considers the IBM link a "perfect overlap", with Manchester getting people "fit for the market" and IBM benefiting from the university's prestige and integrity. He says IBM's "celebrity endorsement" will attract a new breed of brand-conscious students and parents who are focused on graduate careers.

In the case of Microsoft, Mighall says the company may be trying to restore some of its credibility - the multinational was criticised by Naomi Klein in No Logo , the bestselling attack on globalisation and corporatism.

"Microsoft is not stupid. It's good for it to be central to the world of ideas and it's important that it is in at the early stages and pro-active in making it happen," Mighall says.

Stephen Uden, UK education relations manager for Microsoft, stresses that the firm's involvement in foundation degrees is not about "trying to look good" or dominating the market. He says that by raising awareness of vocational qualifications, the technology sector can address a skills gap.

"It is something that is useful for both parties. It's not philanthropy.

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UKplc needs to have skills to succeed in the knowledge economy. Ultimately, we are creating people who will use technology and we hope these people use our technology downstream."

Fabien Petitcolas, head of intellectual capital development at Microsoft Research, says the company's aim in sponsoring European researchers is to stimulate innovation, not to impose research projects. "In most cases, academics approach us with ideas. They have the freedom to carry out their own research agenda. We don't go to universities and say, 'that's what we are interested in, we are going to give you money to solve the problem'."

Microsoft retains a licence to use the intellectual property created by the researchers it sponsors, as well as the option to acquire the intellectual property rights. "We are not a charity," Petitcolas concedes. "We do expect something in return."

Len Shackleton, dean of Westminster University's Business School, sees industry links as "a good thing". "Anything that gives us clearer links with business can only help us to improve the exposure of our staff and students to the wider world where our graduates will be employed."

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But Shackleton warns that cultivating business links "may sometimes distract from our core business of teaching students who come to us for their own careers. Successful business partnerships take a long time to identify and nurture, and the success rate in bringing in genuinely new external funding is quite low."

Nick Barr, professor of public economics at the London School of Economics, also urges caution. He advises universities to build partnerships slowly.

"I worry that people regard business as a goose that lays golden eggs.

Universities are ill-advised to go into this for short-term motives. One night stands end in tears. They should build up partnerships depending on what they can offer industry and what industry can bring to them in terms of research funding. It seems the right principle is that the conclusions of research should be that which the university supports, not what the sponsor wants."

But long-term collaborations also have their risks, according to Anthony Crabbe, research coordinator for theoretical studies at Nottingham Trent University. Crabbe has conducted research in collaboration with large and small businesses for the past ten years. "When the companies involved happen to be IBM or Microsoft, it is not simply the danger of academic independence, but also material dependence if those companies offer to throw in equipment and support. Universities are heavy users of such equipment and the companies have a natural interest in being their suppliers as well as their collaborators. In such circumstances, one could envisage scenarios where the collaborating department decides not to play ball and then other departments in the university find themselves under threat of losing subsidised material support."

The only way to guarantee independence from business is through "blind trust" research funding, according to Frank Furedi, professor of sociology at Kent University. Furedi encountered such a model at the Massachusetts Institute of Technology, in the US - scientists there are funded by an industry trust to research whatever they choose. "If there was a general interest in research and innovation (in the UK), then we would have a hands-off approach. That's the way scientists innovate in the best way."

But there are few universities in the UK - or the US for that matter - that can hope for the freedom that MITenjoys. In most business links, says Crabbe, the ideal of knowledge-transfer collaboration - where the academic researcher has the independence to identify the subject and methodology of research and the freedom to discuss and disseminate results - is hard to achieve.

"My experience of working with giants in the medical field, such as Ciba-Geigy, Bausch and Lomb and Nestle, has heightened my awareness of how such corporations can compromise the integrity of the academic team by directing their funding to limit the scope of inquiry and using their marketing to disseminate results in a way the academics might not choose."

Crabbe projects a bleak future if such collaborations become widespread in the UK, with companies controlling the use of research and luring academics onto their staff with higher salaries. "This raises the larger issue of what we think universities are for," Crabbe says.

But the scenario that Crabbe predicts seems a long way off for UK universities, which are keen to build alternative funding streams in the absence of major increases in government cash.

However, the Government's Higher Education Act could bring big changes.

Uden says: "Over the past two years, the door has swung open and trust is building (between universities and industry). The culture has changed and this is a lot to do with higher education legislation and the competitive pressures it creates. It is getting much easier to have a dialogue with universities."

Uden says Microsoft is mainly working with new universities because they understand the importance of working with industry to improve students'

employability, which will be increasingly important when top-up fees are introduced. He thinks that new universities might become more innovative and better able to pull in industry funding than traditional ones. "There is a change in the landscape and this gives smart new universities the opportunity to leapfrog other universities in a way that might otherwise take them decades."

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Next week: satire and the corporate university.