Tapping into academia

A funded student placement scheme bringing academic
expertise into industry is being expanded in June. Alex Blyth looks at the
benefits such a scheme could bring to your company

Once upon a time, not so long ago, British universities produced a stream of
young graduates all bursting with new ideas. And companies took them on,
investing large amounts of capital to allow them to develop those ideas, and
the results generated yet more wealth for society as a whole. But throughout much
of the 20th century, other countries caught up with the UK. First the US, then
the German and Asian Tiger economies overtook us as the world centres of
technical innovation and commercial success.

TCS – or the Teaching Companies Scheme as it was originally
known – was an attempt to re-establish the potent link between academia and
industry to restart the flow of commercially successful innovations. It funds
graduate students to spend two years in a company working on a specific
project, with the expectation this will lead to an exchange of ideas between
universities and companies to the benefit of all. Although the scheme has been
considerably expanded in recent years, it still has a low profile in the
business community in general, and few companies are aware of what it is and
how they could benefit from it.

First established in 1975 as a postgraduate training programme
for engineering graduates, TCS remained marginal until 1985. Since then, the
DTI and other government bodies that pay for TCS have gradually increased their
funding, extended it to other sectors and increasingly focused on small to
medium enterprises (SMEs). In the 12 years since then, the number of TCS
programmes has more than doubled to just under 950, and more than 90 per cent
are now with companies with fewer than 250 staff.

Each scheme involves three agents: companies, universities and
graduates. No sector is excluded from TCS and the process normally begins with
a company seeking help with innovation.

The first step is usually to develop a proposal with one of
more than 100 higher education institutions involved in the TCS programme. If
successful, a graduate is recruited by the company and their two-year project
is supported by a budget of £80,000 – 40 per cent paid for by the company, and
60 per cent by the Government. Projects are diverse, ranging from developing a
quality assurance programme for the herbal tinctures of Neal’s Yard Remedies in
London, to reducing energy consumption at Glenmorangie’s Broxburn whisky
bottling plant.

John Sutton, assistant director in the Small Business Service
with overall responsibility for TCS, describes the benefits to a company of
setting up a scheme.

"The 295 projects completed in 2002 reported an average
one-off increase in pre-tax profit of £47,000 and an average annual increase in
pre-tax profit after programme completion of £156,000. However, the benefits
are not purely financial. For instance, business related training is provided
to the associate – the graduate – and this can often lead to improved training
and development for the company’s full-time staff. TCS can give smaller firms
the opportunity to embark on projects, such as developing a new marketing
strategy or reducing operational costs, that they would otherwise lack the time
and money to do."

Despite the potential benefits, many SME managers remain
understandably cautious about entrusting a young graduate with the running of a
business-critical project. But Sutton says: "The average age of TCS
associates is 27, so they’re not exactly wet behind the ears. However, they
will be able to look at the business from a fresh perspective and apply the
latest techniques to the project."

Other sceptics are all in favour of hiring young graduates, but
believe it would be easier to do it directly.

"It probably will be simpler, but it will also be less
effective," replies Sutton. "A key aspect of every programme is the
input from the academics at the university. The associate is employed by the
university for the duration of the project and has regular interaction with
academics who have to spend at least half a day a week at the company, with the
result that their expertise and ability is applied to the project in a way that
doesn’t happen when you hire a graduate directly."

Bath-based beverage consulting firm Zenith International set up
its first TSC scheme in 1999 in response to demands from clients to see reports
in an electronic format, recalls research and development director, Gary

"We produce a World Drinks Report, and as the internet was
taking off more people wanted to access it there. So we developed our existing
relationship with Bath University to set up a TCS scheme moving it all
online," he says. "It was very successful and we’re currently
embarking on our second scheme. The only problem was the level of bureaucracy,
but we might have expected that when dealing with the Government."

However, Roethenbaugh believes a badly run programme could go
very wrong indeed, and offers some advice to anyone considering setting one up.

"Make sure you research it thoroughly. Above all else find
a university you can work with. This is the most important relationship and if
it goes wrong, the project will fail. And interview the associate in some
depth. Whenever you hire someone new you are taking a risk, but this is
particularly true in a project as important as this, so ensure the person you
choose has sufficient maturity," he says.

"When devising your project, be led by the market rather
than by the technology to ensure the end result is commercially useful.
Finally, be prepared to commit enough time to it. There’s a lot of blood, sweat
and tears involved in a successful project, but when they do work, as we’ve
discovered, they can have a major positive impact on a company."

After 28 years, the Government is giving the scheme a much
needed makeover in June when it relaunches TCS as Knowledge Transfer
Partnerships (KTPs).

Sutton says there will be two key differences. "The new
scheme will be TCS in essence, but will provide more options. At the moment
only higher education institutions are eligible and schemes have to be two
years, or occasionally three. Now, it will be possible to develop KTPs with
further education colleges, and we will consider projects of only one year in

"We hope this will open up the scheme to a large new
audience and ensure it continues to develop flows of innovation between
industry and academia for years to come. I’m certainly looking forward to
seeing the new proposals that will be coming through in the next few

Case study – Motorola

Initially set up in 1996, the
Motorola scheme at Groundwell, Swindon, is now one of the largest in the
country. Manager of applied technology, Tim Charity, describes it.

"Our division makes the networks that connect mobile
phones to each other, and is right at the cutting edge of innovation in mobile
communications.  We have set up a
project called MAST (Mobile Applications of Software Technologies) employing up
to 17 associates over five to six years. As a large company, we only receive 20
per cent of the funding for associates, and so we are placing some of them in
SMEs in our supply chain where they can receive as much as 60 to 70 per cent.

"The beauty of the scheme from our point of view, is that
you have a well-defined project, which is a constant in times of change. The
flip-side is that it could become less relevant over time, but we’ve structured
the projects to include decision-points so we can shift direction as necessary,
providing us with new service and product innovations that we can exploit.  

"I would advise anyone setting up a TCS to ensure they
have a solid contract between themselves and the partner academic institution,
and to gain early agreement on intellectual property ownership. Our legal
department had template agreements designed to make sure we can capture
patentable ideas while giving our partners at the universities of Sussex and
the West of England the right to publish papers. However, I can imagine this
could be a problem for smaller companies."

TCS teaching companies scheme

TCS is a scheme offering government
support to companies that wish to access the research techniques and knowledge
held in the UK’s higher education institutes.

The company, university and graduate agree a project that is
normally two years in duration. A budget of £80,000 covers the two years. In
most cases, the company pays 40 per cent of this.

Acknowledged benefits include improved product design, enhanced
manufacturing processes, reduced costs, new markets, increased sales and rising

Potential problems include: the administrative burden,
selecting an inappropriate graduate or academic partner, and projects that are
driven by technology rather than markets proving commercially unviable.

Knowledge Transfer Partnerships will replace TCS from June
2003. The new scheme is TCS with alterations allowing for partnerships with
further education institutions and greater flexibility over the length of


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