Examination of Witness (Questions 20-29)|
TUESDAY 6 MAY 2003
Lord Howie of Troon
20. MIT is of course very famousrenowned
is probably the word. What do you think is MIT's main contribution
to the US economy? Does it come through the education of your
students, who then go into various bits of industry? Does it come
from new start-ups by your fairly recent graduates? Or, is it
via businesses founded by staff?
A. Good question. It is certainly all of those,
but without question the first. It is the education, it is the
devolvement of the human capital. So many of these companies are
founded by alumni who have simply gone out after they have left
MIT and used their expertise. When we think of entrepreneurship
and we think of it from a management point of view, there is a
full range of new types of individuals who need to be educated
in terms of people who can do strategic marketing as these new
start-ups develop, people who understand both the technology and
management and that is the sort of human capital we are focusing
on. Without question that is the primary benefit we have. Let
me mention one thing also, which is that I do not consider myself
an expert, but to the extent that I am knowledgeable, I think
the UK has an enormous resource in its university system. It is
far superior to the other countries in Europe. You have a real
strategic advantage here which could and should be exploited.
One concern I have is looking at the salaries which are being
paid to faculty members in science and technology. There is a
real danger of losing a lot of the super stars and that would
be a real tragedy.
21. We are kind of used to that. In your paper,
you lay out some of your triumphs in your first page; a large
number of firms and so on which have been established. I am wondering
two things: firstly, over how long a period do your paragraphs
3 and 4 apply. Secondly, how long lasting were these innovative,
A. Almost all of them are post World War II.
This is primarily from a 20-year period from the 1950s and 1970s
and in fact certainly in the United States the whole concept of
the research university was Vannevar Bush writing a very famous
paper after World War II and that was when the government started
to fund not only MIT but other universities. Most of this is all
post World War II phenomena, in fact up until World War II MIT
was primarily a commuter school, just serving students in the
Boston area. It has been transformed since then.
22. Have many of these firms gone bust? Do you
A. No, I do not know. I assume probably a fair
percentage, which is probably good. It means you are taking the
right sort of risks. There are many which have developed into
23. You could not subtract them from some of
the figures you have given us.
A. No, I could not do that.
24. One last question which is rather oblique.
Quite a number of years ago I had an oblique relationship with
the motor industry which you have mentioned once or twice. You
might not be the man to ask this but I was wondering whether you
have any views on an organisation like the General Motors university
in Flint near Detroit which is different from your kind of organisation.
A. Yes and I think that there is an important
role for that sort of an organisation and there is an important
role for regional colleges which do not do fundamental research.
Any nation should have a whole range of different institutions
and one of the things we have often done is partner these other
universities. I mentioned Ford before. We have a programme on
systems design and management and the Head of Product Development
at Ford said that it was a great programme, they send 10 of their
best people every year but he has to re-educate 5,000 engineers.
So we said that MIT could not do the job, but there is a schoolas
a matter of fact it was a Catholic schoolcalled the University
of Detroit. What we have done is taken our curriculum and given
it to the University of Detroit so the University of Detroit is
able to educate hundreds every year. In a sense that is really
the idea behind this national competitiveness network, the same
sorts of things. Ideally, if you are going to do well in entrepreneurship,
it is not just at the CEO level, it is throughout the organisation;
particularly middle management and at the working level one has
to go to universities other than MIT or Cambridge.
25. The General Motors university is different
in the sense that it is extremely specific and aimed at educating
the employees of General Motors. I think it is true to say that
every director of General Motors goes through the school in Flint.
A. There are two aspects to it. In fact the
General Motors university took people in from outside General
Motors it became so successful. A number of companies do in a
sense have these on campus universities. That was one of the primary
things Jack Welsh did in his time at General Electric: he set
up one up. It is not just General Motors, but that is a trend.
26. Philips does it.
A. Yes; many companies.
Baroness Cohen of Pimlico
27. I have the wrap-up question which in a way
asks you to reiterate much of what you have said to us. What do
you think are perhaps the two most important things European policy
makers can learn from MIT, if you are seeking to promote entrepreneurship
both in large and small firms? What first two things would you
do, or three, or whatever?
A. Let me frame it first of all and say that
what I described at MIT is not something which happened spontaneously,
it takes a lot of time to develop the sort of culture one needs.
The first thing I would say is that I cannot think of anything
more fundamental, more important, than the role of the research
university with respect to entrepreneurial excellence. Out of
that falls a lot of other things. It means one has to provide
the right sort of support for the university. Secondly, it is
absolutely critical to be able to foster good university/industry
relations. My sense isand I say this with a certain amount
of regretthat in many cases there is a fair amount of distrust
and lack of understanding on both sides, that industry views university
professors as aloof and never having met a payroll, having no
idea what it is like to run a company. In the university people
feel industry people are very short sighted. All they care about
is profitability in the next quarter. They have no ability to
think deeply. Both of those are totally incorrect and I think
the government, in its role as an enabler, to the extent that
it can make partnership relationships between university and industry,
is going to be enormously beneficial in terms of the results,
not only from an entrepreneurial point of view, but broadly based
from the competitiveness point of view. I think those are the
two broad points I would make.
28. May I ask one or two quick questions for
just a short response? You said that you felt that the UK was
sitting on a competitive advantage in European terms with strong
research universities compared with the rest of Europe, if I understood
29. Could you expand on that a little? Secondly,
do you think we have too many relatively small research universities?
I see that it was reported in today's university that an expert
thought there was a need to consolidate some of our universities
and have a smaller number of research excellent universities.
A. First of all I should like to add a third
point, which is that human capital and education are without question
the most fundamental, important role that the universities are
playing. Let me answer your question by example. I will not mention
the countries, but several countries have approached MIT basically
saying "Please help; our universities are broke and they
just do not work. We cannot turn out PhDs". They have lost
their ability to serve industry from the point of view of educating
the right sorts of individuals to do the cutting edge research.
Unfortunately a number of universities are very politicised and
a lot of them operate with part-time faculties and lack a degree
of uniform excellence, which one finds across the UK. To answer
your second question, I think there is a danger of trying to upgrade
too many universities, the result of which is the lowest common
denominator. I should also mention that there are unfortunately
a lot of failed government programmes. Communities, states, look
at what has happened in Silicon Valley and Route 128 and say they
will do the same thing at East Oshkosh University and a lot of
money gets put in and nothing happens because the research base
is not there. There is no knowledge to build upon. One has to
be very careful to pick and choose and to go with excellence.
As I said before, if you go with excellence, it can be bringing
in a lot of these other institutions who have a terribly important
role to play as well. I think you need both.
Chairman: Professor Roos, thank you for your
wise counsel, your good advice. We have listened with great care
and we could go on for a long time. I certainly have a number
of questions I should like to have asked and I shall take advantage
of you and write to you. If you can spare a moment to respond
before you return to the States we should be very grateful. Thank
you again; we are most grateful to you for your time.