Fostering university-led, locally responsive entrepreneurial ecosystems

From ivory towers to place-responsive innovation hubs

Imagine a world where universities not only educate students and conduct groundbreaking research, but also facilitate innovation that directly addresses challenges in their localities: catalysing innovative ideas, fostering entrepreneurship and driving inclusive economic growth in their communities. This vision is rapidly becoming a reality around the world as a global paradigm shift unfolds, with policymakers and universities increasingly rethinking the civic-university agenda for the 21st century.

Universities have too often been seen as ivory towers, detached from the real-world challenges facing the places they call home. Their impact is primarily measured through lenses of research excellence, global rankings and national economic contribution.

There is a pervasive myth that these expectations, incentives and measurements are incompatible with a university’s civic mission – that being a civic university is just the latest nice-to-have initiative that diverts resources from their core functions, prime for the chop once finances get tight.

But a new breed of civic-minded institutions is emerging. These universities are deeply engaged with their local community and driven by a profound sense of accountability to their place, redefining what it means to be an anchor institution. They are working with local governments, businesses and people to develop collaboratively designed solutions to the most pressing issues facing their places. From tackling local skills gaps and enriching the cultural fabric of places to driving sustainability and supporting underrepresented populations, civic universities are at the forefront of local transformation.

Developing place-responsiveness allows universities to connect their research, innovation and economic growth to local people, community priorities and skills needs. Making these connections by nurturing place-responsive entrepreneurial ecosystems is rapidly emerging as one of the most powerful tools in the civic-university toolbox.

Universities can catalyse vibrant clusters of innovation and enterprise that are deeply attuned to local contexts. These entrepreneurial ecosystems not only drive economic dynamism, but also generate solutions to societal challenges in their own communities. They represent a virtuous circle of knowledge exchange and value creation, which benefits the university and its place.

However, building place-responsive innovation ecosystems is no easy feat. To do this well, universities must choose to benefit their place, develop an entrepreneurial mindset and receive government support.

First, universities need to think a little differently. To create civic impact, universities must start by developing an institutional culture of local engagement and a genuine commitment to collaboration. They then need to make a choice to recognise the value and potential of these collaborative efforts, and invest in them to agreed outcomes, coproduced with local institutions, leaders and populations.

Second, universities must cultivate an entrepreneurial mindset internally, rather than just relying on private-sector partners. This mindset, characterised by meeting real needs, taking risks, innovating and taking initiative, is critical for building thriving university-driven ecosystems that benefit local communities. Universities that have chosen to collaborate with local institutions, business, leaders and populations are uniquely positioned to connect innovation with the needs of their place, and to bring benefits to their communities.

Third, universities need support to succeed. Doing this well requires a supportive policy environment and the right incentives to drive a culture of engagement and collaboration. By designing smart policies, developing longer-term funding models and investing in what the evidence shows us works, policymakers could power universities to deepen their local civic impact, unleash their entrepreneurial potential and help solve national priorities. 

As the UK grapples with a cost-of-living crisis, regional inequalities and the long-term impacts of Covid, universities have a precious opportunity to step up as place-makers and change-makers. By working in partnership to stimulate innovation, enterprise and inclusive growth, they can help build a fairer, more resilient and more sustainable future for all.

This essay will explore how we can enable this civic transformation by examining global best practices in fostering university-led, locally grounded entrepreneurial ecosystems. It will propose a series of actionable recommendations for creating the conditions in which universities can fulfil their potential as anchors of place-responsive innovation. And it will make the case for a new agenda that empowers universities to work collaboratively to develop a brighter future for the communities they serve, through the power of place-responsive entrepreneurialism.

When local meets global

To understand how policy can catalyse university-driven entrepreneurial ecosystems, it is instructive to examine some successful international examples where governments have effectively supported universities in developing innovation hubs that address local needs.

Toronto’s MaRS Discovery District enables entrepreneurs, researchers and companies to collaboratively solve local and global issues, from healthcare to climate change, disease cures, future jobs and urban mobility.

The University of Toronto was a founding partner of MaRS, along with the Canadian Federal, Ontario Provincial and Toronto City Governments. This collaboration between higher education and government was pivotal to MaRS’ establishment and success, with each partner contributing unique assets. The University of Toronto contributes research expertise and entrepreneurial skills, ideas and technologies from faculty and students. The Federal and Provincial Governments have provided investment and a supportive policy environment that encourages innovation and commercialisation, such as the development of Regional Innovation Networks, non-profit networks driven by the private sector and aimed at accelerating local technology startups.

Actor networks with shared goals and place-based accountability can drive regional economic growth and local societal impact. As one analysis put it: ‘A “strong” state and a highly mobilized set of organized interests can effectively work together to produce regional economic policy for the common good.’

Compared with Canada’s coordinated government-academia-industry approach, exemplified by MaRS, the UK has had a more fragmented university-entrepreneurship policy landscape. UK research and innovation policy prioritises global competitiveness and research excellence, while Ontario aligns innovation with local economic priorities, and strengthens relationships between universities, intermediaries and regional policymakers.

The Dutch government’s Valorisation programme, akin to the UK’s Knowledge Exchange, incentivises translating academic research into societal and economic value. The Dutch programme included the opportunity to experiment with innovation linked to specific regional opportunities, fostering a connection to the local that helps researchers and innovators to address real and pressing community needs.

Dutch policy makers have learned that it is important to stimulate knowledge transfer at regional level, since regional knowledge hubs are often keen to organise such efforts…and most of the benefits are reaped at this level.

Valorisation also supported the introduction of new staff professions and initiatives to broaden career paths within universities (such as policy advisers), and supported an increase in collaboration between higher-education institutions and city and regional governments.

Place-responsive entrepreneurial concepts are evident in various ecosystems across the world. In some African contexts, entrepreneurial higher-education institutions adapt to local conditions, engaging in frugal innovation aligned with community assets and specialisation potentials. For example, at the University of Cape Town, the School of Business offers a bootcamp programme focused on frugal innovation and social entrepreneurship in local informal settlements. Through a challenge-driven pedagogy, students learn how to approach open-ended societal challenges in a resource-constrained environment. They engage with local stakeholders to define challenges and develop solutions, then work with a local startup accelerator to scale up their innovations.

These local approaches to innovation aim to develop solutions with substantial cost reductions, concentration on core functionalities and optimised performance grounded in the needs and challenges faced by local communities and stakeholders.

The diversity of stakeholders involved in entrepreneurial ecosystems is also crucial. For instance, approaches at Addis Ababa University in Ethiopia have included collecting and studying indigenous knowledge within innovation systems, to better understand the needs of a place and the resilience of local cultures, ensuring that innovations are not only effective but also culturally sensitive and locally relevant.

Changing mindsets and policy environments

Developing entrepreneurial capabilities and mindsets across university campuses enables universities to make more impactful contributions to their local innovation ecosystems. But they can only be successful and impactful in environments that support and encourage innovation.

An entrepreneurial mindset encompasses behaviours such as meeting real needs, innovating, taking risks, selling ideas and taking initiative. These are behaviours that – when the policy and cultural conditions are supportive – can help drive deeper community engagement and institutional change within civic universities, in support of developing local impact.

Entrepreneurship education provides valuable skills for any career: problem-solving, creativity, resilience, adaptability. Engaging students with the community to identify issues and solutions cultivates a proactive, empathetic entrepreneurial perspective.

Olin Business School in the US state of Missouri exemplifies this approach by creating opportunities for students to engage locally through ‘seeing, touching, feeling, and working within companies all over town’. By tailoring its initiatives and curriculum to meet the needs of the local ecosystem, and measuring how many students take up key roles in the local economy, the university grows a regional talent pool that stimulates economic growth and meets local needs.

Entrepreneurial university staff also play a crucial role by actively commercialising research, leading to more university spinoffs, and technology transfer to local industries. This culture of entrepreneurship makes the university itself more adaptive and responsive to local economic and social needs.

In the Netherlands, many universities consider developing entrepreneurial mindsets and behaviours as central to their mission across the different constituencies of the institution. They provide learning environments that support the development of entrepreneurial mindsets and competencies in students and staff, through real-world experiences such as problem-based learning, internships, company visits and tutoring.

However, university cultures, behaviours and incentives often conflict with entrepreneurial principles, pulling individuals in different directions – for example: minimising institutional risk versus calculated risk taking; stability of student experience versus experimentation or change; academic specialisation versus multidisciplinary working. Experiential learning opportunities, such as the I-Corps programme in the United States, provide academics with hands-on training, mentorship and resources to develop entrepreneurial skills and translate their research into tangible solutions. Coupling these initiatives with incentive structures that recognise and reward entrepreneurial activities as part of career progression can further encourage academics to embrace this mindset shift.

While an entrepreneurial mindset is crucial for impactful innovation ecosystems, other factors are also critical. A recent study of university graduates in China found that those with higher entrepreneurial intention (a psychological state akin to the ‘mindset’) are more likely to carry out entrepreneurial behaviour. In Pakistan and Malaysia, studies have found that participation in entrepreneurial education significantly raised entrepreneurial intentions and venture-creation rates, but that the cultural, policy and financial environments in which these budding entrepreneurs operate heavily influences whether their mindset and intention produce action and results in impact. This relationship between mindset and impact appears to be mutually reinforcing rather than unidirectional, requiring both universities and government to play a role.

A robust ecosystem enables those with an entrepreneurial mindset to take concrete actions. Public policy plays an instrumental role in creating the enabling conditions – supportive ecosystems, aligned incentives, reduced barriers, experiential learning opportunities, conducive cultures and targeted funding – that empower individuals to translate their entrepreneurial intentions into impactful actions.

Effective public policies are needed to help create a nurturing environment for entrepreneurship, by providing access to resources, networks, mentorship and infrastructure. Furthermore, streamlined policies that simplify the complexities of commercialisation, intellectual-property protection and regulations can mitigate obstacles and facilitate the translation of mindset into action and impact.

Money makes the world go around, but so do partnerships

Vibrant entrepreneurial ecosystems need the right mindsets, supportive policies and access to capital to translate ideas into impact and overcome financial barriers. However, funding should be tied to long-term equitable local partnerships to ensure that impacts meet real needs.

Short-term funding, while helpful for immediate needs, often lacks the stability for sustainable innovation and growth, leading to short-term thinking and transient partnerships. By contrast, long-term investment enables deep relationships between universities, government and industry, fostering integrated, collaborative innovation.

Successful innovation ecosystems such as MaRS showcase the power of ambitious co-investment by governments, universities and industry. Such partnerships provide financial resources and create a shared vision for addressing local challenges through innovation.

The UK’s Civic University Network, a legacy of the Civic University Commission, helps universities to build equitable local partnerships, a crucial aspect of fostering place-responsive entrepreneurial ecosystems. By developing resources and tools that help universities and their communities to forge partnerships based on shared goals and mutual benefits, the Network is laying the groundwork for civic partnerships deeply rooted in local contexts, and could provide a platform for ambitious government investment in developing place-responsive, university-led entrepreneurial ecosystems. 

The Network assists universities in creating Civic University Agreements – strategies based on a shared analysis of local needs and opportunities, developed in partnership with local stakeholders. These agreements present real opportunities for universities to take the lead in developing locally responsive entrepreneurial ecosystems.

In 2023, the Network launched the three-year National Civic Impact Accelerator (NCIA) programme, with funding from Research England. The NCIA is gathering evidence and intelligence on what works in civic engagement, to provide universities with frameworks and tools to deliver meaningful, measurable civic strategies and activities. This emerging intelligence could help inform smarter targeting of funding and policy initiatives to support effective university-led civic engagement, delivering real impact for local places.

How can we build a better system?

Universities collaborating with partners to identify local challenges, pool resources and jointly design solutions can catalyse place-responsive innovation and economic development, given the right policies, support and investment.

The following suggestions, drawn from global exemplars, could unlock UK universities’ entrepreneurial potential and foster place-responsive innovation ecosystems.

The UK Government should:

Create a Civic University Entrepreneurship Fund to seed university-led, place-responsive, entrepreneurship ecosystems. The fund would provide multi-year support to local university, business, government and community partnerships to jointly design and implement place-based entrepreneurial ecosystem strategies, building on Civic University Agreements or similar strategies.

Shift from short-term civic project funding to sustained, flexible investment in long-term university-place partnerships and local stakeholder relationships. The emerging evidence base of the NCIA could enable policymakers and funders to take an intelligence-led approach that helps maximise the societal return on investment in university civic-engagement initiatives.

Commission the Civic University Network to develop a Place-Responsive Entrepreneurial Academics Scheme, providing training, incentives and career development for academics in local entrepreneurship. The scheme could be modelled on successful initiatives, such as the I-Corps programme in the United States, providing an immersive, experiential training programme that prepares academics and university professionals to extend their focus beyond the institution, accelerating the local economic and societal benefits of their work.

UK universities should:

Undertake cultural change to emphasise the value of entrepreneurial thinking and its compatibility with academic values, highlighting how entrepreneurial mindsets enable academics and staff to amplify the real-world impact of their work. This could include developing or adapting existing professional-development options on the core elements of entrepreneurial mindset, and helping institutional communities of practice to share practices and generate ideas on embedding the mindset in staff roles, for the benefit of their place.

Work more deeply with local stakeholders to facilitate the environments that support place-responsive entrepreneurial ecosystems. Through the development of Civic University Agreements and similar strategies, universities should seize the opportunity to collaborate with local authorities, mayoral combined authorities and local anchor institutions, to encourage a supportive policy environment that reduces barriers to place-responsive venture creation. 

Co-create Civic University Agreements with local anchor institutions and communities to foster place-responsive entrepreneurial ecosystems, engaging deeply with community groups and residents to identify local priorities and needs, and to form equitable partnerships to drive local societal impact.

By implementing these recommendations, we could help universities to become true anchors of place-responsive innovation, driving inclusive economic growth and societal impact in their local communities. 

As the UK navigates a complex economic landscape and grapples with regional disparities, universities have a pivotal role to play in catalysing place-responsive innovation and entrepreneurship. By fostering vibrant entrepreneurial ecosystems deeply rooted in local contexts, these institutions can develop collaboratively designed solutions to societal challenges, while also driving inclusive growth and prosperity at a national level.

The ideas outlined in this essay provide a roadmap for how we could collectively unlock the entrepreneurial potential of UK universities and harness their power as engines of place-responsive innovation. The UK could position itself as a global leader in leveraging the transformative power of civic universities to build a more resilient, sustainable and equitable future for all its places and people.

By embracing an entrepreneurial mindset and collaborating with local partners to drive place-responsive innovation, universities have the power not only to transform lives and communities, but to shape a brighter, more equitable future for generations to come.