An effective innovation system requires productive interactions between all its parts. Within Australia there is a view that business-university interactions are suboptimal.
Government has set a target for doubling the interactions between business and publicly funded researchers by 2020; and the Group of Eight has a strategic priority to build closer links between its member universities and business. Business and universities play complementary roles within the innovation system but have many interdependencies. Not least, universities are producing the graduates that business employs, many of whom will become change leaders, supporting business innovation, growth and the creation of new firms.
University research provides a supply of ideas, opportunities and technologies that business can use; and universities store knowledge, competencies and capabilities that business can draw upon. Business has its own, different but complementary capabilities, technologies and information that it can feed into the strategic development of universities and which it can use to support the educational and research activities of universities. There are many different types of business-university linkage and a diversity of mechanisms that the parties can use to initiate and support these linkages.
They may be direct, indirect or system level; strategic and long term or ephemeral. As a minimum they require the flow of information; in many cases they also involve the flow or transfer of money and people. While research linkages tend to receive the most attention, cooperation in other areas of activity can be just as important if not more so; linkages can relate to education, employment, knowledge and technology transfer, the development of strategy and to philanthropy, although there are interconnections between all these areas.