copy the linklink copied!Chapter 6. Organisational capacity: Funding, people and incentives

National reform processes as the basis for organisation capacity development: The 2010 reform

The 2010 “Autonomy Reform” represented an important milestone to increase universities’ degrees of freedom for structural and innovative processes, and entrepreneurial and innovation activities. The reform increased interdisciplinary and inner-institutional co-operation in research and teaching. Following the reform, departments became the main substructure in which university is organised. Departments ought to be composed by at least 40 professors and researchers, responsible for teaching and research and all the activities involving external stakeholders. Before this reform, the responsibilities for research and teaching duties were split between departments and faculties (facoltà), causing inefficiencies to both strands of duties. Faculties or schools have become transversal structures co-ordinating teaching activities, offered under the responsibility of the department.

The quality of study programmes offered in departments or in their co-ordinating structures is assessed by a committee equally composed of teachers and students. The Ministry of Education, Universities and Research (MIUR) has to approve the new governance and related regulation. However, the Italian government did not allocate additional funding to universities to support the transition of the governance system.

Based on the reform, universities have adopted organisation systems based on their different needs and features. As mentioned before, large universities can use faculties or schools to co-ordinate departments in offering study programmes and promote interdisciplinarity. It is the case of the matrix structure, applied by the University Federico II in Naples, the second-largest university in the country. The Federico II is now organised in 26 departments, divided into 13 disciplinary areas that together provide interdisciplinary education programmes in 4 schools: the School of Agriculture and Veterinary Medicine, the School for Human and Social Science, the Polytechnic School of Basic Sciences, and the School of Medicine. This organisation offers students transversal knowledge and promotes the efficient use of the university’s competencies.

In addition, the 2010 reform has allocated to departments the responsibilities for recruitment, technology transfer and third mission. Some universities have created new administrative positions within departments to ensure that the overarching institutional goals are conveyed throughout the organisation and affect individual activities. The organisational structure of the University of Bari provides a good example of this governance arrangement, which could be described as multidivisional-form (M-form).2 The university has 7 central divisions – institutional affairs; procurement, construction and heritage; education and student services; co-ordination of departments; research, third mission and internationalisation; financial resources; human resources – and 23 research and teaching departments. All the departments have seven operational units mirroring the seven central divisions, allowing a continuous “core-periphery” communication in each process. A similar approach has been adopted at the University of Bologna. Each research department hosts a delegate (chosen among faculty staff) that has the responsibility to align activities in the areas of international relations, research and third mission activities to the university strategy. Delegates operate in co-ordination with vice-rectors heading thematic areas, and with relevant administrative divisions. A similar governance arrangement features the University of Rome “Tor Vergata”: all departments host a general manager for third mission.

University autonomy enables HEIs to define their strategic goals, including vis-à-vis entrepreneurship and innovation

University autonomy has provided HEIs with the possibility to develop their own tools to ensure that the academic community moves towards the strategic goals identified by the institution. As discussed in Chapter 1, every three years MIUR sets the priorities for the strategic planning of the university system, after consultation with the main academic stakeholders. HEIs develop their institutional strategies within the framework of the national strategy and discuss with the ministry a co-funding application for implementation.

For the period 2016-18, the resources allocated by MIUR to support institutional strategic planning amounted to EUR 150 million for public universities and EUR 400 000 for private, state-recognised universities. Universities matched these resources with their own funding. In particular, national strategic priorities encompasses three areas:

• access and completion in universities, student employability and internationalisation

• modernisation of infrastructures, the innovation of teaching methodologies

• young researchers and incentives for university teachers (state universities only).

Universities have adopted these priorities areas in their strategic documents and shared the national goals. For example, contributing to regional development through the provision of relevant skills tops the agenda of many of the case-study universities.

Based on the experience of the previous period, the resources allocated by MIUR to support institutional strategic planning in public universities have increased and total EUR 165 million in 2019-20. National strategic priorities include the following areas:

• teaching and learning

• research and technology transfer

• students’ services

• internationalisation

• recruitment.

The relative scarcity of highly educated individuals in the workforce and the low level of literacy and numeracy skills, including among individuals holding a university degree, compared to other countries are amongst the main challenges of the Italian economy (OECD, 2017a). To respond to these challenges, Italy has introduced important innovation in the tertiary education system: the Lauree professionalizzanti or professional bachelor’s programmes; the Instituti Technici Superiori (ITS), short-cycle professional/vocational tertiary education institutions;3 competence centres, an important innovation in the national innovation system, especially regarding the capacity of HEIs to engage with the private sector.

Competence centres are embedded in the Industria 4.0 (I4.0) initiative, developed under the aegis of the Italian Ministry of Economic Development (MISE). I4.0 represents another important policy aiming to improve national skills and encourage and facilitate the transition to digital technologies of Italian firms, including small- and medium-sized enterprises (SMEs). Competence centres are private-public partnerships that provide firms with technology transfer services, guidance and training on technologies enabling the I4.0 paradigm. Since 2015, MISE has invested approximately EUR 73 million to promote 8 national competence centres. In 2019, these centres are in the process of being established and involve a network of more than 70 Italian universities and research centres, and about 500 companies. Italian competence centres take on the form of education labs promoting collaborative training. This is different to international experiences, such as competency centres in Sweden or Austria, which put emphasis on research (Box 6.1). All competency centres are physically hosted by universities in the centre/north of Italy, with the exception of the University of Napoli Federico II.

Within the framework of the 2010 reform, those universities that have identified entrepreneurship and innovation as goals of their institutional development strategy have to generate an entrepreneurial vision for the future of the institution. The institutional strategic plan connects with the performance plan of the organisation. The two plans are monitored on a yearly basis. The Polytechnic of Turin provides an example of an HEI that has defined knowledge exchange and technology transfer as a goal in its strategic plan (Box 6.2).

The reform of HEI autonomy has paralleled the introduction of scientific and pedagogic innovations in many universities, as well as the increasing demand for collaboration from the society and the economy. These forces have generated the need for more co-ordination among teaching activities, research, entrepreneurship, internationalisation and digitalisation actions and respective institutional bodies. Accordingly, the commitment of the rectorate is a necessary condition for efficient organisation arrangements. The results of these co-ordination efforts emerge in the Evaluation of Research Quality (VQR) 2011-14. According to this report, Italian universities have paid close attention to their governance arrangements. In particular, most universities have started monitoring their own activities. Half of the universities have put in place specific efforts to harmonise and integrate under a common strategic vision different functions that had been created independently, including patent offices, career services, industrial liaison offices, technology transfer offices and fundraising structures. Three universities out of four have established a top third mission figure, almost always a vice-rector or a delegate (ANVUR, 2018a).

University strategies and entrepreneurial activities reflect a broad understanding of innovation practices going beyond technology transfer only

The organisational autonomy granted to Italian universities has generated many different governance arrangements supporting efforts to promote innovation and engagement with external actors. Governance diversity also reflects the heterogeneity of HEIs’ approaches to entrepreneurial and innovation activities. In particular, university approaches differ and take into account factors such as geographic location, endowment with resources or age of the institution. Bronstein and Reihlen (2014) developed an intuitive typology to account for different aspects of entrepreneurial universities according to various institutional and ecosystem characteristics. This typology could be used to classify all case-study HEIs discussed in this report (Box 6.3).

In reality, it is quite difficult to find HEIs that are a perfect fit for one of the categories of Bronstein’s and Reihlen’s typology. In most cases, HEIs actually fall into more than one category, due to their multifunctional roles, stemming from path dependencies in their development, governance structures, environment and culture (Unger and Polt, 2016). Yet, Bronstein’s and Reihlen’s typology is useful to classify Italian institutions, such as Rome Tor Vergata, which fulfils many characteristics of the research-preneurial model (acquisition of European Research Council [ERC] grants and Departments of Excellence) or the University of Bologna, which combines techni- and commerce-preneurial attributes (Box 6.4).

Many Italian universities, however, have enlarged the scope of their engagement and go beyond the commercial activities that the Bronstein’s and Reihlen’s taxonomy takes into account. This is in line with the model that Goddard (2009) and Henke et al. (2015) have developed to discuss the “civic” (or engaged) university. This approach considering HEIs as public good providers has also been adopted in the Italian evaluation model of third mission where not only technology transfer activities – for which universities have a long tradition – are assessed, but also new forms of knowledge valorisation in the fields of health research, cultural activities and heritage and lifelong learning (see section “Evaluating the third mission”). Such a broad definition of third mission evaluation is deeply influencing universities’ culture on engagement and societal impact, enhancing a better awareness of their cultural role and social mission. Besides being evaluated in terms of quantities and excellence, research and education outcomes also need to be assessed in terms of their relevance for society. This includes the ability to help solve societal challenges such as ageing, sustainable energy production, smart mobility solutions, etc. Many HEIs in Italy are developing activities to contribute to these missions. For example, several case-study universities have been organising their engagement/third mission activities on the basis of the 17 Sustainable Development Goals (SDG), as defined by the United Nations. SDGs provide universities with a co-ordination platform and facilitate interaction with external stakeholders that are also using sustainable development goals to inform their strategies. Social inclusion represents a core function of civic-oriented HEIs. Universities can promote social inclusion by providing access to higher education to all social groups. Universities can also promote greater employability of graduates by generating skills profiles that match the needs of (local) labour markets. Increasing student employability, for instance, is a core target of Italian education policies. Other measures to promote social inclusion target the ecosystems; HEIs can engage with social or cultural activities and open their campuses and facilities to their communities.

The civic engagement of universities has typically a strong place-based dimension. HEIs focus on their direct impacts with their regional ecosystems. This place-based approach to engagement characterises most case-study universities in Italy. The aim to contribute to the skills and the cultural development of local communities tops their engagement agenda and makes universities important actors (or even drivers) in local development dynamics.

The new campus of the University of Naples, in San Giovanni a Teduccio, represents a good example of this link between the university and its community. The campus is located in an impoverished neighbourhood of Naples and was built on the brownfield of an abandoned industrial site. This was a strategic choice aiming to support the development of the local environment of the campus by attracting companies and other actors to this location. The presence of the university has generated positive spillovers, i.e. university employees, students and national and international visitors have generated a new demand for goods and services. For instance, to favour the positive spillovers for the local community, there are no restaurants or cafes on campus.

The social responsibility programme “Polisocial” of the Polytechnic of Milan represents another example of civic engagement. Polisocial connects ethical and social challenges to research and teaching activities in the university. The aim is to create a linkage between the activities undertaken within the university, and social issues and needs arising in the ecosystem (the surrounding community) and at the global level. Polisocial promotes multidisciplinary approaches and projects for human and social development. It represents an umbrella for a variety of initiatives carried out under the aegis of Polytechnic of Milan, in collaboration with public and private foundations, non-governmental organisations (NGOs), companies and public authorities. These activities should contribute to the development of capabilities and values for future generations to cope with societal and ecological challenges.

The University of Cagliari is another case in which the civic engagement tops the strategy of the institution. The university’s core mission is to contribute to the social and economic development of Sardinia. The university has established close collaborations with the regional government and local private investors. The overarching goal inspires various activities, including: i) co-operating with local business – especially SMEs –; ii) tailoring teaching activities to local needs (for example, in the field of information and communication technology [ICT], which represents a key industry in the local ecosystem); iii) supporting spin-offs and start-ups in the CLab contamination lab; and, finally, iv) helping unemployed individuals get back on the labour market by developing their own entrepreneurial activity. In addition, the University of Cagliari has also organised information campaigns to raise awareness about violence against women.

The University of Bari, among others, has put in place a service to facilitate the integration of immigrants and refugees in the labour market. The university delivers this service through its Centre for Lifelong Learning (Centro per l’Apprendimento Permanente, CAP), which was created to promote lifelong learning and certify formal and informal skills of individuals. In its activity to support refugees, CAP helps with the accreditation process of foreign education certificates and supports inclusion into the respective study programmes at the University of Bari.

Italian universities are also important cultural actors, conducting research activities and protecting and promoting regional cultural and historical assets. There are several examples of such efforts (see Chapter 2), which are often supported by regional authorities (regional governments) that allocate financial resources to local universities to strengthen their capacity to promote cultural activities. This is the case of the University of Siena, particularly embedded in its local ecosystem, which acts as a provider of cultural and archaeological services for both the Tuscany Region and the municipality.

In general, entrepreneurial and civic HEIs contribute with all their missions – teaching, research and engagement – and innovation capabilities to the economic and societal development of their local, regional and national communities (Meissner, Polt and Vonortas, 2017). To function holistically and generate impact, however, HEIs requires new institutions and organisational changes. HEIs have to adopt innovative management models that allocate resources based on the performance of commercial, research and teaching activities. This also requires innovative and flexible structures, and entrepreneurial skills and mindsets in the administration and strategic choice of actions. At the same time, it is important to allow for new and innovative management solutions in public interest institutions (Klofsten, 2018) to promote innovation. In that respect, the way universities such as Bari, Cagliari and Federico II Napoli are challenging their structures and processes – as described above – could be assessed to fit attributes of the “inno-“ or “commerce-preneurial”, though not solely emphasising commercial activities.

Mainstreaming gender diversity as facilitating factors for innovation

Gender diversity, i.e. the participation of women in institutional leadership and research groups, has become a prominent factor in the assessment of higher education institutions. Evidence from the business sector points to a correlation between diverse leadership and better economic performance (see Hunt, Layout and Prince, 2015).

From a research and innovation perspective, mixed teams are keener to innovate, more creative in problem-solving activities and more competitive with regard to publication performance, acquisition of competitive grants, etc. (see Powell, 2018; Campbell et al., 2013; Pollitzer and Schraudner, 2015). Gender equality and gender mainstreaming have become core dimensions in the European Research Area (ERA). The aim is to translate national gender legislation into effective actions to address gender imbalances in research institutions and decision-making bodies, and integrating the gender dimension better into research and development (R&D) policies, programmes and projects (ERAC, 2015). In a dedicated meeting held on 1 December 2015, the Council of the European Union recommended member states strengthen measures to strive for gender equality in this field, especially in leadership and decision-making positions, through the identification of specific targets and quantitative objectives for better gender balance in decision-making bodies including leading scientific and administrative boards, recruitment and promotion committees as well as evaluation panels and to encourage research funding and performing organisations to reach these targets by 2020 (Council of the European Union, 2015).

Within this context, universities are at the forefront to respond to the challenges related to gender diversity. This is due to several factors. For example, universities promote societal development. In addition, universities are confronted with growing needs with regard to changing student population, internationalisation of student flows, research and migration. Several European countries have developed policies and tools, e.g. agreements and indicators, on gender-specific targets for universities. These include specific criteria in competitive funding programmes, as well as specific programmes to promote the participation of women in the top levels of science and research hierarchies (see Evaluation Framework for Promoting Gender Equality in Research and Innovation, EFFORTI, 2017).

In Italy, however, there is the impression that national policy does not consider the promotion of gender diversity in the higher education sector as a national priority. In fact, even though female presence among professors is growing (from 2.6 out of 10 in 1988 to 3.8 in 2017), persistent inequality is reported in the opportunities to climb the ladder as well as persistence in the leaking pipeline phenomenon in women’ academic careers from graduation to apical stages of professorships. Moreover, insufficient integration is still observed in the horizontal dimension, by the scarcity of women in some specific disciplines (ANVUR, 2018b). This national trend is sometimes contradicted by successful practices, at the local level. For example, the University of Cagliari aims to promote innovative start-ups within their local contamination lab, CLab, by emphasising the heterogeneity of student teams during their participation in the programme. The University of Cagliari is one out of two Italian universities where the rector is a woman. The Politecnico Milano has defined strategic targets with respect to gender equality in its current strategic plan for 2017-19. Planned activities comprise the development of a programme to foster equal opportunities by putting in place measures that increase the number of women enrolling and completing STEM (science, technology, engineering and mathematics) courses.

National policies for students are also facing the challenge of raising the share of female students in STEM disciplines. The PLS (Plan for Scientific Degrees) is intended to help students in developing their own academic path within scientific disciplines, encouraging enrolment in such programmes. As female participation in these disciplines is often low, project promoters are also asked to implement targeted measures to encourage young female students to enrol in science.

A stronger and structured approach to gender issues should become a core principle guiding the design of measures, programmes and goals in future national science, research and innovation policy planning. Italy could inspire its policies following tools and best practice examples provided, among others, by the EFFORTI project (Evaluation Framework for Promoting Gender Equality in Research and Innovation, https://www.efforti.eu/), which is financed by Horizon 2020 and aims to model the impact of different actions to promote gender equality in research and innovation activities undertaken in European countries.

Mechanisms of selection of the university leadership: An international comparison

The recruitment processes for leading managerial and academic positions can be a key way to promote diversity and the development of new ideas. This is reflected by the fact that the performance indicators for Italian universities include the percentage of external professors hired per year.

Italy has remained one of the few OECD countries in which the appointment of the rectorate is still based on an internal election process. Although there are several examples of vital and strategically oriented university leaderships, international comparisons have provided evidence that collegial models like the one adopted in Italy tend to negatively affect institutional leadership (OECD, 2008). In particular, being elected by internal bodies and deans, it proves generally difficult for new rectors to overcome institutional path dependencies. In addition, in Italy, the share of external stakeholders seating in the board of governors is limited, when compared with international practices. There are several examples, among OECD countries, illustrating other ways to elect university leadership (OECD, 2008). Box 6.5, below, illustrates the example of Austria.

Competitive funding mechanisms for Italian HEIs

Italy put in place a new funding system of higher education institutions in parallel with the reform of universities’ autonomy. The Italian higher innovation system encompasses 67 public universities. The public funds allocated by the central level, however, seems to be undersized compared with the relatively large dimensions of the system. In 2015, Italy allocated public funding equal to 0.9% of gross domestic product (GDP) to tertiary education. This level is well below the EU average of 1.3% (OECD, 2018). Research expenditures of Italian higher education institutions (higher education investment in R&D, HERD) represent 0.35% of GDP, a level in line with Korea (0.39%), Spain (0.35%), Greece and Ireland (0.31% each), but below the OECD average of 0.43% (OECD, 2016). In more general terms, although the downturn in public funding allocated to the higher education sector in the aftermath of the crisis has been brought to an end in 2016, recovery has not yet brought it back up to 2009 levels (EUR 7.36 billion in 2018 compared with EUR 7.83 billion in 2009).

The funding system encompasses three components, following different allocation criteria to state universities. These components are: i) a mixed allocation based on the historic cost faced by HEIs and the standard cost per student; ii) an allocation based on the performance of research; and iii) a smaller share to help HEIs deliver better services to students. These three dimensions are listed and discussed in turn below.

• The first and largest share represents 55% of the total fund allocation (as of 2018). To allocate resource, the funding mechanism takes into account the structural features of HEIs. First of all, the historic allocation of funds – about 55% of funds in this component are allocated following this path dependence principle. Second, the average standard cost per student (CSTD) is calculated based on: programmes offered; number and qualifications of academic staff; number of non-academic staff and services offered; socio-economic conditions of the students (i.e. average income of the region and potential fees to be collected); and finally, the availability of public transportation. The aim of the reform in the near future is to phase off path dependence and allocate funds to HEIs only on the basis of the CSTD. This should improve the provision of tertiary education and highly skilled graduates entering the Italian job market. In addition, this would help the country increase the number of workers holding diplomas from universities, as Italy ranks on the lower end of the OECD country ranking regarding share of tertiary educated people in the 24-34 age group (OECD, 2017a).

• The second funding stream is the so-called Quota premiale (performance-based funding) and represented about 24% of overall public funding to HEIs in 2018. The largest share (about three-fifths) of Quota premiale is allocated on the basis of the periodical Evaluation of Research Quality (Valutazione della Qualità della Ricerca, VQR), undertaken by the National Agency for the Evaluation of University and Research (ANVUR). The remaining two-fifths of funding allocated by the Quota premiale are equally distributed for the quality of recruitment (one-fifth) and for self-defined targets concerning the quality of research environment, quality of teaching and internationalisation (one-fifth). Compared to international standards, the share of public funding allocated on the basis of ex post performance indicators to Italian HEIs is very high (OECD, 2017a). For example, similar systems, in place in Denmark, Finland, the Netherlands or Sweden allocate a total of about 2% of public funding or even less, based on performance evaluation.

• The third component of the funding system is the so-called Quota interventi specifici (funding for ad hoc initiatives). This component allocates additional funding to compensate for “shocks” (i.e. volatility) in state transfers (21% of total public funding in 2018) and to support targeted measures. These measures include funding of institutional strategic plans, resources for students’ welfare and services, grants for doctoral students and incentives for the recruitment of academics and young researchers. The Quota interventi specifici allocated EUR 900 million to these measures in 2017.

Aside from being a central pillar for public university funding, VQR results are also the basis for the allocation of additional competitive funding for the implementation of Departments of Excellence (Dipartimenti di Eccellenza). Departments of Excellence receive targeted financial support from the Ministry of Education for a period of five years. The selection system ranked the best 350 departments according to their VQR performance between 2011 and 2014. Departments of excellence can use these extra funds to recruit academic and non-academic staff, build infrastructures for research, and provide financial incentives to the personnel to develop 2^nd and 3^rd-cycle study programmes.

Italian universities have become acquainted with evaluation processes. Several case-study universities – while not being enthusiastic about the funding framework – pointed out that mechanisms such as the system of performance indicators and the VQR evaluation procedure, implemented by ANVUR, have become important vehicles to increase the acceptance of performance monitoring and then the efficiency of tertiary education institutions. It also allows each university in Italy to be able to benchmark its positioning in the system. Additional competitive funding streams exist but they are limited in scale and fragmented

A specific feature of the Italian research system is the absence of large (public) intermediaries or funding institutions. In many OECD countries, these entities serve as vehicles for the steering of the academic system by the provision of financial incentives, allocated through competitive bottom-up or thematic programmes. The Italian Fund for Investments in Scientific and Technological Research (FIRST), which operates under the aegis of MIUR, can provide HEIs with financial incentives for industrial research and pilot projects. However, FIRST’s budget is small compared with the size of higher education in Italy: about EUR 84 million in 2018. For example, the Austrian Fund for Scientific Research (FWF) – an independent body that finances excellent research activities – has an annual budget of about EUR 220 million. Likewise, the Swiss National Science Foundation (SNF) – another entity supporting mainly basic research – supported HEIs’ R&D projects with about EUR 880 million in 2017.4 Agencies such as the Swedish VINNOVA, the Austrian Research Promotion Agency (FFG) or the Research Council Norway (RCN) would be examples for independent intermediaries with a broader set of missions, including applied research and development, innovation support as well as strategic task and knowledge creation.

Italian universities partly compensate the relative scarcity of public funding allocated by the centre with alternative sources. HEIs receive funds from students, the private sector, regional governments, funding agencies and from the European Union’s Framework Programmes for R&D. These sources of funds are particularly important for activities in the areas of entrepreneurship and innovation. As an example, in some case-study universities, funding from these sources nearly equals the amount of funds allocated to them by the Quota premiale system. While the diversification of funding sources is generally a positive feature of national systems, the fact that Italy displays large variations in the economic performance of regions penalises universities localised in the south of the country. In addition, some structural features of the Italian economy, such as the large quantity of SMEs, cause the R&D expenditure of business to be generally low compared to the European average (1.33% of GDP in 2016), with the sole exceptions of Piedmont (1.78% in 2016) and Emilia-Romagna (1.49% in 2016).5 Consequently, many universities find it difficult to attract funds from local businesses in their ecosystems.

Italian HEIs’ capacity to engage is negatively affected by the vast regulatory framework they are subjected to as public bodies. Based on evidence collected in case studies, there may be a disconnect between the formal institutional autonomy of universities and the cumbersome regulations and specific (sometimes conflicting) incentives offered by the government (cf. European Commission/EACEA/Eurydice, 2015; Claeys-Kulik and Estermann, 2015).

An example of this disconnect is that the evaluation system takes only into account the research performance of HEIs. It provides an adverse incentive for diversifying institutional strategies, de facto limiting the internal steering autonomy of universities. Bibliometric indicators are quite common in performance-based allocation mechanisms in use in other European countries. However, in Denmark or Finland, for instance, the performance-based mechanism that assesses research outcomes allocates about 2% of the total public funds to HEIs. Conversely, in Italy, the funding scheme emphasises research at the expense of other HEI missions. The current emphasis on scientific excellence at the level of individual entities and researchers is widely perceived to have a crowding-out effect on entrepreneurial and third mission activities.

In addition, the system rewards HEI performance at a given point in time, taking into account only, to a limited extent, positive trends. Gaps between HEIs, in terms of their financial endowments, crystallise and the divide between northern and southern universities may risk getting bigger and bigger. In the same vein, the Department of Excellence scheme – with the majority of these departments located in northern universities – generates conflicting incentives, especially with regard to the promotion of inter-disciplinarily and transversal competencies. In order to maximise the number of citations, researchers may adopt a risk-averse attitude and prefer to continue publishing in “safer” scientific domains rather than initiate new (interdisciplinary) areas of research that may not guarantee the same number of citations in the short run.

Not only do funding schemes provide limited resources to HEIs, they are also fragmented. One example – particularly important for the entrepreneurial and innovation agenda – is represented by the lack of co-ordination between the Research Projects of National Interest Scheme (PRIN), and the cluster initiatives connected with Italy’s Industry 4.0 strategy. PRIN is a MIUR initiative and totals EUR 3 million (as of 2017). National technological clusters depend on the Ministry of Economic Development and have a total endowment of EUR 73 million, which funds 8 competence centres. Co-ordination between these two policy actions would help technological progress in Italy’s productive sector.

There is also duplication of efforts to promote vocational educational training at the tertiary level. For instance, some Italian universities have started implementing the Lauree professionalizzanti. These programmes may overlap with those provided by Instituti Tecnici Superiori, since their basic orientation towards market-oriented tertiary education is similar (OECD, 2017a). To manage the development of vocational educational training at the tertiary level, Italy could take into account the example provided by the Netherlands’ Top Sector Approach, launched in 2011 (Box 6.6).

The lack of long-term planning is an obstacle in the development of partnerships with external stakeholders

The funding system is also challenged by the lack of long-term planning, which negatively affects the sustainability of the initiatives and policies put in place by HEIs. Uncertainty about the availability of resources generates pressure on HEIs which have to fundraise to sustain their innovative activities. Contamination labs represent a good example of the negative effect of the lack of strategic funding and provide students with entrepreneurial education programmes. These programmes are often pre-incubation support for the creation of business start-ups. Contamination labs promote interdisciplinary exchange among students, organised in small teams generating and implementing innovative ideas. Experts from the private sector support students in developing business ideas and, eventually, their start-ups. To participate in the contamination lab programme, students have to go through a competitive process. The programme lasts six months. In some cases, as in the University of Cagliari, the contamination lab has gone beyond its original scope and has generated linkages with the local community supporting lifelong learning and entrepreneurship programmes for unemployed individuals.

There are 19 contamination labs in Italy and these entities have created the CLab Network (http://clabitalia.it/contamination-lab). National programmes support start-up creation. For example, the national award for innovation, PNI Cube (Premio Nazionale Innovazione), selects academic start-ups among the winners of the regional business plan competitions (Start-Cups). Pre-incubation activities of contamination labs rely on institutional and regional funding, including the European Union’s structural funds, and private investors. Contamination labs can be considered a successful practice in terms of entrepreneurial education, which would benefit from strategic funding. Italy could take inspiration for its policies to support academic entrepreneurship from the Austrian “AplusB” (Academia plus Business) initiative.

HEIs and the regional dimension

In Italy, the regional dimension is particularly important for HEIs. Regional governments, agencies and local businesses represent sources of financial support. Regional stakeholders finance activities related to: i) knowledge transfer, entrepreneurship and innovation; ii) the protection of local cultural heritage; and iii) the provision of tailored education programmes, matching the skills needs of local ecosystems. Knowledge dissemination, on the model of the “European Researchers’ Night”, is another activity HEIs carry out at the regional level, by opening their facilities to the public.6 The very presence of university buildings and campuses may represent a driver for development in regional ecosystems, as illustrated by the examples of the University Federico II in Naples (San Giovanni a Teduccio neighbourhood) or the Cesena campus of the University of Bologna. Due to an increasing understanding of their role as agents of socio-economic development in regional ecosystems, several Italian universities have adopted a “bilancio sociale”, an annual report discussing the results achieved in terms of local impact.

HEIs have embraced the smart specialisation paradigm and, especially in the south of the country, they have become acquainted with the use of European Structural Funds and in particular, the European Fund for Regional Development (ERDF). This represents an important evolution compared with the past when the local “engagement” agenda of HEIs was limited to the inclusion of representatives from regional communities in governing bodies such as the administrative board. As mentioned in several interviews with stakeholders met on study visits, the new approach – inspired by the smart specialisation agenda and financed by European Structural Funds – generates a new framework for regional engagement, which involves HEIs in ambitious and structured policy actions promoting development (triple/quadruple-helix). Box 6.8, below, illustrates the case of Cagliari in this perspective of local engagement.

Ecosystems, while local, are not confined to a given territory; they can use local linkages to develop broader networks of stakeholders and provide specialised services to different communities. An example of this kind of “ecosystem” is represented by the federation of the Scuola Superiore Sant’Anna, the Scuola Normale Superiore in Pisa and the Istituto Universitario di Studi Superiori, IUSS, in Pavia. These “schools” have been characterised by the excellence of their research, but also by their small size (a result of their highly selective recruitment process). The aim of the federation is to maintain “excellence” while at the same time gaining critical mass by sharing some services/activities in order to generate a common culture, including for engagement, which capitalises on the features of the three institutions. In other words, the federation should bring about sustainable innovation in these institutions. In particular, by joining forces, these three schools aim to become more visible and competitive at the international level, a dimension in which their size has increasingly represented a handicap. This new organisational solution, based on “institutional innovation”, is a result of the 2010 autonomy reform and is a good illustration of the possibility to generate “critical masses” in research and teaching without the need to merge institutions. The federation between the Pisa-based schools and the IUSS is the result of a three-year programme (2016-18), approved and supported by MIUR.

Individual incentives and recruitment mechanisms supporting engagement

Reforms introduced in 2010 have created new institutions and practices that are positively affecting the performance of the Italian HEIs in their three main missions. So, for instance, while the VQR and the tri-annual strategic planning exercise have contributed to increasing awareness of the academic staff for performance and research quality, the creation of the position of “general manager” has spurred business-oriented processes and structures within institutions.

In the same vein, the autonomy reform has provided HEIs with the possibility of rewarding staff for their support of the overall development of the institution (e.g. the third mission results, the amount of third-party funding, etc.). In other words, HEIs can set the criteria for salary progression of academic staff by taking into account factors that go beyond performance in research and teaching. In particular, Law 240/2010 put in place a new financial tool that provides salary incentives to academic and administrative staff contributing to the development of the institution – the so-called Fondo per la Premialità (Fund for incentives). HEIs can decide on the criteria to assign rewards to staff but the law requires that HEIs define these criteria in their tri-year strategic development plan. The Fondo per la Premialità depends on institutional funding and matching funds provided by the Ministry of Education. The Fondo can also be supported by resources allocated to Departments of Excellence.

However, despite the possibility of rewarding staff for their engagement activities, only 9 out of 67 public universities applied for additional funds for the “Fondo Premiale” in the 2016-18 planning period. Based on study visits and interviews with stakeholders, it seems that HEIs share a common practice to provide financial incentives only to administrative staff, who are hired on private law basis and, differently from academic staff, do not have to fulfil the same regulations as civil servants.

To incentivise staff undertaking activities related to third mission, there is a need for new indicators in the evaluation system. In interviews with university stakeholders, it was unanimously stated that the national funding system, including incentives for individual researchers, is very much biased towards research in terms of publication and citation indicators. This situation provides little incentives to HEIs to connect scarce resources with many different priorities. The same holds true for the recruitment process. According to stakeholders, when hiring, universities cannot take into account social skills and experiences with respect to entrepreneurship. Based on the information collected in the field, a crucial factor hampering the implementation of a reward system as prescribed by Law 240/2010 was also often reported to be the lack of a standardised, transparent and effortless monitoring system to allow a fair assessment of the results reached by universities in the area of third mission.

Stakeholders look with great interest at ANVUR’s efforts to develop a new model supporting the evaluation of third mission activities and of the impact of academic research (see subsequent section) and are requesting performance-based incentives.7 Universities themselves are also very proactive in contributing bottom-up to the construction of the evaluation model proposing as standards their promising experiments (such as some promising experiments in the reward systems) and good practices (for example, the inclusion of music activities for the local community and institutional sustainability initiatives). Nonetheless, there is the impression that formal institutional autonomy is jeopardised by constraints set by rules and bureaucracy: universities have to balance a variety of objectives at the same time. Despite this background in which there are scarce resources supporting engagement and impact, Italy is home to some good practices. For instance, creative non-monetary incentives for academic staff include the provision of sabbatical years, to put in practice innovative ideas, or a different computation of working hours, when the academic staff works in a spin-off. Some universities such as the University of Bari consider that the work undertaken by academic staff in a spin-off company does not conflict with research and teaching duties, this to circumvent the regulation that allows academics to carry out professional activities and consultancies in part-time positions only with the authorisation of the rector.

Other incentives include rewards for inventors of intellectual property rights (IPRs) owned by the university. By law, universities have to give inventors a minimum of 50% of the revenues generated by university-owned patents. The inventor has to use these revenues for research or other academic activities. In some institutions, the share of revenues allocated to the inventor is higher. For instance, the University of Cagliari gives inventors 65% of the revenues generated by patents owned by the institution. In other cases, the additional revenue is allocated to departments that can use it to incentivise patenting activities of the university or to increase the share of the university in the ownership of a given patent. Due to the so-called professor’s privilege, patents owned by universities represent only 36% of all academic patents (ANVUR figures for 2011-14 period). The patenting activity, however, is highly concentrated in a few institutions, about 50% of patents in 12 universities, while in the case of university-owned patents the same share is concentrated in 9 institutions (ANVUR, 2018a).

University stakeholders met by the OECD delegation have been particularly vocal about the new regulation (Legge sulle participate) that prohibits universities holding shares in new spin-offs. According to stakeholders, this regulation may challenge academic entrepreneurship, due to the fact that the performance evaluation carried out by ANVUR consider patents and spin-offs on the same level. In addition, by reducing their participation in spin-offs, the university may lose an important source of income that finances other activities. Finally, another argument put forward by stakeholders to criticise the new regulation is that the university’s participation in a spin-off is a sign of credibility and stability for potential investors interested in the business. So, the regulation, which aims to avoid university participation crowding out private investments, would actually have the opposite result (Netval, 2017).

HEIs propensity to the entrepreneurship and innovation agenda depends also on students’ attitudes and demands. In particular, academic staff seems to be characterised by an age gap. “Older” researchers tend to have a lesser drive towards innovation and market exploitation of research. Vice versa, younger researcher and students are generally more open-minded towards innovation and entrepreneurship. Another key factor driving entrepreneurial attitudes is the increased internationalisation of academia. This includes student exchange programmes and international research collaboration, which challenge traditional practices and promote innovation (see also Chapter 4 on internationalisation).

A good example is that of the University Tor Vergata, which has created mixed teams of academic researchers. Individuals of different age groups and level of hierarchy work together to promote cross-fertilisation of mindsets. To create these mixed teams, the university undertook an activity to map the “professional” skills of academic and administrative staff (about 800 people surveyed). The initiative took place as a basis for further career development plans and training programmes. Information about skills needs within the university informed a large hiring programme for non-academic staff and, in particular for professional skills in areas such as business and technology transfer management.

The University of Bologna has created its incubator – AlmaCube – to promote open innovation and create opportunities for collaboration and professional development. The university and incubator launched an open innovation programme to promote the development of entrepreneurial careers among students and young researchers. The open innovation programme puts in place actions that bring together multidisciplinary students from different universities and challenge them to solve real industry problems. Several international good practices engage students in innovation processes, as in the approach of the University of Bologna. For instance, a well-known example is that of DEMOLA in Tempere (Box 6.9).

Evaluating third mission (TM)

The performance evaluation of TM activities is a challenging task across OECD countries, especially when it should inform the allocation of funds. The Italian agency, ANVUR, has developed an evaluation model for TM activities and the impact of academic research, where “third mission” is defined as the openness of the university towards the socio-economic context through the valorisation and transfer of knowledge.

The model divides TM activities into two main areas and identifies associated standardised indicators. First, the capacity to generate value from research results, which is by definition the transformation of goods supported by public funding (public research) into private goods. Second, the production of public and social goods, i.e. other forms of knowledge transfer and exchange producing impacts on the social, cultural and economic context. Concerning the first area, the evaluation takes into account indicators concerning intellectual property management (patents and plant variety registrations), academic entrepreneurship (spin-offs), third-party research activities and intermediaries’ activities. Regarding the production of public and social goods, ANVUR uses indicators measuring the creation and management of cultural heritage (museums, archaeological excavations and cultural heritage), clinical research and training (registered clinical experimentation, biobanks), lifelong learning activities and public engagement intended as the production of advice, expertise, informed opinion, contributions to controversies, communication of science. Evaluation methods are based on informed peer review. ANVUR has collected data on all third mission activities run by Italian universities in 2011-14 within the framework of the Italian research assessment exercise called VQR 2011-14 (Evaluation of Research Quality 2011-14). Some universities have developed their own methodologies to measure and finance TM activities; Box 6.10, below, illustrates the example of the University of Bologna.

The main challenge to implement an evaluation system for TM activities is to identify good standardised indicators. There are several international practices illustrating different solutions to this problem. The Swedish Developmental Pilot, undertaken between 2013 and 2016, is an example of a process to develop and test national indicators based on qualitative as well as “tailored” approaches to measurement (Box 6.11).