Presented at GLOBELICS 2009, 7th International Conference, 6-8 October, Dakar, Senegal.Parallel session 2: University-industry linkagesOver the past two decades, there have been substantive shifts in the social compact between higher education and society. Unlike the centuries old tradition of the autonomous pursuit of knowledge and science, universities are now expected to be more accountable to society, the state and the market - in particular, more responsive to the demands of a global knowledge-based economy (Salmi 2007, Maassen 2006, Newman et al 2004, Audretsch and Phillips 2006, Jacob and Hellstrom 2000, Delanty 2000, Van Vught 2000, SAUVCA 2004). A decade ago, a world higher education declaration (1998) set out a key premise that has been influencing policy, research and university practice: Without adequate higher education and research institutions providing a critical mass of skilled and educated people, no country can ensure genuine endogenous and sustainable development and, in particular, developing countries and least developed countries cannot reduce the gap separating them from the industrially developed ones. The broad concern is with this changing role of higher education in relation to knowledge-based economic growth, innovation and development, for the countries of the South, which experience these new global imperatives under very different, often disadvantageous, conditions (Sagasti 2004). The specific concern of this paper is to explore the contribution universities make to national development goals through their growing emphasis on interaction with firms in South Africa, as a middle income country. It adopts a systemic lens to investigate universities as critical institutions in the South African national system of innovation, and focuses specifically on their direct role in supporting technological upgrading and firm learning. This choice of focus does not imply that a normative or reductive argument, to promote a single, narrow role for universities as ‘handmaidens’ of the economy or of firms. On the contrary, the multiple roles of universities, and the significance of universities as knowledge generators for the long term health of a science and technology system and for a national system of innovation are fundamental assumptions for the research approach (Nelson 2004). What the paper proposes to do by way of analytical focus is to place firms at the fulcrum of investigation, to address a gap in our current understanding of university-firm interaction in South Africa (Kruss 2007, Lorentzen 2009). Previous research on university-firm interaction in South Africa analysed the diverse ways in which different types of university are responding to and engaging with the global and local challenges, and developing strategies to link university-firm interaction with their institutional goals and mission (Kruss 2005a, 2005b, 2006). This work highlighted a tension between the financial and intellectual imperatives driving universities’ interaction with firms, and the potential consequences of different ways of resolving this tension for individual universities and for the higher education system as a whole. The present research accesses an emerging literature in relation to analysis of developing countries, framed in terms of national systems of innovation and ‘catch-up’ approaches, and foregrounding firm technological upgrading. In this manner, new insights may be injected into debate around higher education, innovation and sustainable development appropriate to South Africa. Section I of the paper will briefly set out the framework and datasets on which the analysis is based. Section II demonstrates that there has been a degree of maturing of the South African system of innovation, but significant system weaknesses, particularly in relation to education and human resource capabilities. Section III problematises the contribution of universities to goals of economic growth through technological upgrading and diversification of firms’ production activities in these conditions. The analysis is aggregated across the system and between specific industrial sectors, analyzing the extent and nature of firm demand for co-operation with universities in relation to their innovative and R&D practices. Section IV focuses on cases of university-firm interaction in health biotechnology, a sub-sector which South Africa has targeted as a priority, to explore the manifestation of contextually specific constraints and possibilities. The conclusion draws out implications for the changing role of the university in South Africa
