Why universities are teaming up with businesses

Innovation districts are building communities beyond the classroom

September 13, 2021

Technology, the pandemic and new government policies are putting universities under increasing pressure to make big changes.

For many institutions this means striking partnerships with businesses and public groups to create communities beyond classrooms and lecture theatres. The aim is to enhance the campus experience, nurture ideas and generate new revenue.

From Australia to Italy, the U.S., and Japan, these ideas are manifesting as innovation hubs: lively live-work-play districts where entrepreneurs, academics, students and professionals cluster and collaborate.

“Where the university research parks of the past were staid enclaves of quiet discovery, universities today are adopting new models of collaboration by either driving, or anchoring, new towers dedicated to work, research and education, adapted campuses, or entire new neighbourhoods that are designed for quick and seamless transfer of knowledge and ideas,” says David Brown, head of strategic consulting in Victoria for JLL.

For instance, the A$300 million (US$224 million) engineering innovation hub in Sydney is taking the shape of a state-of-the art building shared by students, academics and corporates. The venture is a tie up between Western Sydney and University of New South Wales, property developer Charter Hall Group, and the state government.

The Milan Innovation District in Italy incorporates the University of Milan, offices, research facilities, homes and infrastructure for autonomous vehicles on the former site of Milan World Expo 2015. It’s slated for completion in 2031.

“Such developments are important for attracting students, staff and corporate partners amid economic disruption,” Brown says. “But there are quite a few ways to go about it.”

Making the most of industry relationships

Many academic institutions are leveraging established industry relationships to provide the impetus for new innovation hubs.

Virginia Tech’s partnership with San Diego-based semiconductor and telecommunications equipment maker Qualcomm has helped the university build a US$1 billion innovation campus in Alexandria, just outside Washington D.C., focused on computer science and computer engineering.

The Innovation Campus will be fully operational in 2023 and include incubator space for start-ups, offices and retail.

“Companies find access to university resources a compelling draw,” Brown says. “Companies that seek recruits in aerospace or chemical engineering should, for example, be a primary target for universities with programs in that field looking for tenants.”

The mix of tenants is just as important.

The University of Melbourne, in partnership with a consortium led by Lendlease, brings together world leading researchers, industry, government, start-ups, artists and higher-degree students in a purpose-built innovation campus on a former hospital site in the heart of the city, dubbed Melbourne Connect.

“Identifying the right partners is key and this requires a multi-disciplinary and curated leasing strategy to understand industry drivers, assess different stakeholder needs and define what the shared business benefit of co-location might be,” says Dinesh Acharya, consulting lead in education,, JLL


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Public and private funding

Since innovation districts can be catalysts for job creation, projects can attract a wide range of partners.

The Milan Innovation District, for example, is funded through a public-private partnership (P3) based on a 99-year concession agreement between Lendlease, publicly-owned regeneration company Arexpo and the Municipality of Milan.

Partnering with a private developer gives universities access to real estate and market expertise, along with a source of financing. It can be designed to transfer risk from the university to the private partner.

“A P3 doesn’t mean a university giving up control of their project,” Brown says. “For example, an institution could lease a parcel of land to a private developer to build an office building. They the university could lease back some or all of that new building.”

Listening to the community

Involving strategic partners at the outset has been a key move for many universities in establishing new districts.

Virginia Tech’s Innovation Campus has brought together CEOs of some of the largest firms in Washington D.C. to make up an advisory board to shape the project. Boeing, one of the represented firms, even contributed US$50 million.

In Japan, Hiroshima University is working with automotive company Mazda, local manufacturing firms, and the local government, to develop a new cluster for digitised manufacturing.

But consultation with end users is just as critical, Acharya says.

“While involvement from graduate students and post-doctoral associates may not be essential for executing a university innovation project, their needs and priorities should be foremost in the planning process,” Acharya says. “Other stakeholders might include senior administrators, faculty, trustees, major donors, government officials, private industry executives and leaders of community organisations.”