Marketing as the Foundation of a University's Innovation Activity

The application of marketing tools significantly enhances the effectiveness of innovation activities at universities.

Universities have historically been one of the key centers for generating innovations through scientific activities. However, in modern conditions, merely creating a good technology or product does not at all guarantee their commercial success. An innovation may fail because a university's breakthrough development is not adapted to the market, not integrated into sales channels, or information about it simply hasn't reached the decision-makers for purchases. Thus, we come to the idea that effective innovation activity at a university is impossible without competent marketing support. This will be the topic of our series of articles.

The Role of Universities in the Innovation Economy

Currently, the promising development concept recognized is the innovation economy, based on the flow of knowledge, constant technological improvement, and the production and export of high-tech products with very high added value. It is assumed that profit is created primarily by the intellect of innovators and scientists, rather than by material production and capital concentration. The experience of developed countries (USA, Germany, Israel, Japan, etc.) shows that the strategic model for economic growth is the intensive conduct of scientific research and the development of high-tech products based on them, with subsequent entry into international markets. This enhances competitiveness and ensures leading positions for national industry. Within such an economic paradigm, even countries classified as developing based on a certain set of economic parameters get their chance to become leading players in the global market. The key task for such states, including Russia, is to form their own effective innovation system, in which leading universities and scientific-educational centers are expected to play the most important role.

In the context of an innovation economy, higher education institutions act not only as centers of education, science, culture, and upbringing but also become subjects of market relations as producers of intellectual products, selling the results of their scientific activities on the open market. In this regard, universities acquire a new function (besides generating, storing, and transmitting knowledge, forming skills and abilities) – the commercialization of knowledge on an open competitive market, which corresponds to the University 3.0 concept.

Unfortunately, currently, the Russian Federation ranks only 45th in the country ranking by innovation level (according to 2021 data), being next to countries like Thailand, Vietnam, India, and Greece. To improve this situation, the Russian Government in recent years has initiated a number of large-scale support measures aimed at developing scientific and innovation activities in universities (for example, the "5-100" project, the "Priority 2030" program, the project for creating and developing university technology transfer centers, the federal project "Platform for University Technological Entrepreneurship," etc.). However, it is important to understand that besides financial and organizational support from outside, significant changes within the universities themselves are necessary. In this article, we would like to consider the existing approach to organizing innovation activities in universities and ways to improve it.

Marketing Approach to Organizing Innovation Activities

One definition of innovation activity states that it is a process aimed at implementing the results of completed scientific research and development, or other scientific and technical achievements into a new or improved product sold on the market, a new or improved technological process used in practical activities, as well as related additional scientific research and development.

According to established practice, innovation activity in most Russian universities is closely intertwined with scientific/scientific-technical activity and is entirely based on its results. At the same time, there is often an assumption that if a development has unique technical properties, novelty, etc., then it must necessarily be in demand by the market, and no problems will arise with its implementation.

The directions of scientific/scientific-technical activity are traditionally determined mainly based on the existing competencies and background of the university's leading departments, with an orientation towards the main vectors of the country's scientific and technical policy and only roughly considering current market trends. Furthermore, it is important to understand that most modern developments are not created from scratch but are the result of improving existing analogues. The specific directions of this improvement are again determined more based on internal factors (skills and specializations of researchers, available equipment and software, cooperative ties, etc.) and do not always consider the requests of potential consumers.

This approach leads to innovation activity, in marketing terms, being based on the classic product-oriented concept described by the American economist and marketer Philip Kotler. It is based on the assumption that consumers prefer high-quality goods, hence the main focus is on the quality and characteristics of the product and its constant improvement. The main drawback of this approach is the so-called "marketing myopia," i.e., false ideas about the audience's needs.

As a result, at the stage of commercializing developments, difficulties often arise, which are conditionally divided into two large groups:

1. Lack of a product demanded by the market. For example, suppose a certain automated device for performing a technological operation was developed, the use of which significantly improves the quality of the result. And it would seem there are many consumers who should potentially be interested in this device, but considering its high cost compared to similar solutions, it will turn out to be unclaimed by the market due to the ratio of benefits received and costs incurred.
2. Lack of an actual market. By lack in this case, we mean either its small size or its monopolistic or oligopolistic nature. Such a situation arises when trying to replicate technologies or products successfully used abroad (one can also recall import substitution), as well as with developments initially focused on specific industries and sectors of the economy.

The solution in this case is to transform the approach to organizing innovation activity at the university, namely shifting the focus from conducting scientific research to commercialization, which will allow moving from a product-oriented concept to a marketing concept, implying complete orientation towards consumer requests and the characteristics of the future sales market.

As Peter Drucker, one of the most influential management theorists of the 20th century, said: "Business has only two basic functions - marketing and innovation. Marketing and innovation produce results; all the rest are costs." It is precisely through marketing tools that markets and consumer demands can be studied, which, in fact, should be the basis for identifying relevant directions for creating and developing innovations. And again, using marketing as a business activity system significantly enhances the effectiveness of commercializing developments and bringing them to the competitive market. Scientific activity in this approach becomes secondary to innovation activity and is a tool for creating a high-tech product that precisely meets market needs.

All of the above is confirmed by the experience of innovation-successful enterprises and organizations, according to which it is the marketing technologies and tools integrated into their activities that increase their effectiveness and adaptability in the context of developing global markets and intensifying competition for the consumer.

However, despite the obvious relevance, issues of integrating marketing with the activities of higher education institutions are not systematically considered. There are separate publications dedicated to applying a marketing approach in the educational activities of a university, while issues related to innovation activity largely remain open.

First Steps Towards a Bright Marketing Future

Considering that marketing is a tool for increasing the effectiveness of business specifically, it is important to separate scientific/scientific-technical activity, aimed at obtaining and applying new knowledge, from innovation activity, aimed at generating income through the sale of high-tech products on a competitive market. And the latter, preferably, should be separated into an independent direction. At the same time, it is important to find a fine line, considering that on one hand, science and innovations are based on different basic principles, and on the other – they must be closely interconnected.

Currently, in many leading universities, services responsible for commercialization and interaction with industrial partners function in one form or another. However, practice shows that such services, unfortunately, mainly perform service functions and are focused exclusively on promoting existing developments or the university's engineering services.

In this regard, the second important step is transforming the commercialization service into a marketing department with a significant strengthening of its role in the university's innovation activity, as well as endowing it with the authority and responsibility for initiating and implementing new projects, the ultimate goal of which is the sale of science-intensive products on the open market. Such an approach, naturally, assumes the presence of high qualifications and experience combined with specialized marketing/economic education for the head and staff of the service, which involves significant and constant expenses. In this regard, to minimize costs, long-term cooperation with marketing agencies that have competencies in solving special tasks, such as assessing the commercial potential of products, selecting and prioritizing sales markets, conducting marketing research, searching and negotiating with potential partners, etc., is advisable. That is, essentially, it is necessary to implement a combined scheme, within which general activities are carried out by the university's specialists, and individual specific works requiring high qualifications and experience of performers are outsourced.

And finally, the third important step is searching for additional sources of funding for the university's innovation activity, allowing it to be organized according to the new approach. And such sources could certainly be the numerous developments (products, technologies) on the balance sheet of any leading university. Using the terminology of the Boston Consulting Group matrix (a tool for strategic analysis and planning in marketing), it is necessary to exclude the "dogs" from the entire variety of the university's products (results of intellectual activity) and find the "cash cows" to finance the "question marks," which can later become "stars" and bring significant profit to the university. By the way, for solving this task, it is precisely advisable to attract external specialists with a "fresh perspective" and experience in implementing business projects.

In conclusion, we would like to note that integrating marketing into the innovation activity of a university is a very complex process with its own nuances and peculiarities. However, it is undeniable that the sooner such work is carried out at the university, the sooner innovation activity can transition from the "technology push" mode to the "market pull" mode, which will undoubtedly have a positive impact on its overall effectiveness and increase the organization's extra-budgetary income.