Research and Research Training Links
Consultancy and Other Cooperation
Barriers and Impediments to Cooperation
The Broken Hill Proprietary Company (BHP) was incorporated in 1885, mining silver, lead and zinc at Broken Hill, NSW, Australia. In 1915 it commenced steel making and soon became involved in large-scale mining and export of steel products.
Today, it is one of the world's largest diversified resource companies, with portfolios and assets spanning energy industries, steel making and mining. The company employs more than 53,000 people, has assets of more than A$27 billion and shareholders in approximately 70 countries. Its three major divisions are Minerals, Steel, and Petroleum. In addition to these, it operates a range of smaller service industries.
Cooperative activities between the company and Australian universities have developed through a variety of mechanisms and over a considerable period of time. They serve to illustrate the extent to which teaching, research and consulting links can be managed independently yet still contribute to an overall strategy of benefit to both industry and academic partners.
Research and Research Training Links
BHP Research is one of the largest industrial research bodies in the country. It has research laboratories in three major cities employing 650 research and support staff. The research management team consists of the General Manager, the Chief Scientist (with overall research responsibility) and five portfolio managers. Beneath the portfolio managers, there is a large number of project leaders, who are in charge of anything from simple short tasks to large research teams of ten to twelve members and a budget of $1 million plus. There are several major research programs which include Minerals and Petroleum, Major Steel Programs, Tactical Programs, market-related research and Corporate portfolios.
The firm has developed a wide range of links with universities, CSIRO and other government research agencies, private research institutes and international collaborators. These feed into all facets of BHP's basic, strategic and applied research programs. In addition, BHP places significant emphasis on the training of both undergraduate and postgraduate students, who often progress to positions within either BHP Research or its affiliates.
BHP's in-house research is closely focused on its business and technology and therefore has a policy of 'farming out' more fundamental research to university faculties, often through postgraduate students. From the firm's experiences most successful research cooperation projects have been ones where fundamental research has been involved. This is not strictly basic research, but it is a 'step back' from applied research.
Companies who restrict themselves to applied research alone, often lose touch with new knowledge being developed within their area. (interview)
The company now sponsors research in over twenty universities, but its cooperative links are focused on seven institutions. Forms of cooperation include:
BHP is not solely interested in technical research. The company is also supporting work at the University of Melbourne into behavioural psychology-examining the effective organisation of research teams. Through an APA(I) scholarship, the company is supporting research on creativity, also at Melbourne, in order to enhance its organisational capacity for creative thinking.
For a long time engaged with a wide range of informal contacts with the University of Wollongong, BHP undertook a major initiative in 1995 with the establishment of the BHP Institute for Steel Processing and Products at the University's Faculty of Engineering. The aim of the new Institute is 'to foster world class research in steel processing and products, and the cultural aspects of the introduction of new technologies, and to provide high quality postgraduate training to those involved in the steel processing industry'. With four centres based upon the following areas of expertise: steel making and casting; thermal treatment, and steel products; coating technology and surface engineering; and managing technological change in diverse cultures, the Institute is now the focus of much of BHP's cooperative work with the university sector. Its objectives (see box) neatly summarise the convergence between cooperative activities covering education, technical and management collaboration and research and research training.
The University of Wollongong BHP Institute for Steel Processing and Products
Objectives
Source: 'Business Plan, 1995-2001', July 1995
BHP has two main objectives in education and training: to ensure a high standard of skills in future recruits, and to provide suitable technical and managerial training to current employees. The company is a major employer of graduate labour-BHP Steel has a general demand for chemistry graduates and chemical engineers, for example. Continued dialogue is required to ensure that university courses remain relevant to BHP's commercial operations. Roughly half of the staff hired by the research division already have PhDs. This has real 'added value'; they have had time to pursue a research topic in-depth and therefore already possess the scientific training sought by the company. The company is involved in the design of undergraduate courses in several universities, seeks opportunities to 'mould' PhDs in perceived deficient areas, and has used forums such as the university-industry roundtable to influence curricula. Recently, there has been a push by BHP to orient postgraduate courses more towards the practical application of skills and to team management. Doctoral students are being invited to take six to twelve months leave from their studies to work with BHP, and vacation work is offered to undergraduates.
BHP reviews annually the human resource development needs of each staff member to identify appropriate training. Who delivers the training is not a prime concern; much is internal, but outside providers are used for specialist courses. BHP sends staff on technical courses, such as mineral processing or statistical design, often run by consultants who may be former academics or CSIRO people. Very senior staff have been sent to Harvard Business School. Consultant psychologists (not from universities in this case) have been used in the eight day Steel Leadership Program, aimed at creating effective teams.
Consultancy and Other Cooperation
Consultancy is a third arm of the research division but compared with research and training links not as extensive. The company is large enough to carry out much of its own work, and consultancy work has in the past been plagued by a series of problems ranging from intellectual property to commercialisation issues.
BHP uses consultants to help identify the genuine leading edge of science and technology. It employs technical consultants from around the world, including some universities (e.g. Carnegie Mellon for metallurgy) and they are usually seen as cost effective. University consulting companies were viewed as 'not particularly useful', having a tendency to become involved in extended negotiations over intellectual property. On the other hand, university consulting arms may be better equipped to deal 'business to business'. For example, BHP uses TUNRA (The University of Newcastle Research Associates) for testing work and interpretation of test results.
Not surprisingly, given the company's status and reputation, senior BHP staff sit on many technology advisory and research and development funding bodies. For example, the Manager, External Research, is a recent member of the Industry Research and Development Board and has led the Australian Industrial Research Group. The Manager of Minerals and Petroleum research is a member of the Australian Coal Association's Research Program.
However, BHP sees limitations to what can be achieved through industry councils, citing its experience with a major industry research body, the Australian Minerals Industry Research Association (AMIRA). Expenditure on research and development through AMIRA is seen by BHP as largely discretionary, and its projects too prolonged. If the research is truly strategic, industry will self-fund. Increasingly, cooperative research is taking place through CRCs rather than through the research association. It seems likely that AMIRA will find a niche in precompetitive environmental research.
To a major company like BHP, geographical location is not seen as critically important to cooperation. Although BHP Research is located adjacent to the University of Newcastle, BHP has strong links with only one faculty at Newcastle. BHP Information Technology is involved in the Multi-Function Polis Technology Park in Adelaide. Such involvement is a purely commercial decision.
Until recently, BHP has had personal contacts but no formal links with Asian universities. There is now recognition that this situation requires a more pro-active approach and that cooperation with both Australian and foreign universities provides a gateway strategy to consolidate on international opportunities. Australian universities' training links with Asia are well regarded, and the company is also funding studentships and scholarships in India as a strategic move.
BHP would like to build further relationships with academics through sabbatical or vacation work with the company. Australian academics show little interest, but several US faculty have spent time with the company. BHP acknowledges it is not the place to do 'leading edge' research, but would provide academics with an insight to real problems in industry.
Barriers and Impediments to Cooperation
The main impediment to BHP's research collaboration is intellectual property. Some universities have presented real problems in this area, and it is the prime reason why BHP prefers to avoid the university commercial arms in favour of direct collaboration with individuals. BHP Research is developing guidelines with CSIRO on intellectual property and the 'way business will be done' in collaborative ventures. This process is proving successful and is now under trial at Newcastle University and the Wollongong Steel Institute.
A second barrier is the 'cultural gap' existing between the knowledge bases of each partner. BHP usually needs quick technical answers without necessarily wanting to understand the system of knowledge behind a particular problem. Universities, on the other hand, want to know the 'why' and 'how' of the problem and tackle it on a more intellectual level. This is where friction can develop. Partly related to this is the problem of timing with university cooperation. BHP Steel's business plan feeds into a technology plan (with a 6-month lag) and thence into the research and development plan. Universities usually want a three-year project, and there can be significant lag in commencing the project. Problems with timing also emerge where postgraduate research is tied to BHP projects; the BHP budgeting cycle for projects starts in October for projects starting in June, whereas PhDs usually expect to start at the beginning of the academic year (March).
BHP staff express the view that universities have in the past not been particularly good at putting together training packages for industry.
The problem is that for academics working out of the industry system, it is very difficult to identify where the day-to-day problems occur for employees. They are simply not familiar with this level of work environment, and while what they teach may be sound at a theoretical level, it often does not translate in practical terms. (interview)
In relation to BHP-university cooperation in training, one BHP research manager saw 'untapped potential', provided that academics could overcome these concerns. He felt that universities have not been good at packaging short, commercially-oriented training courses, the problem being a lack of marketing rather than a lack of skills.
It was suggested however, that this cultural gap is slowly narrowing. Both parties are attempting to understand the other's perspective and knowledge requirements, a step recognised as necessary if successful collaboration is to continue. BHP's approach in collaborative arrangements with universities is thus to identify the areas of interest, draw in the university department, solve the immediate research or training problem and then let the university run with the 'knowledge extension' aspects. This means that, in funding a PhD for example, BHP will usually take a direct interest for the first year or so, then leave it to the university.
A critical phase in cooperation remains the 'ritual of first contact'. It is partly a problem of overcoming embarrassment, to be able to say 'I don't know what I don't know'. This is made much easier if you know the person, and/or if the university group has a high visibility. Thus BHP managers find it easier to locate skills within CSIRO than in the more 'disorganised' universities. This could be partly overcome by better information exchange, for example on the Internet, in relation both to technical skills and 'best practice' methods of collaboration. But lack of information is only part of the problem. Personal networks and contacts, established in many cases decades ago, remain a favoured basis for interaction; for example, with people who had left BHP to work in a university. As one BHP Research Manager put it, 'It is impossible to overestimate the power of informal contacts'.
BHP's cooperative links with universities in research and training are extensive and long-established, as befits a large, technologically-oriented company. Both formal and informal links play a central role. BHP is in the position of 'having to fight off' universities who wish to collaborate with the company. The company's challenge is how to identify the best collaborators. It is being more proactive these days, but personal relations are still the key: to find good people and support their work. As one research manager noted:
...people you can get on with, develop a relationships with and rely upon for the results you need ...building relationships is the name of the game. (interview)
When an interesting research idea arises, it is usually a matter of several phone calls from the interested parties to get the idea up and running with a suitable research team. People are also brought in from around the world to do particular consultancies, but these people are always well known to BHP and usually have a long track record with them. However, at the same time there are also important formal structures in place for consolidating cooperative activities. These structures integrate teaching, research and consulting activities.
One of the interesting features of the BHP case is this powerful use of both formal and informal mechanisms for cooperation. On the one hand research managers strategically manage 'spot-links' with individual specialists within Australia and elsewhere in the world. At the same time, they are also formally involved with specific institutions through government grants or awards, CRCs or jointly funded institutes.
Figure 2 serves to illustrate the integration between informal and formalised cooperative mechanisms in BHP. It also shows the dual approach to building a knowledge-based alliance with selected universities and at the same time maintaining 'spot-links' across national and international academic institutions.
The case study serves to illustrates almost all mechanisms of university and industry cooperation. At the same time it also illustrates the inter-relatedness between mechanisms. This in part reflects the large size of the firm and the fact that in many areas it is working at the leading edge of technological advance. Consequently, the firm relies on a wide range of collaboration mechanisms because it needs to respond to a wide range of technical and production needs, longer-term research and development needs as well as operational, scientific and business training needs.
This figure is only available in print copy.
Finally, and perhaps most importantly, it reflects a growing trend toward the formalisation of long-term collaborative structures. This does not mean these structures are replacing the informal research and consulting networks, but rather represent a structure that can build on them.