In order to be competitive in the globalising knowledge economy, the OECD countries need to invest in their innovation systems at the national and regional levels. As countries are turning their production towards value-added segments and knowledge-intensive products and services, there is greater dependency on access to new technologies, knowledge and skills. And, with the parallel processes of globalisation and localisation, the local availability of knowledge and skills is becoming increasingly important. OECD countries are thus putting considerable emphasis on meeting regional development goals, by nurturing the unique assets and circumstances of each region, particularly in developing knowledge-based industries. As key sources of knowledge and innovation, higher education institutions (HEIs) can be central to this process.

This chapter briefly illustrates the various dimensions of regional engagement of higher education and provides a definition for this activity. It describes the OECD study encompassing intensive analysis of higher education institutions’ engagement at regional level. It explains the aims and the methodology of the thematic review including self evaluation and external evaluation. It highlights the developmental focus of the OECD study and the aim to support partnership building in the participating regions.

This chapter explores why higher education institutions are becoming more engaged with the cities and regions in which they are located and why such communities are seeking to mobilise higher education to support their economic, social and cultural development. It describes the changes in the territorial development policy and higher education policy which contribute to the stronger focus on the interplay between higher education and their regions. Finally, it provides a conceptual framework for the synthesis of the interests of higher education institutions and regions in the context of globalising knowledge economy.

This chapter examines the extent to which the external influences at the global, national and regional levels can inhibit regional engagement of higher education institutions and suggests adjustments to current policy and practice which could help to overcome these barriers. Barriers to regional engagement are addressed in a thematic manner starting with the sometimes conflicting effects of national higher education, science and technology and labour market policies. Particular attention is paid to how regional engagement is funded. The capacity of local and regional agents to engage with higher education institutions and the influence of regional governance and leadership is considered next. Finally, the chapter closes with reference to leadership at the level of the individual higher education institution.

This chapter presents the empirical part of the OECD study: an intensive case-study analysis of higher education institutions’ engagement at the regional level. Self evaluations and external reviews of 14 regions and their higher education institutions were carried out in order to provide insight as to the causal connections and processes underlying regional engagement (OECD, 2007a).1 The case study descriptions address the following issues: national policy towards territorial development and the role of higher education in this agenda; the characteristics of the region itself; higher education in the region; and the development trajectory and maturity of the relationship between higher education and the region. Case studies reveal considerable diversity across regions in terms of their population and physical size, numbers and types of higher education institutions and the extent to which they are engaged in regional development.

This chapter discusses the relationships between higher education institutions and business and industry and the interlinked policy implications. It analyses mainly top-down policy approaches which aim to improve the link between higher education institutions and regional innovation systems and clusters. Finally it highlights policy practices and instruments as examples of overcoming some of the barriers to regional business innovation.

This chapter considers the role of higher education institutions in regional human capital systems and in building “learning regions”. It presents several examples from OECD countries highlighting the different roles that the higher education institutions play in this domain. First, higher education institutions can widen access to higher education, particularly from remote areas and/or communities with low traditions of participation in higher education e.g. through lifelong and e-learning activities. Second, they can improve the balance between labour market supply and demand through creating improved labour market intelligence, enhancing the links with the employers and supporting new enterprising. Third, higher education institutions can attract talent to the region and help retain it.

Regional development is often thought of in economic terms only, and with a focus on technology-based development. The current OECD project briefing notes, however, suggested a wider interpretation. This chapter looks to the wider community engagement of higher education institutions. Through case studies it reviews the attitudes and practices of higher education institutions in relation to the social, cultural and environmental development of the region, not only as means to economic progress but also as ends in themselves. It identifies three key drivers in this domain: first, beneficial framework conditions, second, existence of networks for sustained co-operation and, third, local conditions which create a sense of urgency.

Interactions between higher education institutions and the region in which they are located can be beneficial to both parties. For this interaction to take place bridges have to be constructed based on firm pillars on both sides. This chapter seeks to identify the elements for developing the capacity for joint working between regional actors and agencies and higher education institutions in the round, not just particular institutions or parts of institutions. These are the building blocks for the pillars and the spanning techniques for bridging the gap to enable the traffic to flow from one side to the other. In regions where there is more than one higher education institution and a number of sub-regions this implies developing the capacity of the region as a whole.

This final chapter draws together pointers for future development for actors at three different levels: central, regional and institutional level. The recommendations emphasise the facilitating role of the central government in creating beneficial framework conditions and incentives. The recommendations highlight the importance of partnership building between the higher education institutions, and between the higher education institutions and regional stakeholders. Finally, they emphasise the need for more active role of higher education institutions.