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How Businesses Benefit from Service Partnerships with Universities

How Businesses Benefit from Service Partnerships with Universities
Service partnerships in commoditized marketplaces are valuable because they provide research and training benefits to both universities and businesses.
The primary goal of most students at any university is to get an education; however, probably of no less importance is the desire to get a good job after graduation. The primary goal of businesses/employers is either profit in private firms or efficient operations in public service. To these ends, universities and businesses have a stake in both performing their primary and secondary goals in the best possible manner. This creates an incentive for partnerships between universities and businesses.

While many articles in this month’s Special Feature are exploring how universities can collaborate with businesses to improve efficiency in service provision, this article will explore how businesses can work with universities to accomplish this same end. My goal is to outline how service partnerships can lead to positive outcomes for the customer (in this case, the business) and the vendor (in this case, the university).

I will focus this discussion on private businesses and not the government, given that the purposes for the partnership are only slightly different. Partnership between universities and businesses come in two major forms, which include research and training. I will break each of these partnerships into their pros and cons.

Research Partnerships

The easiest form of partnership is the research partnership. Research partnerships are formed when a university and business agree to collaborate on a particular research project.  These can be in the form of contracts or grants to conduct research. An example of this is an automotive firm asking an engineering department to design or test a car. The benefits of this kind of arrangement are numerous. For example, students in relevant programs may get the opportunity to perform research for a potential employer; professors/researchers maintain research funding; and the business gets the research done by a potential employee at a reduced cost. This arrangement also allows for independence of the research from the funding source. The disadvantages for this type of partnership can be summed up with one statement: “The business is taking advantage of students.”  At the same time, one could argue that by demonstrating their abilities to the business,  students might get an opportunity to work for the company. I have limited this to one example; however, research partnerships have a plethora of examples from economic impact studies to bimolecular cancer research.

Training Partnerships

Training partnerships form when a business has a specific need for employees and an ample number of positions available for trained individuals. Universities can enter into these types of partnerships with the promise that graduates will have employment at the end of their academic career. An example of this would be a defense contractor that pays for a management program. In this case, students are accepted into the program and take a specific set of coursework. Upon completion, they are hired as entry-level management. The benefit of this type of program for students is guaranteed employment and, for businesses, specially trained individuals. Potential challenges are that the training may only apply to the specific business, or that the business may require a non-compete clause in the employee’s contract. Training partnerships are an interesting phenomenon to study. They tend to act like the ocean’s tide, where one academic year they are everywhere and the next they are being shut down.


The two types of partnerships I have discussed here are not the only ones available, but the most common. These partnerships can benefit students, universities and businesses. They are not a perfect marriage of education and business, but they do provide incentives to all three parties.

Additionally, while I have not focused on this aspect, given the educational budgets throughout the United States, these external funds help fill funding gaps. Business and university partnerships have an important role in modern education and research, and show how service partnerships benefit all involved stakeholders.

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