Leader: Adopting the MIT model will bring a richer, freer future

The Massachusetts Institute of Technology embodies the entrepreneurial model for modern research universities that is being urged on leading United Kingdom institutions by the government and, in particular, by the chancellor.

Gordon Brown was fascinated by a 1997 BankBoston report, MIT : The Impact of Innovation . Its opening assertion - "If the companies founded by MIT graduates and faculty formed an independent nation, the revenues produced by the companies would make that nation the 24th largest economy in the world" - must have been enticing to a chancellor obsessed with innovation and entrepreneurialism. This is not just raw capitalism. Last year, MIT announced that it was putting all its course materials on the web because, it said, access to knowledge was becoming too restricted. The move also threatened to eclipse many less distinguished online projects. On page 5, we report on the fruit of Mr Brown's fascination, the Cambridge-MIT Institute, into which the Treasury is pumping £68 million over five years. It already has £10 million of the £16 million it needs to raise, is running new courses and, most important of all, bringing about change at Cambridge University.

If Britain's universities are to compete with aggressive global players such as MIT, change will have to be radical and rapid. It is one of Cambridge vice-chancellor Sir Alec Broers's strengths that he has been able to present Cambridge as business-friendly despite its intellectual property rights policy and governance structure being a mess. CMI has adopted MIT's policy whereby the university owns its staff's IPR, an indication of where Sir Alec would like to see the rest of Cambridge go, and Cambridge has embarked on wider constitutional changes.

It is a shame that MIT did not consider a wider collaboration. Oxford University is arguably ahead of Cambridge in embracing entrepreneurialism. Vice-chancellor Colin Lucas has presided over a quiet revolution. Oxford owns its academics' IPR, and Isis Innovation has supported academics creating spin-offs. Last year, Oxford was named the UK's most entrepreneurial university in terms of the number and value of spin-offs, links with companies and innovation education for students. Cambridge is only now starting to catch up.

But moves of this kind are too small and too slow to ensure the health of Britain's top universities. In Oxford's annual review, out this month, Dr Lucas writes: "Without a change in direction on the part of government, or an unforeseen inflow of funds from other sources, the university will continue to be faced with the problem of retaining its position as a global player in higher education, while being unable adequately to maintain its physical and human assets and infrastructure."

What "change in direction"? Everyone is pussyfooting around the big issue. The government has - as the policies of the Treasury, the Department of Trade and Industry and the funding councils show - decided that British universities are to follow the American entrepreneurial model. This means they will, as vice-chancellors have begun to acknowledge (page 1), need freedom to act entrepreneurially over the fees they charge rich students for their core business - teaching.

The alternative, implicitly rejected because of its high cost, would be to go the continental European way, with universities seen as part of the public service. This model underlies moves in the European Union to require publicly funded universities to make their intellectual property available at a cost and to standardise quality control across Europe. Such a model would be attractive if there were any realistic possibility of the cash being provided to compete with the Americans effectively. As there is not, the government had better start freeing the universities and, in particular, ensuring that the EU consultations do not result in rules that throttle the entrepreneurial model before it has a chance to deliver.