Why universities struggle to collaborate with SMEs — and what to do about it

Universities often say they would like to work more closely with small- and medium-sized enterprises (SMEs). Governments want it, and regions need it. Universities themselves increasingly recognise that SMEs can be important partners for innovation and for connecting research with real-world problems. Yet despite all that intent, a collaboration between a university and a SME remains harder to start and harder to scale than many institutions expect.

The issue is not a lack of interest from SMEs. It is a structural mismatch between how SMEs operate and how universities typically organise collaboration. Evidence from our analysis of more than 3,000 businesses across 32 European countries shows that many SMEs want to work with universities. They are particularly interested in strengthening their innovation capacity and gaining access to expertise or talent. However, the threshold to get the collaboration started often gets in the way.

Many SMEs approach universities with a very specific need. They might want help solving a technical problem, testing an idea, or finding the right expertise. But when the first step requires navigating several departments, dealing with complex contracting processes, or figuring out where to start, many firms simply walk away.

The wrong assumption at the heart of the problem

Many universities still approach SMEs using collaboration models that were originally designed for large companies. This creates predictable friction.

SMEs operate differently to large firms, and this should shape how universities engage with them. While larger corporates might have dedicated partnership teams with capacity to navigate complex university structures and undertake exploratory work, SMEs often rely on founders or senior managers to make collaboration decisions. Time spent engaging with universities competes directly with day-to-day operations, so interactions need to be immediately relevant, practical, and manageable.

When universities apply the same contracting logic, lead times, and institutional language they use with large corporate partners, the experience can quickly become frustrating for SMEs. What feels routine inside the university often appears slow and unnecessarily complex to a smaller firm.

Where collaboration breaks down

1. Timelines do not match

SMEs often operate under immediate commercial pressure. Problems emerge quickly and need fast responses. Universities, by contrast, move through academic calendars, governance structures, funding cycles, and internal approvals.

This difference in pace matters more than universities sometimes realise.

SMEs are fast moving and need answers on specific points. They might speak with the researcher and get a response, but they often can’t translate it into action without more work as SMEs are constantly adapting to the market in real time. It can be a mismatch that frustrates both sides.

Anthony Francis, Associate Vice President for Innovation and Strategic Partnerships at the University of Texas at San Antonio.

Practitioners working at the intersection of universities and industry often highlight just how immediate SME needs can be.

When the university’s response cycle is slower than the firm’s decision cycle, momentum is lost.

2. Universities often lack a clear front door

Many SMEs do not know where to begin. While universities can provide a rich landscape of opportunities, to SMEs it can appear as a maze of faculties, centres, engagement teams, and services. Even when a SME makes contact, it may be redirected several times before reaching someone who can help.

SMEs don’t think of a university as a first port of call to help them solve their problems, unless there’s already a relationship. We could have multiple interactions with the company across the university, and without a way of tracking that, nobody would know the level of interactions.

Finola Howe, Head of Enterprise and Engagement, Atlantic Technological University

Practitioners working in university engagement often describe this as one of the most persistent barriers SMEs encounter when trying to work with universities. This is not just a communication issue — it is a structural design problem and a persistent barrier to engagement.

3. Language and expectations are misaligned

Universities often talk about collaboration in institutional terms such as impact pathways, valorisation, strategic alignment, or knowledge exchange. SMEs usually frame their needs differently: solving a technical challenge, accessing talent, testing an idea, or finding relevant expertise.

This language gap can make universities seem abstract when SMEs need something concrete. Cultural differences and varying expectations in terms of speed and risk tolerance reinforce the challenge.

Supporting the journey beyond the prototype

As projects become more ambitious, USI is deliberately redefining its role. Rather than attempting to support every stage of venture creation internally, the Center for Applied Research positions itself as one part of a broader local ecosystem.

Steven has invested significant effort in building relationships with regional partners, including small business development centres, chambers of commerce, marketing agencies, financial advisors, and lending organisations. These partners provide expertise and resources that the university itself does not aim to replicate.

4. Trust is shaped by process

Trust is not built only through personal relationships — it is shaped by how the institution behaves.  

It strengthens when universities respond quickly, route enquiries effectively, remember previous interactions, and make the engagement actually feel like a collaboration.

It weakens when processes are slow, fragmented, or difficult to navigate. For SMEs, reliability matters as much as individual enthusiasm. Repeat engagement depends on this institutional trust.

What universities should do differently

Universities that work well with SMEs tend to focus on two practical priorities. First, they reduce friction in how companies interact with the institution. Second, they offer simple ways for companies to start collaborating without major commitments.

This usually means two things. Universities need to be easy to approach, quick to respond, and clear about what they can offer. At the same time, they need entry points that allow SMEs to begin with small, manageable forms of collaboration before deciding whether to deepen the relationship.

Early value matters more than early scaling of the collaboration. When SMEs see practical benefits quickly, they are far more likely to return and develop deeper collaboration over time.

There are key figures who can support collaboration with SMEs by acting as a clear, human entry point into the university. Boundary-spanning roles – or dedicated engagement professionals – matter because they maintain continuity. They help SMEs navigate internal complexity, make sure the right people are involved, and prevent relationships from stalling between departments. In practice, they are often the difference between an institution that looks fragmented and one that feels responsive.

The real shift universities need to make

Universities do not need to lower their ambitions for SME collaboration, – they  need to redesign how it starts. 

That means moving away from a large-company mindset and towards a SME-friendly one: clearer access points, simpler processes, faster responses, earlier value, and lighter-touch pathways. The universities that will succeed with SMEs are the ones that are simplest to work with.

Ready for more?

Dive deeper into how universities can more effectively collaborate with SMEs in the brief “Designing university–SME collaboration that actually works.” It examines why these partnerships often fail to scale and identifies misalignment—not motivation—as the core challenge. Drawing on large-scale European data and case studies, the brief translates insights on engagement, institutional design, and ecosystem collaboration into practical approaches that help universities create accessible, low-friction pathways for SMEs to innovate, grow, and engage meaningfully.

Luca Barbera (author) is a Project Officer at UIIN. His work encompasses a broad spectrum of research topics, including sustainability, deep tech, engagement practices for universities and academics, with a particular emphasis on the valorisation of results.