Professor Kieran Fernandes is the Executive Dean of Durham University Business School. A Fellow of University College Durham and the Wolfson Research Institute, he has held academic positions at Warwick and York, serving as Head of Department, Associate Dean, and Associate Pro-Vice-Chancellor. Before his academic career, he worked as a Sub-Systems Engineer at NASA’s Stennis Space Centre. He was appointed by the UK Secretary of State for International Development as a Non-Executive Director of the UK National Commission for UNESCO, later elected Vice-Chair. A world-leading expert in complex systems and digital innovation in supply chains, he has advised UNESCO, NASA, the World Smart City Forum, and the Swiss Federal Department of Foreign Affairs.
Business schools have long been at the forefront of knowledge creation, talent development, and economic transformation. However, as global economies pivot towards innovation-driven growth, their role is expanding beyond conventional management education. Increasingly, regional innovation ecosystems rely on business schools as catalysts for interdisciplinary collaboration, industry engagement, and entrepreneurial development. This article examines the evolving function of business schools in fostering regional innovation, exploring how they are shaping economic landscapes through strategic partnerships, knowledge exchange, and targeted support for high-growth sectors—offering insights that can inform the broader evolution of business education and its impact on regional economies.
The Changing Landscape of Business Schools
The traditional function of business schools has been to deliver management education, with a primary focus on leadership, strategy, and organisational effectiveness. However, the 21st century presents a new set of challenges, including rapid digital transformation, pressing sustainability imperatives, and the demand for more inclusive economic growth. To remain relevant and impactful, business schools must expand their remit, engaging more actively with regional economies to address these evolving complexities.
A key transformation in business education is the increasing emphasis on interdisciplinary collaboration. Historically, business schools operated in relative isolation from other academic disciplines. However, contemporary challenges—such as the transition to net-zero, the rise of artificial intelligence (AI), and the need for economic resilience—necessitate expertise that spans multiple domains, from engineering and data science to social policy and environmental studies. To meet these demands, business schools must integrate diverse perspectives into their research and teaching, ensuring that graduates are not only adept in management but also capable of driving innovation within their regions.
Business Schools and Regional Innovation
Business schools exemplify how academic institutions can drive regional innovation. Positioned within their respective regions, these institutions play a critical role in supporting local economic growth, attracting investment, and fostering industry partnerships. Many business schools have positioned themselves as hubs for enterprise and knowledge exchange, leveraging their wider research capabilities to advance innovation-driven economic development.
Knowledge Exchange and Business Engagement
A key way in which business schools contribute to regional innovation is through knowledge exchange and industry collaboration. Many institutions have developed extensive partnerships with local businesses, public sector organisations, and multinational corporations to facilitate research impact and practical application.
For instance, business schools have played pivotal roles in initiatives that support the commercialisation of university research across various regions. These programmes foster entrepreneurship by helping academics translate research into high-growth businesses, aligning with broader industrial strategies. Through mentoring, funding support, and strategic advice, business schools assist spin-out companies in areas such as clean energy, digital technologies, and life sciences, strengthening regional innovation ecosystems.
Supporting High-Growth Sectors
Business schools are also deeply engaged in supporting high-growth sectors that align with their regions’ strategic economic priorities. A prime example is their involvement in research centres focused on space technology and satellite applications, helping to position various regions as hubs for emerging industries. Business academics contribute to the commercial and strategic dimensions of these initiatives, ensuring that businesses in these sectors benefit from robust business models, market analysis, and investment readiness support.
Similarly, many business schools play leading roles in advancing the hydrogen and net-zero agenda within their respective regions. As economies transition towards a low-carbon future, these institutions collaborate with local authorities and industry stakeholders to develop strategies for commercialising clean energy technologies. By integrating business expertise with technical research, business schools ensure that regional innovation efforts translate into viable economic opportunities.
Entrepreneurship and SME Growth
Business schools play a vital role in fostering entrepreneurship, particularly among small and medium-sized enterprises (SMEs), which are the backbone of regional economies. Many institutions actively support SME development through their Executive Education and Continuing Professional Development (CPD) programmes, which provide business leaders with cutting-edge knowledge in strategy, digital transformation, and finance.
One particularly impactful initiative is the development of regional scale-up programmes, which equip local entrepreneurs with the skills and resources to expand their businesses. By offering tailored mentoring, business model development, and access to networks, these programmes enable SMEs to scale their operations, attract investment, and contribute to regional job creation.
Internationalisation and Regional Competitiveness
While regional engagement is a core priority, business schools must also support internationalisation to enhance regional competitiveness. Many institutions foster global partnerships that benefit their respective regional economies, ensuring that businesses can access international markets and global best practices.
A notable example is collaborations with international business schools, where faculty exchange programmes and joint research initiatives facilitate knowledge transfer between global markets. Similarly, participation in multinational research and innovation collaborations provides local businesses with international linkages that drive trade and investment.
Challenges and Opportunities for Business Schools in Regional Innovation
Despite the significant contributions of business schools to regional innovation, several challenges must be addressed to maximise their impact. One persistent barrier is bridging the gap between academia and industry. The differing priorities of these two sectors often hinder effective knowledge exchange. To overcome this, business schools must develop mechanisms such as industrial advisory boards and co-designed curricula that align academic research with real-world business needs, ensuring that insights generated within universities translate into tangible economic and social benefits.
Another critical challenge is securing sustainable funding. Many regional innovation initiatives rely on government grants and external funding sources, which can be unpredictable. To mitigate this uncertainty, business schools must explore alternative funding models, including industry partnerships, commercialisation revenues, and philanthropic contributions. Establishing long-term financial sustainability will enable these institutions to maintain and expand their innovation-driven programmes without being overly dependent on fluctuating external support.
Additionally, fostering a stronger entrepreneurial culture remains a key priority. While business schools have made significant strides in promoting entrepreneurship, there is still room to integrate entrepreneurial thinking more deeply into core curricula. Expanding experiential learning opportunities—such as incubators, venture-building courses, and real-world consultancy projects—will equip students with the practical skills and mindset necessary to drive innovation and create impactful ventures. By addressing these challenges, business schools can further enhance their role as drivers of regional economic transformation.
The Future of Business Schools in Regional Innovation
Looking ahead, business schools must embrace several strategic priorities to sustain and enhance their role in regional innovation. One of the most pressing imperatives is the integration of enhanced digital capabilities. As artificial intelligence (AI) and data analytics continue to reshape business landscapes, business schools must equip students and industry partners with the skills necessary for digital transformation. By embedding data literacy, AI applications, and digital strategy into curricula, these institutions can ensure that graduates are well-prepared to navigate and lead in a technology-driven economy.
Equally important is the need for stronger public-private collaboration. Effective engagement with government agencies, local enterprise partnerships, and industry consortia will be essential for shaping regional economic policies and fostering innovation ecosystems. By positioning themselves as strategic conveners, business schools can facilitate dialogue between policymakers and businesses, ensuring that research insights and entrepreneurial initiatives translate into impactful regional development strategies.
Furthermore, business schools must place a greater emphasis on sustainability. Given the growing urgency of climate change and environmental responsibility, these institutions must prioritise sustainable business models, circular economy principles, and the integration of ESG (Environmental, Social, and Governance) frameworks into their teaching and research. By embedding sustainability at the core of business education, schools can empower future leaders to drive responsible innovation and contribute to long-term economic resilience.
Conclusion
The role of business schools in regional innovation is evolving, with institutions demonstrating how academia can drive economic growth, industry collaboration, and entrepreneurial development. Through strategic initiatives, business schools are making tangible impacts on regional innovation landscapes. Moving forward, these institutions must continue to adapt, integrating interdisciplinary expertise, global networks, and sustainable business practices to shape the future of regional economies.