The "strong potential capability in knowledge-intensive activities" that Northern Ireland's university system offers the local economy is being wasted, according to a report from the Northern Ireland Economic Council.
Northern Ireland's university system has world-class engineering and science-related disciplines, particularly information technology. It offers research and development partnering capabilities to every entrepreneurial firm in the province, the report says.
In addition, its 25 university research and product development centres are equipped to address companies' technological needs and enhance the province's technology skill base.
Yet these assets are having no measurable effect on regional growth.
The report says that most of the research centres are under-utilised. Relatively few have active industry-university partnerships. A sizeable number do not involve students.
There are no networks to allow businesses, universities, research institutions, the wider education system and government to collaborate on maximum science and technology output.
The thousands of skilled professionals produced by the university system over the years, moreover, work and run entrepreneurial companies elsewhere.
Michael Best, author of the report and visiting professor at Cambridge's Judge Management Institute, said: "Northern Ireland's problem is not so much the supply of skilled labour, particularly graduates, but the capability of industry to absorb them."
The report, The Capabilities and Innovation Perspective: The Way Ahead in Northern Ireland , also warns that regional growth will be choked if the education system does not produce the requisite numbers and types of graduate engineers.
The report concedes that increasing the number of engineering places will be costly in the short term. But "measured in lost growth opportunity, the failure to make the investment is the truly high-cost scenario. Only the government has both the funds and legitimacy to make educational restructuring and investments on the scale involved."
The challenge for institutions is not, however, simply to increase graduate numbers, but to ensure more graduates are educated in a curriculum that includes emerging technological methodologies.
University curricula have to cater for technological change. Updating the engineering curriculum and adjusting it to technology-driven enterprises have become critical issues in the shift from mechanical to electrical technologies.
"Firms seeking to advance their technological capabilities in opto-electronics, for example, seek graduates educated in photonics as well as electronics," the report says.
Regional growth requires more than the development of engineering methodologies within education institutions. The supply of engineering graduates must be "in sync", both in skill and quantity, with the demand from technology-driven firms.
Professor Best concludes: "Academic research in genome technology and photonics are investments in support technologies of the future, much like electronics were in the earlier decades. All three, however, depend on nano-technology production capabilities. Governments that invest in skill formation in these areas are not placing bets on the future, but investing in it."
Research Monograph 8 is available from the Northern Ireland Economic Council, 1-3 Donegall Square East, Belfast BT1 5HB.