Developing third stream activity is becoming increasingly important for business schools as they come under increasing financial pressure. The purpose of this paper is to highlight the strategies adopted by new university business schools and highlight the resources, capabilities and constraints under which they are operating.
The research conducted for this paper is based upon Yin's multiple case design methodology using replication logic. Six new university business schools were identified, where two cases would be literal replications (large schools with a large portfolio of third stream activity) and four cases designed to pursue different patterns of theoretical replication (large schools with small levels of third stream activity, and two small schools). In total 14 senior staff were interviewed in the six schools.
The overall picture that emerges from the research is of a complex market that is for the most part local and regional in nature, where the ability of individual schools to develop a coherent strategy towards growing third stream activity in a range of sub‐markets is constrained by their resources, capabilities and organisational arrangements, as well as market opportunities in their region. From the analysis it is possible to identify two distinct development paths. One where schools focus on delivering funded activity (funded for example by EU, regional development agencies, learning and skills councils and SSP's) and one where schools focus on more “commercially” based activity (in‐company programmes, accreditation, contract research for public and private sector organisations).
The paper is one of the first to highlight the resources and capabilities necessary to compete in this increasingly important market.
There is little hard evidence available highlighting the development of third stream activity in new university business schools.
