There is a rich research tradition and an ample literature of university – industry (U/I) relationships. Scarce are investigations focusing on university - public sector relationship. Public sector organizations differ significantly from private business firms. Their role in society is often legally defined, state government funded, and politically guided. Their management and organization, performance time-span, effectiveness requirements, conflict of interests, and relationships within the society stand out substantially from those of the private business enterprises. Yet, they also face the need for development and reform. Furthermore, they also are large-scale employers with growing need of the latest knowledge.

This paper focuses on the relationship of a university and a public sector organization. It describes the experiences of Laurea UAS and Tax Administration relationship. Tax revenue is the public sector’s most significant source of income. The purpose of this paper is to provide an insight into multifaceted collaborative relationship. The evolutionary perspective in the relationship is taken. The phases of the relationships development are described. The paper aims to investigate the institutionalization path of the relationship and to develop a framework for leveraging the high potential of the collaborative university - public sector relationship. Applying practice-theoretical approach, this paper investigates how the relationships can be transformed from dyadic personal relations to collaborative actions. The goal of this exploratory paper is to advocate university – public sector collaboration.