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Six-fold return for economy on university innovation funding

Every pound invested in higher education innovation funding adds at least £6 (US$9.70) in knowledge exchange income to the economy, according to a new report sponsored by the Higher Education Funding Council for England, or HEFCE, and launched on 30 April.

The report, Strengthening the Contribution of English Higher Education Institutions to the Innovation System: Knowledge exchange and HEIF funding, draws on institutional strategies submitted to HEFCE.

These strategies set out how universities are using £600 million in higher education innovation funding.

It comes at a time when the role of higher education institutions in supporting economic growth and development has taken centre stage as governments around the world push for private-sector led, innovation-driven economic recoveries from the current, deep economic downturn.

At the same time there have been several “seismic shifts” in the past four years that have fundamentally changed some of the incentives to invest in knowledge exchange. These include the research impact agenda and the switch to charging students tuition fees.

The report, published by Public and Corporate Economic Consultants (PACEC), concludes that knowledge exchange is now embedded within the sector and has become a strategic, integrated activity, driven in part by the research impact agenda.

As one university (Cambridge) put it: “Research excellence and return to the UK economy should be a common goal.”

Integration is also being driven by pressure, under the new student fees regime and difficulties in the graduate jobs market, to focus on student employability, with 75% of higher education institutions putting greater emphasis on student entrepreneurship.

Another core focus is the expansion of student work experience opportunities.

Some 60% of higher education institutions highlight the infrastructure for innovation they provide for their local economies. This can bring together the various innovation support services in an area, and establish a university as an ‘anchor’ of its city or region.

Universities are playing an increasing role in supporting exports from the UK, the report says.

Four out of five higher education institutions are making changes to their internal infrastructure to improve the efficiency of their knowledge exchange investments.

Universities continue to play a key role in the UK’s innovation system, and are an important driver for economic growth and recovery.

A new model of higher education’s role in innovation is presented in the report.

Sir Alan Langlands, HEFCE’s chief executive, said he welcomed the evidence of increased efficiency and effectiveness of knowledge exchange, with 80% of institutions taking steps to improve their performance further.

“This is a sector rising to the challenges of economic recovery and growth by taking an integrated approach to the creation, dissemination and application of knowledge,” he said.

Tomas Ulrichsen, PACEC lead author of the report, said governments around the world are investing in universities as a way to drive innovation-led economic growth and the development of a knowledge-driven economy. However, people often overlook the diverse mechanisms through which this occurs.

The authors had tried to improve the conceptual model for understanding the full contribution made by the higher education sector to innovation and economic development, and to back that up with evidence of real practice from universities on the ground.

“It is clear that universities are becoming increasingly direct partners in the innovation process as well as working to create a more fertile environment for innovation in the economy,” he said.

The report said more than half of higher education institutions are seeking to refocus their activities on the private sector, driven partly by the loss in demand for knowledge education from other sectors of the economy and the heavy focus by the government on targeting public investments towards an innovation-led, private sector-driven recovery.

However, there remains a big question over whether sufficient private sector demand will materialise to meet the desired supply of knowledge education.

Recognising this risk, higher education institutions are also taking steps to diversify overseas into key markets including the US, China and India.

Four out of five higher education institutions are also seeking to align themselves in some way with the priorities of the national research and innovation funding agencies such as the research councils and the Technology Strategy Board, which is the UK’s national innovation agency.

An expert group commended seven institutions for their good practice: Cranfield, Exeter, Hertfordshire, Manchester, Newcastle, Oxford and Staffordshire.

The group also praised two innovative partnerships:

  • Special Purpose Vehicle to manage innovation infrastructure – a collaboration between Staffordshire University, Keele University, North Staffordshire chamber of commerce, and Keele University business and science park, to undertake shared services and collaborative bidding for innovation support funding for Stoke on Trent and Staffordshire local enterprise partnership.

  • Easy Access Innovation – a collaboration between the University of Bristol, King’s College London and the University of Glasgow, as a good example of both working in partnership and the desire to identify methods and techniques that simplify and accelerate the transfer of knowledge to partners.

HEFCE provides £150 million a year in HEIF funding for knowledge exchange to support and develop a broad range of knowledge-based interactions between universities and colleges and the wider world, which it says result in economic and social benefit to the UK.
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