Financial pressures ‘hitting UK university-business collaborations’

Financial pressures on UK universities are now affecting the sector’s ability to collaborate with industry, data suggest.

Figures from the Higher Education Statistics Agency (Hesa) show that 76,619 university-business interactions occurred in 2022-23.

This was down by 5 per cent from the number registered in 2021-22, and the lowest level since at least 2014-15 – including years that were affected by the Covid-19 pandemic.

About a third of the interactions recorded were between UK providers and small and medium-sized enterprises, while two-thirds were with other commercial businesses.

The figures reveal that universities generated £5.7 billion of income from knowledge exchange activity last year – a 6 per cent fall in real terms from 2021-22.

Rosalind Gill, head of policy and engagement at the National Centre for Universities and Business, said the figures were a “stark warning” that financial pressures were straining university knowledge exchange and collaborations with industry.

She said declines in university-business interaction were also linked to the loss of vital support from the European Union’s European Regional Development Fund, which had played a critical role in fostering collaboration and has not been adequately replaced since Brexit.

“There is a crucial window for the government to act now to return university-business collaboration to a trajectory of growth,” added Ms Gill.

“This requires putting university funding on a more sustainable footing and supporting collaboration with businesses of all sizes.”

The fall would be even starker were it not for the 12,001 interactions recorded by SRUC (Scotland’s Rural College) in 2022-23. A 5 per cent annual increase meant that the institution was again the largest contributor to this metric, now responsible for a sixth of the sector’s total.

In contrast, some notable drops in interactions occurred within some of the other largest contributors – including at the University of Hertfordshire (down by 18 per cent), the University of Edinburgh (down 57 per cent) and Leeds Beckett University (down 40 per cent).

Despite the declines, Ms Gill said, university-business collaboration “remains a major competitive strength” of the UK.

The Hesa data showed that the number of new university spin-offs and start-ups created rose to 5,280 in 2022-23, and the number of spin-outs that have survived at least three years climbed by 9 per cent.

Active spin-offs are now employing 122,500 people, with an estimated turnover of £18.8 billion.

Simon Hepworth, director of Enterprise at Imperial College London, said the spin-outs data reflects fantastic new collaborations, including programmes such as Research England’s Connecting Capabilities Fund, and shifts to best practice through initiatives like the TenU USIT Guide.

“I think the data shows that university innovation is thriving in the UK with better than ever support for academics, researchers and students, as each university builds capabilities in its local ecosystem,” added Dr Hepworth.

The government recently accepted the recommendations of a review that said UK universities should take a smaller stake in spin-offs to drive greater private investment.

As a result, a government spokesperson said universities, investors and founders are collaborating to draft clearer rules on the stakes held by universities in spinout companies, and streamlining the process.

"UK universities are more effective than ever at getting their innovative ideas out of the labs and on the market – backed by £280 million through the Higher Education Innovation Fund," they added.

patrick.jack@times.highereducation.com