HE, Business and Innovation

1. HE, Business and Innovation Dr Evan Harris MP Lib Dem member Innovation, University and skills Select Committee

2. I am provoked “Debt” “Scottish HE is less funded without top-up debt” HE Funding per FTE Student 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 England 8,997 9,329 9,528 10,101 10,643 11,337 Scotland 10,734 11,059 11,628 11,595 12,120 12,829 Source: House of Commons Library

3. Have I made my point, Bill?

4. Research Funding Dual-support system: • UK Funding Councils finance university research infrastructure (QR funding), • Seven UK Research Councils provide support for specific research projects. QR funding is allocated on the basis of the Research Assessment Exercise (RAE). • There is widespread support for the maintenance of the dual-support system (e.g. Royal Society, Universities UK and CaSE).

5. Research Funding • Happy campers? • Recent increases • Current difficulties • STFC • BBSRC/EPSRC • FEC!?

6. Third Stream • HEIF was established to increase engagement between Higher Education Institutes and business. • Sainsbury Review, HEIF4 allocated by a formula designed to reward university interactions with SMEs • HEIF4 allocations have yet to be announced. • Winners (mainly) as increased pot with some losers. • Caps and floors. • Biggest loser will be Royal Holloway; HEIF4 (2010-11) award will be £156, 636 lower than HEIF3 (2007-08) award. The biggest winner in absolute terms will be Manchester Metropolitan University (awarded £1,135, 771 more in 2010-11 than in 2007-08). • Need to keep under review

7. Innovation and business • In 2007 UK businesses spend average of 5% turnover on innovation [CBI] = £70billion on innovation by UK businesses. • In 2005, CBI members survey of innovation activity. • 77% of respondents reported collaborative projects with universities[2]. collaborations increasing but employers rated their effectiveness as low. • Both universities and businesses agreed this was due to a lack of understanding between the two communities. • Three-fifths (60%) of companies agree that universities see business as an important customer, yet three-quarters (74%) disagree with the statement that academics understand business needs.

8. Good practice? • ‘Knowledge Transfer Partnerships’ (KTPs). The 2006-07 KTP Annual Report states that, on average, the business benefits that can be expected from a single KTP project are: • an increase of over £290,000 in annual profits before tax; • the creation of eight genuine new jobs; and • an increase in the skills of existing staff.

9. Research Council KT schemes • S&T Committee report ‘Research Council support for Knowledge Transfer’. Urged Research Councils to take steps to engage business users more effectively (Recommendation 6). • The Business plan competition[1] is a cross-research council initiative which aims to help researchers turn their findings into a business opportunity (short background note attached). • [1] http://www.rcuk.ac.uk/innovation/fundingkt/bpc/default.htm

10. Business and HE Teaching • Emphasis has been placed on knowledge transfer and on commercialising research. • What about collaborative approach to learning provision • Funding…… curriculum development, course design and delivery? • Leitch’s report emphasised the need for a demand-led approach to skills, • apprenticeships, degree and postgraduate levels as well as more workplace training. • The Royal Society report ‘A Higher Degree of Concern’ Jan 2008

11. ELQs and business Evidence-free policy? “There may indeed be evidence that the cost of funding ELQ students has been to deprive significant numbers of qualified first time students of a university place.It's just that I haven't seen it.” Richard Lambert, DG CBI Dec 2007

12. Lambert says • “Problem solved” • “I don't have much that's fresh to say about the themes of Business-University research collaboration, which I reviewed for the Government a few years ago. The data show a steady increase in the pace of collaboration across the UK. The Government has stepped up to the plate with increased third stream funding and support for the Technology Strategy Board. And businesses everywhere are recognising the value of academic links at all levels.”“Lord Sainsbury's excellent review - The Race to the Top - … pretty much said it all.”

13. Business will step in? "The House and those way beyond it will have to accept that the employers in this country will have to change. The economy of this country has no option but that employers change...We do not have the option, given the number of people in the workforce without the kinds of skills we need over the coming periods, or, indeed, the skills we need today. There is no option other than that there is a fundamental lifting of the level of skills. The role of employers has to be that they increase whatever they have done historically.“ Lord Triesman Dec 2007 ..Why?

14. Look at Football • Good players available on free transfers • Results merchants look short-term • National policy must not rely on individual business decisions.

15. Risks • Universities short and long-term But businesses short-term (generally) • HEFCE will be risking its co-funding • Gaming the system

16. And finally… Business giveth, the taxman taketh away Officials from HMRC, the CBI and representatives of universities are due to meet next month to discuss the issue of university income and its liability for corporation tax. As charities, universities are currently exempt from corporation tax. It seems, however, that HMRC are concerned that university engagement with industry/business may undermine their charitable status (as currently defined).

17. Government Statistics “In a few years time, Government will expect all doctors to be performing above average”