Universities and Innovation in the UK

1. Universities and Innovation in the UK Chris North Office of Science and Innovation UK Department of Trade and Industry April 2007

2. Macroeconomic Context “For the UK’s science base to capitalise on its historical strength in research, the Government must tackle the market failures that can slow the diffusion and generation of new ideas, in order to encourage businesses to be innovative in their approaches and use of new technologies and, together with academic institutions work to further links between research and commercialisation.” HM Treasury, Pre-budget Report 2004

3. Science Budget • £3.4 billion in 2007/8 • Rising by just under 6% year on year • Almost twice as much as a decade ago • UK R & D spend 1.9% of GDP • Govt 0.7% Business 1.2%

4. Universities key to knowledge economy • UK manufacturing base accounts for decreasing share of GDP • Future lies in creativity, design, high value added products and services • Market failure – no immediate profit, private sector won’t do it alone

5. Qualified People Improved products and processes Research Base Attracting Investment New Businesses Improved public policy Economic impact

6. Richness of the UK university sector • 140 universities, with an estimated 300 000 teaching staff • Some world-class universities (eg Oxford, Cambridge, London Colleges) • UK ranks second in the world in seven out of ten broad disciplines • UK has 2nd largest (and growing) share of world’s most highly cited papers

7. Research Assessment • Research Assessment Exercise (RAE) determines who gets what • Research graded from 1 to 5* • 5* equals research of international quality • Assessment approx. every five years • Last one in 2001 next one in 2008

8. Economic role of universities • The strengthening ofuniversities’ second and third functions, through: • The increasing interest and commitment in developing: • collaborative R&D and innovation-oriented activities • the supply of specialized courses and services in support of businesses and the entrepreneurial environment, • the contribution to economic prosperity of the location region, through knowledge transfer, spin-offs etc

9. Universities and the global economy • Strong international orientation of UK universities • the supply of educational and training services: finding more interested clients and expanding their educational markets world-wide and, also, attracting more foreign students in UK locations; • R&D activities: the coordination of/ participation in international R&D projects at both European and, also, global scale

10. Potential threats • Human resources issues: • Lack of renewal of STEM-qualified students (with increasing demand) • Brain drain from: • Loss of completing overseas students • Attraction of US • Long-term decrease in skilled SET personnel for tech-oriented business sectors

11. Knowledge Transfer • Over £300m allocated to knowledge transfer during 2004-07 to increase capacity in universities to manage knowledge transfer activities, to supply early stage funding for spin-out businesses, enterprise training for students.

12. Greater University Business Interaction Two sides to the coin • Help Universities to be more enterprising • Culture change • Remove barriers • Appropriate funding • Encourage business to work with Universities

13. Support for innovation • Higher Education Innovation Fund (£110m pa) • Research Councils: Better Exploitation • RDA role in promoting innovation (£360m into Science and Technology) • DTI Technology Strategy (rising towards £200m pa)Collaborative R&D, Knowledge Transfer Networks • R&D tax credit (more than £500m pa) • SRIF (£billions of research infrastructure – requirement for business access) • Knowledge Transfer Partnerships

14. Higher Education Innovation Fund Include (not exhaustive): • promoting collaborative research • practical business assistance (consultancy, knowledge translation, use of facilities) • business development, marketing • Commercialisation: tech transfer offices, Proof of Concept • promoting/developing Continuous Professional Development courses for businesses • enterprise education for students, training for staff

15. Knowledge Transfer Partnerships • 30 Years Old • A 3-way partnership designed to help a firm be more competitive: Company / University / Graduate • Underpinned by a comprehensive support package • Enables the graduate to work in the firm for 1 – 3 years with supervision from a researcher and a manager from the firm • Produces defined outcomes that the firm can use (project must lead to a demonstrable strategic change in the firm) • Gives the graduate training in business issues • Enables the researcher to understand current business needs/problems

16. Improved products • Rolls Royce • Turbofan development • University Technology Centres

17. Total Research Income (£ million) Scotland 355 NE 97 Yorks 210 NW 220 EM 140 WM 138 East 265 London 665 SE 355 SW 112 Wales 97 N. Ireland 51 SW

18. Highly concentrated? • London, SE and East get 47% • Cambridge, Imperial and Oxford together get more than any region except London • Top 10 Unis get around 50% of funding

19. Are the policies working? • 20 university spin-out companies floated since 2004 • Value of £1.5 billion • Surveys show positive progress in knowledge transfer activities in university sector • But a long term process and no room for complacency…