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These comprise part of a much wider economic impact [Note 1].

Analysis by HEFCE of the twelfth annual Higher Education – Business and Community Interaction (HE-BCI) survey shows that the total value of the services [Note 2] which UK universities provide to the economy and society increased by 4 per cent to £3.4 billion in 2011-12, from £3.3 billion in 2010-11.

Particularly significant is the 11 per cent increase in activity benefitting small and medium-sized enterprises (SMEs) which gain a competitive advantage from their association with universities – for example through access to specialist knowledge (via consultancy) or facilities (such as rapid prototyping or computer-aided design).

Engagement with large businesses increased by around 5 per cent overall, including a notable rise (6 per cent) in contract research income, from £343 million in 2010-11 to £365 million in 2011-12. This not only shows UK higher education institutions responding to the needs of business at home, but investment from overseas seeking to take advantage of the UK’s world-class research.

Public and third-sector organisations also increased their engagement with universities (by 5 per cent overall) for research, consultancy, training and access to intellectual property.

The report finds encouraging signs of the rising value of UK knowledge exchange [Note 3]:

  1. The increase in consultancy (up 7 per cent) shows how universities are freeing-up their entrepreneurial academics to meet the needs of business.
  2. The strength of UK Universities is further demonstrated by their success at winning funding from the European Union with collaborative research grants and regeneration programmes increasing significantly in 2011-12.
  3. In 2011-12, 191 new businesses were set up based on the world-class research carried out by UK universities. Although this is fewer than in 2010-11, the number of companies surviving three or more years increased slightly to 1,000.
  4. Income from continuing professional development rose by 8 per cent overall, from £606 million in 2010-11 to £651 million in 2011-12; increases were seen across all partner types.
  5. Graduates established 2,726 new enterprises to capitalise on the knowledge and experience gained while studying. Universities support this by embedding enterprise in degree courses, by providing advice and facilities for graduates to set up and grow their businesses, and by putting them in touch with investors looking for opportunities.

Sir Alan Langlands, HEFCE Chief Executive, said:

‘This report shows that our universities continue to have a compelling offer during this period of economic uncertainty. The increases in activity with SMEs are particularly important to ensure we make the best of our world-class research and innovation but it’s also clear that universities offer value right across the economy.  Indeed, our universities are demonstrating greater efficiency than ever in strategically crafting their infrastructure to create the most value for the UK.’

David Willetts, Minister for Universities and Science, said:

‘This report shows clearly that our universities are drivers of growth, contributing £3.4 billion a year to the economy through services to business. There is also a big boost for SMEs, which gain a competitive advantage through their links with institutions.

‘Our world-class universities are great at developing entrepreneurial talent and this is reflected in the growth in new start-up businesses and spin-out companies. They are well placed to compete in the global race and make an even bigger contribution to the economy.’

Iain Gray, CEO of the UK’s Innovation Agency, the Technology Strategy Board, said:

‘This revealing report demonstrates that links between business and academia are often crucial for commercial success. Given that we now support the work of most UK universities, through our funding of business-led consortia, these encouraging figures come as no surprise.

‘However, we believe that there is scope for even greater success through these collaborations and are committed to ensuring that through our funding streams and other support mechanisms, we help to expand and deepen the links between business and academia over the coming years.’

Key indicators from the HE-BCI survey – 2003-04, 2008-09 and 2010-11

Income (£ millions real terms)

2003-04

2008-09

2011-12

Collaborative research

541

732

871

Consultancy

211

332

398

Contract research

577

937

1,113

Continuing professional development (CPD)

219

383

426

CPD and continuing education

76

176

225

Facilities and equipment-related services

80

110

139

Intellectual property

38

124

79

Regeneration and development programmes

216

172

180

Number

2003-04

2008-09

2011-12

Number of disclosures

3,029

3,822

4,294

Number of new patent applications filed

1,308

2,097

2,274

Number of patents granted

463

653

826

Formal spin-offs formed

167

194

191

Formal spin-offs formed which have survived three or more years

688

982

998

Source: 2003-04 HEFCE HE-BCI collection and 2008-09 to 2011-12 Higher Education Statistics Agency finance statistical return collection

Notes

  1. In terms of its wider economic impact the HE sector generated over £59 billion of output. (‘The impact of universities on the UK economy’, University of Strathclyde report for Universities UK, 2009).
  2.  ‘Higher Education – Business and Community Interaction survey 2010-11’, (HEFCE 2012/18).
  3. ’Knowledge Exchange’ refers to all kinds of engagement between Universities and the economy and society. It is a dynamic system that including but not limited to consultancy, training, use of facilities and equipment, contract and collaborative research. Universities can also supply businesses with intellectual property and very highly skilled people.
  4. Data for the HE-BCI survey were collected by the Higher Education Statistics Agency. The survey is analysed and published annually by HEFCE on behalf of the UK Stakeholders Group and the Department for Business, Innovation and Skills. The raw data were published by the Higher Education Statistics Agency in May; this publication provides further analysis of the data including a longer time series.