The return on investment from £1 of Higher Education Innovation Funding (HEIF [Note 2]) is currently estimated at £9.70 in benefits for the economy and society [Note 3], and may deliver even higher returns in future.
These results reflect the way universities overall are gaining greater expertise in KE, using HEIF more effectively and developing stronger partnerships, particularly with businesses. The research studies demonstrate the range and breadth of KE activity, and the significant benefits it brings to the economy and society.
The rate of growth in KE income (6.8 per cent in 2014) has accelerated with the ending of the worldwide recession, and is now higher than previously recorded. This is reflected in the marginal impact calculated in the study – an extra £1 of HEIF now would bring in a return of £7.90 in income [Note 4]. This supports the recommendations of the Dowling and Witty Reviews [Note 5] – that HEIF funding should be maintained, and even increased in future.
The research studies describe positive feedback from businesses and social and community groups working with universities, on the benefits they have received from KE activities. Businesses feel that universities have become much more willing to engage (partly driven by the research impact agenda [Note 6]), and that higher education KE delivers value for money. Benefits for business include developing and spotting student enterprise and talent. There are also wider benefits from HEIF for local economic development and from helping spread technologies throughout industry.
Madeleine Atkins, HEFCE Chief Executive, said:
‘These studies provide a compelling case for HEIF funding. The economy and society have benefitted enormously from university knowledge exchange and this is reflected in these research studies. Universities themselves see a wide range of benefits – to their students, staff, research directions and, most importantly, external partners.
‘At HEFCE, we take very seriously the return that we must deliver from scarce public money, and here again HEIF has delivered substantial and additional benefit for public investment.’
Tomas Coates-Ulrichsen, Research Associate at the Centre for Science, Technology and Innovation policy at the University of Cambridge, and the author of the main report, said:
‘The economy and society are diverse in their needs, which fits with the diversity of universities with their different levels and mixtures of research, teaching and institutional enterprise activities. Measuring the breadth and relevance of KE to the external world, while accounting for institutional diversity, requires careful data analysis and insight. Building on the stable, long-term collection of data gathered in the Higher Education – Business and Community Interaction survey, we can draw some well-founded conclusions about the considerable economic value of HEIF.’
1. 'Assessing the economic impacts of the Higher Education Innovation Fund: a mixed method quantitative assessment’, a report to HEFCE by Tomas Coates-Ulrichsen, and 'Evaluating the Non-Monetisable Achievements of HEFCE Knowledge Exchange Funding’, a report to HEFCE by Public and Corporate Economic Consultants (PACEC).
2. HEFCE provides funding for knowledge exchange through the HEIF. HEIF funding is presently £160 million per annum, with the latest allocations confirmed for 2015-16. HEFCE uses ‘knowledge exchange’ (KE) as the shorthand for the multiple interactions between universities and businesses, public services, charities and communities to create social and economic benefit. These interactions include joint research and development projects, consultancy and training, knowledge transfer partnerships, setting up new companies and social enterprises and public and community engagement. This includes the enterprise and entrepreneurship agenda for staff and students. KE interactions, including income, are measured through the annual Higher Education – Business and Community Interaction survey.
3. Studies in Note 1. The economic study used knowledge exchange (KE) income as a proxy for impact on the economy and society and calculated a £7.30 return for every £1 of HEIF funding using regression analysis. Additionally, it used an innovative pilot method to suggest a further £2.40 in additional non-monetised benefits, building on results from the non-monetised study.
4. The economic study used regression analysis to calculate the marginal impact of HEIF, that is what an additional £1 would leverage in external income now.
6. HEFCE included assessment of the impact of research in the Research Excellence Framework 2014. This was a world first in research assessment.