March 2003/11
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| To: | Heads of publicly-funded higher education institutions in the UK |
| Of interest to those responsible for: | Links with business and the community, Research, Continuing vocational education, Funding, Planning |
| Reference: | 2003/11 |
| Publication date: | March 2003 |
| Enquiries to: | Adrian Day tel 0117 931 7428 e-mail a.day@hefce.ac.uk |
Table of contents and executive summary (read on-line)
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Report
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Annexes C-G
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Annex A
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Annex B
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Contents
Executive summary
Background and purpose
Methodology (process) and robustness
Analysis (deductions and trends/comparisons)
Section A: Institutional strategy and economic development
Section B: Collaborative research with business
Section C: Intellectual property (IP)
Section D: Consulting activities
Section E: Spin-off firms
International comparisons
Section F: Training and personnel links
Section G: Support for economic development activity (national and regional)
Section H: Administration of the questionnaire
Potential future actions
Annex A Full results by nation
Annex B Survey questionnaire
Annex C Survey participants
Annex D List of abbreviations
Annex E HE-BI Stakeholders group
Annex F International comparisons
Annex G Survey methodology, process and robustness
Executive summary
1. This report presents the analysis of the 2002 Higher Education-Business Interaction (HE-BI) survey. It was commissioned by HEFCE on behalf of a group of stakeholders, which are listed at Annex E. It is a follow-up to HEFCE 01/68, 'Higher education-business interaction survey: A report by the Centre for Urban and Regional Development Studies, University of Newcastle upon Tyne'. These surveys may form the basis of an annual request for information from higher education institutions (HEIs) on 'third-leg' activities.
2. This report is based on data for the academic accounting year August 2000 to July 2001. The objectives of the survey were:
- to identify trends in interaction between HEIs and business (often referred to as third leg activity)
- to develop the relevance and reliability of selected indicators which might inform decisions on funding for knowledge transfer activities
- to help develop processes for an annual gathering of data via a standard procedure designed not to be overly burdensome on HEIs. Such data will give valuable support for a more embedded 'stream' of third leg funding. For information from academic year 2000-01, the survey was managed by HEFCE. In due course, it is intended that much of the data be gathered by the Higher Education Statistics Agency (HESA).
3. The survey has arisen as a result of growing recognition of the importance and need to evaluate the third leg of higher education's activities, alongside the two other 'legs' - research, and learning and teaching. Development of capability in third leg activities has been supported since 1999 through the University Challenge, Science Enterprise Challenge, Higher Education Reach-out to Business and the Community schemes (latterly the Higher Education Innovation Fund), the Knowledge Transfer Grant in Scotland and the Higher Education Economic Development (HEED) fund in Wales.
4. The survey, which builds on the 2001 survey by the Centre for Urban and Regional Development Studies (HEFCE 01/68), covers the whole of the UK and includes questions covering aspects of higher education institutions' policies, organisation, activities and outputs related to working with companies of all sizes and sectors and other organisations, including the public sector, in the wider community.
5. The survey response rate was 98 per cent of UK HEIs, giving a highly representative indication of the whole sector.
6. Data are presented in tables and graphs throughout this report, except in cases where it is considered unreliable. Where meaningful, tables show comparative data for institutions by level of research intensity (RI) - they have been grouped into lower, medium or higher level of RI. (How the RI is calculated is described in paragraph 40.) This grouping of HEIs is intended to inform considerations of the differing mix of third leg activities for different types of institution.
7. Robustness of the survey data continues to improve, due to a higher institutional response rate, apparently greater commitment by HEIs to the reporting process, extensive validity and confidence checking. Separate data for England, Northern Ireland, Scotland and Wales are included. Data by English region were excluded from this report as they were considered less meaningful.
8. The survey demonstrates a marked and widespread improvement in the interaction between the higher education (HE) sector and business, compared with 1999-2000. Positive benchmarking and other trends indicate a progressively more strategic and embedded approach by HEIs to HE-business interactions.
9. We have reached a stage where it is practical to identify a core set of quantitative and objective, qualitative indicators which HEIs can apply to their individual third leg strategies. Year-on-year performance comparisons are becoming sufficiently reliable to give evidence of change; in almost every category of data, development of activity and outputs are indicated. Comparisons between the priorities and specific returns for HEIs in the three levels of research intensity suggest that such an overall basket of indicators will give scope for:
- identifying UK-wide and national trends
- use by individual institutions for management purposes
- informing third leg funding and in due course the regional impact of higher education.
10. Referring to HEIs' own intentions regarding business interactions and partnerships, access to education remains the most important. Development of local partnerships and meeting regional skills needs are the priority for institutions classed as lower research intensity. There is evidence of:
- increased strategic planning for business support
- ICT being the highest priority business sector or cluster; cultural and creative sector are also important
- focus on not-for-profit and public sector collaboration for lower RI
- greater reference to Regional Development Agency (RDA) priorities
- importance of 'best fit with institutions' expertise' and response to business demand.
11. Approximately 60 per cent of HEIs report the involvement of senior HE staff in the development of regional skills strategies. The most common geographical focus for institutions is (equally) the government administrative region and the region defined by the HEI itself; a more local or city focus is much less significant.
12. Most HEIs are still developing their data recording processes, to capture information which has not been statutorily required but which both responds to the survey and gives useful institutional management data. This applies particularly to recording the degree of business involvement in, for example, Research Council grants and the distinction between large enterprises and small and medium sized enterprises (SMEs) . It is reported that:
- 37 per cent of business contracts were with SMEs (for lower and medium RI the proportion is higher), representing 13 per cent by value
- there is a healthy continuing growth in TCD-mediated activities
- there is a 15 per cent increase in the number of businesses taking up equipment related services such as analysis and testing.
13. Regarding intellectual property (IP), there is indication of continuing growth in activity and possibly of more business- and market-awareness in its management. There has been:
- an increase of approximately 25 per cent in IP disclosures
- an increase of more than 20 per cent in patents granted
- a continuing rise in the development of in-house licensing capability by medium and higher RI
- over 30 per cent increase in licences to UK companies; the overseas balance has shifted from software to non-software licensing.
14. HEIs appear to be broadening their IP base, with a rise in attention given to industrial design and trademark activity. Lower and medium RI show development across virtually all types of IP based activity.
15. Many HEIs do not yet have a centrally co-ordinated consultancy procedure, and data capture is therefore likely to be incomplete. However, the sector reports a rise in all aspects of this activity:
- over 80 per cent now provide enquiry services for SMEs
- there is a significant increase in the number of companies receiving consultancy help
- there is an increase of approximately 25 per cent in consultancy income.
16. There has been a reduction in the number of HEIs depending on external companies for managing their consultancy and an increase in those using both external and internal management.
17. The number of full-time equivalent (FTE) staff employed in HEIs' commercialisation and other third stream offices has risen from 1,268 to 1,529. Lower RI now have a similar average third stream staffing to medium RI.
18. Despite difficult conditions worldwide for knowledge-based businesses during 2000-01, 20 per cent more spin-off companies were created than reported in the previous (2001) survey, with over 30 per cent increase in spin-offs which had survived over three years. Note that this figure does not (yet) distinguish between highly active and inactive companies. There was evidence of a reduced and erratic income from spin-off company share sales; again this may be connected to external economic conditions. Provision of support for spin-off activity is more from HEIs themselves than from external partners, especially in entrepreneurship training and business advice.
19. Comparisons between the UK and the US continue to show that the HE research expenditure per spin-off is much lower in the UK (£46 million per spin-off in the US and £12 million in the UK). Conversely the licence income generated by HEIs is 4.3 per cent of research expenditure in the US and 0.6 per cent in the UK. This indicates significantly different strategies and probably different maturities of HE commercialisation in the two territories. It is not possible to compare the respective economic benefit of these strategies directly due to lack of availability of comparable data.
20. Knowledge transfer and the delivery of social/economic benefit in HEIs are characterised by various forms of people movement and interaction involving HEI staff, students or business staff; examples are student placements and jointly designed continuing professional development courses. At present, not all HEIs maintain an institution-wide record of student placements, which are often arranged at the HEI's Department or School level; placement data are therefore far from complete. The same applies to consultancy. HEIs report that they generally consult directly with employers rather than using formal labour market intelligence in the design of courses and perhaps in arranging placements. Lower RI institutions report more such interactions than medium and higher RI institutions; lower and medium RI institutions show an increase in their planning on the basis of recognised skills needs. Overall there has been more than 25 per cent growth in income to HEIs from courses for business.
21. Regional Development Agencies and other regional bodies have an emerging role in regional economic development. All sources of economic regeneration funding available to HEIs are perceived as being more significant to lower RI institutions than to medium and higher RI institutions. There is a general broadening in the range of HEI activities supported by such funds; lower RI institutions in particular have increased their focus on facilitating partnerships and community development, rather than on teaching.
22. The declared cost to HEIs of completing the HE-BI survey was approximately £150,000 for the UK overall. HEIs had difficulties with some questions, commonly because data were not already collected for other external or internal purposes; or there were residual ambiguities in the survey. There is strong evidence that HEIs are finding some of the data valuable for internal management uses, and some are developing embedded and co-ordinated processes. As it becomes possible to route some data collection through the HESA Finance Statistics Return, the burden of completing the survey will reduce and reliability of data will be enhanced.
23. The improved response rate of the HE sector and the developing robustness of the indicators, data collection and analysis are a secure basis for a possible annual HE-BI survey. This would involve further refinement of the indicator set and appropriate involvement of HESA for collecting data from all institutions. The burden of the process to HEIs could be reduced by recognising which indicators are less changeable and checking these less frequently. Any process developed should also be informed by related studies and surveys.