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HEFCE closed at the end of March 2018. The information on this website is historical and is no longer maintained.

Many of HEFCE's functions will be continued by the Office for Students, the new regulator of higher education in England, and Research England, the new council within UK Research and Innovation.

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Key findings of this year’s survey

  • Universities in the UK contributed £3.4 billion to the economy in 2011-12 through services to business, including commercialisation of new knowledge, delivery of professional training and consultancy.
  • Analysis by HEFCE shows that the total value of the services 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 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.

Executive summary


1. The Higher Education – Business and Community Interaction (HE‑BCI) Survey is in its 12th year and is an essential source of information on knowledge exchange (KE) in the UK.

2. The exchange of knowledge described here takes place between higher education institutions (HEIs) and the wider world of business and the community. All 161 publicly funded UK HEIs provided data for this report1.

3. Data reported in this survey provide valuable intelligence for higher education (HE) senior managers, KE practitioners and policy makers. The report also provides an in-depth commentary on the extent of, and trends in, KE activity in the UK.

4. This report builds on data published in previous HE‑BCI survey reports, the most recent of which analysed 2010-11 data and was published in July 2012 (‘Higher Education – Business and Community Interaction Survey: 2010-11’, HEFCE 2012/18).

5. In this latest survey, the fourth to be carried out by the Higher Education Statistics Agency, HEIs provided data for activity occurring during academic year 2011-12. Data on strategy and infrastructure (which are not numeric or financial) relate to the end of the academic year (July 2012).

6. The HE‑BCI survey covers a range of activities: from commercialisation of new knowledge, through delivery of professional training, consultancy and services, to activities intended to have direct social benefits. ‘Business’ in this context refers to private, public and third-sector2partners of all sizes, with which HEIs interact in a broad range of ways. ‘Community’ in this context means society as a whole outside the HEI, including all social, community and cultural organisations, individuals and the public.

Key points

7. Data collected for academic year 2011-12 show a continuing increase in the overall exchange of knowledge between UK HEIs and the public, private and third sectors. The growth rate – in cash terms – for the UK is around 4 per cent, from £3,302 million in 2010-11 to £3,431 million3. Over the longer term income has risen – in real terms – by 45 per cent since 2003-04. Annex A contains a summary of the full data set for the UK and separate sub-sets for England, Scotland, Wales and Northern Ireland.

8. These results are impressive, particularly (as highlighted in previous HE-BCI reports) given the context of wider economic uncertainty and other factors that impact on HEIs’ interactions with their partners4.

Income by partner

9. Spending by large businesses increased in nominal terms over the previous year by 5 per cent from £629 million to £663 million, while small and medium-sized enterprises (SMEs) increased their total spending on engagement with UK HEIs by 11 per cent from £174 million to £193 million. Partners in the public and third sectors – charities and social enterprises – increased their spending by 5 per cent from £1,221 million to £1,288 million (see Figure 1).

Figure 1 Total income by partner 2003-12 (real terms)5


Source: HE‑BCI Part B Tables 1, 2, 3 and 4c

Research-based interactions

10. Total income from collaborative research was relatively stable (£872 million in 2010-11 and £871 million in 2011-12, see Figure 2) although the detailed figures show an increase of 8 per cent in programmes with European Union funding and a 9 per cent drop in programmes funded by UK government departments. To measure collaborative research, HEIs provide to the survey figures on public contribution (in money) and both money and in-kind contributions from the external partner, because this provides the most complete proxy for the value of the activity. Of the total £871 million, around 79 per cent was from public sources (meaning public funders, including the HEI’s own funds); cash and in-kind contributions from external partners made up 8 per cent and 13 per cent respectively.

11. Income from contract research has risen by nearly 6 per cent from just over £1.05 billion in 2010-11 to £1.11 billion (see Figure 3). SMEs invested a roughly similar amount to the previous years, while large businesses and public and third-sector partners increased their engagement by 6.2 per cent and 5.8 per cent respectively – an increase of nearly £60 million between them.

Figure 2 Selected HE‑BCI income streams 2003-12 (real terms)

Source: HE‑BCI Part B Tables 1, 2, 3 and 4c

Figure 3 Income by activity and partner 2011-12

Source: HE‑BCI Part B Tables 1, 2 and 4c


12. Consultancy income increased by over 7 per cent from £370 million in 2010-11 to £398 million in 2011-12. The increase was common to all partners, with SMEs showing the highest proportional increase (9.4 per cent), and public and third-sector partners the largest increase by volume (over £20 million).

Equipment and facilities

13. Income from use of facilities and equipment (for example, prototyping equipment or digital media suites) rose by around 8 per cent overall to £139 million; SMEs account for the majority of the spending increase of £49 million in 2011-12, an increase of over 20 per cent from the previous year. Spending by large businesses increased by 2 per cent and public and third-sector partners increased by around 1 per cent.

Education and continuing professional development

14. Income from continuing professional development (CPD) and continuing education activity rose by around 7.5 per cent from £606 million in 2010-11 to £651 million. SMEs increased their spending by the largest proportion (around 20 per cent). Large businesses and public and third-sector parties increased their spending by over 2 per cent each.


15. Income from regeneration programmes fell again in 2011-12, continuing the recent expected trend following the abolition of the Regional Development Agencies (RDAs) in England and general reduction in public expenditure due to austerity measures. The overall decrease in regeneration income to UK HEIs was 11.5 per cent from £203 million to £180 million. There were however increases in some regeneration funding including from the European Union, with income from the European Regional Development Fund now being the largest of the regeneration income streams at around £67 million.

Intellectual property and enterprise

16. We have previously highlighted the fact that institutions are waiting for investment conditions to improve before focusing on later investment and sale of technologies. There has been a substantial increase (14 per cent) in IP income, from £69 million in 2010-11 to £79 million in 2011-12. This includes over £10 million raised from the sale of shares in IP-based spin-off companies.

17. Patent data should be viewed over a longer time series because of the time lag between applications and grants. In 2011-12 all patent indicators increased from 2010-11, including a 9 per cent increase in patents granted (from 757 in 2010-11 to 826 in 2011-12); this may imply there has been an improvement in strategic decision-making in recent years by HEI IP offices.

18. There was a drop in the number of new IP-based companies created by UK HEIs from 268 in 2010-11 to 191 in 2011-12; however the number surviving for three years or longer increased over the same period from 997 to 998. Fewer new enterprises were started by recent graduates (from 2,848 in 2010-11 to 2,726 in 2011-12), while start-ups by academic staff remained constant at 87. There were increases in both staff and graduate companies surviving three or more years, which suggests that, overall, HEIs are becoming better at strategic commercialisation, especially given the wider economic context.

Social, community and cultural activities

19. The HE‑BCI survey also collects data on public events run by HEIs. These illustrate the wide-ranging civic, community and cultural contributions that HEIs make, though they describe only a small part of that range.

20. There were a number of substantial increases in attendees at public events. Exhibitions attracted around 11 million visitors in 2011-12, up from around 7 million in 2010-11.

Strategy and infrastructure

21. There has been a continued reduction in some infrastructure indicators, such as the percentage of HEIs offering an enquiry point for SMEs. However, all of these indicators are still at a high level.

Action required

This report is for information. No action is required. 


1  Data from University of Buckingham and Universities of East Anglia and Essex; Joint Provision at University Campus Suffolk are excluded from this report as they are not publicly funded HEIs.

2 The ‘third sector’ refers to voluntary and community groups, social enterprises, charities, co-operatives and mutuals.

3 Unless stated otherwise, data refer to changes over the period 2010-11 to 2011-12.

4 This dynamic is considered further by PACEC in ‘Strengthening the Contribution of English Higher Education Institutions to the Innovation System: Knowledge Exchange and HEIF Funding’ available at

5 ‘Mixed’ refers to income from activities such as collaborative research, regeneration and sale of spin-off shares where – for reasons of practicality and/or administrative burden – the source of income has not been requested.

Date: 23 May 2013

Ref: HEFCE 2013/11

To: Heads of HEFCE-funded higher education institutions
Heads of UK higher education institutions

Of interest to those
responsible for:

Knowledge exchange; Innovation; Enterprise and entrepreneurship; Interactions between higher education and business, public and third sectors; Contract and collaborative research; Continuing professional development; Public engagement; Strategic planning; Economic development

Enquiries should be directed to:

Joanna Allatt and Rachel Tyrrell, email