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Executive summary


1. The Higher Education – Business and Community Interaction (HE‑BCI) survey is in its 13th year and is an essential source of information on knowledge exchange (KE) in the UK. It focuses on specific interactions with external partners, such as contract and collaborative research, consultancy, continuing professional development and intellectual property, rather than attempting to assess the entire contribution of higher education institutions throughout their teaching and research activities.

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 senior managers, KE practitioners and policymakers. The report also provides an in-depth commentary on the extent of, and trends in, KE activity in the UK. Overall, patterns are similar in each of the four constituent nations, although some data are displayed at the national level in the main report where recommended by Stakeholders Group (see paragraph 24).

4. This report builds on data published in previous HE‑BCI survey reports, the most recent of which, ‘Higher Education – Business and Community Interaction Survey: 2011-12’ (HEFCE 2013/11), was published in May 2013 and analysed 2011-12 data2.

5. The data are collected by the Higher Education Statistics Agency. HEIs provided data for activity occurring during the academic year 2012-13. 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-sector partners of all sizes, with which HEIs interact in a broad range of ways3. ‘Community’ in this context means society as a whole outside the HEI, including all social, community and cultural organisations, individuals and the public both national and international.

Key points

6. Data collected for the academic year 2012-13 show a continuing increase in the exchange of knowledge between UK HEIs and the public, private and third sectors. Annex A contains a summary of the full dataset for the UK and separate sub-sets for England, Scotland, Wales and Northern Ireland.

Table 1 Main indicators (£000s cash terms)






Collaborative research*










Contract research





Continuing professional development and continuing education





Facilities and equipment related services





Intellectual property income





Regeneration and development programmes*





Grand Total





* Denotes data not disaggregated by partner

7. At a time of economic difficulty, growth in knowledge exchange income and activity provides an excellent case for continued public investment in higher education and specifically in knowledge exchange funding streams. During 2013 the UK economy showed signs of recovery and an emergence from the recession which began in 2008, although overall gross domestic product (GDP) remained below pre-recession levels (HE-BCI growth was greater than overall UK GDP growth)4.

Investment in knowledge exchange by partner

8. Most HE-BCI data are collected by partner type, which is categorised into small and medium-sized enterprises (SMEs), large businesses, the public and third sector, and ‘other’ (see paragraph 29). This survey thus captures ‘income’ to HEIs, which is a more efficient approach than surveying expenditure by all (potential) KE partners. The main indicators where income to HEIs reflects the market value of these resources in the economy and society are: collaborative research, contract research, consultancy, equipment and facilities, continuing professional development, regeneration and intellectual property (IP).

9. Total KE investment across all activities from large businesses increased in cash (nominal) terms over the previous year by 11 per cent from £660 million to £729 million, while SMEs decreased their overall spending by 1 per cent from £183 million to £181 million5. Income to HEIs from the public and third sectors (charities and social enterprises) increased by 2 per cent from £1,272 million to £1,295 million in 2012-13 (see Figure 1).

Figure 1 Total income by partner type 2003-13 (real terms)


Source: HE‑BCI Part B Tables 1, 2, 3 and 4c. ‘Other’ refers to indicators which are not collected by partner type due to consideration of burden – see paragraph 29.

Strategy and infrastructure

10. Infrastructure indicators such as support for SMEs appear to have stabilised from recent reductions and are still, overall, at high levels.

Research-based interactions

11. Collaborative research is academic research which has public sponsorship and at least one other external partner. It is undertaken with partners such as research organisations, private business, other HEIs, Government or the third sector, and includes at least one other non-academic organisation. The fruits of the research are assumed to be shared among all partners. Total income from collaborative research increased during 2012-13 by 9 per cent from £871 million to £951 million (see Figure 2).

Figure 2 Selected HE-BCI income streams 2003-13 (real terms) 

Note: ‘CPD’ = ‘Continuing Professional Development’. Source: HE‑BCI Part B Tables 1, 2, 3 and 4c

12. Contract research income (in which a specific question is being researched, primarily for the benefit of the external partner, and which is therefore likely to be more ‘applied’ than collaborative research) also increased by 7 per cent, from just under £1.11 billion to £1.17 billion (see Figure 3). Large businesses and SMEs increased their investment in contract research by 10 per cent and 5 per cent respectively, representing an increase in income of nearly £40 million between them. Income from non-commercial partners also increased by around 5 per cent, reaching £725 million in 2012-13.

13. Consultancy agreements deliver expert advice and intellectual input to a client to assist in analysing a particular client issue­ (‘the innovative application of existing knowledge’). Income from consultancy remained steady with a small increase from £398 million to £400 million in 2012-13, with large businesses and SMEs showing the highest proportional increases of 8 per cent and 6 per cent respectively. Consultancy spending from the public and third-sector partners declined by 3 per cent but still accounts for the majority of activity at £236 million (whereas SMEs and large businesses spent around £64 million and £99 million respectively in 2012-13)

Figure 3 Income by activity and partner 2012-13

Note: ‘CPD’ = ‘Continuing Professional Development’. Source: HE‑BCI Part B Tables 1, 2 and 4c

14. Income from use of facilities and equipment (for example, prototyping equipment or digital media suites) rose slightly, by 2 per cent overall to £142 million. Large businesses accounted for the majority of the spending increase with a rise of 8 per cent, from £41 million to £44 million, and income from the public sector and third-sector partners saw growth of 4 per cent. SMEs’ investment in equipment and facilities fell by 5 per cent; however, the level of £46 million is still higher than for large business, which suggests this is an important area for university engagement with SMEs. 

Intellectual property and enterprise

15. There has been an increase of 9 per cent in IP income, from £79 million to £87 million in 2012-13. There was a 16 per cent increase in the number of patents granted, from 826 to 955 in 2012-13. There was, however, a drop in the number of patent applications (from 2,274 in 2011-12 to 1,942 in 2012-13), suggesting that the level of patents granted will be affected in future years. However, patent data should be viewed over a longer time series because of the time lag between applications and grants.

16. There was a substantial fall in the number of new IP-based companies created by UK HEIs, from 191 in 2011-12 to 150 in 2012-13. The number of new IP-based companies surviving for three years or more fell from 998 to 975 in 2012-13.

17. New enterprises started by recent graduates grew from 2,726 to 3,270; however academic staff start-ups declined from 87 to 62.

Social, community and cultural activities

18. 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.

19. Attendance at public events, presents a mixed picture with some activities showing increases (such as free public lectures up 35 per cent) since 2011-12 while attendance at free exhibitions fell by 24 per cent.


20. Income from regeneration programmes fell in 2012-13, continuing the decline which followed the winding down of the Regional Development Agencies in England and general reduction in public expenditure. The overall decrease in regeneration income to UK HEIs was 4.4 per cent from £180 million to £172 million. There were, however, large increases in some regeneration funding, including the European Regional Development Fund and European Social Fund which rose from 19 per cent and 41 per cent respectively. Income from other local and regional regeneration funds also rose significantly from £17 million to £28 million, representing a 67 per cent increase. It is likely this indicator will rise again when the next tranche of European Structural and Investment Funds begins to flow from 2014-15. 

Continuing professional development

21. Income from continuing professional development (CPD) and continuing education (CE) activity rose from £641 million to £653 million in 2012-13. The biggest growth came from large businesses, which increased their spending by 10 per cent. SMEs decreased their spending substantially by 20 per cent, and the public and third-sector partners had a small decline in spending of 0.3 per cent in CPD. Income from individuals for CE (which may include sole traders as well as study for personal interest) rose by 2 per cent to £230 million.

Action required

22. This report is for information. No action is required. 


1  Data from the University of Buckingham and University Campus Suffolk are excluded from this report as these institutions are not publicly funded HEIs.

2 All HEFCE publications are accessible at

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

5 An error has been corrected from 2011-12 data – more detail is provided in paragraph 87 of the main report.

Date: 12 June 2014

Ref: HEFCE 2014/10

To: Heads of HEFCE-funded 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