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Executive summary

Purpose

1. The Higher Education – Business and Community Interaction (HE‑BCI) survey is in its 14th 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 (CPD) and intellectual property, rather than attempting to assess the entire contribution of higher education institutions (HEIs) throughout their teaching and research activities.

2. The exchange of knowledge described here takes place between higher education institutions and the wider world of business and the community. All 159 publicly funded UK HEIs in 2013-14 provided data for this report1.

3. Data reported in this survey provides 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 UK HEIs. Overall, patterns are similar in each of the four constituent nations, although some data is displayed at the national level in the main report where recommended by the Stakeholders Group (see paragraph 19).

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: 2012-13’ (HEFCE 2014/10), was published in May 2014 and analysed 2012-13 data2.

5. The data is collected by the Higher Education Statistics Agency. HEIs provided data for activity occurring during the academic year 2013-14. Data on strategy and infrastructure, being neither numeric nor financial, relates to the end of the academic year (July 2014). 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 may refer 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 2013-14 shows a continuing increase in the exchange of knowledge between UK HEIs and the public, private and third sectors. The main indicators are summarised in Table 1, below. Annex A contains a summary of the full dataset for the UK and separate subsets for England, Scotland, Wales and Northern Ireland.

7. At a time of growth in the economy following a prolonged period 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. Annual gross domestic product (GDP) growth for the UK in 2014 was estimated to be 2.6 per cent, which was 0.9 per cent higher than the equivalent annual growth seen in 20134. At 10.1 per cent, HE-BCI growth remained greater than overall UK GDP growth of approximately 2.6 per cent. However, while GDP comparisons provide some useful context, more sophisticated methods will be explored for future reports.

Table 1 Main indicators (£000s cash terms)

£000s (cash terms)

2012-13

2013-14

% Change

1a Collaborative research*

951,126

1,143,804

20.3%

1b Contract research

 

 

 

with SMEs

41,108

45,120

9.8%

with large businesses

399,498

418,202

4.7%

Total value with public and third-sector organisations

725,432

729,084

0.5%

Total value of contracts

1,166,038

1,192,406

2.3%

2a Consultancy

 

 

 

with SMEs

64,169

74,272

15.7%

with large businesses (£000s)

99,237

109,166

10.0%

with public and third-sector organisations

236,332

257,990

9.2%

Total income

399,738

441,428

10.4%

2b Facilities and equipment-related services

with SMEs

46,126

51,490

11.6%

with large businesses

43,802

47,946

9.5%

with public and third-sector organisations

51,586

63,490

23.1%

Total income

141,514

162,926

15.1%

2c CPD

 

 

 

CPD for SMEs

18,797

19,707

4.8%

CE and CPD for individuals

230,429

252,708

9.7%

CPD for large businesses

131,921

130,825

-0.8%

CPD for other public and third-sector organisations

272,158

275,179

1.1%

Total revenue

653,305

678,419

3.8%

3 Regeneration and development programmes*

 172,069

 180,606

 5.0%

4c Intellectual property (IP) income

 

 

 

SMEs

10,674

10,466

-1.9%

Large businesses

54,941

62,786

14.3%

Public and third-sector organisations

9,379

8,806

-6.1%

Sub-total (licensing) (£000s)

74,994

82,058

9.4%

Sale of shares in spin-offs (£000s)*

11,646

49,059

321.3%

Total IP revenues (£000s)

86,640

131,117

51.3%

 

 

 

 

Grand total (£000s)

3,570,430

3,930,706

10.1%

* Denotes data not disaggregated by partner.

Note: ‘SMEs’ = ‘small and medium-sized enterprises’; ‘CPD’ = ‘continuing professional development’; ‘CE’ = ‘continuing education’; ‘IP’ = ‘intellectual property’.

Investment in knowledge exchange by partner

8. Total KE investment across all activities from large businesses increased in cash (nominal) terms by 5.4 per cent, from £729 million in the previous year to £769 million, while small and medium-sized enterprises (SMEs) increased their overall spending by 11.2 per cent, from £181 million to £201 million. This improves upon the equivalent figure from last year, which showed a small decrease in SME income. Income to HEIs from the public and third sectors increased by 3.1 per cent, from £1,295 million to £1,335 million in 2013-14. Figure 1 shows how income from different types of partners has changed over time.

Figure 1 Total income by partner type, 2003 to 2014 (real terms)

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

Collaborative research

9. Total income from collaborative research increased by 20.3 per cent during 2013-14, from £951 million to £1,144 million. Data systems have improved in HEIs, which may result from systems put in place for the Research Excellence Framework or from sharing of good practice. This has provided more accurate figures for Research Council funding. Figure 2 shows selected income incomes streams from 2003-04 to 2013-14.

Figure 2 Selected HE-BCI income streams, 2003 to 2014 (real terms)

 

Note: ‘CPD’ = ‘continuing professional development’; ‘CE’ = ‘continuing education’; ‘IP’ = ‘intellectual property’. Source: HE‑BCI Part B Tables 1, 2, 3 and 4c.

Contract research

10. Contract research income increased by 2.3 per cent, from £1,166 million to £1,192 million. Large businesses and SMEs increased their investment in contract research by 4.7 per cent and 9.8 per cent respectively, representing an increase in income of nearly £23 million between them, which is less than the equivalent increase recorded last year. Income from non-commercial partners was stable, with a small increase of 0.5 per cent, reaching £729 million in 2013-14. Figure 3 shows income by activity and partner in 2013-14.

Consultancy

11. Income from consultancy saw an increase from £400 million to £441 million in 2013-14, with work for large businesses and SMEs showing the highest proportional increases of 10.0 per cent and 15.7 per cent respectively. Consultancy spending from the public and third-sector partners increased by 9.2 per cent and still accounts for the majority of activity at £258 million (whereas SMEs and large businesses spent around £74 million and £109 million respectively in 2013-14).

Figure 3 Income by activity and partner, 2013-14

Note: ‘CPD’ = ‘continuing professional development’; ‘IP’ = ‘intellectual property’. Source: HE‑BCI Part B Tables 1, 2 and 4c.

Facilities and equipment

12. Income from use of facilities and equipment (for example, prototyping equipment or digital media suites) rose by 15.1 per cent overall to £163 million. Public and third-sector organisations accounted for the majority of the spending increase, with a rise of 23.1 per cent from £52 million to £63 million, while income from large businesses and SMEs saw growth of 9.5 per cent and 11.6 per cent respectively.

Intellectual property and enterprise

13. HE-BCI identifies income from licences and the sale of spin-off companies as intellectual property income (‘IP income’), although it is understood that almost all activity (collaborative research, CPD and so forth) stems from the intellectual assets of HEIs. Licensing and spin-offs are perhaps better described as income from formal intellectual property rights. There has been a significant increase of 51.3 per cent in IP income, from £87 million to £131 million in 2013‑14.

Social, community and cultural activities

14. Attendance at public events has declined, with a fall in attendee numbers of 41.9 per cent at free events and 29.1 per cent at chargeable events. This fall can be largely attributed to a small number of outliers responsible for returning a sizeable portion of the activity recorded under this heading experiencing a significant fall in their volume of recordable activity this year. However, many free event categories saw rises in attendees.

Regeneration

15. Income from regeneration programmes increased in 2013-14, suggesting that the decline which followed the winding-down of the Regional Development Agencies in England, and the general reduction in public expenditure, may have halted. The overall increase in regeneration income to UK HEIs was 5.0 per cent, from £172 million to £181 million, returning income recorded under this heading to its level in 2011-12.

Continuing professional development

16. Income from CPD and continuing education activity rose from £653 million to £678 million in 2013-14. The biggest growth came from individuals (who may include sole traders as well as those studying for personal interest), who increased their collective spending by 9.7 per cent. SMEs increased their spending by 4.8 per cent, and public and third-sector partners had a small increase in spending on CPD of 1.1 per cent. Large businesses showed a 0.8 per cent reduction in CPD, which may suggest that individuals are increasingly investing in their own CPD and skills while large businesses maintain investment in CPD at a comparable level to the previous year.

Action required

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


1 Liverpool School of Tropical Medicine was added this year. Data from the University of Buckingham and University Campus Suffolk is excluded from this report as these institutions are not publicly funded HEIs.

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

Date: July 2015

Ref: 2015/13

To: Heads of HEFCE-funded higher education institutions
Heads of higher education institutions in Scotland, Wales and Northern Ireland

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:

Darren Watson, tel 0117 931 7452, email d.watson@hefce.ac.uk