Howells Et Al 1998 - Industry Academic Links in UK

Higher Education Funding Council for England

Policy Research in Engineering, Science & Technology

Scottish Higher Education Funding Council

Higher Education Funding Council for Wales

Industry-Academic Links in the UK

December 1998

HEFCE ref 98/70

Jeremy Howells, Maria Nedeva and Luke Georghiou

With assistance from Janet Evans and Susan Hinder

PRESTUniversity of Manchester

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Study Steering Committee

Mr Paul Hubbard, HEFCE (Chair)Mr Derek Barker, OSTMs Gill Davenport, HEFCE (Secretary)Mr Adrian Hill, University of BristolMr Robin Jackson, CVCPMr Geraint Jones, University of Wales, CardiffMr Iwan Jones, HEFCWMs Breda McMillan, Scottish EnterpriseDr Michael McPartlin, SHEFCDr Shekhar Nandy, HEFCEMr Brian Ramsden, HESADr Philip Wright, CBI

AcknowledgementsThe authors would like to acknowledge with gratitude the great efforts made by the survey respondents and interviewees to answer questions which often went well beyond the scope of the data they normally keep. The help and advice of the Steering Committee throughout the study is also acknowledged.

ISBN 1 902369 033

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Contents

Key Findings 5

1. Introduction 7

1.1 Aims and objectives 7

1.2 Industry-academic links: historical context 8

1.3 Policy initiatives to stimulate HEI-industry linkages 9

1.4 Report structure 10

2. Methodology 11

2.1 Study elements 11

2.2 Scope of the study 11

2.3 Response rates 12

3. Research and Consultancy Links 14

3.1 Overview 14

3.2 HEI-Industry links: main trends 143.2.1 Type of collaboration 17

3.3 Motivations and barriers to industry-academic collaboration 17

3.4 Country and regional perspectives 21

3.5 Industry-academic links and type of institution 25

3.6 Problems and success factors in managing research and consultancy links with industry 26

3.7 Trends and issues: adequate recompense, incentives, and influence on intellectual directions 27

4. Commercialisation of Results 29

4.1 Introduction 29

4.2 Intellectual property 29

4.3 Spin-outs and exploitation companies 32

4.4 Science parks and incubator units 33

4.5 Company laboratories on campus 34

4.6 Managing commercialisation 35

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5. Links in the Process of Teaching and Training 36

5.1 Introduction 36

5.2 Postgraduate teaching 365.2.1 Policy initiatives 365.2.2 Trends in postgraduate teaching: close industry involvement 38

5.3 Undergraduate teaching 40

5.4 Short courses and distance learning targeted to industry 41

5.5 Initiation of links in education and training 43

5.6 Success factors and barriers in providing CET for industry 44

5.7 Trends and issues: flexibility, competition, collaboration and shifting boundaries 45

6. Staff Support and Funding 48

6.1 Overview of funding support 48

6.2 Industry sponsorship and work experience 49

7. Structures and Policies to Support Linkages with Industry 51

7.1 Introduction 51

7.2 Frameworks and procedures for IPR and technology management 51

7.3 Frameworks and procedures for spin-out companies 52

7.4 Mission statements 53

7.5 Level at which links are initiated and managed 53

7.6 Links with intermediaries and consortia: one-to-one to complex relationships 57

8. Conclusions and Key Issues 58

8.1 Introduction 58

8.2 Overall conclusions 58

References and Bibliography 63

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Annex 1: Policy Initiatives Associated with Developing HEI-Industry Linkages 70

LINK 70

Foresight 70

Joint Research Equipment Initiative 71

HEFCE incentives 71

Faraday Partnerships 72

University Challenge Fund 72

The University for Industry and company universities 72

Other Research Council schemes 74

National and regional initiatives 75

Annex 2: Research Instruments and Procedures 76

Response rates 77

Questionnaires 78

Annex 3: HEIs and the issue of Intellectual Property Rights 79

Background 79

IPR and some associated problems 79

Annex 4: Teaching and training policy initiatives 81

Teaching Company Scheme 81

Co-operative Awards in Science and Engineering 82

Other postgraduate schemes 82

Annex 5: HEI Frameworks for Industry Collaboration and Linkage 84

Introduction 84

Research and liaison offices 84

Continuing education offices and ‘lifelong learning’ 85

Changing organisational and management structures 85

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Mission statements and HEI strategy toward local and regional economic development 86

Initiation and management of industry links by HEIs 88

Research clubs 93

HEI intermediary and consortia links 94

Annex 6: Regional Classifications 96

Annex 7: Abbreviations and Acronyms 97

Annex 8: ILO and CEO Questionnaires 100

List of Tables

Table 1: UK higher education institutions by country and type of institution 12

Table 2: Distribution of responses by country and type of questionnaire 12

Table 3: Research grant and contract income of UK HEIs by year and source 14

Table 4: UK institutions accounting for 33% of the total university research grant and contract income from industry 16

Table 5: Factors motivating links with industry in terms of research contracts and income ranked by mean value (all UK HEIs) 18

Table 6: Factors motivating consultancy links with industry ranked by mean value (all UK HEIs) 18

Table 7: Factors in motivating consultancy links with industry ranked according to mean value by country (all HEIs) 19

Table 8: Barriers to establishing research links with industry ranked by mean value (all UK HEIs) 19

Table 9: Barriers to establishing research links with industry ranked according to mean value by country (all HEIs) 20

Table 10: Barriers to establishing consultancy links with industry ranked according to mean value (all UK HEIs) 20

Table 11: Barriers to establishing consultancy links with industry ranked according to mean value by country (all HEIs) 21

Table 12: Research grant and contract income by source and country (all UK HEIs, 1996-97) 22

Table 13: Research grant and contract income by source and English region* (1996-97) 22

Table 14: Proportion of research income by type of firm and country 23

Table 15: Proportion of research income by type of firm and region 23

Table 16: Proportion of HEIs receiving research and contract income from local firms by type of firm 25

Table 17: Proportion of research income by type of firm and type of institution 25

Table 18: Problems in maintaining existing relationships with industry 26

Table 19: Factors associated with successful relationships with industry 27

Table 20: Patent, licence and option activity in UK HEIs 30

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Table 21: Patent, licence and option activity in UK by year and country 30

Table 22: IPR income generated by UK HEIs 31

Table 23: Total spent by UK HEIs on filing and maintaining patents 31

Table 24: Areas of expertise of HEI-owned companies 33

Table 25: Problems associated with commercialisation of research results 35

Table 26: New CASE studentships in 1995-96 and 1996-97 37

Table 27: Distribution of CASE studentships across subject areas 37

Table 28: Institutions having established mechanisms for industrial sponsorship of undergraduate, masters and doctoral students 39

Table 29: Proportion of externally supported courses designed jointly with industry by source of support 39

Table 30: Postgraduate and undergraduate courses designed jointly with industry by academic area 40

Table 31: Percentage of revenue from continuing education and training for industry by firm size and country 42

Table 32: Percentage of revenue from continuing education and training for industry by firm size and type of institution 42

Table 33: Factors for initiation of new education, continuing education and training projects with industry ranked according to mean rating 43

Table 34: Success factors in providing continuing education and training for industry by UK HEIs 44

Table 35: Barriers to providing continuing education and eraining for industry by UK HEIs 45

Table 36: Expenditure of research grant and contract income on staff by source (1995-96 and 1996-97) 48

Table 37: Expenditure of research grant and contract income on staff by source and type of institution (1996-97) 48

Table 38: Expenditure of research grant and contract income on staff by source and country (1996-97), percentages 49

Table 39: Academic staff by primary source of income (1996-97), percentages 49

Table 40: Management and co-ordination of intellectual property and spin-out companies 51

Table 41: Usefulness of main HEI channels for forming new research and consultancy links 55

Table 42: Proportion of value of equipment-related and consultancy services managed at each level 56

Table 43: Proportion of value of equipment-related and consultancy services managed at each level by country 57

List of Figures

Figure 1: Distribution of research grant and contract income from UK industry (all HEIs, 1996-97, £k) 16

Figure 2: Distribution of research grants and contract income by type of industrial collaboration (1996-97) 17

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Key Findings

There has been a spectacular growth in recent years across the United Kingdom in the scale, number and variety of linkages between higher education (HE) and industry. These linkages are manifested in research collaboration, provision of consultancy services, market transactions in the commercialisation of research, and industry’s growing involvement as an interactive user of all types of teaching and training. Through surveys of industrial liaison officers and continuing education officers, interviews with senior staff, and compilation of available statistics, this report describes the status and trends of these relationships.

Research funding by industry has grown by 30% over the past three years and by 11% in the past year. However, the level of income in 1996-97 of £183 million is highly concentrated, with seven universities accounting for one-third of the total and half of universities for 8%. Higher education colleges account for only £5 million of research funding from industry.

Access to research funding is seen as the prime motivating factor by higher education institutions (HEIs), but only as a means to pursue goals which fulfil the aims of both academic and industrial partners. Mutual trust and a professional, business-like approach by the academic partners are seen as the keys to success. Keeping the linkages over time is dependent upon good personal relationships and avoiding a divergence of objectives during projects. Motivating individual academics to work more with industry requires an incentive structure of similar weight to that of the Research Assessment Exercise.

HEIs are recognising the need for closer involvement with their local and regional economies and in particular the small and medium-sized enterprises (SME) sector. Local linkages with industry (within 50 miles) are principally with small firms, while linkages with large firms are less frequently locally based. Hence, 72% of respondents reported that over half their links with large firms (over 500 employees) were non-local; conversely, 75% reported that over half their links with micro-firms (fewer than 50 employees) were with local companies. Size of firms was also a source of differences around the UK: Welsh HEIs were more dependent upon research income from large UK firms than other UK HEIs, whereas Scottish HEIs estimated that SMEs provided one-third of their industrial income.

Income from intellectual property rights appears to be growing, with £11.1 million reported by 31 institutions in 1996-97. This represents an increase of 58% over two years. The significant investment being made in securing intellectual property rights suggests that larger income streams are anticipated in the future. Commercialisation is also manifested by the growth in the number of spin-out companies wholly or partly owned by HEIs. Half of the responding HEIs had such companies to exploit their research, with 223 firms identified in total. Spin-out companies in which the institution had no holding were identified by 44% of respondents. Lack of seedcorn capital is the principal constraint upon commercialisation.

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HEIs are making increased efforts to meet industry’s needs for training. At postgraduate level, 86% of respondents had work and project placements for their students; half had industrial sponsorship arrangements for their masters (58%) and PhD (54%) students; and 53% of responding institutions had masters courses specifically designed to meet the needs of a firm or group of firms. Industrial placements for undergraduates are offered by 92% of respondents, and 73% offer sandwich courses (though such placements are becoming harder to arrange).

Provision of continuing education and training (CET) is highly competitive, with competition coming both from within and beyond the HE sector. Flexible delivery, close relationships with clients and niche strategies for specialised courses are generally seen as the keys to success. Universities receive half of their CET income from large firms, while HE colleges receive 92% from SMEs.

HEIs are forming consortia to identify, co-ordinate and deliver research and training services to industry. These consortia are predominantly regional or local and generally provide an enhanced profile for participants. In general, institutions that are similar to each other are more likely to collaborate. HEI-industry partnerships are also developing more widely and evolving from one-off contracts to long-term strategic relationships, deeply embedded.

There is increased competition among HEIs for industrial resources, driven partly by the matching-funds requirements of many public initiatives. In teaching, new technology has helped the competitive arena to move beyond regional boundaries. HEIs also have a more competitive relationship with industry through the desire to raise revenue from the knowledge they generate. But it will take some time before there is universal acceptance of a market for a previously free commodity. However, both HEI consortia and HEI-industry partnerships offer a rich and promising route for closer and more innovative industry-academic relations.

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1. Introduction

1.1 Aims and objectives

Universities and other higher education institutions (HEIs) across the developed economies of the world have been facing major changes during the last decade, particularly in relation to their roles and responsibilities in national systems of innovation. During this period, key studies have drawn attention to the emergence of new types of relationship in the process of knowledge production (Gibbons et al, 1994). They have charted the developing relationship between HEIs, industry and government in terms of a ‘triple helix’ which takes into account the expanding role of the knowledge sector in relation to the political and economic infrastructure of society (Leydesdorff and Etzkowitz, 1996).

This report seeks to assess these changes in detail, particularly within the United Kingdom (UK) context, and to highlight some of the major issues and trends that HEIs in the UK are facing at the end of this century and the beginning of the next in terms of their relationship with industry.

The focus of the report is on the role of HEIs in technology transfer and the innovation process, and from this their wider contribution to national and regional economic development. Three main dimensions of the relationship with industry are examined: collaboration through research and consultancy; HEIs’ commercialisation of their research; and linkages made in the context of teaching and training. Cutting across all three of these dimensions are two horizontal themes: the effect of public policies designed to support the higher education (HE) system, particularly policies directed at stimulation of the relationship with industry; and changes in the broader operating environment for HEIs which have impacted upon academic-industrial linkages. The findings are based on a survey of the UK HEIs’ links with industry, sponsored by the Higher Education Funding Council for England (HEFCE), the Higher Education Funding Council for Wales (HEFCW) and the Scottish Higher Education Funding Council (SHEFC), and carried out by PREST during 1997-98.

The principal objectives of the study are to provide:

i) a comprehensive picture of direct and indirect interactions between all UK HEIs and industry;

ii) information enabling the HEIs to benchmark their individual activities in this area.

The report builds upon two previous surveys undertaken by Tartan Technology on behalf of the Innovation Unit of the Department of Trade and Industry (DTI).

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1.2 Industry-academic links: historical context

Within Europe at least, the UK higher education system, has been at the leading edge of several developments in terms of the relationship with industry. As this report will demonstrate, however, this advance has not followed a single or direct pathway, but is the summation of a wide variety of initiatives at every level. As Halsey (1995, p 302) put it:

‘British higher education has undergone a more profound reorientation than any other system in the industrialised world.’

In some senses, academic-industrial links are a long-standing feature of the system. This is exemplified by the establishment of the ‘redbrick’ universities in the industrial heartlands of Britain in the mid and late nineteenth century (Manchester being a leading example). These universities were founded on the principle of industry and academia working together not only for scientific and technical advancement in an academic sense, but also for the benefit of the local industry and economy. The origin and core task of British civic universities was to provide a technically educated workforce (Driver, 1971, p 42). Later on, such thinking led to the creation of the polytechnic system within the UK, geared to the skill and technical requirements of British industry.

Industry-academic links thus go back a long way, to the late nineteenth century, and indeed represented the main mechanism by which industry funded research (Sanderson, 1972; Meyer-Thurow, 1982; Liebenau, 1984; Swann, 1989; Barnett, C, 1986). But it has only been since the 1970s that the industrial and policy significance has become fully recognised. Much of this renewed interest came from the United States (USA) (see, for example, the review by Peters, 1989) where a number of universities had developed close links with industry.

These linkages resulted arguably from four main mechanisms and sources. Firstly, through informal contacts and spin-outs from university departments; secondly, from contract and collaborative research performed by universities on behalf of industry; thirdly, as a result of property-led initiatives in the form of science parks; and fourthly, via the commercial exploitation of university research through the management and licensing of intellectual property rights (IPR). Europe in general, and the UK in particular, saw the United States as being at the forefront of the growth and development of industry-academic linkages. New developments and mechanisms furthering university-industry links in the USA were closely monitored and often adopted in the UK. The 1980s was a particularly significant decade during which, in 1985, the right to exploit research results through intellectual property was transferred from the British Technology Group to academic institutions (see Section 4.2). Partly to manage this process and partly to gain a share of the increasing market for research funding, institutional mechanisms began to appear in the academic system. A survey by PREST in 1989 found that 60 industrial liaison offices had been founded in UK universities within the preceding five years.

Today it is taken for granted that universities and other higher and further education (FE) institutions have a role in supporting innovation and technology transfer in their local and national economies. But the existence of this relationship has also

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introduced tensions and challenges which have to be overcome. The first group of tensions again go as far back as the nineteenth century, when some academics were concerned that research collaboration with industry was against the central ethos of universities: undertaking fundamental research and the education of students. They feared that links with industry could detract from this overarching mission of universities and individuals working within them, and moreover could have undesired side-effects. These centred on restrictions and distortions in the free flow of information and materials among the academic community. When individuals or departments within institutions enter research collaborations with firms, they usually have placed upon them arrangements constraining the type, amount and destination of information disseminated. This problem is also seen from the other perspective, that potentially valuable intellectual property may be damaged by premature disclosure of scientific discoveries.

A second major group of tensions arise from the possibility that staff may be distracted from their academic functions by too much industry-directed work (Organisation for Economic Co-operation and Development (OECD), 1970, p120). In the increasingly busy life of the academic in the late 1990s, competing demands upon time are a major constraint on the ability to develop and maintain external linkages. As this study will demonstrate, the strongest and most productive relationships with industry are founded upon HEIs doing what they are best equipped to do, that is pursuing excellence in research and teaching, rather than attempting to duplicate the functions of industry. The necessary cultural shift comes in terms of being able to understand the needs of industry and provide an interface which allows the swift and effective flow of knowledge and people to their most productive use.

1.3 Policy initiatives to stimulate HEI-industry linkages

Policies to promote HEI-industry linkages can be seen as a cumulative process in which new models have developed over the past three decades without necessarily displacing those which went before. Thus an initial situation of informal linkages and occasional bilateral contracts was supplemented by specific policy measures from the 1970s onwards. These measures included the concept of ring-fencing areas of research deemed to be of particular relevance to industry, and promoting them with additional resources and management support. An early manifestation was the Directed Programme. Also dating from that period are two schemes designed to support industrially relevant training: Co-operative Awards in Science and Engineering (CASE) studentships and the Teaching Company Scheme (described in detail in Annex 4). During the 1980s, beginning with the Alvey Programme and Joint Opto-electronic Research Scheme, the mechanism of collaborative research between universities and industry was introduced, and continues to the present day in the form of LINK programmes (Annex 1) and through participation by UK HEIs and industry in the European Union’s (EU) Framework Programmes. The 1990s have seen a broader effort to marshall academic research towards support for competitiveness and quality of life through the Foresight Programme and redefined missions for the Research Councils. Most recently the exploitation interface has been directly addressed by the announcement of the University Challenge Fund. Current schemes are outlined in more detail in Annex 1.

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1.4 Report structure

After a review of the methodology used to collect the information presented in this report, Section 3 presents the main findings about research and consultancy links, covering industry funding of HEIs and motivations for and barriers to collaboration. Data are analysed by country, region and type of institution. The section concludes with a discussion of the problems and success factors which are revealed. Section 4 moves on to present findings on commercialisation of HEIs' research results, covering intellectual property, spin-out companies and HEI-owned exploitation companies, science parks and incubator units, and company laboratories on campus. In Section 5, attention switches to the linkages with industry in the context of teaching and training. A brief review of policy initiatives designed to support the development of such links is followed by a review of postgraduate and undergraduate teaching and short courses and distance learning. The section concludes with a consideration of success factors and problems encountered, and a discussion of emerging trends and issues. Section 6 briefly presents findings on support for HEI staff from industry. Section 7 goes on to examine HEI structures and policies to support linkages with industry, including the role of research and liaison offices, continuing education offices, and changes in management and organisation to accommodate and facilitate links. Also addressed are frameworks and procedures for the management of intellectual property and spin-out companies. The role and relevance of intermediary bodies are considered. Section 8 concludes the report with a discussion of key issues raised.

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2. Methodology

2.1 Study elements

To meet its objectives, the study of UK HEIs’ links with industry was designed to include five main elements:

a) a comprehensive survey of industrial liaison officers (ILOs) (or equivalent) in UK universities and higher education colleges;

b) a comprehensive survey of continuing education officers (CEOs) (or equivalent) in UK universities and higher education colleges;

c) face-to-face semi-structured interviews with continuing education officers in a selected sample of HEIs representing the different types of institutions;

d) face-to-face interviews with senior management (mainly vice-chancellors) in a

selected sample of HEIs representing the different types of institutions;

e) secondary analysis of data collected by the Higher Education Statistics Agency (HESA) and other sources.

2.2 Scope of the study

All universities and higher education colleges in the UK (Table 1) were included in the scope of the study. The HEFCE, HEFCW and SHEFC provided lists of universities and HE colleges. During the initial stage of the study, all relevant universities and HE colleges were contacted and institutional points of contact identified. In most cases the institutional points of contact were the industrial liaison officers (or equivalent) and the continuing education officer (or equivalent), who were also the best positioned and most competent persons to answer the survey questionnaires. Several respondents noted that the required information had to be collated from multiple sources within the institution. In some cases, senior academic staff assumed overall responsibility for the institutional response. Initially, all universities and HE colleges agreed to take part in the study, but some later declined to respond on the grounds of lack of activity in the respective areas of interest. It is worth noting that this study is the first to include the higher education colleges in its scope. The study collected information about the academic years 1995-96 and 1996-97.

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Table 1: UK higher education institutions by country and type of institution1

Country University HE College Total

England 86 79% 50 78% 136 79%Scotland 13 12% 9 14% 22 13%Wales 8 7% 5 8% 13 8%Northern Ireland 2 2% 0 0% 2 1%Total 109 100% 64 100% 173 100%

Source: Funding Councils

2.3 Response rates

For the purposes of this report, 108 responses from ILOs (62% response rate) and 99 responses from CEOs (57% response rate) have been used. Expressed as institutional coverage, the overall response rate is 72% whereby 49% of all HEIs replied to both questionnaires, 14% replied only to the ILO questionnaire and 9% returned only the CEO questionnaire. Universities responding to the ILO survey together account for 79% of income from UK industry, according to HESA statistics. On the other hand, 71% of the non-respondents account for under 5% of UK industry income. No attempt is made in the report to extrapolate findings to the whole population of institutions but it may safely be assumed that responses based upon the proportion expressing a view are representative of those with experience of collaborating with industry in research and consultancy. For responses which depend upon aggregate financial data, the significance of missing institutions should be borne in mind. The distribution of responses by country and type of questionnaire is presented in Table 2.

Table 2: Distribution of responses by country and type of questionnaire

Country ILO returns CEO returnsEngland 83 77% 74 75%Scotland 15 14% 15 15%

Wales 9 8% 9 9%

Northern Ireland 1 - 1 1

Total 108 100% 99 100%

Response was variable to individual questions. In general, closed questions and those requesting comments or opinions were answered by almost all respondents. Requests for financial data posed much greater difficulty for respondents. A number reported that they were unable to break down information in the ways requested because it was not recorded in an appropriate format. Others had no centralised records and were unable to retrieve information from their component departments.

CEOs in nine institutions and senior academic staff in eight (seven of whom were vice-chancellors) were interviewed.

Annex 2 provides a more detailed description of the methodology and response rates, and examples of the questionnaires and interview guides.

1 The number of HEIs in this and other surveys varies slightly from year to year, principally as a result of mergers and changes in the status of institutions.

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3. Research and Consultancy Links

3.1 Overview

Research grants and contract income received by HEIs in the UK continued to grow during the period 1995-96 to 1996-97 by 5.7% from £1.55 billion to £1.64 billion at current prices, reflecting a slight increase in real terms (Table 3). Income from UK industry amounted to some 11% of this total, at £188 million in 1996-97. It grew by nearly 10.8% at current prices from 1995-96 to 1996-97, nearly double the overall growth rate (although because its absolute share was small relative to the absolute total its overall percentage share grew only from 10.87% to 11.45%). Data for the year 1994-95 indicate that research and contract income from UK industry was £145 million, indicating a growth rate of 29.6% at current prices over three years. Income from overseas, which includes a substantial amount of funding by foreign firms of academic research in the UK (and covering sources from both the European Union and elsewhere in the world: ‘EU other’ and ‘Other overseas’ categories), rose at an even higher rate of 11.7% between 1995-96 and 1996-97 to some £91.4 million.

Table 3: Research grant and contract income of UK HEIs by year and source2

UK Industry

OST/ Research Councils

UK based

Charity

UK Central Govern

ment

EU Govern

ment

EU Other

Other overseas

Other source

Total

1995-96 (£M)

169 532 338 269 128 20 59 38 1,554

% 11% 34% 22% 17% 8% 1% 4% 2% 100%1996-97 (£M)

188 525 364 297 135 23 69 42 1,642

% 11% 32% 22% 18% 8% 1% 4% 3% 100%Total 357 1057 702 566 263 43 128 80 3,197

Source: HESA statistics

In relation to overall income sources, therefore, industrial funding from both UK and overseas sources appears to be becoming, both absolutely and relatively, more important over time3. Industry is now a key funder and market for the research being generated by HEIs across the UK.

3.2 HEI-Industry links: main trends

There is, however, significant variation between institutions in terms of how much research grant and contract income they receive from industry (Figure 1). Thus the top seven institutions in terms of UK industry research income, led by Cranfield University and Imperial College, accounted for a third of the total research grant and

2 In this, and all other tables totals are based on actual rather than rounded sums for columns or rows as appropriate.3 Obviously these data only cover a short time period (two to three years), but growth does appear to be robust over this time frame.

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contract income received from UK industry by the 111 universities in the UK in 1996-97 (Table 4). In terms of this income, the top 15 institutions accounted for half of UK industry income, while the lower half collectively accounted for only 8% of the total income.

Figure 1: Distribution of research grant and contract income from UK industry (all HEIs, 1996-97, £k)



Table 4: UK institutions accounting for 33% of the total university research grant and contract income from industry

Position Institution1 Cranfield University2 Imperial College3 University of Cambridge4 University of Leeds5 University of Nottingham6 University of Oxford7 University of Southampton


By contrast, research collaboration with industry by higher education colleges is on a much smaller scale with only 22 out of 64 higher education colleges actually receiving any industrial research grant and contract income at all. The most significant collaborators in this group of HEIs were agricultural or veterinary colleges, such as the Scottish Agricultural College, the Royal Veterinary College and Harper Adams Agricultural College. One institution, the Scottish Agricultural College, accounted for 40% of the UK industry income to this sector, and a further four colleges for 41%.

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3.2.1 Type of collaboration

Figure 2: Distribution of research grants and contract income by type of industrial collaboration (1996-97)

Source: PREST HEI-industry links survey

Industrial funding for HEIs may be contracted directly or occur within the context of a public initiative. Of the funding reported in the ILO survey (which, unlike HESA statistics, also includes income from government attached to collaborative research with industry), just under 60% is commissioned directly by industry, and a quarter (27%) is via European-supported research collaboration with industry (Figure 2). A further 9% and 5% respectively is associated with UK collaborative research programmes such as LINK, and with collaborative research undertaken in the context of regional collaborative arrangements.

3.3 Motivations and barriers to industry-academic collaboration

In relation to motivations for establishing industry-academic links in research4, not surprisingly HEIs rated access to industrial funding as the main motivating factor (Table 5). The next most important factor was that collaboration with industry was seen as a strategic institutional policy objective. Also significant was that collaboration with industry provided an exploitation outlet for research capabilities in the ‘real world’ and, related to this, it provided an outlet for research results. Lower down in terms of rating was that industrial links allowed access to complementary expertise and to equipment. Political pressures to establish industry-research links,

4 For the purposes of this study the Frascati Manual definition of research and development (R&D) is used ‘… creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society and the use of this stock of knowledge to devise new applications. R&D is a term covering three activities: basic research, applied research and experimental development.’

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and the role of industry-research collaboration as a way of contributing to the local and UK economy were rated the least significant motivation factors for research links.

Table 5: Factors motivating links with industry in terms of research contracts and income ranked by mean value5 (all UK HEIs)

Rank Motive Mean1 To access industrial funding 4.22 Collaboration with industry is a strategic institutional policy 2.63 To find an exploitation outlet for research capabilities 1.94 To access complementary expertise 1.65 To provide an outlet for research results 1.56 To access state-of-the-art equipment & facilities 0.97 To contribute to local economy 0.78 Government policy and/or political pressure 0.59 To contribute to UK economy 0.4


Country differences in answers to this question were not large, with the exception of Welsh respondents who rated making a contribution to the local economy in fourth position, and Scottish respondents giving a higher ranking to the effects of government policy. In both cases the efforts of national development agencies are the likely explanation. There was little difference in the rank ordering by universities and HE colleges.

In terms of motivations for establishing consultancy links, all the factors listed above received similar rankings in terms of the top three motives, although with slightly more evenly spread ratings (Table 6). Contributing to the local economy was ranked fourth in this case, higher than for research.

Table 6: Factors motivating consultancy links with industry ranked by mean value (all UK HEIs)

Rank Motive Mean1 To access industrial funding 3.22 Collaboration with industry is a strategic institutional policy 2.53 To find an exploitation outlet for research capabilities 2.04 To contribute to local economy 1.55 To access complementary expertise 1.36 To provide an outlet for research results 1.27 To contribute to UK economy 0.78 To access state-of-the-art equipment & facilities 0.69 Government policy and/or political pressure 0.4


Country differences were more evident in this case, with Scottish respondents ranking at the top the importance of their strategic institutional policy (Table 7). Welsh and English respondents rated the local economy higher than did those in Scotland.

5 Respondents were asked to rank their top five factors of the nine shown in Table 5 in order of importance. To calculate the means shown, a score of five was given to the most important factor, four to the next important etc. Items outside the top five were given a score of zero. Respondents were also given the opportunity to write in other motives, but few did so.

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Table 7: Factors in motivating consultancy links with industry ranked according to mean value by country (all HEIs)

Motive England Scotland WalesRank Rank Rank

To access industrial funding 1 2 1Collaboration with industry is a strategic institutional policy 2 1 2To find an exploitation outlet for research capabilities 3 3 8To access complementary expertise 5 6 5To provide an outlet for research results 6 4 4To access state-of-the-art equipment & facilities 7 9 7To contribute to local economy 4 5 3Government policy and/or political pressure 9 8 9To contribute to UK economy 8 7 6


Again, there was little difference between the responses of universities and HE colleges, though the latter reversed the order of the two highest ranked motives.

In the context of barriers to establishing working relations with industry in research, the most important factor noted by HEIs was differences in the research objectives between industry and academia (Table 8). Next followed that the research was often not interesting for academics to work on, and lack of information about getting in touch with relevant industrial partners for the research involved. Rated fourth was that working with industry on research projects had no influence on institutional base-line funding, followed by concerns about insufficient equipment and facilities in HEIs to support collaboration. Lastly came four other barriers: lack of influence on academic promotions; delays in the publishing of results when undertaking industrial research; IPR restrictions (see Section 8) and, finally, HEIs not being seen as reliable partners for research by industry.

Universities and HE colleges differed significantly in their ranking of barriers to establishing research. HE colleges ranked insufficient equipment and facilities top followed by lack of influence on base-line funding. They also ranked highly industry not seeing HEIs as reliable.

Table 8: Barriers to establishing research links with industry ranked by mean value (all UK HEIs)

Rank Barrier Mean1 Differences in objectives 2.592 Work needed by industry not interesting 1.843 Getting in touch with relevant industrial organisations 1.814 No influence on base-line funding 1.565 Insufficient equipment & facilities 1.366 No influence on academic promotions 1.217 Delay in publications 1.188 IPR issues 1.149 HEIs not seen as reliable 0.99


There were also strong country differences in the perceptions of barriers, with Welsh respondents ranking perceived lack of reliability of academic partners as the most

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important, and also giving a high ranking (third) to insufficient equipment and facilities (Table 9). The fact that work needed by industry was not interesting for academics was given the lowest ranking, and was also somewhat lower (sixth) in Scotland. Scottish respondents ranked IPR restrictions highly (third).

Table 9: Barriers to establishing research links with industry ranked according to mean value by country (all HEIs)

Barriers England Scotland WalesRank Rank Rank

Differences in objectives 1 1 2Work needed by industry not interesting 2 6 9Getting in touch with relevant industrial organisations 3 2 5No influence on base-line funding 4 5 6Insufficient equipment & facilities 5 4 3No influence on academic promotions 7 7 4Delay in publications 6 9 7IPR issues 8 3 8HEIs not seen as reliable 9 8 1


Barriers to establishing consultancy links were ranked somewhat differently from those for research, reflecting the lack of incentives for academics to pursue this line of activity (Table 10). Hence, the fact that work needed by industry was not interesting was ranked top, and the lack of influence on academic promotions rose to third in importance, behind difficulties of getting in touch with suitable industrial partners. Differences in objectives drops from first position for research to fourth position, reflecting the different expectations that HEIs have for consultancy, which are more likely to reflect industry’s needs.

Table 10: Barriers to establishing consultancy links with industry ranked according to mean value (all UK HEIs)

Rank Barrier Mean1 Work not interesting 2.12 Getting in touch with relevant industrial organisations 2.003 No influence on academic promotions 1.84 Differences in objectives 1.75 No influence on base-line funding 1.76 Insufficient equipment 1.47 HEIs not reliable 1.18 IPR issues 0.89 Delay in publications 0.6


Again there were substantial national differences (Table 11), with Scottish respondents ranking lack of influence on academic promotions top. Welsh respondents once again highlighted industrial perceptions of lack of HEI reliability as their top-ranked barrier. On the other hand, getting in touch with relevant industrial organisations appeared to be much more of a problem for English respondents.

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Table 11: Barriers to establishing consultancy links with industry ranked according to mean value by country (all HEIs)

Barriers England Scotland WalesRank Rank Rank

Work not interesting 2 2 6Getting in touch with relevant industrial organisations 1 7 8No influence on academic promotions 5 1 2Differences in objectives 3 4 4No influence on base-line funding 4 3 5Insufficient equipment 6 5 3HEIs not reliable 7 9 1IPR issues 8 6 7Delay in publications 9 8 5


3.4 Country and regional perspectives

A further contrast in the funding patterns for industrial research can be seen in the country6 breakdown of industrial funding within the UK (Table 12). There were, however, remarkably few differences across countries in relation to UK industry funding compared with the overall distribution of the total funding for research grant and contract income. England accounted for some 83% of UK industry and ‘EU other’ funding. Wales received some 3% of the total in these categories. Scotland had a slightly higher share of UK industry funding (12.7%) compared with its aggregate share (12.2%). Northern Ireland had a lower share of UK industry funding (1.2%) and a higher share of ‘EU other’ funding (2.2%) than its overall share (1.6%). Where English HEIs performed much better than expected was in relation to foreign industry funding from outside the EU (‘Other overseas’ category), where it gained 87.8% of total monies under this category, and where Wales (2.2%), Northern Ireland (1.0%) and especially Scotland (9%) received lower shares.

There were also regional7 differences (Table 13). In relation to UK versus foreign funding, the wider ‘Region 1’ South East area accounted for over three-quarters (77%) of all foreign ‘other overseas’ (which includes industry funding) income flowing into England compared with its 56% share for UK industry-funded monies (and compared with its overall share of 60% for all research funding sources). Not unexpectedly, HEIs from the ‘Region 2’ and ‘Region 3’ groups were more dependent on UK industry income in relation to total industry and income sources than for HEIs coming from the Region 1 area. HEIs from Region 2, covering the South West, and the East and West Midlands had higher contributions than average from ‘EU other’ sources, but much lower for ‘Other overseas’ sources. HEIs from Region 3 had a higher share of their total income coming from ‘Other overseas’ than the Region 2 HEIs.

6 Defined here as England, Scotland, Wales and Northern Ireland. 7 see Annex 6.

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Table 12: Research grant and contract income by source and country (all UK HEIs, 1996-97)

UK Industry


UK-based Charity

UK Central Government

EU Government

EU other

Other overseas

Other source

Total

England £M 155 439 310 238 110 19 60 34 1366Scotland £M

24 66 42 37 16 3 6 5 200

Wales £M 6 15 8 13 5 0.7 2 2 51Northern Ireland £M

2 5 4 8 4 0.5 0.7 1 26

Source: HESA statisticsNote: the total number of institutions is 143 in England, 22 in Scotland, 14 in Wales and 2 in Northern Ireland

Table 13: Research grant and contract income by source and English region* (1996-97)

UK Industry


UK based Charity


EU Government

EU other

Other overseas

Other source

Total

Region 1 (£M)

87 254 212 123 64 9 46 22 817

% 56% 58% 68% 52% 58% 50% 77% 67% 60%Region 2 (£M)

31 86 41 50 20 5 5 4 244

% 20% 20% 13% 21% 18% 28% 8% 12% 18%Region 3 (£M)

37 99 57 65 26 4 9 7 306

% 24% 23% 18% 27% 24% 22% 15% 21% 22%Total England

155 439 310 238 110 19 60 34 1366

% 100% 100% 100% 100% 100% 100% 100% 100% 100%Source: HESA statistics

Note: Region 1: London, South East, Eastern; Region 2: South West, West Midlands, East Midlands; Region 3: Yorkshire and Humberside, Merseyside, North West and North East.

Country variations were also revealed by estimates in the ILO survey of the importance of different types of firms contributing industry funding to HEIs (Table14). In relation to shares of research monies coming from foreign-owned firms, English HEIs gained an estimated 20% share of their industry and contract money from this source, compared with 15% for Scotland and only 3% for Wales. Welsh HEIs were more reliant on large UK firms (employing over 500 workers) than either England or Scotland, reflecting, at least in this respect, that its economy includes a significant number of branch plants. If the shares of contributions from large UK and foreign-owned firms are added up, however, England and Wales come out with the same proportion of large company contributions, at 70%. Scotland is more reliant on SMEs (firms employing fewer than 500 workers), which contributed over a third (34%) of all their estimated industry income stream, although Wales had the highest proportion of micro-firm (fewer than 50 employees) involvement.

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In relation to the English regions, Region 1 HEIs estimated that they were involved with a higher proportion of SMEs than did Region 2 and Region 3 HEIs (Table 15), although HEIs from Region 2 estimated that they had the highest share of micro-firm research funding contact. In terms of funding from foreign-owned companies, HEIs from Region 3 had the lowest proportionate levels of funding, and Region 2 HEIs had a slightly higher level of estimated contact than HEIs from Region 1.8

Table 14: Proportion of research income by type of firm and country

Type of firm England Scotland Wales% % %

UK-owned firms 500 or more employees 50 46 67UK-owned firms 50-499 employees 21 30 19UK-owned firms with <50 employees 7 4 9Foreign-owned firms 20 15 3Trade and commerce associations 2 6 2Total (of reported income) 100 100 100


Table 15: Proportion of research income by type of firm and region

Type of firm Region 1 Region 2 Region 3% % %

UK-owned firms 500 or more employees 40 50 54UK-owned firms 50-499 employees 29 13 21UK-owned firms with <50 employees 4 10 7Foreign-owned firms 24 25 15Trade and commerce associations 2 2 2Total (of reported income) 100 100 100


The survey also explored the extent to which linkages with industry were with local firms, defined as being no more than 50 miles away (or within the province for Northern Ireland institutions). For those respondents able to estimate these proportions, shows, not surprisingly, that links with large firms were often not locally based. Nearly three-quarters (72%) of responding institutions indicated that local firms accounted for under half of such linkages. The reverse was true for micro-firms, for which 75% of institutions reported that over half of such links were local. Perhaps more unexpectedly, links with medium-sized firms (50-499 employees) were predominantly not local: 61% of institutions reported that under half of such links were with local firms.

8 Care has to be taken in interpreting these figures as they are estimates rather than actual HESA funding data.

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Table 16: Proportion of HEIs receiving research and contracts income from local firms by type of firm

Local UK-owned firms >500

Local UK-owned firms 50-499

Local UK-owned firms <50

Local foreign-owned firms

Local trade and commerce

associationsInstitutions % Institutions % Institutions % Institutions % Institutions %

less than 10%

18 36 11 23 6 15 25 68 14 45

10-24% 12 24 12 25 3 7.5 5 14 25-49% 6 12 6 13 1 2.5 2 5 50-74% 7 14 9 19 11 27.5 3 8 4 1375% and over

7 14 10 21 19 47.5 2 5 13 42


3.5 Industry-academic links and type of institution

The universities have a dominant position in terms of HE research and contract funding over higher education colleges, which have only just over 1% of the overall total. Noteworthy, however, is that UK industry and other related industrial funding plays a more important role in the overall research funding profile of higher education colleges. Interestingly, from the estimates provided by the HEIs themselves, the dominant proportion (53%) of research funding for higher education colleges was from foreign-owned firms (Table 17). Trade and commerce associations were also an important source (16%) of research funding, together with larger SMEs.

The significance of foreign-owned firms to HE college funding may relate to the discussion in Section 3.2, concerning the importance of agricultural colleges in higher education college performance. Foreign-owned firms, such as Rhône-Poulenc, Monsanto and Agrevo, are all key global players in this market segment, but also have significant research laboratories in Britain. There may be also a country/regional dimension - for example, Welsh higher and further education colleges having good links with foreign-based companies in the Principality (such as Bosch or Sony).

Table 17: Proportion of research income by type of firm and type of institution

Type of firm Universities HE colleges% %

UK-owned firms 500 or more employees 51 7UK-owned firms 50-499 employees 23 16UK-owned firms with <50 employees 7 8Foreign-owned firms 18 53Trade and commerce associations 3 16Total 100 100


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3.6 Problems and success factors in managing research and consultancy links with industry

To conclude this section, ILOs’ own views on the problems and success factors HEIs have encountered in maintaining relationships with industry are shown in Table 18 and Table 19. These tables are compiled from open questions, where up to three factors could be given. Examining first the problems, the most frequently cited (38 respondents) was divergence of objectives between the HEI and industry during the project. Most often this was caused by changes in priorities on the industrial side, sometimes driven by changes in management or ownership. Specific conflicts of objectives that were mentioned were timescales for delivery, time horizons more generally, and industry not communicating changes in research direction quickly enough for academics to respond. Closely related was the third most frequent group of problems cited, namely misunderstanding or lack of understanding of aims. As one respondent put it, a key problem was a confusion over what was promised and what was being produced. Some respondents cited lack of understanding by one side or the other, but most saw the problem as mutual.

A frequently cited problem was the HEI’s lack of a professional approach to the collaboration. This was manifested in various ways, most commonly in terms of lack of adherence to deadlines, but deficiencies in response time caused by HEI procedures, reporting deficiencies and contracts were also mentioned. ‘Other priorities for academics’, cited by 31 respondents, focused mainly on the competing demands for staff time from other research and teaching activities. Turnover of personnel, particularly in industry, but also in HEIs was a source of broken contacts. Lack of resources to support the link was manifested in terms of infrastructure and facilities, central and distributed management resources for liaison, and the general funding position of HEIs. The final cluster of problems concerned the difficulty some HEIs had in obtaining these resources from the market, principally because of a reluctance by industry to pay economic rates, fully inclusive of overheads. Some respondents mentioned cutbacks in industry as a factor.

Table 18: Problems in maintaining existing relationships with industry

Problem No. of times cited1 Divergence of objectives between partners 382 Lack of professional approach by HEI 363 Misunderstanding/lack of understanding of aims 324 Other priorities for academics 315 Maintaining contacts as people leave 256 Resources to support link 197 Lack of industry funds/high costs 178 Other 32

Source: PREST HEI-Industry links survey

Turning to the positive side of collaboration experiences, at the top of the list of factors cited by ILOs was mutual trust and its corollary, good personal relationships between the collaborating parties. The benefit of a long-term relationship was mentioned. Often arising from this was the second most frequently cited factor, namely shared goals and mutual benefit from the work (the obverse of the principal problems mentioned above). Goals did not have to be identical, so long as both sides

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appreciated the other’s needs. The third success factor was the counterpart to another principal problem, in this case the need for a professional, businesslike approach by the HEI. Flexibility, rapid response and timely delivery were all mentioned, together with project-management skills. Clear agreed objectives at the start could be seen as a part of this, to ensure both that expectations of deliverables were clarified, and that an appropriate contract was drawn up. Other cited factors included excellence in the HEI’s research, facilities or staff, good communications and marketing, and meeting customer needs. Price competitiveness was only cited five times.

Table 19: Factors associated with successful relationships with industry

Problem No. of times cited1 Mutual trust and good personal relationships 542 Shared goals and mutual benefit from work 463 Professional businesslike approach by HEI 404 Clear agreed objectives at start 225 Excellence of research, facilities, staff 166 Good communications/marketing 147 Meeting customer needs 78 Low prices/value for money 59 Other 30


3.7 Trends and issues: adequate recompense, incentives, and influence on intellectual directions

Interviews with senior academic managers indicated a general sense of progress and achievement, particularly in the past two to three years, but a concern was expressed that this was not a time for complacency. While recognising that research links with industry were a part of their institutions’ historical legacies, the current situation was seen as qualitatively different. As one manager put it, universities are now more flexible and responsive institutions. From a strategic point of view, industrial funding for research is seen as a rare example of a resource with significant growth potential. However, to take advantage of this potential it is essential for research links to be run on a business footing, in order to generate a surplus. To do this, costs need to be properly understood and negotiations conducted by professionals. New institutional mechanisms, discussed in Section 7, are being generated to meet these needs.

As indicated in the sections above, incentives for academics to work with industry are a key issue. At stake are the rewards accruing to individuals in the course of their academic career in terms of promotion and resources to pursue their objectives. The Research Assessment Exercise (RAE) was the subject of conflicting views among interviewees. Vice-chancellors of universities with large research incomes and generally high RAE ratings considered that the RAE was neutral, in that it does not aim to provide incentives for all aspects of academic activity. Thus industrial linkages should be driven by other incentives from the Funding Councils. In one sense the relationship was seen as positive, in that good output in RAE terms fed the intellectual capital of the institution, allowing industry to interact with excellent research. It was recognised that those sections of industry with a high knowledge content would be the beneficiaries of such research.

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On the other hand, a number of senior academics in institutions with lower levels of research funding and generally lower RAE ratings felt that the RAE acted as a disincentive to maintaining and strengthening industry-academic links. Even though the RAE criteria ostensibly saw applied research linked to industry as being of equal merit to basic research, this group of respondents felt that in actuality it was not. This discrepancy was not so marked when there was research collaboration with a major multinational corporation that was itself at the leading edge of research. Such collaboration had relatively long time horizons and concentrated on basic research issues. However, the discrepancy was most apparent when applied research was undertaken for small and medium-sized firms. Contracts had much shorter time periods and although the work was equally challenging, it comprised more direct technical and applications activity. This was most apparent for links between SMEs and the newer universities.9 Many new universities felt a strong responsibility toward their local economy and helping to stimulate research and technical uptake by SMEs (Section 7.4). But such links were seen as a direct threat towards the desire of such institutions to improve their RAE ratings and hence publicly supported income streams. A practical issue raised was the continued lack of suitable indicators, apart from publications, which could cope adequately with capturing the academic merit of activities10 closely linked with industry, but which had few outputs associated with publications.

Senior managers did not consider that relations with industry had affected the core mission or intellectual direction of their institution. But they did point to second-order developments which were nonetheless important examples of change, notably the establishment of on-campus incubators and industry-oriented laboratories. More generally, they felt that although the majority of academic decisions were driven by intellectual pursuits, at the margins maintaining links could be a factor in staff appointments if there was a risk of losing a key capability.

9 Post-1992 universities, that is the former polytechnics. However, this issue was not exclusive to such institutions; it was highlighted as the most significant barrier by a large pre-1992 university in the North of England. 10 One such field was the area of design, but included other disciplines such as architecture and surveying.

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4. Commercialisation of Results

4.1 Introduction

The previous section described the mechanisms by which knowledge generated by HEIs is transferred to industry through research collaboration and consultancy. Knowledge may also be commercialised more directly by HEIs if they are able to secure the intellectual property rights arising from their work and exploit them (Rapport and Webster, 1997). This can be achieved either through licensing or through taking knowledge into the market by means of exploitation companies which HEIs own. This section explores activity in these areas, together with the related phenomena of science parks, incubator units, spin-out companies owned (at least in part) by individual academics, and company laboratories on campus.

4.2 Intellectual property

There are three basic models of IPR operation within HEIs. First, there is pure, publicly funded research aimed at areas of fundamental science or research, which is made available at little or no charge to the ‘public’ and is essentially unprotected apart from copyright protection on publications derived from such research. In many areas of this type of research, no IPR can be secured because basic scientific principles cannot be patented. A second mode of operation is at the opposite extreme, namely contract research paid for by a firm with full IPR assigned to the firm or shared with the HEI. Between the two is a halfway stage most appropriately seen in the ‘shared cost’ model whereby both HEI and industry enter a partnership to jointly share and exploit the ideas originating from the HEI (for more information see Annex 3).(Charles and Howells (1992), pp 175-6)

The survey revealed growth on all indicators over the two academic years covered. Thus in 1996-97, some 594 UK patent applications had been filed11 by the HEIs responding to this section of the survey, up from 491 in 1995-96 (Table 20). New patent applications filed12 numbered 371 in 1996-97, compared with 306 in 1995-96. Similarly, in terms of granted UK patents, numbers rose from 45 in 1995-96 to 56 in the 1996-97 period. The total number of active licences and options rose from 321 in 1995-96 to 395 in 1996-97. Lastly, in relation to computer software, the number of sales and licences was 92 in 1995-96 and 80 in 1996-97. Patent, licence and other option activity was almost exclusively reported by universities, with only two patent applications and two licence options reported by HE colleges.

11 ‘Total UK patent applications filed’ includes any filings made during the year requested, including: a) new UK filings and re-filings for the same divisionals; b) Patents Co-operation Treaty (PCT) patent applications in which the UK and the European Patent Office (EPO) are designated; and c) European Patent applications and divisionals in which the UK is a designated state. 12 ‘New UK patent applications filed’ is a subset of ‘Total UK patent applications filed’. It refers to patent applications filed through any route (generally UK patent applications) for the first time and covers the very first patent application filed in the UK, or designation of the UK for any new invention.

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Table 20: Patent, licence and option activity in UK HEIs

Year Total UK patent

applications filed

New UK patent

applications filed

UK patents granted

No of licences and options

executed

Total number of active

licences and options

No. of sales and licences

executed (software)

1995-96 491 306 45 139 321 921996-97 594 371 56 177 395 80Total 1,085 677 101 308 716 172


Table 21: Patent, licence and option activity in UK by year and country

England Scotland Wales1995-96 1996-97 1995-96 1996-97 1995-96 1996-97

Total UK patent applications filed

432 88% 530 90% 45 9% 50 8% 14 3% 12 2%

New UK patent applications filed

273 89% 331 90% 28 9% 33 9% 5 2% 5 1%

UK patents granted

38 84% 45 80% 5 11% 9 16% 2 4% 2 4%

No. of licences/options executed

122 88% 147 83% 8 6% 18 10% 9 6% 12 7%

Total no. of active licences/options

279 88% 347 89% 26 8% 29 7% 13 4% 16 4%

No. of sales/licences executed (software)

88 96% 75 94% 4 4% 4 5% 0 0% 1 1%


Country differences across the categories of intellectual property activity are not great (Table 21), with England accounting for 84-96%, Scotland 8-11% and Wales 2-6%, all on relatively low numbers.

For the 17 institutions13 which had also reported IPR income for 1994-95 in the 1996 DTI survey, there was an increase in such income of 58% by 1996-97. Gross income from IPR fell slightly over the two years covered by this survey (Table 22), both for software and for other areas.14 The picture was uneven on a country basis: gross income from licences/options (excluding software) grew in England and Scotland, but fell substantially in Wales. Income from software sales and licences was almost exclusively reported by English institutions. Among the regions of England, growth was recorded in both categories by Region 3 and strongly in the non-software

13 The 17 institutions which reported income in both surveys accounted for 31% of 1994-95 income and 65% of 1996-97 income.14 It should be noted that only 31 respondents registered some IPR income for 1996-97.

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category by Region 2. Region 1 was static in non-software and suffered a drop of over 50% in income from software sales and licences.

Table 22: IPR income generated by UK HEIs

Gross income from licences/options

Gross income from software sales and licences

Total IPR income

£M £M £M1995-96 10.1 1.6 11.71996-97 9.9 1.2 11.1Total 20.0 2.8 22.8


A number of other issues surrounding IPR also emerged from the survey evidence. Not surprisingly given the growth in IPR activity, the cost of filing and protecting patents grew at current prices from approximately £2.4 million in 1995-96 to £2.9 million in 1996-97 (Table 23). Indeed, the increasing cost of protecting IPR within HEIs was seen as a growing concern of senior academic staff (see below). However, over three times as many respondents presented a positive ratio of IRP income over expenditure, as did those experiencing a negative ratio.

Table 23: Total spent by UK HEIs on filing and maintaining patents

Year Total amount spent on filing and maintaining patents

£ million(current prices)

1995-96 2.41996-97 2.9


The problem of adequate monitoring and management of IPR is especially difficult for the ‘new’ universities who felt they were not able to lever the full value out of the intellectual property generated from their research. Such universities could not afford to run an IPR office because it is simply too expensive. Therefore they could not properly monitor and defend their intellectual property rights across the globe, especially against large firms. Some HEIs had employed intermediaries to overcome this problem, but without much success. These intermediaries, such as a research or technology corporation, have often introduced technology audits whereby they trawl departments for exploitable ideas. In these circumstances, the British Technology Group (BTG) was not seen as a suitable route for many respondents. It was felt that the BTG’s policy was now essentially to select ideas which may already be patented, and which can then be fitted into its existing technology portfolio. Other institutions have introduced formal mechanisms so that staff are now responsible for coming forward with ideas they think are patentable prior to publication or conference presentations.

Even once a UK patent, for example, has been taken out, the institution then probably needs to take out further European and USA patents to defend it, and then seek an industrial partner to use or further develop the invention. This can be extremely expensive, in terms of both searching for partners and continuing to defend the patent

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whilst a partner is being sought. Then there may be problems with industrial partners once they have been found. Again, small institutions felt at a disadvantage against large multinationals, who had large legal departments and considerable experience of ‘working the system’. Once a contract is signed, monitoring its use could also be virtually impossible. Certainly the new universities although they had come a long way in developing their IPR strategies, still felt highly constrained in what they could do with the limited budgets they had available for IPR management. Against this, there were also firms who operated wholly honourably and had established good, long-term working relations with HEIs. High levels of rapport and trust between the firm and the HEI had been established, leading to deeper collaborative relations, such as a joint venture. One example of a joint venture is Bodycote-SHU, which arose between Bodycote plc and Sheffield Hallam University to work on coatings technology.

It is the case that HEIs are developing more sophisticated and formal arrangements for handling IPR arrangements with industry, and this trend will undoubtedly continue. Further details of such mechanisms and practices are outlined in Section 7 and Annex 3.

4.3 Spin-outs and exploitation companies

In relation to more direct commercial involvement, just over half of the HEIs surveyed (52%) had wholly or partially owned company(ies) to exploit the research they had generated. Four institutions also reported that companies which they had owned had gone into liquidation between 1995 and 1997. Companies can basically be divided into two types. Firstly, there are those firms often termed ‘umbrella’ organisations, which are essentially holding companies for exploiting the HEI’s IPR portfolio and which remain under the direct, ongoing control of the HEI (36 of these were reported by those institutions that owned companies). Secondly, there are ‘spin-out’ companies from the HEI, which are established to exploit the commercialisation of research results arising from a specific stream of research. The level of capital held by the HEI in spin-outs varies considerably and is usually determined on an ad hoc, case-by-case basis. However, even this appears to be changing, with eight HEIs noting that they had formal frameworks for allocating equity in spin-out companies (see Section 7.3).

In the ILO survey data, HEIs reported in detail about some 223 companies that they wholly or partially owned for the commercial exploitation of their research results. For those that ILO respondents were able to classify, the companies’ areas of expertise are shown in Table 24. Biotechnology, life sciences and medicine together form the largest grouping, followed by engineering. There has been a large increase in the number of these companies being founded, though this now appears to have levelled off. Only 12 of these companies were established before 1984, 18 between 1984 and 1986, 12 between 1987 and 1989, and 22 between 1990 and 1992. Seven started operations during 1993, 17 in 1994, 23 during 1995, 28 during 1996, 26 during 1997 and 14 during the first part of 1998.

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Table 24: Areas of expertise of HEI-owned companies

Areas of expertise %Engineering 20Biotechnology 19Software 11Chemical/physical 11General consultancy 10Life sciences 9Medicine 5Other 15Total 100


Although there has been a considerable growth in the number of firms directly owned by HEIs, there are also a wide range of companies that have spun-off from HEIs with which the HEI has no ownership ties.15 Indeed, traditionally this has been a key aspect of academic entrepreneurship. Thus probably the most significant element in industry-academic links is through unrecorded, informal contacts, consultancy work and start-ups or spin-outs of firms. In the survey, 44% of responding institutions indicated that they knew of spin-out companies started by employees of the institution in which they did not have a financial interest.

As Charles and Howells (1992, p6) noted more generally in relation to firm-HEI-public research establishment (PRE) links ‘it is important to stress the significance of informal mechanisms in technology transfer, although they are much harder to quantify or evaluate’. A number of high-profile (but exceptional) areas, such as Silicon Valley (Rogers and Larsen, 1984; Saxenian 1985; 1994), Route 128 (Cooper 1971; Saxenian 1985) and the Cambridge area (Segal, Quince and Partners, 1985), have all depended for their success and development on a dense network of informal, personal links and largely informal spin-out processes. Indeed, much of the growth associated with the ‘Cambridge Phenomenon’ was associated with such informal spin-outs (Segal, Quince and Partners 1985). Certainly part of the success of the universities of Cambridge and Oxford in the UK in terms of spin-outs of firms has been the decentralised nature of the university system, which has allowed a large amount of personal research and consultancy work.

4.4 Science parks and incubator units

From the outset, HEIs have been closely linked with the emergence and development of science parks16 in the UK. Policy initiatives that have been developed have largely

15 In certain literature those companies which have no formal links with their former HEIs are termed ‘spin-outs’, as distinct from the term ‘spin-offs’, which is seen as covering firms having formal ties with HEIs. However, since such a distinction is not widely accepted, the term ‘spin-out’ firm is used throughout this report to avoid possible confusion and to be consistent with previous Industry-University Co-operation Surveys. 16 The term ‘science park’ is used throughout this report as a catch-all for all property-led initiatives for research and high-technology activities, including research incubators, research parks and technology parks. Indeed, technopoles incorporate many of the same aspects of these schemes except that their scale is much larger.

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centred on property-led schemes around science parks and related research and technology parks.

Some science parks are established by HEIs to satisfy a multiplicity of goals. These cover the following aims: to earn revenue; to capture more satisfactorily IPR leaking out of the HEI; to attract companies who may then become customers for the HEI’s research; and to fulfil a wider economic regeneration role within the local economy. However, other science parks have few or no ties with HEIs, although HEIs may see a science park as a locus of potential consumers for their services, as well as offering a possible site for spin-out companies in which the HEI may or may not have a financial stake.

Care should therefore be taken not to equate science parks as simply a mechanism for solidifying industry-academic links in a locality. In their own context, most schemes have been successful. Although there has been a drop in numbers of science parks which are members of the United Kingdom Science Park Association (UKSPA) from 51 in 1996 to 48 in 1997, there are now 1,414 tenant companies in science parks which are UKSPA members. This represents an increase of 47 companies from 1996. These tenants employ 27,371 people (UKSPA, 1998), and some £656 million has been invested in these science parks up to 1997. However, HEIs were the source of only 15% of the finance going into science parks in 1997, and only 22% of tenant companies have originated from an HEI. Just 3% of companies in UKSPA science parks are HEI-owned firms. This confirms the Massey et al. (1992, p 134) survey of 183 establishments on science parks; only one in six (17%) were HEI start-ups. Cambridge Science Park had one of the lowest percentage of academic start-up firms, whilst Aston had one of the highest

On a smaller scale, but still significant developments in their own right, are other property developments in the form of ‘incubator units’. These are usually located within or adjacent to the boundaries of the HEI’s campus. The University of Manchester, for example, has a bioscience incubator, the Manchester Bioscience Incubator, set up in 1997. This represents an £18 million development which has received £6 million in European funding and aims to create more than 900 jobs over the next five years.

4.5 Company laboratories on campus

Another way that HEIs can secure closer relations with industry is to allow firms to locate laboratories on the institution’s campus. This mechanism allows close liaison between the funding firm and the HEI. It also creates a culture whereby HEI staff are more directly confronted with the firm’s overall objectives in the targeted research field (although this is generally basic, long-term research work). In turn, the company’s research staff can be moved to the laboratory to gain a more academic feel for their work and to refresh and renew their own competences. This pattern of co-operation in the UK has followed that of the USA, whereby a whole stream of companies have laboratories that are based on American campuses.

There are many examples of such schemes. They vary from significant financial support of existing laboratories in return for research work, to dedicated company laboratories. Most of these company laboratories have so far been situated on

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campuses of the older and larger HEIs. In the former case, for example, Mitsubishi Chemical announced in 1998 that it will spend several million pounds on financial support for a new Genetics Therapies Centre and for the existing Process Systems Research Centre at Imperial College. In the latter case, Eisai has set up its own laboratory at University College London. Pfizer from the USA, which has its main European R&D centre in Sandwich, has also announced it is establishing a laboratory in the Department of Chemistry at the University of Kent at Canterbury where it will employ some 20 staff who will be working on synthetic organic chemistry.

Interestingly, UK-owned firms, at least within the UK, have been more reluctant to give direct funding to dedicated research laboratories on campus, instead preferring specifically funded research projects. A recent exception has been the recent announcement by Unilever to base a Unilever centre in the Department of Chemistry at the University of Cambridge. The centre will cost £13 million and will research into drugs that can tackle the so-called ‘superbugs’.

4.6 Managing commercialisation

Asked which were their three problems most commonly associated with commercialisation of research results (Table 25), ILOs most frequently cited a lack of capital or seedcorn development funds. Such funds would normally be for taking the initial idea to proof of concept, at which point venture capital finance could be sought. Closely related to problems of finance, but also encompassing marketing and development capabilities was the second most frequent problem, finding the right partner or licensee. This was not necessarily the same organisation as a research partner, but rather a commercial champion. Almost equally cited was a collection of issues around the problems of IPR, including the problem of prior disclosure of results in publications preventing rights being established, and confidentiality requirements. Fourth came the problem of securing a sufficient time commitment from academic staff in the face of other priorities. Fifth was the lack of expertise in business or sound advice on how to commercialise research, which was also presented as a lack of entrepreneurship among academics. Slowness of action was one manifestation of this. Other factors mentioned were an excess of risk or uncertainty in the face of accountability requirements, the cost of IPR protection (discussed above), and difficulty in undertaking sufficient market research to establish whether or not commercialisation was a viable prospect.

Table 25: Problems associated with commercialisation of research results

Problem No. of times cited1 Lack of capital/seedcorn development funds 422. Finding right partner/licensee 223 Ownership of IPR/prior disclosure/confidentiality 214 Time commitment of academics 195 Lack of expertise/advice/speed of reaction 126 Too much risk/uncertainty 87 Cost of IPR protection 78 Difficulty of doing market research on viability 69 Other 31


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5. Links in the Process of Teaching and Training

5.1 Introduction

HEIs are not only important sources of research and technical information, they are also responsible for educating and training an ever-increasing proportion of the UK’s workforce. As the UK economy becomes ever more knowledge intensive, so does the demand by industry for educated ‘knowledge’ workers. Not only has demand and supply increased for higher education, but provision has also changed and diversified. Historically, universities mainly provided education on a full-time basis to students who had recently left secondary education. With the emergence and growth of polytechnics and other types of HEI provision and their emphasis on more vocational education and training, there has been a shift towards a much wider range of higher education provision which has increasingly sought to cater for part-time and mature students. In terms of direct funding of students (as distinct from indirect funding through government schemes), industry makes a relatively low input to the higher education system. But industrial involvement takes many other forms: 91% of institutions in the CEO survey reported that they received teaching, lectures and seminars from industrialists, and 85% had industrial feedback on their academic curricula.

This section outlines the volume and range of industry involvement in postgraduate and undergraduate education and training within the UK, as well as government policy initiatives seeking to promote and extend such links.

5.2 Postgraduate teaching

5.2.1 Policy initiatives

In relation to postgraduate education, a number of policy mechanisms have been instituted in the UK and supported by government funding to improve links and collaboration with industry. The two most important initiatives in the UK in terms of numbers, durability and perceived effectiveness have been the Teaching Company Scheme (TCS) and the Co-operative Awards in Science and Engineering (CASE), both of which are regarded as being highly successful.

Well over 2,000 TCS partnerships have been created since it was first established. In March 1997, 606 companies were currently participating in the TCS, supporting some 1,000 postgraduates in almost every UK HEI. In 1997 alone 222 new TCS programmes were started and 356 postgraduates were recruited during the year. Industry committed £35 million to support these new TCS programmes, which augmented the £17 million of grant allocated to them. The TCS has also recognised the need to target SMEs and 19 TCS Centres for Small Firms have been established within HEIs to focus academic help on the needs of SMEs, (defined here as employing fewer than 250 staff) in their locality. Interviewees reported the TCS as a whole is to be inhibited by the lack of incentives for academics to participate, and

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even more so where SMEs are involved because of the low likelihood of any contribution to RAE performance. Suggestions for improvements included greater flexibility, with programmes of shorter duration and availability for students as well as researchers. More interdisciplinarity and less bureaucracy were also mentioned as being desirable. Despite these criticisms, among the HEIs interviewed for this study the TCS was regarded in a positive light, with one interviewee calling it:

‘... the best of the schemes for promoting HEI links with industry’

Numbers of CASE studentships issued by each Research Council in 1995-96 and 1996-97 are shown in Table 26. The decline in the total for 1996-97 was caused principally by the EPSRC (Engineering and Physical Sciences Research Council) changing its rules; for the first time, PhD studentships could be awarded to departments without specifying how many were to convert to CASE. The resulting conversion rate was lower than expected.

Table 26: New CASE studentships in 1995-96 and 1996-97

1995-96 1996-97CASE Industrial

CASECASE Industrial

CASEBBSRC 113 94 165 68EPSRC 699 117 424 122ESRC 59 36 44 30MRC 25 19 22 17NERC 87 10 99 15PPARC 10 - 10 -Total 993 276 764 252

Source: Office of Science and Technology (OST)

Of the 2,349 CASE studentships reported as being current in the ILO survey, for both CASE (44%) and Industrial CASE (41%), the chemical and physical sciences represented the most important science and technology fields where studentships were placed (Table 27). This was followed by engineering (24% and 32% respectively) and health and life sciences (21% and 20%).

Table 27: Distribution of CASE studentships across subject areas

Engineering Chemical and physical sciences

Information technology

Health and life

sciences

Business, management

and accountancy

Total

CASE 24% 44% 9% 21% 1% 100%Industrial CASE 32% 41% 3% 20% 3% 100%


However, a number of more specific initiatives have also been run by Research Councils, which are seeking to provide postgraduate education and training geared towards industry’s needs. The background to TCS, CASE and a number of initiatives

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started by the EPSRC are described in more detail in Annex 4, while more general trends and analysis from HESA and survey sources are discussed below.

5.2.2 Trends in postgraduate teaching: close industry involvement

On the basis of the survey data, it can be argued that HEIs are becoming more attuned to industry’s needs in relation to postgraduate education and training, and are seeking to develop closer relations with industry. Of those HEIs responding to the relevant question in the CEO survey, well over three-quarters (86%) had work and project placements with industry for their postgraduate students. Moreover, over half of the responding HEIs had established mechanisms for the industrial sponsorship17 of their masters (58%) and PhD (54%) students (Table 28).

Interviewees indicated several means by which research students were engaged with industry. Transferable skills and professional development courses are now generally provided for doctoral students, in some cases with industrial presenters. There was active engagement in the various public schemes described above. This was the one area where direct sponsorship of students was at a reportable level, typically for projects driven by ad hoc industry needs. Some sponsorship existed within the context of long-term relationships between company and department. For example, there are six to seven PhD students in the University of Birmingham’s Department of Metallurgy sponsored by Rolls Royce. Such relationships are founded on personal contacts and on movement of staff from HEI to industry or vice versa. A newer element in research training is the increased profile of work-based degrees, where the teaching element may be either at the HEI’s or employer’s premises, but the research study would take place in the work environment under academic supervision.

Industry is also becoming more involved in supporting the design and implementation of new courses. Taught masters degrees appear to be the area in which there is greatest collaboration with industry, though it was pointed out by several respondents that responsiveness to industry’s needs could come through various sources of marketing intelligence as well as through direct collaboration. A majority (53%) of institutions had masters courses specifically designed to meet the needs of a firm or group of firms. Two-thirds of these were part-time and all were designed with industrial participation.

Apart from having industrial membership on their course advisory boards, the main trend among those offering masters courses aimed at industry has been towards modularisation and part-time registration. This is a means of providing the flexibility needed by company personnel and employers fearful that those attending a full-time degree may leave after qualification. The same modules may be delivered several times to specific company audiences, or be provided in short-course format for professional institutions’ qualification requirements. Difficulties encountered occasionally included obtaining a company’s commitment to the full duration of a masters course rather than some relevant modules, on the grounds that the company did not require a general qualification and the employee might leave on qualification. A ‘promissory note’ may be requested to try to ensure that the employee remains with the employer for a certain length of time, say three years, after completion.

17 For discussion about industrial sponsorship of staff, see Section 6.2.

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A successful example of tailoring a course to the needs of more than one company is a consortium MBA offered by Heriot-Watt University to employees of the Bank of Scotland, Hewlett Packard, Scottish Power and the NHS. The MBA takes two to three years part-time, offered in five-day modules with 20 people each year. It is considered to work because all the companies are large and there is no competition between them.

In relation to masters degrees, UK-owned firms supported 60% of courses where external organisations were reported as taking part in their design and implementation, and supported a further 12% foreign-owned companies (Table 29). The rest were supported by trade and commerce associations, and central and local government. In total, of the masters courses that received support in their design and implementation, the largest share were in business, management and accountancy fields, followed by engineering, and health and life science courses.

Table 28: Institutions having established mechanisms for industrial sponsorship of undergraduate, masters and doctoral students

Undergraduates Masters PhDInstitutions % Institutions % Institutions %

Yes 41 43 57 58 54 56No 46 48 34 35 33 34Don't know 8 8 7 7 9 9Total 95 99 98 100 96 99

Source: PREST HEI–industry links survey

Table 29: Proportion of externally supported courses designed jointly with industry by source of support

Large UK-

owned firms

UK-owned firms 50-

499

UK-owned

firms <50

Foreign owned firms

Trade and commerce

associations

National government

Local government

Total courses reported

Undergraduate courses

24% 18% 12% 18% 16% 2% 10% 100%

Masters courses

29% 19% 12% 12% 12% 6% 11% 100%


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5.3 Undergraduate teaching

Table 30: Postgraduate and undergraduate courses designed jointly with industry by academic area

Engineering Chemical and physical

sciences

Information technology

Health and life sciences

Business, management

and accountancy

Total

Masters courses

27% 9% 9% 20% 36% 100%

Undergraduate courses

39% 3% 8% 8% 42% 100%


Industrial links to undergraduate teaching take a wide variety of forms. At a general level advisory committees to faculties with courses of vocational relevance typically contain industrial representatives. Active involvement by industry in courses includes provision of visiting speakers (and occasionally lecture series), validation of courses, membership of examination boards, carrying out of student projects in collaboration with firms, and sponsorship of student prizes. Also widespread is a trend towards seeking to develop students’ transferable skills relevant to the industrial environment, including for example computer literacy and teamworking skills. Training for entrepreneurial skills is supported by the Enterprise in Higher Education initiative.

Undergraduate degree courses designed to meet the needs of a specific firm or group of firms were offered by 33% of higher education institutions surveyed. Of these courses, almost two-thirds were part-time. Nearly all of the institutions responding positively to this question indicated that these courses were designed jointly with industry. In terms of their distribution across subject areas, engineering had a much higher representation (39%) than for postgraduate and CASE studentships. Business, management and accountancy was the most important discipline at 42% of Undergraduate teaching).

By contrast, the chemical and physical sciences, health and life sciences and information technology had much lower representations. From interviews it was apparent that these courses had a range of formats. At the traditional end of the scale, professional institutions - notably in engineering - offer accreditation for selected courses which provide exemption from further written examinations. More recent developments are more specific, for example the University of Portsmouth operates a Partnership Programme which is a three-way alliance between employer, employee and university to obtain diplomas, bachelor or masters degrees by selecting course units across the university and pursuing studies while in full-time employment. Projects of relevance to the goals of the employer are undertaken. Over 100 companies have so far sponsored employees on the Partnership Programme.

About 92% of HEIs responding to the survey had some work and project placement schemes with industry. Nearly three-quarters (73%) of HEIs in the survey had established mechanisms for sandwich courses. Sandwich courses are very important

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for some institutions. For example, the University of Ulster has some form of sandwich-course arrangement for 50% of its full-time first-degree students, usually for one year.

All of those interviewed who offer sandwich courses noted the increasing difficulty of finding placements, as more organisations (even schools) seek them, and industry is also tending to offer fewer places. London was identified as an area of particular difficulty in this respect. There is a proposal to establish a database of companies and students in the capital, supported by eight HEIs, in order to provide a matching agency for placements.

Sandwich courses were seen as a good lead into a job for students, as a means of forging links with industry for staff and as a selling point for courses. One institution had suffered through employers being so impressed by its students that they had tempted them to stay and not complete their course. By its nature this approach is less suitable for students who already have jobs and for mature students with other commitments. Other solutions include offering a voluntary accredited year in industry. Short-term placements also exist Cardiff University operates a scheme assisted by the local Training and Enterprise Council (TEC) whereby small groups of third-year engineering students are placed with a senior industrialist (who is paid for his/her participation) for one day per week over a period of eight weeks.

In relation to sponsorship, 43% of HEIs indicated that they had an established mechanism for sponsorship of undergraduate courses. Although this is lower than for postgraduate courses (Table 28), it is still a high figure and is likely to continue to grow. In terms of the sponsorship profile regarding the design and implementation of courses (Table 29), the pattern is very similar to that for masters courses outlined in 5.2.2, although industry involvement in the latter is somewhat higher. Direct sponsorship of students was generally considered to be quite rare, but there is renewed interest in this activity as a result of the introduction of tuition fees. It was felt that employers may be willing to pay these fees, particularly for final-year students in relevant courses.

5.4 Short courses and distance learning targeted to industry

According to HESA statistics, income from continuing education and training (CET) from UK industry was £82 million in 1995-96 and £62 million in 1996-97. CEO survey returns indicated that two-thirds (66%) of reported CET revenue from industry was received from SMEs (Table 31). There was substantial country variation, with Welsh institutions reporting almost half of their industrial CET income as coming from enterprises with fewer than 50 employees, as compared with 24% for England and 17% for Scotland. There was a commensurately lower input from large firms in Wales. Variation was also evident by type of institution (Table 32). Universities received half of their industrial CET revenue from large firms, while for HE colleges the figure was only 8%.

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Table 31: Percentage of revenue from continuing education and training for industry by firm size and country

England Scotland Wales All UK% % % %

Small enterprises (<50) 24 17 49 24Medium-size enterprises (50-499) 41 53 33 42Large firms (500<) 35 31 18 34Total 100 100 100 100


Table 32: Percentage of revenue from continuing education and training for industry by firm size and type of institution

Universities HE Colleges% %

Small enterprises (<50) 12 43Medium-size enterprises (50-499) 38 49Large firms (500<) 50 8Total 100 100


A high level of short-course activity directed to industrial needs was revealed in the interviews with CEOs. Notable examples included an industry-led specific training programme provided by Cardiff University (in collaboration with the University of Glamorgan, Swansea University, University of Wales College at Newport and Sussex University) on semiconductors as part of the Korean firm, LG’s inward investment in Wales. The programme lasts two months for 60 to 70 employees. In Scotland, Heriot-Watt University has established niche areas through the support of large companies (particularly in the petroleum industry). HEIs also recognised the need also to provide for the requirements of SMEs Bolton Institute of Higher Education, for example, is aiming to develop standing links with SMEs rather than relying on ad hoc mailshots.

A general trend in this type of training is towards accreditation up to the point where units are accumulated towards a higher qualification. Interviewees raised concerns about compatibility and administration of assessment standards.

The other major problem area lay in the economics of developing courses. As one interviewee put it, it is only in the process of putting together short courses that the true cost of education becomes apparent, and it is expensive. In this respect several interviewees acknowledged the critical role played by continuing vocational education (CVE) funds in pump-priming and advertising courses. The benefits could be felt beyond this immediate area, as examples were given of short courses that provided the basis for future mainstream postgraduate provision.

Distance learning is widely available for MBAs, but also across a broad range of more industry-specific subjects. For example, the University of Ulster provides a postgraduate Certificate in Management for Shorts, the aircraft company. The course consists of one and two-day workshops and half-day meetings over 12 to 18 months, with work-based learning focused on company requirements, but also developing some generic skills. This is a paper-based course with telephone support, and company managers trained as mentors. Multimedia support is becoming more

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common; for example, the Integrated Graduate Development Scheme (IGDS) is funding a collaboration between the University of Northumbria and Bolton Institute of Higher Education to provide a course in microelectronics based on the Internet. Companies have contributed to the design of the course and it is supervised by industrial advisory boards. On payment of the fees, the company receives an ISDN line and a video link. Students can choose modules which are tailored to their company’s requirements. Students meet occasionally as a group.

The high cost of preparing materials is a constraint on the expansion of this mode of teaching. In part, distance learning was seen as a solution to the reluctance of companies to give time off work. Paying the costs for distance learning undertaken in the student’s own time was seen as a compromise solution.

5.5 Initiation of links in education and training

As noted above, in order to be able to provide suitable (and popular) education and training courses for industry, HEIs must be willing to listen and respond to industries’ needs. Existing working relationships and personal contacts remain important (Table33), but the survey indicated that industry itself was often an important initiator and ‘shaper’ of new course work. The factor was ranked third in terms of importance by HEIs, behind existing relationships and personal contacts. Below these factors, came contacts established by ILOs themselves, and the Teaching Company Scheme outlined above. Other factors ranked below this by HEIs in terms of usefulness were the contributions of industry training organisations, TECs and Local Enterprise Councils (LECs), Business Link and Business Connect relationships and, lastly, advertisements. Some minor country differences included a higher rating for LECs in Scotland and TECs in Wales, and a lower rating for ILOs contacts in Scotland. HE colleges also rated TECs/LECs more highly and the Teaching Company Scheme lower.

Table 33: Factors for initiation of new education, continuing education and training projects with industry ranked according to mean rating

Factor Meanrating UK*

Englandrank order

Scotlandrank order

Walesrank order

Existing working relationship 3.7 1 1 1Staff's personal contacts 3.6 2 2 3Initiative from industry 3.4 3 3 2Industrial liaison office contacts 2.9 4 6 4Teaching Company Scheme 2.8 6 4 5Industry training organisations 2.7 5 7 7TECs/LECs 2.7 7 5 6Business Link/Business Connect 2.3 8 9 9Advertisements 2.1 9 8 8

* Scale 1=not important, 2=minor importance, 3=important, 4=very importantSource: PREST HEI-industry links survey

Interviewees gave a mixed response when asked about the utility of intermediary bodies. In general, the more research-oriented institutions were unenthusiastic about TECs/LECs, with a feeling that they did not fully understand the provision of higher

44

education and are focused on lower tiers of skills provision. It was also felt that TEC surveys of training needs of SMEs were misleading because they concentrate on the need for low-level skills, leaving SMEs unaware of the high-level training that they could use. However, there were instances where TECs were able to mobilise funding, for example in provision of training for unemployed postgraduate students in Wales. Several interviewees felt that there was unexploited potential in their relationship with TECs. The most positive support for intermediaries was outside England, with Scottish Enterprise and the Welsh Development Agency and several bodies in Northern Ireland being praised. There were high expectations for regional development agencies (RDAs) in England. The very local focus of TECs and LECs is clearly an inhibiting factor for HEIs which naturally have a wider regional scope of operation. Other intermediaries mentioned as being of some help were professional bodies, Business Links and local authorities.

5.6 Success factors and barriers in providing CET for industry

Asked to identify the three top factors for success in providing continuing education and training for industry, CEOs gave course content as the most important factor (Table 34). Specific aspects cited included sufficient flexibility to meet the specific needs of the audience while maintaining academic rigour, and flexibility in terms of timing, mode of study and curriculum. Professionalism in all aspects of delivery and ‘after care’ was also mentioned. The second most highly cited success factor was the development and maintenance of close links between the HEI and its industrial clients. Several respondents stressed the need for the relationship to be based on mutual benefit and to involve effective liaison and communication.

Table 34: Success factors in providing continuing education and training for industry by UK HEIs

Success factor No. of times cited

1 Course content designed for industry’s needs 342 Development of close & long-term links 283 High-quality staff and material 124 Good marketing 115 Commitment to CET for industry 96 Credibility and reputation of the HEI 57 Other 25


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Table 35: Barriers to providing continuing education and training for industry by UK HEIs

Barriers No. of times cited

1 Lack of willingness/ability to pay economic rate 262 Insufficient priority within HEI 253 Industry not perceiving CET as relevant 234 Difficulty in getting marketing information 225 Need for cultural/structural change in HEI 206 Difficulty for SMEs to release staff 87 Other 9


Looking at the same issue from the perspective of identifying the most common barriers, CEOs identified a larger and more evenly spread number of cited items (Table 35). At the top of the list was a lack of willingness or ability on the part of industry to pay an economic rate for provision. Some respondents mentioned the difficulty of competing with private providers. Others mentioned an expectation that such courses should be subsidised, and the relatively low value of public funding to support this type of activity (including resources to develop activities). The particular problems of SMEs in this context were mentioned several times. SMEs were also mentioned in the sixth ranked barrier in terms of their inability to release staff for training even for short periods.

The other most frequently cited barrier originated within the HEIs, and concerned a lack of priority for this type of activity. The lack of career incentives for academic staff to undertake CET rather than conventional teaching and research activities was the most frequent driver of this problem (the RAE was also mentioned). A similar weighting was given to the barrier of industry not perceiving CET as relevant to its needs; as one respondent put it:

‘A perception amongst many managers and employers that universities are ivory towers and are not capable of providing work-related training’

The problem extended to the general lack of commitment to training amongst SMEs as well as a specific negative perception of universities, particularly by non-graduate managers.

The fourth most commonly cited barrier was the practical difficulty of economically accessing large numbers of SMEs, including undertaking market research in order to understand their needs and then to sell the product. Fifth was the concern for the need for both cultural and structural change within HEIs if they are to operate effectively in this market. The capability to make a quick and flexible response to industrial needs was the most frequently cited requirement in this area.

5.7 Trends and issues: flexibility, competition, collaboration and shifting boundaries

At all levels of HE, education and training are seen as becoming more attuned and responsive to industry needs and requirements. This trend ranges across the design,

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implementation and delivery of undergraduate and postgraduate courses. However, these two broad categories of course are not the only mechanisms by which HEIs deliver education and training to people. Short-course work, sandwich courses and distance learning are becoming recombined in some HEIs in a more seamless range of both full and part-time courses which can be set within the wider agenda of lifelong learning. Indeed, the interview surveys showed that a number of HEIs now felt that the distinctions between full and part-time courses were becoming increasingly meaningless. This also applied to the term ‘mature’ students. Students were no longer seen as one-off components. Institutions, such as the University of Wolverhampton, were increasingly seeing them in terms of intermittent but ongoing education ‘users’, who may return several times to the HEI for further education, training and re-training courses and facilities. Modes of delivery and assessment continue to multiply with the use of multimedia, flexible times of provision and work-based learning. As one respondent put it:

‘Like many institutions we keep stretching the boundaries of flexible provision. This involves developing ICT [Information and communication technologies] programmes for industrial groups and teaching mainstreamed programmes at weekends. Specific pioneering work focuses on electronic delivery, assessment of vocational qualifications, and video and computer conferencing delivery of short unaccredited courses through postgraduate diplomas.’

Looking ahead, interviewees saw the most important trends being in the sphere of lifelong learning, both in a policy sense and through a move away from company-based training (partly because of the reluctance to provide time off as reported above, and partly because of general financial pressures on firms) towards provision for individuals in a vocational context. This process would be accelerated by employment trends towards multiple careers and outsourcing of staff. A consequence would be further growth in the demand for accreditation. All of these changes would increase the importance of flexible delivery.

The market for provision of CET for industry was unanimously regarded as being characterised by intense competition. This was particularly the case for generic and low-level skills, where HEIs struggle to maintain even a relatively small market share compared with private providers. One model envisaged as a growing trend was for HEIs to provide the private sector with accreditation. Competition also comes from other lower cost players, notably the further education sector. Market entry is also a feature, with regional training organisations, subject associations, industrial research and technology organisations, government laboratories, TECs, Chambers of Commerce and employers’ bodies all offering training. Competition goes beyond regions; examples were given of HEIs in the regions establishing offices in London and of English HEIs operating in Northern Ireland.

Global competition was also cited as a factor, particularly in the context of providing training for multinational companies. Multimedia and distance learning will lead to an increase in such global competition. Most interviewees saw the response to this market as being one of avoiding unprofitable activities, even if participant numbers appeared large, and instead focusing on niche strategies in highly specialised areas, capitalising on both local and global linkages.

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Developing strategic links with firms spanning research and training was one way to secure a market. Reaching SMEs remained a problem, though one interviewee saw supply-chain activity with large firms co-ordinating training for their SME suppliers as a way forward. Financing new developments will remain a problem, though European funding is seen as increasingly important for the future. However, as one interviewee warned, such niches and advantages needed to be maintained and cultivated if they were to be sustainable.

Collaboration between HEIs in provision for industry is also an increasing feature of the landscape. In part this is driven by policy initiatives, notably the IGDS, examples of which are given above. Underpinning this collaboration is the enhanced ability to assemble customised packages when selecting across the capabilities of more than one institution. Post-1992 universities interviewed were increasing their collaboration with the FE sector and examples were also given of joint programmes with continental European universities. Outside the orbit of schemes such as IGDS it was also reported that collaboration between neighbouring institutions could be inhibited by perceived differences in status or focus.

The final trend identified by interviewees was that of eroding boundaries between providers. Most commonly raised by post-1992 universities was the prospect of improving the interface with the FE sector. One interviewed HEI had ‘acquired’ a local FE college under threat of closure in order to secure its ‘feeder lines’ for students. Another was sub-contracting modules to local FE colleges as a means of reducing its costs. For these HEIs, seamless provision was attractive so long as it stopped at the level of the first year of a degree course.

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6. Staff Support and Funding

6.1 Overview of funding support

Another important mechanism for further cementing relationships between HEIs and industry is the support for university and college staff from monies gained from research grants and contract income. Table 36 uses HESA data to provide a breakdown (by source) of expenditure of such grant and contract income on HEI staff for the years 1995-96 and 1996-97. In both years, around a third of such monies allocated came via the Office of Science and Technology and the Research Councils whilst just over a quarter came from charities (in particular the Wellcome Trust, the largest research charity in the world). UK central and local government together with hospital and related trust expenditures accounted for just under 20% in both years, whilst EU government funding came to 7%. UK industry was the source of 9% of all research and contract monies spent on staff, a significant amount within the context of other sources. Other EU and overseas sources made up a further 4% of expenditure, and other sources 2%.

These broad patterns for HEIs over the two academic years conceal significant differences between universities and higher education colleges (Table 37). Lower proportionate funding levels for higher education colleges from OST and research council sources in 1996-97 are made up by higher relative funding contributions from other sources, most notably charities, government and related sources, and industry. Industry’s share of research and contract monies spent on staff rose to 12% in the case of higher education colleges’ allocation patterns in 1996-97.

Table 36: Expenditure of research grant and contract income on staff by source (1995-96 and 1996-97)


UK-based Charity


EU Government

UK industry

EU other Other overseas

Other source

Total

1995-96 34% 26% 18% 7% 9% 1% 3% 2% 100%1996-97 32% 27% 19% 7% 9% 1% 3% 2% 100%


Table 37: Expenditure of research grant and contract income on staff by source and type of institution (1996-97)


UK- based Charity


EU Government

UK industry

EU other

Other overseas

Other source

Total

University 32% 26% 19% 7% 9% 1% 3% 2% 100%HE College

19% 33% 22% 5% 12% 2% 4% 4% 100%


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Variations in research and contract monies spent on staff can also be seen on a national level within the UK. In relation to industry as a source, interestingly, the highest shares are evident in HEIs in Scotland and Wales at 10% each, followed by England with 9% and Northern Ireland with 7% (Table 38). Other variations are evident through the different central government funding mechanisms, especially in relation to Northern Ireland. Noteworthy also is the importance of EU funding for staff support in Northern Ireland.

Moving more specifically to the primary source of income for academic staff, there are once again significant variations between universities and higher education colleges (Table 39). For higher education colleges, general institutional income formed the dominant source in 1996-97, making up 92% of contributions, with minimal input from other sources. For universities, Research Council funding made up 12% of total contributions, followed by 7% from charities and 3% from UK industry.

Table 38: Expenditure of research grant and contract income on staff by source and country (1996-97), percentages


UK- based Charity


UK industry

EU Government

EU other

Other overseas

Other source

Total

England 32 27 18 9 7 1 3 2 100Scotland 33 25 20 10 7 1 2 3 100Wales 29 20 27 10 7 1 2 3 100Northern Ireland

20 18 30 7 16 2 2 4 100


Table 39: Academic staff by primary source of income (1996-97), percentages

General institutional

income


UK industry UK- based charity

EU Government

Other Total

University 75 12 3 7 2 0 100HE College

92 3 1 3 0 0 100


6.2 Industry sponsorship and work experience

Section 6.1 highlighted some of the general patterns of industry funding of HEI personnel through grant and income monies. However, industry is more directly seeking to support HEI staff financially by funding personal professorial chairs and university lectureships. This is an important but personal mechanism whereby firms can cement their relations with a particular institution. It can lead to, or be associated with, a wider tranche of money for research and teaching from that particular company. Often such sponsorship confers some limited duties on the part of the academic for the sponsoring company. For some institutions this has been a long-established phenomenon; industry across the whole UK and from overseas has funded professorships and other staff appointments.

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The University of Hertfordshire has personal professorial chairs supported by Glaxo Wellcome and SmithKline Beecham, which are two important local employers. Such sponsorship can also be important in particular academic fields; one recent such area is business schools, where an increasing number of staff are being funded by large corporate sponsors.

In the context of work experience, half of all HEIs responding to the survey question had institutional arrangements providing formal schemes for work experience in industry for academic staff. This indicates a positive attitude, as well as demonstrating the importance now attached to HE staff having close work experience with industry.

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7. Structures and Policies to Support Linkages with Industry

7.1 Introduction

Over the last 10 years, HEIs have sought to coordinate and develop their links with industry more effectively. In particular, HEIs have been concerned to protect and exploit their knowledge bases more fully. This section charts the growth and development of this commercialisation process, and the mechanisms and funds that have been deployed to defend and manage such exploitation routes. More detailed strategic and administrative issues behind such developments are outlined in Annex 5.

7.2 Frameworks and procedures for IPR and technology management

The survey data revealed that, at least in terms of licence income, almost three-quarters (71%) of those HEIs that responded had instituted frameworks for revenue-sharing agreements (Table 40). Universities and higher education colleges have therefore begun to institute more formal intellectual property incentives and mechanisms for industrial collaboration. HEIs are moving away from ad hoc, one-off decisions to more consistent (but still flexible) polices for intellectual property exploitation and transfer. The University of Newcastle upon Tyne is one such HEI; it has established an incentive and exploitation policy for intellectual property which covers both research and inventive activity, and possible spin-out companies (Section 7.3) created by such work (Box 7.1).

Table 40: Management and co-ordination of intellectual property and spin-out companies

Type of Arrangement: Yes%

No%

Revenue-sharing agreements for licence income 71 29Policy for allocating equity in spin-out companies 21 80


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7.3 Frameworks and procedures for spin-out companies

By contrast, the situation was almost reversed when it came to implementation of policies for allocating equity in spin-out companies. In this case, many senior staff and executives had simply not got round to instituting such a policy because it was still a rare occurrence or because they felt it could be best handled on a ‘case by case’ basis because circumstances varied so much. However, it was evident that many HEIs were beginning to feel that at least there should be overarching frameworks in place, so that the overall position of the institution would be clear at the outset of any discussions (see Box 7.1 for an example). A number of HEIs felt that they had lost out from the any financial benefits of a number of spin-outs, even though the companies established had relied on HEI support. How much a spin-out company owed to the individual geniuses of staff working at home on their own, and how much was a result of paid work within HEI was often difficult to discern (and more particularly dispute).

Nonetheless, an increasing number of HEIs feel a responsibility for attempting to ‘capture’ at least some financial rewards for the institution, whilst still allowing incentives for staff to set up such companies. Mechanisms are being put in place to institutionalise these arrangements in a more formal framework for both staff and industrial clients and sponsors.

Box 7.1

University of Newcastle upon Tyne’s Intellectual Property Exploitation Policy

Exploitation by licensing or assignment:

revenue shared between university and inventor(s)

after legal costs, first £5,000 of intellectual property (IP) income goes to the inventor(s)

the next £200,000 of IP income is split the following way: 50% to the inventor(s); 25% to the department(s) of the inventor(s); and 25% to the university.

Exploitation via start-up company:

inventor(s) can take equity in the company

inventor(s) involvement subject to the university’s company directorship policy.

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7.4 Mission statements

Most HEIs make some kind of formal acknowledgement to the importance of industrial links in their strategic intent. Thus, in the context of the survey data, three-quarters (75.3%) of HEIs which responded to the question of whether their institution had a policy to support industry in terms of meeting industry’s education and training needs as a formal part of their mission statement replied ‘yes’. A further 12.4% had some other kind of formal written policy incorporating such an aim.

By contrast, only 12.4% of HEIs which responded had no formal acknowledgement of their institution’s role towards industry in terms of teaching and education commitment.

7.5 Level at which links are initiated and managed

This section reviews the level at which industrial links are initiated and established by HEIs in the UK. This is done using the categorisation set out in Box 7.2. The development process shifts from simple, one-off, one-to-one relations by individual staff within HEI departments to complex, long-term consortia involving a wide range of institutions and covering a broad spectrum of research and teaching arrangements. There are six broad means by which HEIs establish and co-ordinate links with industry (Box 7.2; see Annex 5 for further details).

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The survey evidence more specifically provided current guidance on what HEIs see as the main conduits for helping to initiate new research and consultancy links with industry. Not surprisingly, staff’s personal contacts came out as the most significant channel for forming new research and consultancy links, and were rated as very important (Table 41). Rated as important were initiatives outside the UK, particularly the EU’s Framework Programme or other European programmes, such as EUREKA. This highlights the continued growth in the scale and importance of such schemes to UK universities and colleges. UK government-funded schemes, such as the LINK programme and Realising Our Potential Award (ROPA), received a similar rating.

Box 7.2

Typology of Channels through which Industrial Links are Established and Co-ordinated

1) Links with industry initiated and delivered by individual, or small group of, academics within HEI departments, ranging from consultancy through to research and teaching work, via both a) informal, private contacts and b) formal, open bids.

2) Links established at departmental, school or faculty level, often through dedicated applied research and/or training units, and ranging from one-off links through to longer term research arrangements and teaching delivery with industry.

3) Collaborations established and co-ordinated centrally by the HEI through a single administrative unit.

4) Links co-ordinated centrally by a university or higher education college, but devolved directly to the HEI’s exploitation company.

5) Collaborations initiated and channelled through multi-HEI local or regional consortia, often including additional institutions and agencies.

6) Policy-initiated collaborations stimulated by government schemes administered by a central agency, such as LINK or the Teaching Company Scheme.

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Table 41: Usefulness of main HEI channels for forming new research and consultancy links

Channel type Rank Mean score

Staff personal contacts 1 3.9Initiatives outside the UK 2 3.1UK government initiatives 3 3.0World Wide Web 4 2.7Institution’s directory of expertise 5 2.4National & regional development agencies 6 2.3TECs & LECs 7 2.2Commercial databases 8 2.2Business Links 9 2.1Chambers of Commerce 10 1.9Business innovation centres 11 1.9

1=not important, 2=minor importance, 3=important, 4= very important Source: PREST HEI-industry links survey

After these three channels came a set of mainly electronic media, such as the World Wide Web and institutional directory sources. Commercial databases, national and regional development agencies and local agencies were all rated as being of minor importance for HEIs in terms of helping to establish new research and consultancy contacts. However, many HEIs did not view this to be the role of local agencies in any case. A somewhat different perspective might have been gained by questioning firms and asking them for their views about the key channels for making links with HEIs.

In relation to how such links are co-ordinated, there were frequently hybrid arrangements in terms of the six forms outlined in Box 7.2 above. For example, the University of Northumbria at Newcastle has 12 units (including the Electronics and Physics Research Group, the Manufacturing Technology Group, the Centre for Industrial Design and the Built Environment Studies Centre/European Building Centre) housed within its five faculties (Type 2). All of these units are targeted at undertaking dedicated research and teaching for industry. However, the units then report to the university’s ‘umbrella’ company, UNNCEL, which manages, supports and promotes their relations with industry (Type 4 above). Moreover, initiation and co-ordination of industrial links do not necessarily equate with the management of them. To take the case of University of Northumbria again, it can be said that the establishment of links and their actual operation are undertaken on a Type 2 basis, whilst their overall co-ordination and management are carried out on a Type 4 basis. Yet even this is a simplification. Industrial research, and technical and consultancy services may be co-ordinated on a personal (Type 1), departmental or faculty (Type 2) level or via an exploitation company (Type 4), depending on the type of services being undertaken.

This variation can be seen in relation to how collaborations with industry were managed in terms of two types of activity, namely equipment-related services and consultancy work. The main management locus for both universities and higher education colleges was at departmental level (Table 42). However, management practices varied significantly between equipment-related services and consultancy activities, with the former more likely to be managed at departmental level.

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Consultancy activity within universities was managed by a wide range of different options. Interestingly, more universities centrally managed these activities centrally than higher education colleges. There were also more universities that managed via the HEI’s exploitation company; this is not surprising given that few higher education colleges own exploitation companies.

Table 42: Proportion of value of equipment-related and consultancy services managed at each level

Centrally managed

Departmentally managed

Managed privately by staff

Managed by an HEI exploitation company

Total

Universities Equipment-related services

14% 64% 6% 16% 100%

Consultancy for industry

15% 36% 20% 29% 100%

HE colleges Equipment- related services

4% 96% 0% 0% 100%


8% 67% 21% 3% 100%


The country in which the HEI was based added a further dimension to the way that industrial links were managed. From the survey data, Scottish HEIs operated much more centralised systems of management than either their English or Welsh counterparts (Table 43). In the case of Welsh HEIs, much of the management remained highly coordinated, but management was devolved to the HEI’s exploitation company. By contrast, English HEIs have devolved more of their management to departmental level, particularly for equipment-related activities (70% of all responses). Although equipment-related and consultancy activity forms only a part of the range of industrial research and technical collaboration, the survey indicated potentially quite different strategies being adopted by HEIs across the UK; this merits further study.

Lastly, a number of other specific mechanisms not covered by the typology in Box 7.2 or by the above analysis deserve some acknowledgement. These range from property-led initiatives such as science parks (Section 4.4), through to the Knowledge House (Annex 5) which acts as a central contact point for firms with HEIs in the North East of England.

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Table 43: Proportion of value of equipment-related and consultancy services managed at each level by country

Centrally managed

Departmentally managed

Managed privately by

staff

Managed by an HEI

exploitation company

Total

England Equipment-related services

8% 70% 7% 16% 100%


11% 38% 23% 29% 100%

Scotland Equipment- related services

84% 12% 4% 0% 100%


61% 29% 5% 5% 100%

Wales Equipment- related services

9% 23% 0% 69% 100%


1% 32% 0% 67% 100%


7.6 Links with intermediaries and consortia: one-to-one to complex relationships

HEIs, as with other organisations, have had to deal with a burgeoning range of public and public/private agencies at local, regional and national level over the last two decades. Over the past few years, the institutional framework of government agencies and quasi-public bodies has been bewildering both in its growth and also in its frequent changes. One Vice-Chancellor recognised the need for engaging with these organisations but was hampered by the ‘absolute mess’ that had emerged in his university’s local and regional context.

In the past, life was much simpler for UK HEIs in relation to maintaining industry contacts. HEIs largely dealt with companies on a one-to-one basis. But they are now having to get used to dealing with firms through a welter of intermediaries and/or consortia, either on their own or in partnership with other HEIs. Some of these intermediaries only set up the initial contact (as with Business Link referrals made by personal business advisers (PBAs)). Other intermediaries mediate the relationship with the firm(s) not only through initial contact, but also throughout the course of the link. This is often the case when an intermediary acts as a consortium leader, or when an intermediary is part administering or funding the link, or both (funding may be direct or indirect, for example through EU European Regional Development Fund (ERDF) grants). Some intermediaries have a clear local or regional focus, such as Business Links, TECs, LECs and RDAs. Others have a UK remit and are associated with, for example, the LINK Programme or Research Council schemes.

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8. Conclusions and Key Issues

8.1 Introduction

This study has explored the various means by which relationships develop between HEIs and industry, and the current status of those relationships in the UK. While building upon previous work, the survey has extended the scope of inquiry both in the range of issues addressed, and by covering the entire higher education sector in the UK. It was evident that a significant part of the information being sought was not available from some institutions, for reasons of internal structure or resources with which to respond. There are lessons for future surveys, notably the need to provide long-term advance notice of future information requirements. Nonetheless, the high response rate (particularly among institutions with significant industrial linkages), the great efforts respondents made to provide information, and the convergence between data from the surveys, interviews and published statistics all lend confidence to the findings, subject to the cautions noted in particular instances.

8.2 Overall conclusions

Much has been made of the emergence of the ‘knowledge-based economy’ or ‘knowledge society’, where knowledge and technical acumen form the key foundations of economic success and performance in the global industrial economy. Within the knowledge-based economies, universities and other HEIs play a vital role in the supply of both knowledge and trained people. A third role is emerging as an initiator of entrepreneurial ventures which, after a suitable period of incubation, pass into full industrial ownership in return for financial gain to the institution. The overall finding of this study is that interactions of each type have continued to grow.

Research grant and contract income is becoming absolutely and relatively more important over time. Increasingly, industrial income is used in concert with public resources across a range of schemes. However, major success in obtaining such income is concentrated upon relatively few institutions. It is desirable that variety and specialisation should exist among institutions, but the implication remains that there is substantial growth potential if average practice moves closer to best practice. The study has confirmed that successful collaboration is founded upon mutual trust and shared goals with industrial partners, clearly expressed. Some barriers to success, notably the changing priorities of industrial partners driven by the market, cannot easily be legislated for, but others, such as increased professionalism in the conduct of relationships, can be addressed at both institutional and individual levels. The other important factors are time and resources to support industry-academic links.

Commercialisation of the results of academic research hinges upon securing intellectual property rights. Again, there appeared to be growth according to all indicators, in terms of patent, licence and option activity and income over the two

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years covered by the study. But there was concern at the cost of exploiting and protecting IPR. The number of HEI-owned companies is growing rapidly. In addition, there are those spin-out firms in which the institution does not have a holding. New institutional mechanisms, including on-campus incubators and company laboratories, have added to the existing base of support activities, notably science parks. The principal problem is financial: finding seedcorn capital to develop ideas to the point where they may be marketed to more conventional sources of finance. Finding the right partner or licensee and, once again, the problem of time commitment of academics are the other principal barriers to exploitation.

In the context of teaching and training, relationships with industry are also increasing at all levels. Postgraduate activity is dominated by policy-led initiatives, notably the TCS and CASE. But industry is also becoming more involved in the design and implementation of taught masters courses, often tailored to the needs of a firm or group of firms. Modularisation and part-time registration characterise such arrangements. Similar developments are underway in undergraduate teaching, though traditional delivery mechanisms such as sandwich degrees are having increasing difficulties in securing industrial placements. In short courses and distance learning the HE sector is generally operating at the high-level, high-quality end of the market, increasingly with the aid of new technology. Lower level training is generally provided at lower cost by the FE and private sectors. Accreditation represents a source of advantage for HEIs over agencies and other suppliers who are unable to offer it. Success factors to be developed include flexibility and the development of long-term relationships. Attracting the interest of SMEs remains the greatest problem externally. Internally, the provision of career and other incentives for HEI staff is necessary.

The following is a consideration in more detail of some key issues emerging from the study.

1) Intellectual property and technology management

Despite the acknowledged importance of IPR in the administration and commercialisation of research results, and IPR’s heightened profile in government policy circles, many HEIs found effective management of their intellectual property a problem. This was particularly acute for those newer and smaller universities and HE colleges which only had small industrial liaison offices and could not afford to have dedicated staff (or a unit in the form of a technology licensing office (TLO)) who could properly manage and exploit the intellectual property and technology being generated by their institution.

Many of the HEIs surveyed still felt that much of the research and technology they generated was not being exploited at all, let alone being ‘fully’ exploited. This was to the detriment of the HEIs, the higher education system and the local, regional and national economies in which HEIs were situated. It is evident that some new universities are working towards developing mechanisms that could be described as ‘best practice’, including collaborative arrangements between institutions. These mechanisms need further consideration and support.

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2) Local and regional embeddedness

All HEIs recognised that they needed closer involvement with their local and regional economies. The survey findings made it clear that local linkages were very often with the SME sector. At one level, institutions had clearly picked up on the need for action from recent government documents, such as the Dearing Report (1997). However, for most HEIs it was not just a ‘top-down’ exercise that they were required to undertake. They had a genuine commitment to their local communities. HEIs and their staff acknowledged that they had responsibilities to help support the development and rejuvenation of their local areas. Most HEIs had begun a set of programmes that would seek to develop these relationships further, although many senior academic staff recognised that they still had much more to do.

In addition, although HEIs had begun their local and regional agendas on a largely ad hoc basis, some felt they should have a clearer, if not more formal, role within their economies. They felt the need for a more precise framework and guidance on where they should engage with the local and regional economy. Much dialogue and focus had been created by cross-directorships between HEIs and TECs/LECs, Chambers of Commerce, Business Links and other local and regional agencies, as well as more informal links with regional government offices in England, and government departments in Scotland, Wales and Northern Ireland. In general such relationships were functioning more effectively in Scotland, Wales and Northern Ireland. However, many English HEIs also felt there was a plethora of institutional/agency relationships which made achieving more effective HEI-originated and mediated regional development difficult. In England the arrival of more formal regional development agencies may do much to clarify this situation.

3) Incentives and barriers to industry-academic links

Barriers to industry-academic research links remain. Fundamentally, they still pertain to the different objectives and aspirations of the two types of organisation and their staff. More practical obstacles also exist and can be observed in relation to lack of equipment or the lack of adequate incentive structures within the UK higher education system. It should be recognised that incentives and barriers to industrial collaboration occur at all levels of the system: in terms of the overarching institutional framework; in relation to HEI organisations; at departmental level; and right down to the individual level. More needs to be done to restructure, refine and develop these incentive structures and to remove barriers to industrial collaboration. The study revealed conflicting views about the RAE in relation to industrial linkages. It is clear that its effects can be positive in the sense that leading-edge industry requires access to excellent research, which the RAE seeks to reward. Its effects are negative in that the RAE increases the pressure on academics to engage in publication-oriented activities and hence crowds out the time to develop industrial links. The RAE is also neutral in the sense that it does not aim to provide incentives for all aspects of academic activity. If policy-makers wish to promote the full range of industrially relevant activities, then additional targeted incentives of equivalent influence would be necessary.

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4) Competition and collaboration in industry-academic links

Two developments in industry-academic links that are emerging as important shaping factors in HEI-industrial collaboration. They concern HEI-HEI collaboration in the form of HEI consortia, and HEI-industry partnerships. Both of these dimensions raise the question of competition.

i) HEI consortia: An increasing number of HEIs are forming consortia to identify, co-ordinate and deliver research and training services to industry. Consortia allow HEIs to tackle schemes associated with industrial collaboration which an individual HEI could not afford or would not or be able to provide in terms of the depth and range of services offered. Regional and local consortia are the most prominent examples and were outlined in Section 7.5. They typically cover a broad spectrum of activities, but may include more specific work, for example targeting research and technical services towards SMEs, or offering Internet services. Such regional groupings also allow HEIs to raise their political profile, and provide further leverage for institutions when they become involved with TECs, LECs and national and regional development agencies. HEI-HEI alliances have been highlighted, but the importance of HEI-FE college alliances has also been stressed. Sectoral, technological and task-specific groupings of HEIs also occur, although they usually retain a local or regional focus. Despite the existence of prominent counter-examples, the main impression given by interviewees in this study was that similar institutions were more likely to collaborate than ones which differed in their mission, research-intensiveness and so forth. Some saw this as a consequence of perceived status, while others felt that similar institutions would simply have more in common.

ii) HEI-industry partnerships: HEIs and industry are also entering into a new and wider set of research and training links, based on partnerships with deeper but less formal relations. This can mean one-to-one collaborations associated with, for example, company-funded laboratories on university campuses, through to more complex sets of inter-firm (and inter-HEI) consortia (such as the Centres for Expertise in Wales, See Annex 1). It is evident that many HEI-industry ties are no longer restricted to short-term contacts centred on specific research or training topics, but are moving towards longer term collaborations covering a wide range of issues and agenda. A single company may now have a whole spectrum of links with a single HEI. This in turn will be associated with a widening and deepening of formal and informal links between staff at the two organisations at all levels, and not just centred on a few research staff from both sides.

iii) Competition: The establishment of both consortia and partnerships has raised some complex strategic issues, such as, when should HEIs operate on their own and possibly in competition to their local HEI partners, and when should they collaborate. HEI consortia may also start to act as regional cartels, for example, by informally agreeing on the ‘going rate’ for specific research or training services. Each of these relationships has its corollary in terms of competition. There was ample, if anecdotal, evidence of increased competition among HEIs for industrial resources. This was particularly intense in the training market, where new technology and entrepreneurial attitudes were allowing HEIs to operate outside their home regions. In the research field, the increasing requirement for industrial contributions to trigger public funding has caused an ever wider range of academics to beat a path to industry’s door. Competition for major investments from company universities or laboratories is even

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more intense. The second dimension of competition comprises that between HEIs and industry. The desire to raise revenue through commercialisation of intellectual property inevitably positions HEIs in competition with other organisations developing similar technologies. Within a collaborative relationship there is also some competition for a share of the benefits. As with other previously ‘free’ goods, it will take some time before there is universal acceptance of a market for knowledge. Despite these possible reservations, both HEI consortia and HEI-industry partnerships offer a rich and promising route for closer and more innovative industry-academic collaborations.

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Annex 1: Policy Initiatives Associated with Developing HEI-Industry Linkages

This Annex outlines some of the key policy initiatives associated with developing, or which have a bearing on, industry-academic links in the UK.

LINK

The basic objective of the LINK initiative is to improve the competitiveness of UK industry and to improve the welfare of people’s lives through the support of programmes of pre-competitive science and technology. More specifically, LINK’s mission is to ‘offer a well-established framework for collaboration between public and private sectors in support of science and technology (S&T) in areas of strategic importance to the national economy. LINK aims to enhance the competitiveness of UK industry, and quality of life, through support for managed programmes of pre-competitive S&T in market or technology sectors, and by encouraging industry to invest in further work leading to commercially successful products, processes, systems and services.’

Currently, 56 LINK programmes are sponsored by various government departments and Research Councils (see below) in a wide range of technology sectors. Each programme supports a number of collaborative research projects, which each last between two and three years. The government funds up to 50% of eligible costs of a LINK project, with the balance coming from industry. As LINK’s programmes focus on a particular technology or market area, the initiative became a good ‘vehicle’ by which the government could implement some of the recommendations coming out of the Foresight initiative (see below). Since March 1995, the government has announced 19 new LINK programmes which are responsive to priorities identified under the Foresight initiative. These programmes will support projects costing up to £169 million over the next few years.

Foresight

The Foresight Programme (originally Technology Foresight Programme) was announced in the White Paper on Science, Engineering and Technology (1993) ‘Realising Our Potential’ and began in 1994 with the dual aims of forging a new working partnership between science and industry, and informing decisions on the balance and direction of publicly funded science and technology. Foresight is managed by the Office of Science and Technology. At the core of the Programme are 16 panels (initially 15) with varying degrees of academic representation in their membership, along with representatives from industry and government. The first phase of the Programme culminated in the publication of sectoral reports by each panel. These reports aimed to identify the likely social, economic and market trends in each sector over the next 10 to 20 years, and the developments in science, engineering, technology and infrastructure required to address these future needs. The conclusions were based upon widespread consultation. Since the publication of the reports, there has been extensive dissemination of the findings and numerous events have been held. Most of those events have aimed to promote the development of

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academic-industrial networks to support the exploitation of opportunities revealed by the Programme. The most recent phase of Foresight has concentrated on stimulating wider and deeper engagement of business, beyond the R&D function, towards marketing, finance and business planning. Currently, consultation is in progress about the format for a new cycle of Foresight, which is scheduled to report in November 2000.

Among the follow-up measures to Foresight was a dedicated scheme, the Foresight Challenge competition. This was launched at the end of 1995 with the explicit aim of increasing interaction between industry and academia. Consortia of business and the science base were able to apply for matching funds for projects addressing Foresight priorities. In the first round, following a large number of applications, awards were made to 24 projects costing a total of £92 million, of which £62 million came from industry and £30 million from the OST. The second round of the initiative, renamed Foresight LINK Awards, has £10 million of government funding available. The SHEFC and HEFCW also provided funding for research projects reflecting Foresight priorities, awarding £7.5 million and £1 million respectively to support a total of 25 projects.

Joint Research Equipment Initiative

The Joint Research Equipment Initiative (JREI) supports the provision of equipment in Foresight areas. The Funding Councils co-fund with external sponsors equipment costing above £200,000, and the Research Councils amounts below that figure. Additional funding has also been provided by the Department for Education and Employment. One aim of this initiative is to promote partnership between higher education institutions and external sponsors of research, including industry and commerce. In 1997-98, the JREI is providing £80 million, £45 million of which is from external sponsors. After two ad hoc competitions it is intended that the JREI should become an annual feature.

HEFCE incentives

HEFCE introduced generic research (GR) funding in response to the theme of wealth creation in the White Paper on Science, Engineering and Technology ‘Realising Our Potential’. GR funding rewards collaborative research which does not have a single beneficiary. It replaced a previous formula which rewarded all contract research (CR). In 1995-96, GR funding amounted to £20 million. Allocations are made in proportion to institutions’ GR qualifying income. Qualifying income is the total received from users of research for collaborative projects where the institution retains the intellectual property and publication rights to the related research. HEFCE is planning a ‘third leg’ of support which will help institutions to boost their ‘professional capability’ through better links with the business world and local communities (Patel, 1998). This will help institutions to develop long-term strategies for these activities and to recognise them as a core activity alongside teaching and research.

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Faraday Partnerships

The establishment of Faraday centres has had a long and difficult ‘birth’. The centres were proposed as far back as 1992 by the Centre for the Exploitation of Science and Technology (CEST) as a means of bridging academia and SMEs in the UK and were inspired by Germany’s network of Fraunhofer Institutes. Under the previous Conservative government, the DTI was to provide matching funding with the EPSRC, but this did not happen and in the vacuum the EPSRC decided to go it alone. In September 1997, it therefore announced the establishment of four pilot Faraday Partnerships which will each receive £50,000 start-up funds and then up to £1 million over four years from EPSRC. The main objectives of the Faraday Partnerships are to encourage greater interaction between HEIs and industry, especially SMEs. The aim is to expand information flows and links, thereby improving awareness in academia of industry requirements and increasing exploitation of the research results (EPSRC 1997, 54).

Of the four Faraday centres, three involve partnerships between universities and independent research and technology organisations. The centres are in the domains of enhanced packaging technology, 3D multimedia applications and technology integration, interdependent mechanical and electronic parts, and intelligent sensors for control technologies.

University Challenge Fund

The government announced in its March 1998 budget the establishment of a £50 million seed-capital fund to encourage the exploitation of scientific discoveries in universities. The government has agreed to contribute £20 million to this ‘University Challenge Fund’. Additional funding will come from the Wellcome Trust, which is to contribute up to £18 million, and the Gatsby Charitable Foundation (£2 million).

The aim is that universities will establish their own seed funds with the help of the University Challenge money. The seed funds will enable academics to scope out the commercial potential of research outcomes and take the first steps towards commercialising the research. It is envisaged that a typical seed fund will have a size of around £2-4 million and that universities will establish management boards with substantial representation from the business and venture capital sectors to manage their seed funds.

The University for Industry and company universities

In April 1998, the government outlined the new University for Industry (UfI) and promised £15 million funding for its launch in 2000. Some 600,000 individuals are expected to take part annually in its learning programmes by 2002 and 2.5 million to use the university’s information services. In the long term, the UfI will be privately funded, with the proportion of public sector support declining over time. Users will be charged, mainly through individual learning accounts. A central aim of the university will be to act as an education broker and deliverer, facilitating access to education and

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training provision, whilst also stimulating new demand and developing innovative products and services. The UfI will have four priorities:

1) Improvement of basic literacy and numeracy. The university has been set a target of training an additional 200,000 people a year in basic skills to level two of the national qualifications framework within five years.

2) Meeting the skills needs of SMEs. The university is being asked to deliver services to 100,000 start-up businesses and 50,000 established companies within five years.

3) Information and communication training for the workplace. The UfI will be required to ensure that an additional 200,000 people enter into this kind of training within five years.

4) Specialist training provision for automotive components; multimedia; environmental technology and services; and distributive and retail trades.

The UfI has already attracted various criticisms, including whether it can even be claimed to be called a ‘true’ university, or whether it should be called something else. There is also discussion about how the UfI and the Scottish UfI (see below) might be linked in with the new ‘community universities’ covering the University for the Highlands and Islands, the Community University of the Valleys, and the Community University of North Wales. There are also a number of ‘company’ universities, such as the Unipart University, which have emerged in the UK over the last few years and which have followed successful American models, including Motorola University and Ford University. These company universities have sought to provide in-house higher, further and vocational training to their staff. The creation of such universities has allowed companies to develop a more systematic approach to the education and training of their staff. As with the UfI, their critics regard them as not being proper universities. For company universities, the designation of the title ‘university’ has almost been an internal marketing tool to emphasise the firm’s commitment to high-quality education. It has also been used, however, to denote a trend away from company support of very specific vocational training, often aimed at shopfloor workers, towards much wider professional and business qualifications which upgrade the skills of employees who are already graduates and postgraduates. This move indicates a shift in philosophy to encompass the concept of lifelong learning and education to enable the workforce to be more flexible and ‘rounded’.

A more ambitious development is the British Aerospace Virtual University. This is being established with an annual budget of £200 million to provide the company, its customers and suppliers with both a major education and training facility, and a focal point for contact with universities for technology transfer. Its three faculties are for engineering and manufacturing technology, ‘learning’ (covering a wide range from lifetime education to masters and doctoral training), and an international business school. The academic input will be provided by selected leading universities.

In this sense, both the UfI and company universities represent ‘virtual’ universities by acting as intermediaries, brokers and conduits which place students with the relevant

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teaching programmes in what might be termed ‘linked workplace learning’. Central to the UfI concept is the inclusion of other universities and colleges in delivering directly many of its courses. This brokerage and conduit role is also central to the success of the UfI, acting as it does as ‘gatekeeper’ to the process of lifelong learning for many people who have had little or no direct contact with traditional universities.

Other Research Council schemes

The Research Councils have all participated in schemes that have sought to encourage industry-academic research links and exploitation activities. They have all been closely associated with the LINK and Foresight initiatives (see above), and have established packages which provide adjuncts to such schemes. Thus, the Medical Research Council (MRC) runs an Open-LINK scheme which funds high-quality collaborative projects that meet the LINK criteria, but which do not fit into any particular LINK programme. The Natural Environment Research Council (NERC) operates a pump-priming programme, Connect A, for short research projects, workshops or seminars with industrial relevance. A larger scheme, Connect B, offers grants of up to £200,000 for innovative partnerships with 50% funding from industry. The EPSRC also runs several initiatives in which contributions from industry are required as evidence of commitment and interest. Realising Our Potential Awards (ROPAs) indirectly promote industrial collaboration by rewarding academics who raise industrial funding with the opportunity to apply for funding for innovative research.

Since the 1993 White Paper ‘Realising our Potential’, the participation of users (including industry) has been a fundamental precept of Research Council activity. As well as being manifested through specific initiatives, industrial influence (together with that of other users of research) is felt through representation at virtually every level: on the Council, through boards and committees, and through participation in refereeing and consultative exercises. The Research Councils also sponsor efforts to disseminate results to industrial audiences.

In terms of exploitation initiatives, in 1987 the MRC opened its MRC Collaborative Centre in Mill Hill, London. Its role is to help establish pharmaceutical companies to develop practical uses for MRC technology, and to be an incubator centre with laboratory and office space for spin-out firms. The MRC also runs a seedcorn fund to invest in MRC spin-out firms arising from MRC research. On a smaller scale, the NERC co-ordinates NEST (Network for the Exploitation of Science and Technology), a consortium involving all the Research Councils, some independent research organisations and the University of Leeds. NEST provides a website to act as a gateway for brokering partnerships between R&D users, providers and enablers of exploitation.

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National and regional initiatives

A number of prominent schemes have been initiated by national and regional development agencies. One such scheme is the Centres for Expertise in Wales which has been set up by the Technology Transfer Group of the Welsh Development Agency (WDA). There are now 35 such centres based in HEIs across Wales. They comprise specialist research groups which offer industry the opportunity to benefit from their research expertise in specific scientific or technical fields. The aim of the scheme is to help companies to access HEI resources, and to form collaborative links with academics to develop relevant projects. The cost of carrying out research in these centres can be supported through a programme of partnership schemes and shared resources. The Centres of Expertise can particularly support SMEs who could not undertake research projects on their own. The centres can also help with specific areas of expertise in design, prototyping, automation and testing.

In Scotland there have equally been a whole range of schemes and initiatives established in order to further industry-academic links. The most recent has been the announcement of a Scottish University for Industry (Scottish UfI). For the English regions, schemes have been more limited and specific, but nonetheless successful. One such example is Higher Education Support for Industry in the North (HESIN) outlined in Annex 5.

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Annex 2: Research Instruments and Procedures

For the purposes of this study it has been assumed that three main types of relationships between HEIs and industry can be distinguished.

Relationships in the context of researchThese can be direct and mediated. Direct links include: sporadic contributions from industry to the science base (donated research equipment or one-off financial contributions); research commissioned to HEIs by industry; services offered and/or required (measurements, standards, testing); movement of researchers between HEIs and industry. Mediated links between HEIs and industry mostly concern co-operation and collaboration in the process of research and are encouraged by a wide range of government mechanisms (notably LINK).

Relationships in the process of teaching and trainingIn the context of these relationships, HEIs provide teaching and training aiming to satisfy demands from industry. These relationships are initiated through mechanisms such as: the Co-operative awards in Science and Engineering (CASE), Industrial CASE, the Teaching Company Scheme and so both. The activities are at master’s or PhD level, or through tailored short courses and schemes for continuous education (including distance learning).

Commercialisation of research resultsHEIs tend to exploit their research results through patents (and other means of protection) and licences, and through forming companies (according to the findings of previous studies two distinct types of companies are being formed: exploitation companies which are wholly or partially owned by HEIs, and spin-out companies which are set up to exploit results from university research, but have a separate identity). Policies and mechanisms to encourage the commercialisation of research results include science parks and incubator units.

These assumptions and the need to ensure continuity and comparability between this study and previous studies shaped our decisions regarding the specific instruments for data collection and their design. The following instruments for data collection were used.

i) Industrial liaison officers’ questionnaire

This questionnaire was sent out to industrial liaison officers (or equivalent) in the universities and HE colleges in the scope of the study and collected information about the following issues:

number and size of research contracts directly commissioned by industry; type of research and services offered by institutions; number and size of sporadic contributions from industry; movement of staff; number and size of participation(s) in different initiatives and schemes aiming to increase collaboration with industry; participation in local schemes and initiatives (if any);

motivation for entering into collaborative relationships with industry; barriers to forging new links with industry; problems most commonly associated with

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maintaining existing links; the role and importance of intermediary organisations and other factors for forming new research and consultancy links with industry;

number of exploitation and spin-out companies and when set up; turnover of exploitation and spin-out companies (by company and year if possible); contact details for exploitation and spin-out companies; what R&D product/process do they exploit and origin of initial funding (if possible); established mechanisms for commercialisation of R&D results (incubators, participation in science parks); number of patents and licences filed and granted.

ii) Continuing education officers’ questionnaire

This questionnaire was sent to continuing education officers (or equivalent) in the HEIs and collected information regarding their teaching-related links with industry. Issues covered by the questionnaire included:

numbers of staff and students sponsored by industry (including sponsored undergraduates and sandwich students); existence of masters courses (face-to-face and distance learning) specially designed to address industrial needs; short courses sponsored by industry; annual revenue arising from these courses;

assessment of the usefulness of different factors for initiating of new education, continuing education and training projects with industry.

iii) Semi-structured interviews

The study also used two semi-structured interview guides — one for interviews with continuing education officers and one for interviews with senior academic staff (mainly vice-chancellors). These interview guides had different emphases. The one for CEOs aimed to collect more detailed information on issues already included in the questionnaire, such as institutional policy to support the needs of industry, modes of institutional involvement in collaboration with industry, and the importance of intermediary agencies. The interview guide for senior academic staff aimed to collect information regarding strategic views of present and future policies at institutional level, and the way in which these are influenced by policies at national level.

iv) Direct inquiries

In addition, in the course of the study a number of direct inquiries were made to bodies such as the UK Science Parks Association, the OST, the Research Councils and the Association for University Research and Industry Links (AURIL).

Response rates

The following tables present information about response by country, type of institution and type of returned questionnaire. The calculations are based on institutions that have submitted at least one of the questionnaires.

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Table A2.1: Distribution of institutional response by country and type of returned questionnaire

Country Only ILO Only CEO BothEngland 21 88% 12 80% 62 74%Scotland 2 8% 2 13% 13 15%Wales 1 4% 1 7% 8 10%Northern Ireland 1 1%Total 24 100 15 100 84 100

Table A2.2: Distribution of institutional response by country and type of responding institution

Country Universities HE CollegesEngland 65 76% 30 79%Scotland 11 13% 6 16%Wales 8 9% 2 5%Northern Ireland 1 1%Total 85 100 38 100

Questionnaires

The ILO and CEO questionnaires are reproduced in Annex 8.

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Annex 3: HEIs and the issue of Intellectual Property Rights

Background

Up until the mid and late 1970s, HEIs gave very little consideration to IPR issues. As far back as 1971, the Docksey Report (1971) proposed the abolition of monopoly rights granted to the National Research and Development Corporation (NRDC) in the exploitation of research results. The report recommended that HEIs should be granted the freedom to choose the routes and mechanisms for the commercialisation of their research results. However, it was only effectively in 1985 that the then Conservative government formally ended the NRDC’s monopoly in the exploitation of publicly funded research. The NRDC itself was restructured under the new name of the British Technology Group. Even then, HEIs formally had to satisfy the BTG that they had proper mechanisms in place for identifying, protecting and exploiting their intellectual property (Gourlay et al. 1997).

Since the mid-1980s, many HEIs in the UK have developed much more sophisticated strategies for protecting and making use of innovations coming out of academic research. Many HEIs started to set up specialised intellectual property management and administrative centres, commonly known as technology licensing offices. These were set up within, or parallel to, existing industrial liaison offices. Up until this period, most HEIs had little monitoring, let alone effective control, of the intellectual property that was being generated by their staff. Many real commercial opportunities were lost. Some were never exploited, others were taken up by private companies — all too often it seemed from overseas.

This view was so strong that it led to the setting up in 1980 of Celltech Limited with funding from the National Enterprise Board (NEB). By the early 1980s, with an increasing degree of linkage between HEIs and industry, associated with the growing concern over income generation for public sector research, IPR had become a major policy and strategic issue. The tendency to view academic and public sector research as a free public good sponsored by government had begun to be replaced by a more complex model of public-private relations. This trend has been furthered by government and other policy documents (Cabinet Office, 1992; 1993; National Academics Policy Advisory Group, 1995) which have all highlighted the need to tighten up intellectual property management and exploitation in the public sector, and in HEIs more particularly.

IPR and some associated problems

Aside from the issue of IPR disputes acting as a barrier to industry-academic relations, for certain HEIs and based on the interview survey of senior staff, the question of IPR was seen as a significant overall problem. It was not so much seen as a barrier hindering industry relations, but as a lost opportunity. This was in the sense that HEIs felt that they did not have the adequate capacity, and more particularly funds, to exploit commercially or defend their IPR. The management of IPR can be seen as covering the whole spectrum of intellectual property activity, namely in the:

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1) effective monitoring of research/inventive activity being generated by the university or higher education college;

2) accurate identification and selection of research/inventions that are seen as valuable and worth protecting in terms of generating future income;

3) take-up and negotiation of the selected research/inventions with the research team for protecting and defending the research, including the establishment of appropriate incentive and exploitation schemes;

4) selection and establishment of the appropriate legal IPR defence mechanisms for the research/inventions;

5) decision on the length and extent of IPR protection for the research/inventions;

6) appropriate decision on the long-term IPR exploitation and development route of the research/inventions.

It should be noted that many of these activities are not sequential and linear, but run in parallel and involve close feedback loops. Nonetheless, the range of these IPR activities provides a spectrum of what is entailed in the proper management and functioning of the IPR system within HEIs.

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Annex 4: Teaching and training policy initiatives

Some initiatives aiming to encourage the establishment of industry-academy links in the context of teaching and training are described below.

Teaching Company Scheme

The Teaching Company Scheme was founded in 1975 and has been regarded as one of the greatest successes of UK HEI-industry links. The TCS was initiated by the DTI and aims to develop active partnerships between HEIs and industry. The scheme sets up partnerships between firms and HEIs through the formation of teaching company programmes. Firms take on graduates, known as TCS associates, to work full time on specific projects jointly supervised by the HEI and the company.

Projects are intended to be closely linked to the interests of the firm and should be aimed at achieving a substantial and comprehensive change in the firm, for example in management and production techniques. Partnerships are exclusively between HEIs and firms within the region as the associates must travel regularly between the two organisations. The scheme has five formal objectives, namely to:

a) raise the level of industrial performance by effective use of academic resources;

b) improve manufacturing and industrial methods by the effective use of advanced technology;

c) train able graduates for careers in industry;

d) develop and retrain existing company and academic staff;

e) provide academic staff with broad and direct experience of industry, to benefit research and enhance the relevance of teaching.

A typical programme lasts for two years. The graduates have a science and engineering background and are recruited jointly by the partners. The associates spend 90% of their time working in the company on specific projects and are paid at industrial rates. The remaining 10% of their time is spent within the HEI undergoing training. Until 1981, the TCS was financed totally out of public funds, but since then firms have provided up to one-third of the cost of new programmes and at least 50% of the cost of renewed programmes. The programmes range in size from one associate over two years to 14 associates in a three-year programme which is then renewed. A quinquennial review during 1996 found that 70% of associates are offered employment in participating companies at the completion of a TCS programme. Well over 2,000 TCS partnerships have been created since it was first established.

One example of the new TCS centres is that of Cardiff University, the University of Glamorgan and North East Wales Institute who are partners in the TCS centre in Wales (one of 40 programmes in the Principality). An SME participating in the scheme for the first time only needs to pay 30% of the direct costs (compared to a

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larger firm, which normally pays 60% of costs). Although it is still too early to provide an adequate assessment of TCS Centres, early evidence indicates that it has been successful in making HEIs more aware of the education and teaching needs of SMEs (Robson, 1996, 106).

Co-operative Awards in Science and Engineering

The Co-operative Awards in Science and Engineering scheme is used to fund research students, who are jointly supervised by academics and external sponsors who may come from industry or from public sector bodies. The CASE scheme is largely financed by the Research Councils, with some industrial finance for the student and the academic department. The awards aim to encourage industrially relevant research projects by PhD students at HEIs. Standard awards are allocated to HEIs, typically by a quota allocation to a department.

In 1994, the CASE programme was extended to cover Industrial CASE. This extension was set up under a three-year trial period. Industrial CASE operates in exactly the same way as CASE, except that the Research Councils allocate the awards to industrial companies to support projects at HEIs which they select. Thus with Industrial CASE, studentships are allocated directly to firms so that they can take the initiative in defining the research project and selecting the academic partner. Under a 1996 review of the pilot scheme, the Industrial CASE programme received strong support. Aside from the normal Industrial CASE mechanism, a small number of awards under a continuing pilot scheme are made available to SMEs through regional technology centres regional technology centres. This initiative also appears to have worked well and has extended the reach of the scheme to firms who would not normally have participated in CASE.

Other postgraduate schemes

The Research Councils also run a range of bespoke schemes often linked with wider government programmes (other bodies run similar schemes, for example those run by the Royal Society of Edinburgh). Schemes run by the EPSRC are presented here as one example. The EPSRC manages a number of postgraduate schemes linked in with the TCS and CASE. These are briefly outlined below.

1) Engineering doctorate: Most notable perhaps is the engineering doctorate, which is a four-year award designed to develop innovative thinking, whilst tackling industrial problems. It aims to develop not only engineering skills, but also a wider repertoire of research, business and management expertise essential to successful innovation in industry. Five centres based in HEIs operate the scheme and 75 new awards are allocated each year. Some 200 companies are currently participating in sponsoring research projects within the centres (EPSRC, 1997, p.53).

2) Postgraduate Training Partnerships: This scheme is jointly funded with the DTI and offers the opportunity for doctoral students to undertake industrially relevant postgraduate training in industrial research organisations, again in partnership with selected HEIs. In 1996, three new partnerships were established and support for the

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initial five centres was extended for a further three years. From 1997, 65 studentships were to be available annually through the eight designated centres.

3) Research masters: In 1995, a four-year pilot scheme was established to provide students with a range of skills of value to research careers within industry and elsewhere. A total of 160 studentships have been made available each year since 1995 through 16 courses.

4) Total Technology: This scheme’s objective is to provide young engineers with a thorough training in research, development, design, planning, production and maintenance activities. It also seeks to broaden their skills base by making them more effective ‘hands-on’ engineers. A total of 46 CASE studentships are channelled to four designated centres each year through this scheme.

5) Integrated Graduate Development Scheme: The IGDS aims to promote and develop industrially oriented postgraduate training for students employed in industry. The scheme involves a series of short intensive modules designed to extend graduates’ technical and managerial abilities, especially in terms of attuning them to the needs of their firm. For the individual, the scheme can lead to a part-time MSc. Funding is provided on a pump-priming basis to establish the course, with the intention that the programmes will become fully funded by industry. Up to the end of 1997, the EPSRC has funded 45 IGDS programmes across the UK, involving more than 300 firms. The EPSRC is currently seeking to extend the scheme through distance learning and innovative teaching methods.

6) Fellowships: In 1997, the EPSRC instituted 25 new advanced fellowships, seven new industrial fellowships and three new senior fellowships, and the funding for one fellowship under the Daphne Jackson Trust (to support career-break returnees) each year.

7) Graduate schools: Graduate schools are one-week courses set up by EPSRC to broaden the skills training of postgraduate engineers and in particular to help prepare them for employment. Around 1,000 students pass through these graduate schools each year.

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Annex 5: HEI Frameworks for Industry Collaboration and Linkage

Introduction

This annex describes the background to some of the key developments in industry-academic links that HEIs have set out to institute over recent years. More specifically it outlines a number of frameworks, strategies and procedures that HEIs have developed in seeking to enhance their commercial and community effectiveness.

Research and liaison offices

As with other aspects of industry-academic links, there has been a clear trend towards the professionalisation and training of technology transfer staff within HEIs and the establishment of research and liaison offices. These offices or units have acquired a much more central role within HEIs and their status has risen substantially. Many industrial liaison and technology transfer staff work in specialist units established by HEIs. In smaller or more decentralised HEIs, however, such staff often remain in the main administrative functions of the organisation, or in some cases directly in the research facilities themselves.

Industrial liaison officers form the main ‘actors’ in HEIs in relation to developing and sustaining industry-academic links, although their status and relationship with the host institution can vary considerably. There are ILOs who are permanent members of the institution (senior administrative or academic staff). On the other hand, some ILOs are kept at arm’s length and are employed in the HEI’s ‘umbrella’ holding company (and are usually recruited from industry). However, although ILOs were the first development within HEIs, they have been supplemented more recently by other specialists within research contract offices or exploitation units. These newer specialists and specialist units are more likely to have general business or legal skills, and provide advice on contract law, business plans for spin-out companies and even property management skills for HEI-owned science parks (Charles and Howells, 1992, pp108-9). The emergence of technology licensing offices (Section 8) as an adjunct to industrial liaison offices within HEIs is just one example of this increased specialisation over time.

As noted above, there has been a growing professionalisation of industrial liaison, technology transfer and exploitation staff within HEIs. As far back as 1969, the University Directors of Industrial Liaison group was established. This was subsequently mirrored by the creation of the Association of Industrial Liaison Officers, formed for liaison staff operating within UK polytechnics and higher education colleges. With the creation of the new universities out of the former polytechnics, these two organisations merged to form the Association for University Research and Industry Links. AURIL (and its forerunners) has sought to extend the professionalisation of industrial liaison work through two main elements of activity: firstly, by promoting the growth of university-industry collaboration; and, secondly, by exchanging information relating to the best practice technology transfer (see, for example, AURIL/CBI, 1997). The staff involved in industrial liaison and technology

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transfer are a mixed group both in their skills and roles within the institution and in their backgrounds. Not unexpectedly, those taking up industrial liaison posts in HEIs are unlikely to have the full range of necessary expertise to undertake the job and there is considerable learning and job redefinition taking place at all levels (Barnes, 1988). Attempts to provide more formal training courses have been slow. They have been based on retrospective examination of the kinds of tasks performed by industrial liaison staff, and attempts to identify generic approaches to continuing professional education (European Research Associates, 1987).

Research and liaison offices are also becoming more proactive. In the past they largely administered and advised on research contracts and projects that were directed towards them. Such units are now actively scanning the external environment for industrial contacts and partners.

Continuing education offices and ‘lifelong learning’

There has been a long evolution towards what might be described as the aim of ‘seamless’ lifelong learning which provides higher education to a wide section of the populace throughout their lives. In the past, the ‘old’ universities often had individual and separate adult education and continuing education departments. These departments were targeted at what were seen as very different ‘markets’ for the services of higher education, namely adult liberal education and the provision of applied and vocational education and training services for industry. By the early 1990s, many of these departments were merged, as in the example of Keele University. In Scotland, however, there remains a differentiation. This is between continuing personal education and continuing professional education. The latter is targeted specifically at those already employed and is vocationally relevant.

Most CEO and related staff interviewed for the study envisaged that there would be significant growth in courses delivered through concentrated modules (for example, over the weekend or during holiday periods) and via distance-learning methods. Further aspects of this discussion are presented in Section 5.

Changing organisational and management structures

In the past, most research and teaching contact with industry was carried out primarily by individual academics working in departments that covered traditional disciplines in science and engineering. Over time such relations have become more formalised and have come more directly under the supervision of HEI administration. There has been a growth in more specialised applied and interdisciplinary departments and units, and new organisational structures which have sought to deal more adequately with industry collaborations. These departments and units have typically been targeted at particular markets or fields of industrial technology rather than following traditional disciplines. HEIs have therefore taken a much more centralised and formalised approach to industry relations over the last two decades. The existence of an industrial liaison unit, in turn supported by a dedicated IPR office and an ‘umbrella’ HEI-owned firm is now commonplace in many of the larger HEIs. Many of these developments are linked, as with case of the University of Northumbria at Newcastle (see below).

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At the same, time new organisational structures and improved reporting practices and standardised procedures have been adopted by most, if not all, HEIs. The dissemination of practices and procedures to staff and more particularly their monitoring and implementation are, however, still lagging behind in many HEIs. One example of new practices is in the Department of Chemical Engineering at Imperial College, which introduced a type of matrix management with devolved budgets and rigorous cost accounting (Charles and Howells, 1992, p132). The activities of the department have been organised into a series of programmes which are cost centres and which draw upon academic and research staff as necessary, according to the type of project being undertaken. For each programme an annual budget and forecast of earnings are prepared, against which programmes are assessed.

As the range and complexity of industrial links and the organisational responses to them have increased, so have the dangers of remoteness and disengagement of ‘normal’ university and college life. Increasingly, specialists and specialist units have been brought in to deal with issues that in the past were dealt with at departmental level by academics and administrators. This shift has brought its benefits, but the balance must be maintained so that many of these specialist staff and units do not become remote from mainstream HEI activities and end up as ‘enclaves’. Organisational frameworks and practices that seek to maintain structures and mechanisms which are as decentralised as possible for dealing with industrial links, whilst benefiting from more centralised advice and administrative support, are likely to be more successful in the long term.

Mission statements and HEI strategy toward local and regional economic development

Mission statements and HEI strategy toward economic development are communicated to staff through a variety of mechanisms:

i) induction courses for new staff;

ii) certain types of training and retraining of existing staff;

iii) staff newsletters and electronic media;

iv) the proactive approaches of ILO staff making personal contact with departments and individuals, and highlighting the obligations and policies of the HEI regarding industrial links.

How effective these approaches are in emphasising and reminding staff about the industrial mission of the HEI is difficult to assess, although the personal contact undertaken by ILO staff is seen as probably the most effective.

The importance of industrial links can moreover be stressed in a variety of forms, either in combination or on their own. Direct acknowledgement of the importance of industrial links is made in straightforward terms in relation to their contribution to the income stream of the HEI and the funding of crucial research. The value of such links is also noted in relation to enabling applied research which HEIs might otherwise not undertake without industrial support and technology knowledge sharing. The

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industrial mission is additionally stressed in the context of teaching and the more general shaping of the strategic direction of the HEI. Thus the University of Portsmouth states in its strategic plan:

‘The University is particularly concerned to meet the needs of employers in developing its academic programmes, building on its existing strengths in preparing students for employment.’

and ...

‘The University will establish employer advisory boards for all departments. This will enable the University to develop its understanding of and responsiveness to the future requirements of the economy, industry and the professions. The flexible, unitised course structure will enable the University to respond more rapidly not only to changes in student demand but also those of industry, commerce and the professions.’

The indirect value of an industrial strategy is also being increasingly stressed in relation to allowing the HEI the ability to deliver on its wider contribution to the local and regional economy, as in the example of the University of Portsmouth’s reference to it in relation to student teaching. This is in terms of economic development and social regeneration. Here HEIs see themselves as both partners with industry and other local agencies (the importance of ‘partnership’ is increasingly being stressed), but also as vital ‘animateurs’ within the local or national system, often as a major employer in the local economy.

This last point should not be ignored. The higher education system has expanded rapidly over the last decade at a time when many traditional industries have undergone further restructuring and in some instances disappeared. New universities in a number of localities are now the largest employers in the local economy, and regardless of top-down policy statements have acknowledged their often pivotal position in the future prospects of their area. In some instances this responsibility is taken even more seriously than the direct contribution of industrial funding to the HEI’s income base. This can be seen, for example, in Bolton Institute of Higher Education’s strategic plan 1995-2000 where one of its ‘core values’ is:

‘establishing strong collaborative links with external local, national and international communities and organisations, partly in order to emphasise the Institute’s role in economic regeneration.’

and a key strategic goal is:

‘to be a major provider of easily accessible HE, including continuing vocational education, within the South Lancashire/North Manchester sub-region.’

and:

‘to be an integral part of the wealth creating and economic regeneration activities in the North West, especially Bolton and Bury.’

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Similarly, many other institutions have mission statement commitments to their region which are firmly embedded in the consciousness and responsibility of the staff. A number of HEIs have gone so far as to establish regional offices. In 1993, for example, the University of Sheffield set up the Sheffield Regional Office to provide a focal point for establishing partnerships with local private and public sector organisations. The regional office is also looking at ways in which the university can participate more fully in local economic regeneration and how it can establish local fora and industrial clubs. The University of Newcastle upon Tyne has also established a regional development office to co-ordinate and make more proactive its relations with the Northern region.

Such commitments are reflected in the survey data, in which over two-thirds (68.6%) of HEIs who responded to the question of whether their institution had a policy on contributing to regional development as a formal part of their mission statement said ‘yes’. A further 15.1% had some other kind of formal written policy incorporating such an aim. By contrast, only 16.3% of HEIs which responded had no formal acknowledgement of their institution’s role in regional development.

Initiation and management of industry links by HEIs

Section 7.5 provided a short discussion of the level at which industrial links are initiated and established by HEIs in the UK. It outlined six broad means by which HEIs establish and co-ordinate links with industry (Box 7.2); each of these will now be discussed in more detail.

1) Individual/small group links

Individual and small-group links remain a key element in industry-academic collaboration and have been the longest established. In the past, many of these relationships were informal and payment went directly to the academic with the HEI having no knowledge of, or involvement in, the transaction. More recently, as HEI funding pressures have become more acute, HEIs have sought to formalise and control such exchanges and to gain the financial benefits of such collaboration (see 3 below). With the continuing real decline in academic salaries, HEIs have instituted elaborate mechanisms to allow often substantial payments to academics in order to retain them within the HEI and to act as an incentive to pulling in further industry-related monies. Nonetheless, many of these transactions are still undertaken informally and records of such collaborations remain poor.

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2) Departmental or faculty links

The main growth in industrial links in recent years has been through more proactive, targeted initiatives established at departmental or centre level, driven by the need to obtain research and teaching funding to establish and maintain centres of excellence in particular fields. These links may be at departmental level or school or faculty level, depending on the size of the department or faculty. However, they may also be channelled through applied units or centres which are either wholly or partly targeted at industry’s research needs. This growth has been accompanied (or as many would argue has been encouraged) by the growth in short-term, non-tenured staff contracts, which has allowed greater flexibility in coping with changing research needs and funding levels. Increasingly, administrators support these departmental or faculty-led industry links, and provide financial and other contract-related advice.

3) Centrally co-ordinated links

A number of HEIs have sought to centralise the way in which industrial links are established and co-ordinated. This is in part a reflection of HEIs seeking to ‘capture’ more industrial revenue and to monitor it more effectively. Centralisation has also been associated with the increasing professionalisation of industrial liaison and technology transfer staff, who feel they can offer better advice and support to academic staff through a centralised mechanism. In turn, they can also offer a better managed and higher quality service to industrial clients.

4) Co-ordination via exploitation companies

Some HEIs have adopted centralised co-ordination of industrial links, but have devolved their day-to-day operation to wholly-owned exploitation companies. In this arrangement, HEIs devolve much of their overall management of industrial liaison issues to their exploitation companies, where the specialised personnel best placed to co-ordinate such relations in the HEI are based. However, this arrangement still allows the centralised monitoring, co-ordination and capturing of industrial links and revenues. 5) Local, regional and national HEI consortia

HEIs are not only combining to act as pressure groups according to age, status and so on, they are also increasingly combining to form regional interest groups. These often have a strong industrial collaboration dimension, as can be seen in an increasing number of local, regional and national groupings of HEIs. One of the longest running is Higher Education Support for Industry in the North which was established in the Northern Region of England to support wider frameworks for HEI-industry links in the region (Box 5.A). More recently in 1996, HESIN set up the Knowledge House, an initiative to provide local industry with a single point of contact to the universities. The scheme is specifically targeted at SMEs who otherwise would not consider contacting or searching for university-based expertise and it is partially funded by ERDF money. In Yorkshire and Humberside, the Yorkshire and Humber Universities Association was founded as a collaborative venture between the region’s nine universities and seeks to encourage regional development. In particular the association is seeking to develop a more co-ordinated and targeted business agenda for the region.

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In a more local scheme in Sussex, the local HEIs (the University of Brighton, the University of Sussex and Brighton College of Technology) have received funding from local authorities and industry to establish the ‘Sussex Academic Corridor’ and the Sussex Innovation Centre (Box 5.B) to lead a more entrepreneurial and property-led scheme to support HEI spin-outs and high-technology companies in the local economy. Another more specific example is the System Level Integration institute in Livingston, supported by a coalition of HEIs and agencies in the local region (Box 5.C).

The government is driving HEIs to form more cohesive regional units and to become more dominant forces within their respective regions. Thus Dr Howells, the former Minister for Lifelong Learning, has stated that universities and colleges must be prepared to act as regional powerhouses and to take a lead role in defining how the UfI (Annex 1) and the new regional development agencies should operate. Dr Howells noted ‘We are very keen that universities should view themselves more than they do at present as very important resources for the region they serve’ 18.

18 see ‘Howells outlines UfI vision’, The Times Higher Education Supplement 24.04.98.

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Box 5.A

Higher Education Support for Industry in the North (HESIN)

HESIN was formed in 1983 as a local industry-academic consortium. HESIN’s constituent bodies were five HEIs in the Northern region: the University of Newcastle upon Tyne, the University of Durham, the former polytechnics of Newcastle, Sunderland and Teesside together with the Northern regional office of The Open University. HESIN has set up several training schemes in collaboration with industry. The two most notable are a former EU-funded COMETT project and an integrated graduate scheme.

NEPTUNE was a COMETT-initiated university training enterprise which co-ordinated individual submissions from HEIs in the Northern region. It comprises a partnership between the six HESIN members, the Regional Technology Centre (RTC North), the Northern Development Company and three private sector organisations.

Knowledge House

More recently in 1996, HESIN set up the Knowledge House to provide an interface connecting the universities and industry in the North East. Its task is to encourage local SMEs to take advantage of the combined resources located within the six North Eastern universities. The Knowledge House functions as a centrally co-ordinated enquiry and response service providing local industry with a single point of contact for advice, guidance and support on a range of technology and management-related issues. RTC North acts as the central co-ordinator of the Knowledge House, with additional managers based at each of the universities.

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Box 5.B

The Sussex Academic Corridor

The Sussex Academic Corridor involves the collaboration and support of Brighton College of Technology, the University of Brighton and the University of Sussex, together with Brighton Borough Council, East Sussex County Council, Lewes District Council and Sussex TEC. The aim is to help contribute to the economic regeneration and development of an area running along Lewes Road from Brighton to Falmer. The vision is for the HE sector in Brighton to become an engine of local and regional growth, both through its own development along the Corridor and through the co-location of advanced, competitive, high value-added enterprises across a range of industrial, technological, professional, commercial and cultural activities. One mechanism the initiative seeks to use is that of providing technological and research support to existing or newly locating businesses in the area. Another is that of spinning out commercial activities from the partner academic institutions. In addition, the Sussex Innovation Centre (see below) will provide a key resource centre for innovative activity in the Brighton area.

The Sussex Innovation Centre

The Sussex Innovation Centre is a 20,000 square foot business campus located adjacent to the University of Sussex’s campus at Falmer near Brighton. It represents a

public-private partnership between the University of Brighton, the University of Sussex and Brighton College of Technology. The Centre has received funding from

Brighton Council and East Sussex County Council and is sponsored by Seeboard plc. It is subdivided into units, ranging from 145 square feet to 1,500 square feet. The

units are available as offices, laboratories, or a mix of both on rental terms of up to five years. Tenants have access to a group of external advisers and consultants on various issues, including finance, marketing, and intellectual property protection.

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6) Policy-led collaborations

There is also an important set of industry-academic links which are initiated, managed and funded through policy-led schemes run principally by the European Commission and UK central government initiatives, but which may also involve local authority funding and support. These initiatives include all the main EU Framework Programme schemes and, within the UK, the LINK Programme, Faraday Partnerships, the Teaching Company Scheme and CASE (which are covered in more detail elsewhere in this report, Section 5.2.1; Annex 1; Annex 4). These schemes have all had an important part to play in raising the profile and status of industry links in the UK higher education system as well as simply providing additional funding. The initiatives have had by their nature a strong top-down approach. This has been implemented through taking disparate research teams (HEIs) or research interests (industry) working in the same field and bringing them together, as in the case of LINK, or in providing an administrative and funding support framework to encourage both industry and HEIs to participate, as with the TCS and CASE. Such schemes have also had an ‘educational’ role for many academics and HEIs by encouraging and enabling them to link up with industry for the first time.

Research clubs

Research clubs were originally developed outside the higher education system to facilitate technology transfer with industry, but they have been embraced by some HEIs. They remain an important mechanism despite falling out of favour in recent

Box 5.C

System Level Integration Institute

Scottish Enterprise, together with the Universities of Glasgow, Edinburgh, Heriot-Watt and Strathclyde, established in 1997 a System Level Integration (SLI) institute which specialises in the science of combining increasing numbers of hardware and software functions within ever-reducing dimensions on a computer chip.

The institute forms part of two other facets comprising Project Alba, supported by Scottish Enterprise. This project represents a major investment by Cadence Design Systems, the world’s leading supplier of semiconductor design technology and services, in Livingstone, West Lothian. The last facet is the establishment of an independent design complex based on SLI. This will be the focus of a friendly environment to facilitate the trading of intellectual property, thus speeding up time-to-market in an industry where product life can be extremely brief.

The institute is based at the new design complex in Livingstone, where it will provide a focus for teaching and research and will work closely with the companies based there. The new institute aims to develop MSc courses and professional development modules relating to system-level design.

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years. Konecny et al (1995, pp80-2) argue that research clubs belong to three basic categories:

i) Information disseminating clubs: where information is collected by a central body or by sometimes by participants themselves and is then disseminated to all the other members of the club. One example is the UK Universities Internal Combustion Engine Group.

ii) Double membership clubs: where industrial members pay fees and receive reports, and academic members can attend meetings and submit research proposals. An example is the Optical Sensors Collaborative Association (OSCA) set up to promote the use of optical fibres and supported by the DTI. It has 28 full members (firms) and 14 affiliate members, mainly universities. OSCA sponsors research projects in organisations (members and non-members), although the projects are generally small.

iii) Clubs with a limited number of research laboratories: which are distinguished by their focus on specific research projects and where the number of projects instituted is small. The amount of funding per project is generally large, and is focused on a single laboratory.

In general, research clubs form an interesting mechanism whereby firms can ‘listen into’ and participate in research initiatives at relatively low cost. The University of Kent at Canterbury is exploring the idea of setting up a set of research clubs as a cheap and effective mechanism to reach out to SMEs in the Kent economy. Other HEIs have also expressed an interest in developing the research club model as a mechanism to improve the reach of their industrial collaborations.

HEI intermediary and consortia links

Section 7.6 noted that recently the institutional framework of government agencies and quasi-public agencies has been bewildering both its growth and in its frequent changes. There are a number of circumstances relating to this growth and the increasing importance of the role of such intermediaries and consortia.

1) The basic fact is that intermediaries and/or consortia provide an essential mechanism in cases where if they did not exist, industry-academic links would not occur. This in turn relates to two scientific and economic factors:

a) in scientific or technological fields, where one firm could not afford to fund, or risk funding, the research;

b) equally, where a single HEI could not supply all the scientific and technical capabilities of the required research.

2) There are situations where an intermediary provides a link between a firm(s) and a suitable HEI(s), which otherwise would not occur through lack of information, or the high costs of information scanning for the firm (especially in relation to an SME).

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3) There are more complex areas where a single firm on its own would not fund the research and needs an impartial arbiter and ‘animator’ to set a project up. This would occur in situations such as research on aspects of industry standards or use of shared facilities or networks.

Many of these intermediaries are local or regional in character. Good relations with these bodies and agencies have been seen as increasingly important, particularly when paralleled with HEIs’ growing recognition of their local and regional responsibilities. In particular, links both directly and through their intermediary role with TECs, LECs, Chambers of Commerce, Business Links, new and existing national and regional development agencies, former development corporations, RTCs and local authorities have therefore gained increasing significance.

Good relations and frequent contact with these agencies is important, but there remain significant differences between the old and new universities. One survey (Goddard et al, 1994, p47) revealed that 50% of new universities meet regularly with TECs, but only 38% of old universities. Equally, 81% of new universities were able to report ‘very good’ or ‘quite good’ relations with local authorities, but only 43% of old universities. These differences are perhaps not surprising given the more vocational profile of the new universities, but good relations and frequent contact are not always the case even for new universities. In this survey, one vice-chancellor noted that his former (new) university had terrible relations with its local TEC, which saw the university as somehow a competitor in many of its activities. The vice-chancellor, however, equally recognised the value of good relations with the local TEC and other agencies, and recommended that vice-chancellors should sit on the board of their local TEC to overcome precisely this sort of problem.

Industry and trade associations, together with other professional bodies, can also form important intermediaries between HEIs and firms. For example, the Royal College of Arts has had some of its most successful collaborations with industry when it was mediated by such bodies as The International Wool Secretariat, The British Furniture and Furnishings Council and The Cable Communications Association, in addition to the wealth of its one-to-one relations with industry. Industry and trade associations can form useful mechanisms by which more general and long-term research issues can be collated and then ‘parcelled out’ to HEIs with the relevant research expertise (this echoes the initial factors behind the foundation of the original industrial research associations after the First World War; Johnson, 1973).

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Annex 6: Regional Classifications

_____________________________________________________________________

The following regional aggregations of government regional office areas were used in the analysis:

1. Region 1 London South East Eastern

2. Region 2 South West West Midlands East Midlands

3. Region 3 Yorkshire and Humberside Merseyside North West North East

Northern Ireland

It should be noted that these regional areas differ from the UK Standard Regions used in most standard government regional statistics.

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Annex 7: Abbreviations and Acronyms

AURIL Association for University Research and Industry Links

BBSRC Biotechnology and Biological Sciences Research Council

BERD Business Expenditure on Research and Development

BTG British Technology Group

CASE Co-operative Awards in Science and Engineering

CBI Confederation for British Industry

CCLRC Council for the Central Laboratories of the Research Councils

CEC Commission of the European Community

CEO Continuing education officer

CEST Centre for the Exploitation of Science and Technology

CET Continuing education and training

COMETT Community Action Programme for Education and Training for

Technology

CR Contract research

CRTO Contract Research and Technology Organisation

CVCP Committee of Vice-Chancellors and Principals of the

Universities of the United Kingdom

CVE Continuing Vocational Education

DED Department of Economic Development (Northern Ireland)

DENI Department of Education in Northern Ireland

DfEE Department for Education and Employment

DGXII Directorate-General for Science, Research and Development,

Commission of the European Communities

DGXIII Directorate-General for Telecommunications, Information

Market and Exploitation of Research, Commission of the

European Communities

DGXV Directorate-General for Regional Policy, Commission of the

European Communities

DoH Department of Health

DTI Department of Trade and Industry

ECU European Currency Unit

EEA European Economic Area

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EPSRC Engineering and Physical Sciences Research Council

ERDF European Regional Development Fund

ESRC Economic and Social Research Council

EU European Union

FE Further education

GDP Gross domestic product

GERD Gross Expenditure on Research and Development

GOVERD Government Intramural Expenditure on Research and

Development

GR Generic Research

GRE Government research establishment

HE Higher Education

HEFCE Higher Education Funding Council for England

HEFCW Higher Education Funding Council for Wales

HEI Higher education institution

HERD Higher Education Expenditure on Research and Development

HESA Higher Education Statistics Agency

HESIN Higher Education Support for Industry in the North

HMSO Her Majesty’s Stationery Office

IACR Institute of Arable and Crops Research

ICT Information and communication technologies

IGDS Integrated Graduate Development Scheme

ILO Industrial liaison officer

IPR Intellectual property rights

JREI Joint Research Equipment Initiative

LEC Local Enterprise Company

LGC Laboratory of the Government Chemist

MAFF Ministry of Agriculture, Fisheries and Food

MBA Master of Business Administration

MRC Medical Research Council

NEB National Enterprise Board

NERC Natural Environment Research Council

NEST Network for the Exploitation of Science and Technology

NHS National Health Service

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NRDC National Research and Development Corporation

OECD Organisation for Economic Co-operation and Development

OST Office of Science and Technology

PBA Personal business adviser

PNP Private Non-Profit

PPARC Particle Physics and Astronomy Research Council

PPP Purchasing Power Parity

PRE Public research establishment

R&D Research and development

RAE Research Assessment Exercise

RDA Regional Development Agency

ROPA Realising our Potential Award

RTC Regional Technology Centre

RTD Research and technological development

SERC Science and Engineering Research Council

SHEFC Scottish Higher Education Funding Council

SIC Standard Industrial Code

SME Small and medium-sized enterprise

SOEID Scottish Office Education and Industry Department

TCD Teaching Company Directorate

TCS Teaching Company Scheme

TEC Training and Enterprise Council

TLO Technology Licensing Office

UfI University for Industry

UK United Kingdom

UKSPA United Kingdom Science Park Association

USA United States of America

WDA Welsh Development Agency

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Annex 8: ILO and CEO Questionnaires

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Howells Et Al 1998 - Industry Academic Links in UK

Documents

heiindustry links

wales industryacademic

industry sponsorship

heiindustry linkages

initiation of links

close industry involvement

hefce mr brian ramsden

postgraduate teaching