The UK's universities are precious national assets, regularly leading the world in the quality of their research and discoveries. But for decades, policymakers have wrestled with the question of how to turn academic excellence into economic impact.
With the collapse of the UK's financial services sector, this issue has become urgent. The innovative businesses that our universities create and support will be essential to allowing us to emerge strongly from the recession. This report asks how we can make this a reality.
It begins by examining the multifaceted contribution that universities make to the economy, highlighting their importance as sources of knowledge, and also their role as sources of skilled employees and as the centres for regional economic clusters.
Eight case studies show how thriving clusters of economic activity have grown up around leading UK universities, and the effect of recent policy and university strategy in helping this to happen.
The case studies also show that the way universities interact with businesses is evolving.
The earliest collaborations, such as those seen in the initial growth of the Cambridge cluster, relied significantly on good fortune and often happened below the university's radar, a model we have called the 'serendipitous university'.
Over the past 15 years, the process of formal knowledge transfer - developing spin-out companies, profiting from patents and licences - has been professionalised and upgraded.
This 'commercial university' model has helped promising clusters emerge more widely. More recently, universities have been casting their attention even more broadly, thinking not just about the formal transfer of intellectual property to industry, but also their role in building clusters, connecting to the national and international economies and bringing together thinking, practice, and finance.
This model of the 'connected university' holds the key to further economic growth.
Building the links to encourage business growth will become an increasingly urgent issue for universities. As public sector funding in other areas is cut, there will be an increasing onus on universities to demonstrate the public and economic benefit of spending on science, technology and research.
There are several ways that universities can do this:
- Getting the basics right: ensuring that technology transfer organisations are performing at the standard set by leading UK institutions; or good practice initiatives in the wider pool of pre- and post-1992 institutions.
- Embracing the model of the 'Connected University': recognising the importance of building networks with local firms, nurturing local clusters, creating national and international connections, and putting this at the heart of their strategy.
- Recruiting, developing and promoting more 'boundary spanners': people whose experience encompasses both public and private sectors who can build links between them.
- Measuring the benefits of university business interaction more effectively and communicating these to the public.
Government has a role to play as well. Local government should look carefully at how it applies planning regulations to universities. Since physical spaces for university business interactions are just as important as institutions, local authorities interested in innovation and growth should give priority to requests to develop places where firms and universities can interact.
Local authorities and universities should move beyond a 4 5 transactional relationship focusing on planning, to a broader dialogue on the role the university can play in local economic development.
The funding system should also take into account the importance of university-business interaction. Those portions of university funding dedicated to encouraging universities to interact with the outside world - such as the Higher Education Innovation Fund (HEIF) - should better measure the contributions that universities make to the local, national and international economies, to sharpen the incentives for co-operation.
A version of HEIF should be extended to the Further Education Sector. The forthcoming Research Excellence Framework should increase the rewards for interdisciplinary and outward-facing research, drawing on existing good practice among research councils.
The recession presents a unique chance for us to realise the economic benefits of our firstclass research base. This is an opportunity that the UK cannot afford to miss.