The past and present… We live in unprecedented times for knowledge exchange.

For Research England (building on the experience of HEFCE), our funding for university knowledge exchange (KE) is increasing at its greatest pace since the Higher Education Innovation Fund (HEIF) began in 2003. This is at a faster rate than the increase to deliver Lord Sainsbury’s “Race to the Top” review from 2008. Our institutional allocations have grown from £160 million in 2016-17, to £225 million in 2018-19 through HEIF, with an additional £25 million through the Connecting Capability Fund (CCF). And the Government’s Industrial Strategy committed to HEIF rising to £250 million by 2020-21.

The current period has some common features with past accelerations in public investment in KE. Like the early 2000s, increased funding for KE is linked with an overall Government commitment to increase levels of expenditure on research and development – then the Science and Innovation Framework, now the 2.4% R&D target. The increases in 2008-11, and in the current period, also follow strong endorsement from business leaders of the importance of investing in university capabilities to engage – previously from Richard Lambert, and currently from Sir Andrew Witty.

With greater resources comes the need to provide this greater transparency, information and assurance – for policy makers, funders and critical external partners.

We can be sure that the future of KE will be shaped by these increasing resources in the hands of universities. This should enable significant increases in innovations in KE, identification of best practices to world leading standards and their widespread adoption (supported, as an example, by our CCF programme) – and overall higher levels of realworld impact and university KE sustainability. We need to be ambitious.

It is critically important then that the scale of the opportunity is backed by appropriate tools and resources to ensure that we maximise impacts, and for the long term.

Our development of the Knowledge Exchange Framework (KEF) is one key enabler. It should provide a sophisticated system to understand university KE performance in greater depth. This moves beyond higher education sector aggregate evidence that we provide in Higher Education Business and Community Interaction (HE-BCI) survey reports or in various HEIF evaluations. It should also provide means for universities to identify their key institutional peers and comparators and reach to partners.

The KEF is very powerful when combined with the KE Concordat, currently in consultation, providing universities with insights on leading edge practitioners – and on leading edge practices. The development of the Concordat has been led from university leadership, responding to the Government’s challenges to universities in the Industrial Strategy. But funders including Research England need to back it with investment in best practices, and with help to engage economic and societal partners in its value, with independent scrutiny of its effectiveness.

With greater resources comes the need to provide this greater transparency, information and assurance – for policy makers, funders and critical external partners.

Systems pulling together in a 2.4% world

The current increase in investment in KE sits in the context of a much larger and more ambitious package of support for research and innovation, with an additional £4.7 billion investment to deliver the Industrial Strategy announced by Government at Autumn Budget 2016. This comes at the same time as – and is linked with – the creation of UK Research and Innovation (UKRI), to foster the research and innovation system.

Notably, the Industrial Strategy uplift supports both supply and demand side interventions – in research, knowledge exchange and business innovation. This includes increases to HEIF and CCF, as well as programmes such as the Industrial Strategy Challenge Fund, Strength in Places and Future Leaders Fellowships – different programmes, but seeking to operate in concert on universities, businesses and investors, places and partnerships.

In order to understand the dynamics to achieving the 2.4% target, we have commissioned Tomas Coates Ulrichsen of the Centre for Science, Technology and Innovation (CSTI) at the University of Cambridge to advise us on how KE and commercialisation need to look in a 2.4% world. Diagram 1 describes the different KE levers.

Alice Frost Diagram 1

Different ways to achieve the 2.4% target will have different KE outcomes. More emphasis on expanding the public research base will likely lead to the need to support more university spin-off companies. More emphasis on business R&D will likely require more activity on consultancies, training and use of testing or other equipment and facilities.

As one example of the 2.4% world, if the target was achieved in line with the current public-private mix of R&D, trends suggest that this would produce another 100 spin-out companies, needing over £600 million additional private investment. Trends also suggest this might generate another £0.5bn in contract research activity and similar levels in continuing professional development.

Achieving the target is likely only feasible by using systems approaches. Research England, and UKRI more generally, will be an important part of the overall framework to achieve the target. However, we are part of a much wider network, and the target is likely only achievable by creating wide and deep connections with many other critical partners across many different types of systems.

I describe below how universities naturally form part of the many complex systems that are needed to achieve the 2.4% target.

At Research England, we have begun to increase our understanding of the different types of systems at play in the 2.4% world – the partners, cultures and drivers to different system players. One example of this is working with Mike Rees, the former deputy group CEO of Standard Chartered and current Angel investor, on deepening our understanding of the linkages needed between universities and private sector investors. Another is our support of a pilot research study with Professor Andrew Jones at City University to improve our understanding of the eco-system needed to underpin a knowledge/tech start-up economy – comparing London with, as example, New York.

As described in the Industrial Strategy, universities provide the foundations of ecosystems of various sorts:

  • Attracting R&D intensive international companies to co-locate and cluster near to them.
  • Creating ecosystems that provide conditions for new companies – spin-offs and start-ups.
  • Working with local partnership formations on scaling up companies.
  • Providing R&D services and skills to companies, communities and local people in civic connections.
  • And acting as overall system connectors and public spaces.

Universities are the heart…

The Universities Minister recently described the important systems role played by universities: “We must never lose sight of the fact that our universities provide the magnetic field that attracts people, business and investment into the UK”.

While we need to learn how to put in place frameworks and systems to pull toward 2.4%, universities have long been embedded in these on the ground.

The Minister’s description of universities as central to ecosystems is reflected in evidence we gained from universities on how they were using HEIF to deliver the Industrial Strategy – described in Diagram 2. Universities are using HEIF to begin to put in place infrastructures and capabilities needed to get systems to pull together toward the target:

  • Using the university’s footprint and co-working capacity in shared R&D facilities, technology and innovation centres and science parks.
  • Strengthening industrial and technology sector networks, through road-mapping and the like.
  • Enhancing the technology transfer system – such as in licensing and new company formation and entrepreneurial ecosystem development (access to finance, acceleration/mentorship and incubation).
  • Supporting local industrial systems – R&D, enterprise and skills pipelines and marketing the city or region for inward investment or international trade.
  • International partnering – R&D, technology and IP showcasing.
  • And, critically, developing a wide range of KE professional competence, skills and best practices to support all of the above.

Alice Frost Diagram 2

The future of KE – strengthening systems leadership

I envisage that the future of KE will be shaped by the forces I have described – of increased expectations, additional resources and the need to dig deeper into more complex systems.

One of the important facets of the future of KE flagged by Professor Trevor McMillan, Vice-Chancellor of Keele University, is leadership. This is reflected by Professor McMillan in both his review of technology transfer and now in his development of the KE concordat. This includes national leadership through UKRI, but also, vitally, university leadership on the ground. KE leadership requires strong skills in collaboration – the ability to get actors with very different drivers to find common purposes, such as to pull toward 2.4%. The KE Concordat suggests many of the requirements for good KE leadership – clarity of mission, accurate representation of strengths to partners, clear indicators of performance improvement, and giving broad confidence to governing bodies and government.

Finally, I see a bright future for the National Centre for Universities and Business as well placed as a critical connector of both leaders and systems. We look forward to continuing our partnership with NCUB, and with their members, in our 2.4% quest.

This article first appeared in the 2019 State of the Relationship report published 19 June 2019.