The number of interactions between universities and businesses in the UK declined in 2019/20 and 2020/21, driven by disruption from the COVID-19 restrictions.
However, the latest data reveals that this trend has been reversed, and the level of university-business interactions is now recovering towards pre-pandemic levels. According to the latest Higher Education – Business and Community Interaction (HE-BCI) Survey, university-business interactions surged by 5%, from 76,952 interactions in 2020/21 to 80,881 between August 2021 and the end of July 2022. This increase has also resulted in a higher level of income, increasing by 16% over the same period (refer to Figure 1 below).
SME and large business interactions
The surge in the total number of interactions can be primarily attributed to the increase in interactions with small and medium-sized enterprises (SMEs), which rose by 4% compared to the previous year, from 52,032 in 2020/21 to 54,090 in 2021/22. This growth is a promising sign that university-SME interactions have stabilised after experiencing a downward trend for two consecutive years (refer to Figure 2).
The data shows in particular that income from contract research with SMEs has risen significantly, by 20%, followed by consultancy services (up 7%), and facilities and equipment (up 4%) (refer to Figure 3).
The increased activity between universities and SMEs could be attributed to several factors, such as the increased ease of physical collaboration as COVID-19 restrictions were eased, the effect of government and funder interventions to drive up university commercialisation and knowledge exchange and increased institutional focus on working with businesses to drive impacts from research and other university capabilities.
The data shows that more SMEs are recognising the value of partnering with universities; and universities are becoming more successful in engaging with SMEs, especially following the considerable disruption faced during the early stages of the pandemic.
According to HESA’s latest data, engagement between universities and large businesses reached its second highest level in 2021/22, with 26,791 interactions recorded, representing a 7.5% year-on-year increase. This level of activity is now above pre-pandemic levels, demonstrating that collaborations with large businesses have remained robust even in the aftermath of the pandemic. Additionally, the total income from these interactions has significantly increased by 17% in the last year, primarily driven by a 14% rise in income from contract research (refer to Figures 4 and 5).
This increase in industry-university collaboration is positive, as it demonstrates that more businesses are accessing cutting-edge research, technology and insights, in turn enabling universities to realise real-world impacts from their research and contributing towards UK economic growth and societal benefits.
The survey’s findings indicate that the observed trends are generally consistent across different nations and regions of the UK (refer to Figure 6). Universities across England and Scotland saw an increase in interactions, with the exception of those in the East and West Midlands, which, along with those in Northern Ireland and Wales, reported a small decline in total university-business interactions.
Commercialisation activity
The situation regarding specific university commercialisation measures is mixed. On the one hand, total income from intellectual property has significantly increased (up 22%), especially driven by income from large businesses and SMEs, which saw an increase of 29% and 22% respectively. HE-BCI also shows that universities issued 40% more licences, totalling 25,760 licenses, the highest ever registered in the survey records since 2014/15. This has been driven by a 63% increase in the number of licenses issued to large businesses (See Figure 8). Statistics also show that the number of spinout companies that survive for three or more years continues to increase (up 5% from 1379 in 2020/21 to 1,440 in 2021/22). On the other hand, there have been reductions in the number of new patents (down 21%) and newly-registered spinouts (down 9%) (See Figure 9). This emerging trend is worth investigating further and we will delve deeper into this in our upcoming State of the Relationship Report, set to be published in December.
The latest HE-BCI data shows how successful the joint efforts of the Government, industry and universities have been at strengthening university-business collaboration, which has become remarkably resilient in the face of multiple challenges. The Government is placing its bets on an economy driven by innovation and intensive research to lead the way towards growth and prosperity in the future. To achieve this, we need to see even greater collaboration between universities and businesses to share insights and co-develop new technologies and ideas. Indeed, these collaborations are essential in various ways, including talent development, research commercialisation and collaborative problem-solving.
University-business interactions have, as the data illustrates, played a crucial role in economic recovery. As these interactions are critical to future growth and success, it is imperative to closely monitor these trends.
Principal Economist, NCUB
Policy Analyst
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