Business links boost coffers by £10.3bn

But report claims some scholars fear third-stream activity has gone too far, writes Hannah Fearn

April 2, 2009

An investment of £600 million to encourage universities to enter into money-making partnerships with business has generated up to £4.2 billion, according to the first comprehensive analysis of public spending on knowledge transfer.

A report commissioned by the Higher Education Funding Council for England says that universities generated £10.3 billion through the exchange of knowledge with businesses between 2001 and 2007 - the so-called "third stream" of activity after teaching and research. Of this, between £2.9 billion and £4.2 billion can be directly attributed to Hefce third-stream funding.

But the report says that third-stream activity faces many barriers, with some academics believing that higher education has "gone too far" to meet the needs of business to the detriment of teaching and research. It adds that universities still lack expertise in the field.

The report was carried out by Public & Corporate Economic Consultants, which was commissioned to assess the effectiveness of the first four rounds of Hefce's Higher Education Innovation Fund (Heif).

It says Heif funding has encouraged universities to rewrite their strategies over the six-year period, reflecting the increasing importance of third-stream activity, and adds that there is strong support for knowledge exchange among senior management.

"Such a positive change in culture at the senior level of higher education institutions is an important development for the innovation system as a whole," the report says.

But it also found that university knowledge-exchange (KE) offices remain unable to attract sufficient numbers of qualified staff, meaning that in some institutions "there is a perceived lack of capability in dealing with the legal side of the KE engagement process".

This is despite the fact that the proportion of funding spent on staff increased from 31 per cent to 52 per cent between the first and the fourth Heif funding allocations in 2002 and 2008. While KE offices have increased in size and expertise, "45 per cent of the academics surveyed had no contact with (them) over the past three years", the report says.

Two thirds of academics believe that the lack of time to fulfil all their commitments is a barrier to knowledge transfer, and 28 per cent say it produces insufficient results.

The report also says there is no clear consensus "on whether institutions have gone too far over the past few years in attempting to meet the needs of external organisations, to the detriment of their teaching and research roles".

Alice Frost, head of Hefce's business and community team, said this could be put down to generational differences.

"Some academics who came into the profession a while ago probably have different expectations about (knowledge transfer). Younger ones are going to have a more entrepreneurial attitude. Institutions are still exploring how they support ... academics getting involved."

Innovation consultant Richard Blackmore said it was no surprise that finding skilled staff was a continuing concern. "KE offices have expanded rapidly in recent years, salaries have been low by commercial standards and the fixed-term nature of appointments will have deterred good applicants."

But he said the downturn could give universities a "rare opportunity" to recruit more experienced staff.

He also said it was understandable that academics would often sidestep knowledge-transfer offices and form their own links with business. "Direct personal contact is usually the best way to initiate a relationship," he said.

The Institute of Knowledge Transfer said it attempted to address skills shortages by offering training to its members and said it would shortly unveil a new mentoring programme, pairing junior knowledge-transfer professionals with more senior staff to share expertise.

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