Intellectual property investment of £20m yields just 1% fillip in income

Patent activity rises but IP income falls in real terms, Hefce survey reveals. Hannah Fearn reports

July 10, 2008

Increased investment in the exploitation of universities' intellectual property has failed to boost income for the sector, a new report has shown.

The annual Higher Education Business and Community Interaction Survey, carried out by the Higher Education Funding Council for England, charts the expanding relationship between universities and their external partners.

This year, the survey shows that while there was a 22 per cent increase in the resources invested in the protection of intellectual property, to more than £20 million, income from IP rose by less than 1 per cent - a drop in real terms.

This is despite the fact that the number of patent applications and the number of patents granted increased over the past year.

David Cairncross, policy adviser at the Confederation of British Industry, said that the investment was not wasted.

"Like DNA, most IP is junk. Obviously, some of it is extremely important and extremely valuable, but in order to get the full benefit of the extremely important stuff a lot of investment has to be made," he explained.

Overall, the survey found that universities were becoming increasingly embedded in the business community. Total income from work with corporations, small and medium-sized enterprises and non-commercial organisations increased by 17 per cent, from £2.267 billion to £2.641 billion over the past year.

Income from consultancy work rose by 19 per cent, from £242 million in 2005-06 to £288 million last year. Commissions from the public sector accounted for the greatest proportion of the increase.

Income from collaborative research went up by 12 per cent, and by 20 per cent from contract research. The largest increase in contract research came from public and third-sector partners.

Combined research activities brought in £1.45 billion for universities.

Adrian Day, policy officer at Hefce, said the fall in income from intellectual property was not yet a cause for concern because it could take up to 25 years for the investment to pay off.

"If you think about research being commissioned and carried out, that could take five to ten years, and then there's the patents," he said. "Then it might be another five years before anyone buys it. The majority of the sector at the moment is making a loss on IP - you have to pay for the patent a long time before you get the money back."

He said the increase in knowledge transfer - or third-stream - activity was partly due to increased reporting, but also down to universities' recognition of the importance of working with the outside world.

"Nobody is going to start drinking champagne rather than water in meetings because of this work, but if they weren't doing these things, would they be here in 20 years' time? It shows an understanding of the importance of this activity," Mr Day added.

Richard Brown, chief executive of the Council for Industry and Higher Education, said: "I suspect that these figures show that it will be increasingly difficult for UK universities to capture a larger share of the global business market for research ... Given the importance of collaborative research for knowledge exchange this is a real concern."


According to Hefce's survey of UK universities' activity:

  • Income from business and the community totalled £2,267 million
  • 226 spin-off companies were formed
  • Income from research totalled £1,450 million
  • Income from consultancy hit £288 million, up 19 per cent
  • The provision of equipment and facilities by universities generated £93 million, an increase of 3 per cent.
  • Income from involvement in regeneration programmes rose by 17 per cent to £265 million.

Source: Higher Education Business and Community Interaction Survey.

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