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Dr Neil Lee
Head of the socio-economic centre
T 020 7976 3611
Dr Neil Lee

Transfer payments: Why knowledge transfer helps the UK get value from its Universities?

Authors: Dr Neil Lee Neil Lee

26 May 2011

The Higher Education Funding Council for England (HEFCE) have just announced the new higher education innovation funding  (HEIF) package. HEIF is designed to fund institutions to work with business through collaborative working, events and other partnerships. It amounts to about £150 million a year, which is useful money for universities in these difficult times.

There’s a wealth of research which shows the important economic role of such funds. The traditional roles of universities have been teaching and research. Yet for academic research to have economic benefits requires funding to link it into the wider economy – the third role of ‘knowledge transfer’. Our research uses the idea of an innovation ‘eco-system’ – the idea that the interconnections between universities, firms, entrepreneurs and other institutions is vital for the successful commercialisation of new ideas. Successful innovation isn’t ever about a single organisation on its own, but about the relationships and connections between economic actors.

Universities play vital roles in this system, with multiple roles and connections with different firms. It’s for these reasons that we were pleased when the coalition spared the science budget in last year’s spending review. And given the importance of these connections, there’s a clear logic for providing incentives for academics to engage in them. Funding for knowledge exchange such as this helps ensure the benefits of our world class research extend beyond the University. This is what makes HEIF funding so important, both for the UK’s universities and for an economy limping out of recession: the UK’s universities perform world class research, and funding such as HEIF helps the UK benefit.

There will, inevitably, be controversy. The government is trying to create incentives for universities to perform in this area, and, in contrast to previous rounds, the funding is loaded towards those institutions which have done well in the past. This means some will lose out, but those with the potential to add to national economic growth are likely to win.

While we know this funding is necessary, there are still some unanswered questions. If we’re funding universities which drive national growth, how can the vital role of universities in regional economies be supported? How appropriate is a model of knowledge transfer which was criticised as being focused on STEM (Science, Technology, Engineering and Mathematics) subjects for Universities which focus on the social sciences?  

There are no easy answers to these questions – but to maintain the UK’s lead in higher education needs continual work on these issues. The Work Foundation is bringing together sector partners, higher education institutions and visionary individuals to answer these questions, and many more in a bold new initiative - the Big Innovation Centre which will launch in September. Run by Professor Birgitte Andersen and chaired by Will Hutton, the centre will address the role of universities as interactive partners in our economy – amongst other issues. Expect more answers soon.

Comments in Chronological Order (Total 2 Comments)

Dr David E Clarke

02 Jun 2011 11:15AM

To qualify for a HEIFs a threshold non-grant income of £250,000 is required. I have a simple question: How was non-grant income calculated and was it audited?

cheers -- dec

PDF Links.twentyfive

06 Dec 2014 11:59AM

How was non-grant income calculated and was it audited?