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The value of university-business collaborations to UK economy

22 September 2015
Students breakout study

As organisations make submissions to the government’s Comprehensive Spending Review 2015, Director for Employment & Skills at CBI, Neil Carberry, outlines the case for investment in universities.


The UK economy is in remarkably good shape compared with many others, but nevertheless is faced with some serious threats to sustained growth. Two of the greatest challenges are a worsening skills crisis and persistently low levels of productivity. This is where universities and their graduates – and their relationship with UK business – come in. As the government carries out its Spending Review, there is no better time to be talking about the value of university-business collaborations – both to individual universities and businesses, and to the UK economy as a whole.

The latest CBI/Pearson Education and Skills Survey, Inspiring Growth, illustrates the magnitude of the skills emergency. Two out of three businesses surveyed expect their need for staff with higher level skills to grow in the years ahead, but more than half of them fear that they will not be able to access enough workers with the required skills. Even more disturbingly, it is the high-growth, high-value, high-potential sectors which are under most pressure – including construction, manufacturing, science, engineering and technology.

UK productivity has for a long time lagged behind most other developed countries. There are a number of causes, including low skills levels in many sectors, but a fundamental driver of productivity growth is innovation, where the UK is held back by low levels of public and private investment and an unbalanced ecosystem in which the infrastructure for supporting commercial innovation does not match the world-class research base.

With support and encouragement from the CBI, a growing number of businesses are taking advantage of the scope which the UK’s universities – one of our greatest competitive assets – offer to address these obstacles.  In 2013–14, businesses of all sizes spent nearly £900 million on university research, consultancy, professional development and other services. This figure has been growing strongly for four successive years – in 2009-10 it was £710 million – and at 6% this represents a faster annual growth rate than overall business investment in R&D, which has itself been growing at over 4%.

Innovative schemes like the UK Research Partnership Investment Fund (RPIF) and HEFCE’s Catalyst Fund have pump-primed major long-term capital investments by businesses in university facilities, to the benefit of all parties involved. University-business collaboration has been accelerated by developments such as the Research Councils’ Impact Agenda, the cumulative effect of funding from the Higher Education Innovation Fund, and the introduction of the Research Excellence Framework. The incentives for academics who want to work with business – and for their institutions – have been balanced in a fairer and saner way.

All these funding streams and initiatives are important components of the innovation ecosystem that helps to bring research to market, improve business processes, and raise productivity.

Another reason for the change in attitudes to university-business collaboration is the growing realisation in individual businesses of the benefits which engaging with universities can bring – whether for developing workforce skills through bespoke programmes, sponsoring degree courses, or in support of innovation or other business challenges. Two-thirds of the firms that responded to the Education and Skills Survey have links with at least one university, and more than a third plan to expand them, while others plan to start to develop links in the future.

To promote wider awareness of the advantages that partnering with universities can bring to businesses, the CBI has produced a guide to business-university collaboration for research, innovation and skills, Best of Both Worlds. This is backed up by a business-university collaboration section on the CBI website with a growing range of case studies.

Dame Ann Dowling’s recent review of business-university research collaboration noted that there is a ‘challenge to engage those companies that have never participated in collaborations but could profit from doing so’, and recommended a campaign to raise awareness of the benefits that companies have derived from university collaboration.  The CBI is leading that campaign – and also supporting companies in increasing the benefits from the university links many already have.

The CBI is also making common cause with UK universities in other campaigns: on immigration for example, an issue of shared concern to businesses and universities, where skills and innovation agendas intersect. On this and on other issues – including the national debate on EU membership – the CBI will continue to work with universities to build on – and articulate – the many benefits university-business partnerships bring to the economy, and the role they play in addressing the UK’s skills and productivity challenges.

This is the third in a series of blogs commenting on the issues discussed in Universities UK’s submission to the government’s Comprehensive Spending Review.

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