Universities And Colleges And The Industrial Strategy .
Universities and Colleges and theIndustrial Strategy: Exploring data onknowledge exchange, research andskillsIndustrial Strategy CouncilResearch PaperAbigail Whiteley, Katy Haigh and DanWakeSeptember 2020
Industrial Strategy Council: Universities and Colleges and the Industrial StrategyAbout the Industrial Strategy CouncilThe Industrial Strategy Council (‘the Council’) is an independent non-statutoryadvisory group established in November 2018. It is tasked with providing impartialand expert evaluation of the government’s progress in delivering the aims of theIndustrial Strategy. Its membership is comprised of leading men and women frombusiness, academia and civil society.AcknowledgementsThe Industrial Strategy Council would like to thank the Universities UK team andProject Advisory Group for their contribution to this paper.Project Advisory Group Professor Peter Mathieson, Principal of the University of Edinburgh (Chair)Mr Filip Balawejder, Economic Advisor, Industrial Strategy CouncilProfessor Karen Cox, Vice-Chancellor, University of KentMs Alice Frost, Director of Knowledge Exchange, UK Research & InnovationDame Jayne-Anne Gadhia, Gadhia Group and member of the Industrial StrategyCouncilDr Cristina Garcia-Duffy, Head of Technology, Strategy and Integration,Aerospace Technology InstituteMs Angela Joyce, Principal of Warwickshire College GroupSir Paul Marshall, Marshall Wace and member of the Industrial Strategy CouncilProfessor Malcolm Press, Vice-Chancellor, Manchester Metropolitan UniversityMr Mike Rees, independentMs Ellen Thinnesen, Principal of Sunderland College.Universities UK team Ms Katy Haigh, Policy Researcher, Universities UK (principal researcher)Mr Chris Hale, Director of Policy, Universities UK (project oversight and strategicapproval)Dr Stephanie Harris, Policy Manager, Universities UK (project manager, June2019 to January 2020)Mr Alistair Jarvis, Chief Executive, Universities UK (project oversight andstrategic approval)Mr Dan Wake, Policy Analyst, Universities UK (project manager, January 2020 toJune 2020)Ms Abigail Whiteley, Policy Officer, Universities UK (principal researcher).1
Industrial Strategy Council: Universities and Colleges and the Industrial StrategyForewordIn 2019 the Industrial Strategy Council posed the question: “is there an easy way ofidentifying the extent to which universities and colleges contribute to prosperitylocally and regionally across the UK?” Since the answer was deemed to be “no”, apiece of work was commissioned to develop a tool to fill some of the gaps. I wasinvited to form and chair a steering group and Universities UK (UUK) agreed toprovide personnel to collate data, project manage and develop interactive maps toaddress the perceived need. I would like to express my sincere thanks to all thecontributors, particularly to the UUK team who did most of the hard work. We soughtto include Further Education Colleges but recognised from the outset that their datawas likely to be harder to ascertain.It was established early on that there exists a plethora of data on the topic: what waspreviously lacking is a user-friendly way of accessing and interrogating the data,making reliable assessments of the UK-wide distribution of activity and shining a lighton regions or subjects which could benefit from further investment. We wereconscious of the UK Government’s “levelling up” agenda and the importance in UKnational policy of “place”. We were also conscious that Universities/Colleges shouldnot “mark their own homework”. We resolved to collate, amalgamate and displaypublicly available datasets and not, in the first instance at least, to undertake newprimary research.The work was not significantly impacted by the COVID-19 pandemic, but we fullyrecognise that the data reflects the pre-COVID-19 situation, we believe it will bemore important than ever for policy makers to have an accurate and user-friendly setof tools to examine the underlying position as the UK adapts to the post-COVID-19world.We have produced a series of interactive maps of the UK in which data sets can beamalgamated or interrogated by year, by place, by subject area etc. The mapsillustrate data on knowledge exchange activities including consultancy agreementsand various types of spin-outs; on spatial distribution of industries in Great Britain;regional movement of UK-domiciled graduates in work; graduate migration patterns;graduate retention data; skills vacancies by UK region and sector; and variousindices of funding inputs into research and innovation.The immediate visual impact is to be able to assess distribution across the UK andscale of activity in any given institution or region. The user can devise and answertheir own questions and conclusions.Some of our findings are surprising, not conforming to our pre-conceived ideas or tothe perceived wisdom about “the usual suspects”. We also highlight some strikinglyuneven distributions across the UK of research and innovation funding. The available2
Industrial Strategy Council: Universities and Colleges and the Industrial Strategydata did not allow detailed correlation analysis, but we suggest that there is noobvious correlation between funding inputs and spin-outs or other indices ofcontributions to local/regional prosperity.The UK’s higher education sector is a key driver of both national and local prosperity.Whether through research & development spending, associated spin-outs, skillstraining, graduate start-ups, social enterprises or assorted revenue streams fromprivate sector collaboration, our tertiary education institutions can and should bepillars of a knowledge-based economy. As we prepare for a post-Brexit world,adapting to the consequences of the COVID-19 pandemic, the UK faces keydecisions about how we allocate a much higher public R&D spending budget tomaximise prosperity, and how universities and colleges can play their part in thewealth creation process. Previously, limited user-friendliness of the available datahas prevented simple and accessible analysis of the extent to which our highereducation institutions contribute to the local and national economy, and how far theinputs (R&D grants, Catapult funding, teaching grants, etc.) translate into outputs.We believe that our report will help fill that gap.The recent publication by the UK Government of a roadmap for research &development is welcome. This report provides a user-friendly assessment of thestarting point of the journey that the roadmap mandates.I hope you find the information interesting and informative.Peter MathiesonPrincipal, the University of Edinburgh and Chair of the Steering Group3
Industrial Strategy Council: Universities and Colleges and the Industrial StrategyContentsExecutive summary . 5Headline Findings . 5How universities support the business environment . 6How universities are (and will be) contributing to progress on the GrandChallenges . 7Visualisations . 8Introduction . 9Project scope . 10Section 1: Knowledge exchange . 13Data sources . 13How do knowledge exchange activities support the UK’s business environment? 14How does external funding support knowledge exchange activities? . 20Key findings . 23Section 2: Research and innovation . 24Data sources . 24How does funding for universities support progress on the Grand Challenges? . 25How can institutional and regional strengths be reconciled? . 30Key findings . 36Section 3: Skills development . 37Data sources . 37How do universities and colleges contribute to upskilling the UK population? . 38To what extent are regions able to retain their graduates? . 42What are the key skills required by industry and local areas and how far dograduates meet these needs?. 45Key findings . 47Annex: Visualisations . 484
Industrial Strategy Council: Universities and Colleges and the Industrial StrategyExecutive summaryThe Industrial Strategy Council asked Universities UK to undertake a dataexploration project to better understand the contribution of further and highereducation to the UK’s Industrial Strategy. The work was overseen by an independentProject Advisory Group, including two members of the Industrial Strategy Council.This research paper summarises the key findings and supplements a more detailedset of data visualisations that have been made freely available. The visualisationsfocus on three themes: knowledge exchange, research and innovation, and skillsdevelopment.The contributions of further and higher education to the UK’s prosperity are generallybelieved to include:1 turning ideas into products and services on which the industries of the futurewill be built;providing people with higher level skills that are needed by employersaccording to national and local needs;investing in the excellence and impact of research to ensure the sustainabilityof research infrastructure;creating and helping businesses to support the business environment;being the centre around which places and local economies build richinnovation ecosystems.Through these contributions, universities and colleges also provide skills, insights,and connections to support the UK’s Sector Deals and Grand Challenges.But the evidence on the contribution of universities and colleges to UK prosperity isfar from complete. This project aimed to add to the evidence by using granular datato provide analytical insights about how universities support the businessenvironment via knowledge exchange and skills development, as well as fundingdistributions across the Grand Challenges. While the data has its limitations, webelieve this report provides useful insight and the accompanying visualisations allowusers to devise and answer their own questions and reach their own conclusions.Headline FindingsPrevious research has explored the aggregate contribution made by universities andcolleges to the UK’s prosperity. For example, econometric analysis has shown thatUK universities and their students accounted for 95 billion of gross output andnearly 944,000 jobs in 2014/15. On these estimates around 1 in every 34 of UK1These are all highlighted in the 2017 Industrial Strategy White Paper. See BEIS (2017). IndustrialStrategy: building a Britain fit for the future, November. Retrieved -strategy-building-a-britain-fit-for-the-future5
Industrial Strategy Council: Universities and Colleges and the Industrial Strategygross domestic product (GDP) was “attributable to the activities of universities andthe expenditure of international students and visitors”.2 This paper does not providean exhaustive literature review of previous research on the aggregate impacts. Itconsiders what we can learn from looking at more granular data on knowledgeexchange, research and innovation and skills development. Given the role of theIndustrial Strategy Council, it focuses specifically on how universities and collegessupport the business environment as well as funding distributions across the GrandChallenges.This report and accompanying visualisations were developed prior to the COVID-19outbreak. Therefore, this project does not look to answer questions regarding thecontributions to short-term management or longer-term recovery from this virus.How universities support the business environmentThe project explored how universities support the business environment throughknowledge exchange activities. Knowledge exchange is the action of sharingknowledge between education institutions and partner organisations and turning thisinto impact on society and the economy.3 This includes the production of spin-outs(companies set up to utilise intellectual property from higher education providers),start-ups (companies set up by graduates or provider staff) and services such ascontract research or consultancy. The project also explores where graduates migrateto and how they could address business skills shortages. Spin-out activity and the provision of business services in the UK is highlyvariable by region. University-owned spin-outs (firms using universitydeveloped ideas) generated 1.4 billion across the UK in 2018/19. TheUniversity of Oxford leads the way with spin-outs reporting turnover of nearly 450 million. There were 20,039 newly-registered graduate start-ups in the last 5 years andthey are more prominent at modern universities than older, research-intensiveuniversities. There is surprising evidence of the distribution of universityservices for businesses, particularly for SMEs, where there is significantinstitutional diversity among the partnerships developed. Graduate start-ups from teaching-led institutions on average have receivedless external investment than those from research-intensive institutions buthave produced comparable collective turnover. The University of Northumbriastands out, being in the top two (by turnover) in all 5 years of the dataset.2Oxford Economics, UUK (2017). The economic impact of universities in 2014-15. Retrieved rsities.pdf3 GuildHE, UUK (2020). Concordat for the advancement of knowledge exchange in higher education.Retrieved from: ts/Documents/2020/knowledgeexchange-concordat.pdf6
Industrial Strategy Council: Universities and Colleges and the Industrial Strategy More evidence would be welcomed on the correlation between research andknowledge exchange funding inputs and provider outputs, to identify effectiveapproaches for public spending in the UK to create short- and long-termbenefits for the economy. The recently published Knowledge ExchangeConcordat will “inform relevant funding approaches by providing assurance onthe value being delivered by public funds”.4 Innovative firms are more likely to partner with research-intensive universitiesregardless of place, while less innovative firms are more likely to look to localpartners. Local and extra-local partnerships with universities both haveconsiderable, but different, value to the business landscape. Extra-localpartnerships can encourage more innovation and be more lucrative, whilelocal partnerships support small firms and develop effective local ecosystems. There is significant variation in rates of graduate progression by region andsector. Mapping geographic, subject and employment data together can helpemployers, government, and others to consider where there are opportunitiesto address businesses’ skill-shortages and improve skills development.How universities are contributing to progress on the Grand ChallengesThe project explored how funding for universities is distributed for industry-focussedresearch across the Grand Challenges and how this distribution corresponds withfunding for businesses. For most Grand Challenges, funding for businesses is concentrated in Londonand the South East, even when large businesses are removed to mitigate theheadquarter effect. Funding for universities is distributed more widely,particularly among research-intensive institutions, but there is a clear skewtowards London and the South East in the Ageing Society and AI and DataEconomy Grand Challenges. There is only limited evidence for a relationshipbetween funding for universities and businesses. Funding for Clean Growth is widely distributed for universities, while London,Scotland, and the South East lead funding for businesses. In the Future ofMobility, funding for universities is concentrated in the East and WestMidlands, and Yorkshire and the Humber. The West Midlands also receives alarge proportion of funding for businesses, but London and the South Eastlead funding for businesses despite employing fewer people in the sector. There is evidence of mutually beneficial relationships in collaborativeresearch, particularly with Catapult Centres.4GuildHE, UUK (2020). Concordat for the advancement of knowledge exchange in higher education.Retrieved from: ts/Documents/2020/knowledgeexchange-concordat.pdf7
Industrial Strategy Council: Universities and Colleges and the Industrial StrategyVisualisationsVisualisations can be accessed through the following links:Box 1: Visualisation hyperlinksKnowledge exchangeKE1 to KE3: University affiliated businesses, business services and community engagement,2014/15 to 2018/19KE4: Grant funding for Knowledge Transfer Partnerships, 1988 to 2018ResearchR1: Innovate UK project funding, 2003 to 2019R2: Horizon 2020 Societal Challenges, 2014 to 2019R3: Industrial Strategy Challenge Fund contributions, 2017 to 2020R4: UK Research Partnerships Investment Fund allocations, 2012 to 2020R5: Spatial distribution of industries in Great Britain, 2015SkillsS1: Regional movement of UK-domiciled graduates in work, 2012/13 to 2016/17S2: Graduate migration patterns from domicile to location of employment, 2012/13 to 2016/17S3: Graduate retention and employer vacancies, 20178
Industrial Strategy Council: Universities and Colleges and the Industrial StrategyIntroductionThe Industrial Strategy notes that a key attribute of strong local economies is a richinnovation system, often built around a university. It also notes that higher educationbrings economic benefits through “the provision of higher-level skills that are neededby employers both nationally and within local areas”.5 That means universities andcolleges should make important contributions to the aims of the Industrial Strategy.For example: Universities produce and translate world-leading research through local,regional, and international networks, which drives innovation and generatesideas to address the Grand Challenges.6 At the local and regional level, universities and colleges support growth byeducating the current and future workforce, providing and creating jobs,attracting talent, and driving social mobility. The diversity of educationprovision allows people to undertake lifelong learning to raise aspirations,address skills shortages and meet changing employer needs through anadaptable workforce. Many businesses are developed from, or supported through, universityinfrastructures such as spin-out companies or graduate start-ups, while otherbusinesses utilise university resources, research, and talent. Institutions alsoinvest in capital and local services to regenerate regions and support jobgrowth and invest in their data infrastructures to support open research.7 Universities and colleges engage with communities locally and regionallythrough collaborations with businesses, employers, and researchers. Thesenetworks can create a productive business environment. Collaborationsbetween education providers and their localities can boost an area’scompetitiveness and growth, attract skilled workers, and create jobs.As regional anchors, universities can help to identify how places can best besupported and how local innovation ecosystems can be developed. For example,places could be enhanced by closing the gap between research innovation and itstranslation or implementation, or by collaborating with local businesses to ensurelearning incorporates relevant skills. Furthermore, universities and colleges have akey role in the interrelated physical, social, and cultural dimensions of places. In the5BEIS (2017). Industrial Strategy: building a Britain fit for the future, November. Retrieved -strategy-building-a-britain-fit-for-the-future6 BEIS (2019). The Grand Challenges, September. Retrieved -thegrand-challenges7 Open Research Data Taskforce. (2017). Research Data Infrastructures in the UK: LandscapeReport. Retrieved from: nr%201%20final%2030%2006%202017.pdf9
Industrial Strategy Council: Universities and Colleges and the Industrial Strategycontext of the COVID-19 pandemic, this includes reconnecting people and places,using innovative practices and generating economic activity.8Despite this, the evidence on the contribution of universities and colleges to UKprosperity is far from complete. While previous research has explored aggregatecontributions in some detail, more granular evidence is less readily available. Thisproject aimed to address this by exploring more granular data on knowledgeexchange, research and innovation and skills development. As such, this paper isnot an exhaustive literature review of previous research.Project scopeVisualisations have been produced from existing data sources to investigate threeareas of activity: Knowledge exchange. Knowledge exchange is the action of sharingknowledge between education institutions and partner organisations andturning this into impact in society and the economy.9 This project exploresdata on:o graduate start-ups, spin-offs, and social enterprises;o university business services, including consultancy, contract researchand facility/equipment-related services;o engagement with the community through exhibitions, public lectures,performance arts and museum education;o Knowledge Transfer Partnership (KTP) funding. Research and innovation. Interrelated with knowledge exchange, researchand innovation data is used to explore:o where funding is allocated to industry-focused research at UK highereducation providers;o institutional and regional research strengths and sectoralspecialisation;o how sector research, through business collaborations, helps to addressthe Grand Challenges. Skills development. This project explores the education sector in the contextof the UK’s ambitions to support business performance. Data for this project isused to consider:Coe, J. (2020). Universities’ role in economic recovery. WonkHE: 28 April. Retrieved -economic-recovery/9 GuildHE, Research England, UUK (2020). Concordat for the Advancement of Knowledge Exchangein Higher Education. Retrieved from: 10
Industrial Strategy Council: Universities and Colleges and the Industrial Strategyo regional graduate retention;o the skills required by industries and UK regions, and how far graduatesaddress these skills shortages.All visualisations have been made available online, with a snapshot of somereproduced below as examples.Although discussed separately in the report, the three project strands overlap interms of their overall contributions to the UK’s prosperity. For example, knowledgeexchange activities support the development and application of research, whilestudents are provided with skills that allow them to innovate and develop businesses.In order to become an innovative, knowledge-based economy, and to raiseproductivity, the UK requires a talented and skilled workforce.10 The three strandsalso have a regional context, including how local innovation clusters are developedand how the needs of local businesses are addressed.The higher and further education sectors have both distinct and interrelated roles toplay. The sectors work together with employers in innovative and diverse ways toprovide joined-up routes to higher level skills, for learners on “more vocational andtechnically focused programmes, as well as traditional, academic routes”.11Note on categorising higher education institutionsThere are several approaches to grouping higher education providers, based onfactors such as financial data, membership of mission groups, and student cohortcomposition.12 We have adapted a segmentation approach from the Association ofUniversity Directors of Estates (AUDE), as research intensive providers may havedifferent facilities through which to commercialise research.13 Where this isdiscussed, research-intensive institutions are those which generate over 20% of theirincome from research, while teaching-led institutions are those which generate over80% of their income from teaching. Institutions are also included in the specialistcategory where they receive the specialist targeted allocation from the Office forStudents, or where their public-facing materials specifically identify the institution asa specialist provider.1410NCUB (2019). State of the relationship: Report 2019. Retrieved lationship-Report-2019.pdf11 UUK (2018). Routes to high-level skills. Retrieved from: s/Documents/2018/routes-to-high-level-skills.pdf12 Hewitt-Dundas (2012). Research intensity and knowledge transfer activity in UK universities.Retrieved from: -Ulrichsen (2018). Knowledge Exchange Framework Metrics: A Cluster Analysis of HigherEducation Institutions. Retrieved from: lysis-report/13 Method used from AUDE (2017). AUDE Higher Education Estates Management Report 2017.Retrieved from: www.sustainabilityexchange.ac.uk/files/emr 2017 final.pdf14 OfS (2019). Guide to funding 2019-20: How the Office for Students allocates money to highereducation providers. Retrieved from: 5e5-8fa88a676f2c9530/ofs2019 18.pdf11
Industrial Strategy Council: Universities and Colleges and the Industrial StrategyLimitations of the research This project does not provide an exhaustive account of contributions, orprovide a comprehensive literature review, but rather serves as a dataexploration exercise. More comprehensive public data exists on universityactivities than college activities. For most knowledge exchange activities, little data is available about therelevant sector of the activity or knowledge exchange partners. This limits theextent to which observations can be made about specific sectors. Due to alack of data about universities' business partners, reference to other literaturehas been used to consider geographical tendencies in partnerships. Data on research funding is informative about the systems for fundingindustry-facing university research but does not capture universities' outputsdirectly. The time lag between research funding and impact can also beconsiderable; in some industries, research impacts can take decades tomanifest. Some data, such as the business and community interactions data, is selfreported by higher education providers. The HESA Destinations of Leavers from Higher Education Survey that is usedto explore graduate mobility in this project, is being replaced by HESA’sGraduate Outcomes Survey.15Further details of the research and data limitations are discussed in the TechnicalAppendix.15HESA (2020). Graduate Outcomes Data. Retrieved from: www.hesa.ac.uk/data-andanalysis/graduates12
Industrial Strategy Council: Universities and Colleges and the Industrial StrategySection 1: Knowledge exchangeEducation providers can drive innovation and boost the economy by facilitatingknowledge exchange.16 In the context of higher education, knowledge exchangecaptures “activities, processes and skills that enable close collaboration betweenuniversities and partner organisations to deliver commercial, environmental, culturaland place-based benefits, opportunities for students and increased prosperity”.17 Theagents of this collaboration from education providers may be academic or nonacademic staff, or students. Non-academic partners can include businesses, noncommercial organisations, or the broader community. While further educationinstitutions cultivate important partnerships with employers and the community, verylittle data is available on these activities. Further education is discussed where thisdata is available, but more data would be invaluable in this area. Knowledgeexchange is a key vehicle for institutions to use their resources for the public good bycollaborating with businesses and engaging with the wider public.18This chapter considers the following questions: How do knowledge exchange activities support the UK’s businessenvironment? How does external funding support knowledge exchange acti
Industrial Strategy: Exploring data on knowledge exchange, research and skills Industrial Strategy Council Research Paper Abigail Whiteley, Katy Haigh and Dan Wake September 2020 . Industrial Strategy Council: Universities an
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