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Spin offs rise as business-HE links flourish

18 July 2007

The number of spin off companies with links to higher education institutions (HEI) is on the rise, with growing commercial research and intellectual property income underscoring higher education’s key role in the economy, new figures revealed today.

The sixth Higher Education-Business and Community Interaction (HE-BCI) survey report finds that the quality of these companies is also increasing, with the number of spin offs in business three years and older rising from 592 in 2004-05 to 669 in 2005-06.

Formal collaborative research between public funders and business is valued at almost £600 million - an increase of 12 per cent from the previous year, with the income from intellectual property and consultancy also rising. Total direct research-related income is now valued at £1.2 billion.

Universities and colleges are getting even better at exploiting intellectual property (IP), with the number of licences increasing by a quarter to 2,699. IP income shows that higher education institutions are active on a global scale, with £7.8 million income from overseas in 2005-06, around a fifth of all HEIs’ income from intellectual property rights. There are currently 9,000 active patents held by UK higher education institutions.

Minister for Lifelong Learning, Further and Higher Education, Bill Rammell, said:

These figures show the crucial economic part that our universities and colleges are playing in the economy. Business and academia are forging strong ties, with collaborative research an important way of developing new technologies to help give the UK a leading edge in an increasingly competitive world.

UK businesses clearly recognise they can improve their performance by drawing on the knowledge and skills within higher education, with commercial business spending over £300 million on contract research and a further £115 million on consultancy in 2005-06.

The rise in bespoke training courses provided for businesses also highlights the key role these institutions are playing to boost workplace skills and tailor learning to business needs.

Professor David Eastwood, Chief Executive of HEFCE, said:

This survey shows how universities and colleges are continuing to embrace the development of the modern knowledge society with strength and excellence. The higher education sector is diverse, allowing companies of all sizes and sectors to benefit from knowledge exchange. The survey results show that the Council’s long-term commitment to funding this agenda, begun in 1999, is delivering a dynamic and powerful impact on the economy and society today.

While wealth creation is an important aspect of knowledge exchange, universities and colleges are also making a significant social and economic contribution through the £430M of regeneration and development programmes delivered over the two year period of the survey. Higher education also adds to the quality and vitality of life of individuals and communities – evidenced by more than 10,000 days of HE staff time given for free public lectures each year.

In addition, the Third Annual Survey of Knowledge Transfer Activities in Public Sector Research Establishments (PSREs) is also being published today, which covers a wide range of publicly owned research organisations including Research Councils and Government Laboratories.

Minister for Science and Innovation, Ian Pearson, said the survey showed public sector research bodies were also boosting their interaction with business, with increases in the number of licenses and spin outs since the survey began in 2003-04 and £186m being generated in 2005-06 through IP licensing agreements.

This survey shows a growing benefit for the UK economy from public sector research establishments, through increased income and collaborations with business to help develop new products and services.

The PSRE survey mirrors the results we’re seeing from universities and colleges in the HEB-CI survey. We have helped encourage links between higher education and business through the funding we provide to promote knowledge transfer including the Higher Education Innovation Fund, which now provides support for all English universities.

HEB-CI Survey

The HEB-CI survey shows that universities and colleges have improved the contribution they make to the economy and society across a broad range of activities. These activities vary widely reflecting business and public service needs, from the commercialisation of new knowledge, through the delivery of professional training, consultancy and services, to activities intended to have direct social benefits.

The HE-BCI survey reveals that UK higher education institutions (HEIs) received £2.25 billion from business and community interaction in 2005-06. This income rose by 6 per cent from 2003-04 to 2004-05 and by a further 7 per cent over the period 2004-05 to 2005-06.

HEIs interact with the economy at all levels from local business and community groups to global partnerships.

  2003-04 2004-05 2005-06
Collaborative research income
(£ million)
Consultancy income (£ million)211219236
Equipment and facilities income
(£ million)
Regeneration and development
income (£ million)
Spin-offs with some HEI ownership
older than 3 years

Further data examples are given in the notes. Access HEB-CI at under 'Publications'.

Public Sector Research Establishments (PSREs) Survey

The HE-BCI survey is published at the same time as the third Annual Survey of Knowledge Transfer Activities in Public Sector Research Establishments (PSREs), which measures the contribution of research occurring in public sector organisations.

Public Sector Research Establishments (PSREs) are public sector organisations that carry out research. This is a wide ranging and diverse community including Research Council Institutes, Government Laboratories, NHS Innovation Hubs and major museums and galleries. This is the third annual survey of their knowledge transfer activities – which is undertaken by Technopolis on behalf of the Office of Science and Innovation. Access this report at or e-mail at DIUS.

For further information contact:

Notes to editors

  • The report is published jointly by the Department for Innovation, Universities and Skills and the Higher Education Funding Council for England (HEFCE). It was produced by the Higher Education Funding Council for England (HEFCE) on behalf of several stakeholders within Government including DIUS. The report, (HEFCE 2007/17) is available on the HEFCE web-site under Publications. Data in this press release refer to UK HEIs.
  • The new Department of Innovation, Universities and Skills (DIUS) brings together the nation’s strengths in science, research, universities and colleges to build a dynamic, knowledge-based economy. Its primary role will be to drive forward delivery of the Government’s long-term vision to make Britain one of the best places in the world for science, research and innovation and to raise the level of education and skills at every level in our economy to give the UK the competitive edge.
  • The Higher Education Funding Council for England (HEFCE) distributes public money for teaching, research and related activities. In 2007-08 HEFCE will distribute over £7 billion to universities and colleges in England.
  • Data were collected for 2004-05 and 2005-06 under a single questionnaire to allow the (normally) annual survey to be published as soon as possible after the data is available. For this reason, only financial and numeric data were captured for 2004-05 as only a single snap-shot was taken of strategic and qualitative indicators.
  • 162 HEIs were included in the survey, giving a highly representative indication of the whole sector.
  • Patents are only one way of protecting certain types of intellectual property, more info at
  • 132 HEIs in England have received between £200,000 and £3 million from HEIF3
  • A ‘spin-off’ is an enterprise that has one or more of the following attributes:
    • an HEI or HEI employee(s) possesses equity stakes
    • it has been created by the HEI
    • it has been set up by HEI employees to enable the commercial exploitation of knowledge arising from academic research.
  • Due to developments in the annual survey process, not all indicators can be viewed over all years. Those provided in the table above are sufficiently robust to form a trend.
  • Some additional selected UK data
Knowledge transfer indicator 2003-04 2004-05 2005-06 Change since
Contract research income
(£ million)
Contract research income from
commercial business (£ million)
Consultancy income from
commercial business (£ million)
Number of Licences and options executed2,1542,0992,69925%
Gross income from intellectual property (£ million)38575851%
Number of spin-offs **16114818712%

  2005 2007 Change
HEIs providing short bespoke courses on companies' premises (%)80834%
Full-time equivalent staff dedicated to
engaging with commercial partners
An enquiry point for small and medium-sized enterprises (% of UK HEIs)90911%