Collaborations between companies and universities have stalled

The number of businesses working with universities is stagnating, prompting the science minister, Lord (Patrick) Vallance, to commit to “driving progress” under his watch.
After many years of increased research and innovation activity between companies and universities, encouraged by government policy and European funding, the volume of activity has “stalled” since 2019 and declined by 5 per cent in 2023, a report by the National Centre for Universities and Business (NCUB) has found.
Large companies, in particular, have cut back on collaborations, with the total number of interactions recorded falling by 8.8 per cent in 2023 to 24,420. Small and mid-sized businesses reduced their efforts by a lower amount, down 3.5 per cent to 52,199.
Universities reported that financial pressures and the loss of European funding for business support initiatives had meant they focused their efforts on fewer, higher-value projects.
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Rosalind Gill, the centre’s head of policy and engagement, said that the trend had continued into 2024. “The situation is probably getting worse,” she explained, as the financial position of many universities has weakened and companies have focused on immediate challenges rather than projects that may pay dividends in years to come.
She added: “For a long time, [business interactions with universities] had been activity that was significantly growing, as there had been a clear sense from government that they wanted to see more collaboration between industry and universities in lots of different forms.
“The concern is that, particularly since the pandemic, we are now seeing that flatlining, which is not good news for the research innovation system.”
The loss of European funding for business support activities, and the ending of the smaller-scale and short-lived UK Shared Prosperity Fund and Regional Innovation Fund, was also taking its toll. Public funding was “very important for a lot of collaborative activity, particularly with SMEs,” said Gill. “We are hearing there is a real gap and universities are trying to fill that, but the funds are not as great.”
In response to the report, Lord Vallance, who was the government’s chief scientific adviser during the pandemic and who became science minister in July, said that effective collaboration between universities and businesses played an important role in driving economic growth.
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“Partnerships with businesses ensure that groundbreaking science and new innovative technologies are developed and integrated into the UK economy,” he said. “This report calls on policymakers, universities and businesses to strengthen their collaboration to drive progress. As minister for science, research and innovation, I am committed to working with the sector to achieve this.”
The study by the NCUB noted a number of trends, including a decline in the licensing fees collected by universities from large companies that use the technology they develop. The number of patents secured from university and business collaborations has also fallen by 20.5 per cent compared to pre-pandemic levels.
In contrast, the number of tech firms spun out to commercialise university know-how — and that remained active after three years of trading — increased by 19.4 per cent to 1,571 in 2023.
In terms of collaborations, the report said that some universities had “strategically chosen to collaborate more with medium and large businesses, rather than expanding partnerships with SMEs”, in order to maximise their fee income.
Fees from business were £790 million in 2023, representing about 11 per cent of the total income received by universities from their research efforts.
Meanwhile, business schools have warned that as universities grapple with rising costs and falling income from fees paid by students, there is a risk that they will not receive the investment they need.