Universities and innovation in England: King’s College London as a worked example

Ian Creagh Head of Administration & College Secretary

International symposium on university costs and compacts Canberra, 14 and 15 July

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Universities, innovation & HEIF in particular• Universities and innovation: recent background and policy

context• Perceptions of trends in business university engagement • Issues surrounding the Russell Group and its innovation

and research performance • King’s as a worked example • HEIF funding: where it fits; its scale; utilisation; maturing

objectives; target sectors; critical partnerships• Some successes & and recent trends – KPIs • Outstanding challenges, issues cultural & otherwise,

internal and external

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HEIs and innovation – the policy subtext

• Universities not particularly well managed – a view firmly held within some quarters of government

• Certainly NOT sufficiently focussed on meeting business needs

• A pre-disposition towards US solutions/methods• A pre-disposition towards apparent linear

solutions• Lambert’s 2003 Review changed the tone and

tenor of the debate

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Lambert Review -- 2003“The biggest challenge identified by this Review lies on

the demand side….

“There has been a marked culture change in the UK’s universities….

“…most of them are actively seeking to play a broader role in the national and regional economy….

“Compared with HE institutions in other European countries, British universities have made real progress

in their efforts to work with business.”

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Key outcomes -- Lambert• People networks• Innovation process is non-linear• Calculation of economic returns to academic research

is fuzzy, but evidence of public good is persuasive • Research concentration rather than diffusion • Tech t’fer: not the goose that will lay the golden

income egg for institutions • Business should have a greater say• 3rd stream funding: should be permanent feature of

HE funding; formuliac allocation

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Sainsbury Review 2007 echoed these sentiments…

“Both new and established high-technology companies want to work with world-class research universities….

“Private firms alone, in seeking to maximise their returns, will undertake less research than is socially optimal…

“Although research is of great importance to any innovation ecosystem, little is to be gained from research in universities…if there are not strong links between the

researchers and industry, and that is why knowledge transfer, and incentives for it, are so important.”

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Sainsbury: key directions for the innovation ecosystem• Strong support for formuliac HEIF• Research Councils: KT targets• Push on Science Technology Engineering & Mathematics• International collaboration• Repositioning the role of govt departments in innovation• Attempted to differentiate between “research

universities” and “business-facing” institutions

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Warry report, 2006, on RCs and KT• High profile for economic impact in Council

strategy • Substantial funding for user-relevant programmes • Peer review and potential economic importance • Expand incentives for researchers to engage in KT • Promote interchange of people and ideas • Clear demonstration of the economic impact(Increasing the economic impact of research councils, 2006)

• White Paper on Innovation (DIUS, 2008) : further support for the UK’s “world class research base…”

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UK HEI research income by source

Source: HESA

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Source: Research Council Economic Impact Group, 2006

Transmission mechanism of research base benefits to economic benefits

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Recent indicators of HE/business interaction

HE – BCI survey of university/business innovation activity

Activity type 2003-04 2004-05 2005-06

Collaborative research income (£ million) 541 530 595 Consultancy income (£ million) 211 219 236 Equipment and facilities income (£ million) 80 76 89 Regeneration and development income (£ million) 216 206 224 Disclosures 3,029 3,027 3,268 Spin-offs with some HEI ownership older than 3 years 521 592 669

Source: HEFCE, from HE-BCI Survey

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Russell Group (RG) – dominant force in business interaction • RG institutions comprise 12% of HEIs• Among other things, HEIF has seeded interaction between

RG and non-RG institutions in relation to business collaboration

• All England RG institutions received maximum capped amount in recent HEIF 4 funding round announcement

• Recognises the obvious: basic research intensivity/quality correlates highly with knowledge transfer capability

• Capped amount will be £1.9m in 2010/11

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Industry research performanceInstitutional ranking of HEIs, England:

research income, 2005/06

Research funding category

Rank Total research income

UK industry, commerce, pub. corps.

QR grants (06/07)

1 Oxford Imperial Cambridge 2 Imperial Cambridge Oxford 3 Cambridge King’s UCL 4 UCL Oxford Imperial 5 Manchester Manchester Manchester 6 King’s Leeds King’s 7 Southampton UCL Leeds 8 Sheffield Birmingham Southampton 9 Birmingham Bristol Sheffield

10 Leeds Southampton Bristol

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RG: evidence of successful business interactionRG institutions comprise 12% of all HEIs, but in 2003/4,

were:• 79% of HEIs whose contract research with SMEs was >

£1m• 65% of HEIs whose contract research with non-SMEs

was > £3m• 85% of HEIs whose contract research with non-SMEs

was > £5m• 60% of HEIs who had set up 3 or more business spin-

offs with some HEI ownership

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King’s Research income 2006/07

£'000% of total income

Research incomeFunding Council "R" grants 54.7 13.4Research grants and contracts 109.9 26.9Total research income 164.6 40.3Teaching/student income 159.3 39.0

Research income/total income

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HEIF 2001/02 to 2010/11HEIF1 HEIF2 HEIF3 HEIF4£'000s £'000s £'000s £'000s

2001/02 233.32002/03 233.32003/04 233.32004/05 750.02005/06 750.02006/07 1,500.02007/08 1,500.02008/09 1,675.82009/10 1,805.62010/11 1,900.0

Total 700.0 1,500.0 3,000.0 5,381.4

Allocations to KCL from HEIF

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As a proportion of total spend…

HEIF1 HEIF2 HEIF3 HEIF4£'000s £'000s £'000s £'000s £'000s %

2001/02 233 316,181 0.07%2002/03 233 323,896 0.07%2003/04 233 337,962 0.07%2004/05 750 353,978 0.21%2005/06 750 375,961 0.20%2006/07 1,500 405,887 0.37%2007/08 1,5002008/09 1,6762009/10 1,8062010/11 1,900Total 700 1,500 3,000 5,381

Allocations to King's College London from HEIF

Total King's Expenditure

HEIF % of total

expenditure

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Research and innovation management at KCL

FunctionTotal FTE

Total HEIF FTE £'000s

Total HEIF

support £'000s

HEIF support

%

Research Support 22 0 1,164 0 0.00%Clinical Trials Office 15 0 680 0 0.00%Knowledge Transfer 14 14 1,295 1,295 100.00%Technology Transfer 7 2 838 174 20.76%KB Management 4 1 426 37 8.69%Consultancy unit 1 1 70 70 100.00%

Total 63 18 4,473 1,576 35.23%

King's Business, 2007/08

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Early innovation funding at KCL• Early years of HEIF funding devoted to capacity

building, direction setting, reach-out mechanisms• In particular, business development and reach-out

capacity within King’s Business • Also focussed on collaborative activity with other HEIs• Leadership, culture change and embedding KT and KE

support in the enterprise• Weaving KT and KE into the mission “…in service of

society.”

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With maturing capability, innovation objectives have sharpened • Undoubted focus on income from business for collaborative

research, commercial clinical trials and consultancy• Also now focussed on stocking the innovation pipeline to

enrich the licensing portfolio and associated deal flow• BUT, income alone is not the point. KT/KE positioned as

non-linear & dynamic process leading to varied benefits• All about layered business partnership: to create, share,

apply and translate research to achieve a social & economic impact

• Successful creation of King’s Academic Health Sciences Centre: a major priority of the translational research and innovation agenda

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Target sectors• London and the South East predominate, but also

multi-national • As a bio-medical & health sciences led research

university, the pharmaceuticals sector is of particular importance

• Social sciences and public policy footprint is also large – has led to some intriguing interactions and commercialisation activities

• Financial services – the City • Creative and cultural sector – South Bank cultural

quarter, Globe Theatre, British Library, British Museum, King’s Cross

• Often highly multi-disciplinary in character

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Critical partners/friends/contributors • London Development Agency

• Larger bio-medical charities • Department of Culture, Media and Sport• King’s partner NHS Foundation Trusts

- Guys and St Thomas’s – Foundation Trust - King’s College Hospital Trust – Foundation Trust- South London and the Maudsley – Mental Health Trust

• Crucial to the creation of the Academic Health Sciences Centre and its translational research raison d'être

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HEIF successes: HEIF supported spin-outs

• Medpharm http://www.medpharm.co.uk/

• Simulstrat http://www.simulstrat.com/

• Ixico http://www.ixico.com/index.php

• Osspray http://www.osspray.com/

• Proximagen http://www.proximagen.com/default.shtml

• Lidco http://lidco-ir.co.uk/

• LACE http://www.lcace.org.uk/home.php

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King’s -- Business related income

New Awards £'000

Total income £'000

2002/03 11.1 13.22003/04 8.8 13.72004/05 8.9 12.72005/06 11.0 13.32006/07 16.6 14.5

King's College London, business related income from UK & overseas industry

2002/03 to 2006/07

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King’s Equity realisation Equity realisation 2002/03 to 2004/05

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2002/03 2003/04 2004/05Year

' £

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Innovation agenda: institutional challenges and tensions• HEIF both in terms of purpose and design is SME focussed • King’s research impact dominated by bio-medical science• Natural partners -- pharmaceutical sector; transnational

rather than regional in character• SE England pharmaceuticals have relationships with the

best institutions on the planet • Access has to be achieved at the most senior levels • Also requires subtle partnerships with others, when

ferocious competition is the norm!• Global Medical Excellence Cluster initiative may assist

help to overcome

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Scale and competence of KT/KE experts still needs to grow• Demand outstrips capacity to supply embedded KT

expertise by an order of magnitude• Expectations increasing esp. with the advent of the

translational research agenda and the King’s Academic Health Sciences Centre

• Not quite as acute in relation to the creative and cultural & public policy sectors

• In part this is the case because of residual cultural resistance to or suspicion of engagement with business (eg. some humanities disciplines)

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A note on FEC and pricing of SME contract research

• All research now required to be fully FEC’d• Price rather than the fully FEC’d cost is quoted to the

SME partner• Most PIs report that SMEs simply cannot afford the full

cost of the research…at this point in time• May improve, but results in internal tensions regarding

business engagement mood music, research strategy, focus and income target achievement

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In conclusion• HEIF -- an important and welcome (but relatively

small) funding stream for research intensive institutions such as King’s

• Has evolved on the back of a consensus among policy elites & business lobby groups concerning the positive role of universities in a modern economy

• Has assisted with KT/KE institutional capacity building• Seeded collaboration between HEIs in the interests of

business• Raised the profile, importance and benefits to most

research active academics of KT/KE