The UK is a leader in innovation and university-business collaboration, and our advantage derives from excellent research within our world-class universities.

Collaboration with business is a core part of our universities’ work, whether that is sharing knowledge and skills with local employers, working on major research projects with multinationals or helping innovative start-ups to grow.

Research projects run by Russell Group universities often translate well commercially. They can help the Government realise its ambition to boost UK performance in bringing ideas from the lab to the market place. Universities want to do more of this work and, to do this, they must be supported by an enhanced Higher Education Innovation Fund (HEIF), available across the country. There must be a reformed tax system, a widely available fund for projects that can come to a reality, and a flexible approach to intellectual property.

In 2015-16, start-ups and social enterprises formed by Russell Group universities, academics and graduates employed more than 16,000 staff and were responsible for 59% of all university spin-out companies that were active after three years.

In the same year, more than 20,000 small and medium-sized enterprises (SMEs) benefitted from Russell Group university consultancy services to help them boost productivity, deliver better products and services, and gain the ability to upskill their workforce.


Innovation funding and environment

Original, high-quality research within universities underpins the long-term history of innovation in the UK, so it is essential that funding for innovation is complementary and on top of funding for fundamental, basic research.

Our universities are highly successful in the commercial exploitation of their world-class research, but they are continuously looking for ways to improve and would welcome additional support to do this.

Investment in the Higher Education Innovation Fund (HEIF) is returned almost ten-fold and that is even greater when focused on the most research-intensive universities. On this basis, increasing HEIF investment to £250 million per year could lead to benefits of around £2.4 billion. Lifting the caps on the amounts of funding available to individual universities would allow universities with the most success in this area to do even more. In addition, funding of this nature should be consistently available across the UK.

Creating a proof of concept fund available across the research spectrum would be a helpful step towards helping take research ideas through to a final commercial product or service in the UK.


Regulation and tax

A stable regulatory and tax system is essential to providing an environment where universities and businesses have the confidence to invest in long-term relationships.

Government tax measures are valuable in supporting early stage companies to develop products and technologies to commercialisation and should be maintained. Collaboration could be incentivised further, however, if all joint research between businesses and universities were automatically eligible for tax relief through the Research and Development Expenditure Credit (RDEC). This would drive further private investment in research and development and would also contribute to the Government’s commitment to reduce regulatory burden on business

It would also be helpful for Government to consider how VAT legislation and guidance could be simplified to avoid hindering collaboration between universities and businesses.


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