Using research for a competitive economy

Chemistry lab worker31 October 2012

The report from the Heseltine Review published today, No stone unturned in pursuit of growth, looks at ways of making the UK economy more competitive – recommending a National Growth Council and distributing funds locally rather than through central government as some of the measures. Other recommendations include "long term stability of the core funding of science and research", a higher degree of collaboration between universities and employers to encourage placements, and partial sponsorship of student fees from firms in return for a fixed employment period after graduation.

Policymakers have frequently looked to research to boost business and the economy, through innovation, spin-off products and companies – depending on co-operation and knowledge exchange between university researchers and the private sector.

According to findings from the ESRC-supported Impact of Higher Education Institutions on Regional Economies research initiative (finished last year), a firm is six times more likely to produce innovative products if it collaborates with a higher education institution – and five times more likely to produce an innovative process.

The findings also show that firms with university collaborations are four times more likely to innovate than those without.

Despite a policy focus on technology spin-offs from research, it is actually one of the least common forms of external knowledge exchange activity compared to interaction based on personal contacts, community and problem-solving. An ESRC–funded research project looking at university-industry knowledge exchange suggests that firms' motivations to interact with universities - rather than being restricted to technology development - are concerned with other aspects of management and business performance, such as service development, human resource management, training and marketing.

The geographical closeness of university research departments can also influence where companies are located. Research by the ESRC Centre for Market and Public Organisation and the Institute for Fiscal Studies indicate that pharmaceutical firms locate their research and development (R&D) facilities within 10 kilometres of world-class rated university chemistry departments. But in this industry and others, the location of R&D also appears to be linked to the presence of science parks.

In the chemicals, vehicles and machinery industries however, R&D facilities tend to be located in areas with higher manufacturing employment - rather than being near to universities.

According to the same research, innovative firms sited near related university departments are more likely to engage with higher education institutions.