1. Welcome slide

2. Future third stream policy Manchester, May 2008 Alice Frost, Head of Business and Community Policy a.frost@hefce.ac.uk

3. The third stream journey Where did we say we were going? Where are we now? How far have we gone in the journey toward our destination? The spatial dimension

4. Where did we say we were going?

5. HEROBC 1999 3rd stream of funding, complementing T and R Responding to business and wider community Developing culture, capability etc Each HEI develop.. appropriate to its circumstances Core belief..all HEIs should be engaged Achieving wealth creation [not income generation]

6. Evolution of third stream funding CULTURE CAPABILITY CAPACITY OUTPUT OUTCOME IMPACT HEIs - and their activities - will be at different stages on this trajectory…... Refresh, refine and review Sustainable Strategy

7. Time of transition Where we have come from… Where we are going to… STEM focusAll disciplines Simple ‘transmission’ model of knowledgeDynamic exchange model Wealth creationInnovation, productivity, quality of life, cultural enrichment, civic dev, community regeneration etc. Large, multi-national businessesSpectrum from global to local/ regional and all users

8. ‘If universities are to have a key social and economic impact, then the required values must be internalized at the institutional level’ (HEPI report 2005, Hatakenaka)

9. ‘For research universities truly concerned about their economic impact, as exemplified by universities such as Stanford or MIT, the culture within the university does not consider it good enough for research results to be academically valued; they care that their research results have a real impact on society’ (HEPI report 2005 Hatakenaka ( Community engagement - San Francisco State University)

10. Finland: University Act (2004 amendment) (1) The mission of the university shall be to promote free research and scientific and artistic education, to provide higher education based on research, and to educate students to serve their country and humanity. In carrying out their mission, the universities shall interact with the surrounding society and promote the societal impact of research findings and artistic activities. (Amendment 715/2004)”

11. Where are we now?

12. Chronological Funding View 990200010304050607 HEROBC Transitional HEIF 1 HEIF 2 HEACF BUSINESS FELLOWS HEACF KTCF 08 09 ‘HEIF 3’ 3 rd stream formula funding

13. ‘This [Higher Education Innovation Fund (HEIF)]..now a permanent part of the University funding landscape, will increase to £150M per year by 2010/11.’ »Innovation Nation, March 2008

14. HEIF 4 – Funding available 2008-09£112 million* 2009-10£134 million 2010-11£150 million (HEIF 3 2007-08£111 million) * Plus £8 million for existing Centres for Knowledge Exchange

15. HEIF 4 (2008-2011): method overview 100% formula funding Based on HEIF 3 formula Broad distribution across the sector Incentive for SME engagement All HEIs receive allocation £100k - £1.9M pa Released against an institutional strategy

16. HEIF 4 – Formula Formula: First component (40%) –Capacity building and potential –Academic staff numbers (FTE) Second component (60%) –Performance –Value of B&C services –(SME income double weighted) Min allocation (£100k; transition funding (0.8 x HF3); relative and absolute caps (2.5 x HF3; £1.9M) »Purpose of formula funding

17. HEIF 4 – Purpose of funds Support a broad range of KT and enterprise With all - private, public and third – sectors Global, national, regional, local.. Resulting in economic and social benefit Engagement to develop core T and R

18. HEIF 4 strategy HEIF 4 funds released against a strategy HEI’s own statement of ‘third stream’ strategy Use of HEIF funds within strategy Specific contribution of HEIF Indicative HEIF expenditure Management – KPTs, risks etc

19. Timetable Oct 07Sainsbury review, Science Budget Nov 07Final formula; indicative allocations Jan 08Circular request institutional strategies to release funds March 08Final allocations (HEBCI/HESA data) 14 AprilStrategies submitted to HEFCE Mid-JulyFinal assessment complete August Funding begins

20. Selected third stream indicators 2000- 01 2001- 02 2002- 03 2003- 04 2005- 06 Number of disclosures2,1592,4782,7103,0293,268 Consultancy income (£M)117136181221236 Collaborative research income (£M)470521515566606 Required contracting system for all staff-business consultancy (% of UK HEIs)60%65%66%68%74% An enquiry point for SMEs (% of UK HEIs)83%85%89%90%92% Regeneration income (£M)129134150216208 Facilities and equipment related services income (£M)2556728489 HEIs providing short bespoke courses on companies’ premises (% of UK HEIs)62%67%78%80%84% HEIs providing distance learning for business (% of UK HEIs)52% 66% 70%

21. HEBCI Survey results 06-07

22. How far have we gone in the journey? The evidence

23. Outputs from HEIF 4 assessment (1) Confirmation of funding Feedback to all HEIs Commended strategies Innovative flagship projects Potential failure

24. Outputs from assessment (2) Overview report - July: –Progress on strategy and embedding –What HEIF is spent on and its contribution in mix –Methods of managing risks, KPIs etc –Sharing views on risks and lessons learnt – celebrating excellence and innovation Potential thematic networks, good practice opportunities etc

25. Evaluation “to evaluate what has been achieved by HEFCE/OSI 3rd stream funding to achieve culture change and embed capacity toward optimising the direct and indirect economic impact of HE [assumed baseline 1999]" Focus is on HEROBAC, HEIF (all rounds), UC/SEC Two key aspects: internal: culture change within an institution; external impact it has on organisations HEI works with (likely to be more of former than latter, but should see latter in former) Conducted by: Consortium of PACEC and Centre for Business Research (Cambridge University) Module 1: A top down ‘macro’ analysis of existing survey-based data (all institutions) Module 2: Case study research of individual HE institutions (~ 30 institutions) Aim to comment on vfm of third stream investment to date Timetable: started September 2007; final report June; publish September 2008

26. Emerging findings (evaluation)? Impact appears additional - and substantial Increased ability to innovate; access to new funding Strengthened links between T, R and 3 rd stream Dynamic increasing returns per £ - ‘engagement multiplier’ Barriers – constraints of capacity; patchy academic embedding; perceived demand problems

27. Emerging findings (strategies)? Very high standards Thoughtful/high level engagement Authentic – a university’s or college’s own third stream journey More strategic coherence – and with T and R Inter-play of innovation and enterprise Multiplier effect

28. The future? In the hands of our universities and colleges?

29. Spatial dimension

30. “A university as an institution constitutes a place which needs to be situated within a wider space. Universities, as places, are constituted as a result of the operation of these contesting spatial forces acting upon them.’ Increasingly HE shaped by ‘blurring the distinction between the different geographical scales’ (Fumi Kitagawa, Hitsotsuhasha University Japan, Entrepreneurship, HE Management and Policy, OECD 2005)

31. New University Challenge (Innovation Nation March 2008) Widen participation and unlock talent Contribute to social cohesion Help drive economic regeneration Create highly skilled workforce for local business community Engage with business to boost innovation

32. New Partnerships for Innovation (Innovation Nation March 2008) Bring together public, private and third Develop innovative solutions to local and regional challenges Build links between public finance, innovation investments and private finance LAs, business, RDAs and HE and FE

33. Thank you

34. Welcome slide