1. TEMPUS Project Comparative Structures for Knowledge Transfer (KT) at UK Universities
Mr. John Perry
London Metropolitan University
Acting Head, Innovation & Enterprise

2. Overview Background to Knowledge Transfer
Reasons for Knowledge Transfer
HEBCI-Survey overview & outcomes
International Comparison – Research £
Definition/categories of KT Services
Legal Structure
Other Structural Issues
Case Studies of Universities
Case Study of KT Activity - Consulting

3. Background to UK Knowledge Transfer
March 1999 – Higher Education Reach-out to Business and the Community Fund (HEROBC) (£83M over 5 years)
May 2001 – Higher Education Innovation Fund (HEIF1) for
£77M over 2 years
Dec Higher Education Innovation Fund – Round 2 (HEIF2) for
£187M over 2 years

4. Background to UK KT (cont’d)
Nov Higher Education Innovation Fund – Round 3 (HEIF3) for
£2387M over 2 years
Nov ??
=> £585M over 8 years for infrastructure, capacity building and developing 3rd stream activity

5. Reasons for KT
Creation of economic value from publicly-funded research and teaching
Financial returns
Extend and strengthen links with business, industry, government and other organisations (eg NGOs) - in turn strengthening the research base
Increased visibility of University activities – enhanced reputation and profile
Create culture of innovation and entrepreneurship - attract and retain the highest performing academic staff and students
Commitment to improving local communities
KT (Commercialisation) is seen as a critical component of third stream activity as well as the innovation cycle

6. HEBCI-Survey Higher education-business and community interaction survey
UK Government wanted to measure the impact of its investment (HEROBC & HEIF)
It wanted to move towards success based awarding of funds (=> needing metrics)
Other reasons for HEBCIS:
To measure BCE (business and community engagement) interactions
Provide reliable, relevant data about KT
Provide comparative information – benchmarking
Develop metrics for deciding funding allocations.

7. HEBCI-Survey (cont’d)
Now 6 years of returns ( > )
158 Universities (England, Wales, Scotland, Nth Ireland)
5 main income areas:
Contract Research
Consultancy
CPD (Non-accredited courses)
Facilities & equipment related services
IP Exploitation (software & non-software licences, other and share sales in spin-offs)

8. Results of HEBCI-Survey
Income up 7% p.a. over 2 yrs up to end 2005/06
Total income now over £2.25 billion
Direct research related (contract/collaborative) income up 11.4% to £1.2b
CPD 3rd largest income source – over £400million
9000 active patents held by HEIs & over 50% outside UK
1,400 licences granted to commercial companies to exploit IP
187 spin-off companies formed in 2005/6
746 spin-offs have survived for 3 or more years
Spin-offs employ over 16,000 people and turnover >£500m
Graduates formed 1,172 new companies in 05/06 with annual turnover of about £85m
Staff formed 58 new coys with annual turnover £27m

9. Comparison of Research Income (different nations)
Sources: DEST, AUTM, individual university websites

10. Breakdown of KT Services
Research
Management
Commercialisation
Of Research
Of Education
Research
Services
Technology
& IP Rights
Patent & trademark management
Technology licensing
Start-up creation & investment
Innovations Division
Courseware & Curriculum Materials
Curriculum licensing
Multimedia & specialised software licensing
Copyright management
Curriculum Licensing Services Division
Consulting & Advisory Services
Connecting organisations to University experts
Client responsive contractual and project services
Consultancy Division
Customised Award & Non-Award Courses
Customised award and non award postgraduate courses
Research contract management
IP policy and procedures
Research Office
Short Course Division(s)
Head of Commercialisation / Managing Director of Enterprise Company Ltd
Deputy VC (R&D) / Deputy VC Enterprise/ Vice Chancellor

11. Legal Structures for KT Delivery
Internal University Department (101/158)
2 options. Highest number for this structure (but also default!):
Separate Centre for Enterprise/Innovation
Combined with Research Department
Separate Exploitation Company(ies) (9/158 Unis)
Wholly owned by University
Majority owned by University
Both Internal Department & Exploitation Company (46/158)
Some just for VAT or EU projects?
Some to protect charitable status (but different opinions)

12. Other Structural Issues
Key Department Structure (R&D, IEU etc)
Line management (DVC, VC etc)
Senior Management buy-in/champion
External Board/Panel members (control?)
Tax
Uni Support (Fin, IT etc) vs. bureaucracy
Generally to by-pass inflexible/uncommercial finance/HR/IT processes
Capacity and resources
Income generating activity focus (eg consulting)
Market Positioning of Uni services
Incentivising Staff
Risk management
Other arrangements (eg pipeline deals)

13. Structure Case Studies
Imperial
IC Innovations plc
AIM listed (£25m IPO)
59% IC owned
Mkt Cap £186m!
Pipeline Agreement
IC Consulting
100% sub
Turnover > £13.3m
Profit £1.01m
29 staff
Coventry University
Internal Department AND wholly owned CUE Ltd
Board includes externals (minority)
£7m turnover
Range of activity (Technology park)

14. Structure Case Studies (con’t)
Robert Gordon Uni
Coy for Short courses
Dept for consulting etc
External panel for spin-out decisions
Hariot Watt
Internal Dept (R&D combined)
Internal Suspicion against companies
Management buy-in (DVC selected partly on enterprise)

15. Key Process/Policy Areas
Staff Involvement in Consultancy
Staff Employment Contracts
‘Modes’ of Consultancy Delivery
Staff Resourcing for Consultancy
Incentivising Staff
to Engage in
Consultancy
Activities
Freeing-up Staff
to Engage in
Consultancy
Activities
Objectives and Definition of Consultancy
Income and Surplus Distribution Policies
Staff Incentivisation
Faculty Discretionary Funds
Faculty & University Overheads
The Consultancy Process and Organisational Policies
Strategy Development
Proposal Development/Approval
Project Delivery & Management
Invoicing and Payment
Organising
to Deliver
High-Quality,
Surplus-Generating
Consultancy Services

16. Consultancy – All in One
‘Centre’
Autonomous
‘Consultancy Unit’ – Ltd. Company
Client
Finance Dept.
Characteristics
...
Dedicated Support Staff
Administrative Focus
Support for Contracts
Some Marketing / Business Development
Staff Consultants have Contracts with Unit
Payment to Staff – Direct / Via Payroll
Academic from Department A
Academic from Department Y
Academic from Department Z
Advantages
Possible Constraints
Automomy
Simplicity
Operational Efficiency
‘Commercial Operation’ – Client Perspective
Limited Business Development Capability
Operational Distance from Departments / Faculties

17. Consultancy - Devolved
‘Centre’
Client
Finance Dept.
Trading Arm
‘Central Enterprise’
Consultancy Guidelines
System Accessibility
Characteristics
Faculty-Dedicated Business Support
‘Central Enterpise’ Providing Guidance to ‘Local Enterprise’ Teams
Local Access to Finance Systems
Invoicing Initiated Locally
Payment to Staff Via Payroll
...
Faculty A
Faculty B
Faculty C
‘Local Enterprise’
‘Local Enterprise’
‘Local Enterprise’
Advantages
Possible Constraints
Localised Decision-Making
Sense of Faculty Ownership
Strong Business Development Capability
Lack of Consistency
Limited Capability to Tackle Pan-University Projects

18. Consultancy - Income
Benchmarking Consultancy Income at 18 London-Based Institutions
Approximate Figures for Annual Consultancy Income
£13m
£3m
Across 18 London-Based Institutions, the Estimated Income from University-Based Consultancy Activities is around £30 million
£2m
(<£300k
Through
Unit)
£1.7m
£1.5m
£1m
£750k
£600k
£500k
<£500k
£400k
£150k
£100k
Source Innovation Partners

19. Staff Incentives Providing Financial Incentives
% of Income or Surplus
Net or Gross Payments
PAYE or non-payroll
Providing Professional Incentives
Access to Surpluses Paid into Discretionary Fund
Inclusion in Performance Review
Individual targets for KT activity
Providing Value-Added Support
PI Insurance
Invoicing and Payment
Contracts Support
Business Development
Providing Time-Based Incentives
‘Professional Endeavour’ Days
Teaching ‘Buy-Out’ Option

20. Further Information John Perry Acting Head Innovation & Enterprise
London Metropolitan University
133 Whitechapel High Street
London, E1 7QA
Phone: Fax:
*Acknowledgement: To Innovation Partners for use and/or adaptation of their slides in relation to consultancy