1. The Higher Education Innovation Fund Vinnova and British Embassy seminar 21 March 2006

2. The aim of the Third Stream (Mission) That all Higher Education institutions are committed to making an active and effective contribution to improving both the performance of the UK’s knowledge base, and the overall innovation performance of the economy for the social and economic benefit of the UK

3. The HE Innovation Fund (HEIF) To increase HEIs’ capability to respond to the needs of the economy and society For - impact on UK innovation performance Through – a wide range of knowledge transfer, seed funding, enterprise education

4. General Issues Demonstrating value for money Delivery of benefit, not maximising income Developing economic and social impact Needs useable indicators for both Unlocking resources of diverse HE sector Need and scope for all HEIs’ engagement

5. HEFCE -Third Stream Scope COMMUNITY PUBLIC SECTOR CULTURAL LANDSCAPE BUSINESS Competitiveness, Growth Efficiency, Cohesion Cultural Enrichment & Quality of Life Resources & Opportunities PRIVATE SECTOR SOCIAL & CIVIC ARENA ENHANCING INNOVATION & PRODUCTIVITY DELIVERING ECONOMIC & SOCIAL BENEFIT NB This represents scope not scale

6. Case studies/Good practice Strategic direction and preparation for change Organisational change Internal standards and procedures Marketing Partnerships (non HEI) Results and evaluation http://www.hefce.ac.uk/reachout/casestudies/list.htm

7. HEIF 3: Core Principles National scheme + regional dimension Focus on promoting direct and indirect economic benefit to the UK Not for funding ‘profit making’ actions Majority (75% of main fund) by formula Additional (25%) by competitive bidding

8. HEIF 3 Overall £218 million main fund, 2006 to 2008 Up to further £20 million for Centres for Knowledge Exchange activity (2006 to 2008) Continuing support and development of the third stream role for all HEIs Embedding change and enterprise as relevant for each HEI

9. Formulaic Element Core Funding, £164 million Every HEI (130) has received an allocation… …released by institutional high level plan Continue/broaden current good practice Extend and develop successful HEIF actions Collaboration strongly encouraged

10. Structure of the Formula Three formula components: Capability/potential (academic FTE) Demand side (external income) ‘Basket’ of activities to reflect delivered benefit and the diversity of the HE sector Modifiers:- minimum £200 thousand - maximum £3 million - ‘transition factor’

11. Competitive element Two stage bidding process 90 bids received; 23 going to second stage £54 million, not a ‘top-up’ for previous action Limited number of awards from £3 to 5 million Impact is vital; innovation very important Collaborate within and beyond England HEIs

12. HE-Business and Community Interaction SURVEYS UK Surveys annually from 2001 Setting baseline, identifying trends Evolving/testing measures and benchmarking Potential to inform funding decisions & CSR Informs HEIs’ management information ‘Business’ includes companies and public sector et cetera

13. Selected deductions from 2005 HEBCI (2003-04 data) Large increase in licences granted (due, in part, to 2 HEIs) Slight decrease in IP and Contract Research income Increases in Collaborative Research (£541 million) and consultancy (£211 million) 70% of HE Governors from B&C (34% business) Over 5,200 dedicated ‘third stream’ staff £300 million CPD income & £215 million regeneration income Only 12% of HE institutions have no formal process for managing third stream activity 90% have dedicated enquiry point for SMEs Over 10,000 staff days for free public lectures (>1,000 for chargeable events)

14. Selected data from 2005 HEBCI survey

15. 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

16. Next steps? Overall Strategy Third stream as second mission for some Creative Industries and other sectors UK Spending Review

17. ANNEX Background information

18. REFERENCES HEFCE web pages www.hefce.ac.uk/ HEFCE business and community web pages www.hefce.ac.uk/reachout/ HE-business interaction survey web pages www.hefce.ac.uk/reachout/hebi/

19. HEROBC HE Reach-out to business and the community fund Jan 2000 to July 2004 in two phases £92 million, 135 awards, 15 consortia Awards (generally) from £100 thousand to £1.1 million First formal ‘third stream’ funding for many HEIs; includes Business Fellowships Awards to fund HEIs’ own plans

20. HEIF 1 HE Innovation fund first round Three years from Jan 2002 £78 million, 89 awards, 16 consortia Awards (vs plans) from £250 thousand to £5 million Co-ordinated with University Challenge and Science Enterprise Challenge (UC and SEC) Often knowledge-transfer focused

21. HEIF 2 HE Innovation Fund second round For all sizes and research profiles: - global reach, local/regional impact Incorporating seed funds and enterprise training Total £186 million 2004 to 2006 Includes 22 Centres for Knowledge Exchange 124 awards, 46 collaborative

22. Centres for knowledge exchange activity Knowledge Transfer/skills development 22 centres in 2004-06 (potentially beyond) under HEIF 2 Scope for less research-specialist HEIs Deploying knowledge from a range of sources, as needed Up to £500 thousand per year each for up to 5 years

23. HEACF HE Active Community Fund HE student and staff volunteering For generic skills development, working with not-for-profit organisations £37 million total conditionally allocated by formula across all English HEIs 2002 to 2006; now extended to 2009 Volunteer awards scheme