HEFCE approach to evidence - KE/innovation SRHE, London May 2015 Alice Frost

To inform decision making/advocacy (eg SR) To support policy development/evaluate options To support policy implementation To illuminate and share best practice To evaluate policy interventions HEFCE Research and Evaluation: draft aims

Government approach

What did knowledge exchange ever do for us? (outcomes, impacts) Wuz it HEIF Wot Dun it? (attribution) Was it all worth it? (vfm) Can’t you get it any ‘bleedin’ cheaper? (efficiency and effectiveness) SR key questions – knowledge exchange

HEBCI – provides information on development of KE infrastructure, activity/income, outputs - ‘income as a proxy for impact' New studies: PACEC ‘Value of student start-ups’ – monetised additional HEBCI outputs PACEC (draft) ‘Non-monetisable Achievements of HEFCE Mainstream Funding for KE’ – case study/qualitative view of impacts. Library of case studies of user benefits T Coates-Ulrichsen: econometric/quantitative study – eg regression analysis of broader range of outcomes than income (ONS, DHLE) Novel valuation expert roundtable Enterprise Research Centre – SME studies 2009 PACEC/CBR evaluation – ‘behavioural additionality’: culture change and capacity building and embedding SR Evidence

Cost benefit balance sheet (draft PACEC 2015)

Non-Monetisable Achievements: Cost-benefit balance sheet: outputs (draft) Qualitative Non-Monetised Benefits Business Benefits Skills from KE to understand issues and develop ideas and solutions Benefits to start-up/spin-out businesses. Consolidated start-ups and improved management to achieve business growth Improved innovation, the development of technology and IP through testing and application to products and processes The successful development of marketable products and processes The commercialisation of IP and products and services Improved business performance (sales, employment opportunities, productivity, profits) Increased benefits for SMEs Support and outputs for high tech and innovative clusters/sectors Social and Community Group Benefits Greater understanding of issues and solutions for organisations, local community groups, and clients Development of services to meet the needs of local groups and residents Increased benefits to meet needs for partners and residents Wider Economic and Social Benefits Shaping and developing regional partnerships, e.g., LEPs, Local Authorities, business groups Strengthening the innovation system through businesses and regional agencies Improved enterprise support for SMEs, start-ups, and larger firms with a focus on key technologies and sectors Stronger supplier linkages resulting from University engagement and business growth Greater technology diffusion Labour market benefits Stimulation for inward investment to University regions from student placement and graduates

Non-Monetisable: Co-investment policy (draft) KE activityHE co-investment policy Events/networks10% transactional % user pays Enterprise support50% transactional % user pays Innovation and Research87% transactional % user pays Students/graduate placements 33% transactional % user pays Community development/support 12% transactional. 0-50% user pays

Benefits of HEIF HEIF funded outputsReturn on Investment of £1 HEIF KE income services £6.4/6.8 (long/short) Additional benefits from student start-ups £3.3 Additional public benefits allied to income services - using shadow price (eg SMEs) £2.6 Benefits with little income evidence (eg networks); benefits not captured by price (eg user impacts) Library of Case Studies

Measuring benefits – more sophisticated and convincing way of saying what we don’t know! Distribution of additional benefits related to income? Innovation Systems collaboration/alignment – what is role of HE, and of other funders/ stakeholders/agencies? Government priorities? HEFCE wider R&E strategy……on-going Tentative conclusions

Other Firms (customers, competitors, suppliers, etc.) Technology intermediarie s FIRM National innovation system Graduatin g students, research publication s University External Engagement Education Research Government Institutions Absorptive capacity Generic / specialised skills Local innovation conditions Local policies Local leadership Innovation infrastructure Inward investment Export support Skills development Access to expertise Access to finance Enterprise culture Attract talent Quality of area University Knowledge Exchange Knowledge & technical expertise Research-led innovation & product technologies Shared infrastructure Social capital development Problem solving Testing & prototyping Production / supply chain development Organisational innovation

Relationships between different types of innovation system

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