Scottish Knowledge Exchange: Strong Performance, But Funding Reforms Anticipated

Scottish universities performed well in figures released yesterday in the HE Business & Communication Interaction (HE-BCI) Survey summary results for Scottish universities. Despite a decline in income under the "regeneration" and "IP income" headings (not to mention the absence of data from one institution), Scottish institutions increased their total relevant income by some 7% in 2007-08. This increase of £19.1M delivered an overall Scottish total of £341.4m and a 4% real terms growth rate.

The Scottish rate of growth is not only slightly ahead of the rest of the UK, but comparative data shows that Scotland outperforming comparators across a range of areas. The statistics indicate that Scotland's universities make considerably more patent applications per million of population than those in Canada and the rest of the UK. Similarly, spin offs from Scottish HEIs have, on average, a higher turnover than those from the rest of the UK and Scotland's universities have consistently achieved a higher rate of spin-offs per million of population than their peers in Canada, the rest of the UK and the USA.

Whilst this strong performance may be cause for celebration, the funding stream used to incentivise knowledge exchange in Scotland looks set to change. Writing in November last year, Cabinet Secretary for Education & Lifelong Learning, Fiona Hyslop, asked that the Funding Council (SFC) "ensure that Scotland increases the demand side ‘pull’ for new knowledge created in universities and delivers knowledge into the Scottish economy which creates additional wealth." As a result of this direction, the SFC has stated that it plans to review the metrics used for the allocation of the £21m Knowledge Transfer Grant (KTG) during 2009.

The KTG funding was included in the SFC's new 'Horizon Fund for Universities' the details of which were announced as part of a major overhaul of the SFC's approach to funding in March. The new Fund is specifically intended to drive the government's policy priorities and the inclusion of KTG within this stream, coupled with the emphasis the November letter placed on SME's and the need to address demand, suggests that the consultation may propose some radical reforms.

Whether or not radical reform is proposed, the forthcoming consultation is certain to be particularly closely scrutinsed in the universities of Glasgow, Dundee, Strathclyde, Edinburgh and Aberdeen. The HE-BCI survey shows these five institutions account for some 82% of the total value of "contract research" income in the Scottish sector. The same five will also together share some £14.64m, or 70%, of the current KTG grant for 2009-10.