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Fewer business bucks for UK schools

D money in university research

By | December 20, 2005

British companies are channeling a smaller proportion of their research and development cash to UK universities, and evidence suggests that some – including the pharmaceutical industry – are focusing their attention on bigger markets in Asia, an interim report from the Council for Industry and Higher Education (CIHE) said last week.

The report shows that between 1993 and 2000, the amount UK businesses spent on funding research in British universities rose from less than £150 million to over £250 million annually. But since then, business investment in research and development in universities has remained broadly static – which, in the context of inflation, represents a decline, according to the report.

"The pattern is now fairly stable, having risen substantially in the 1980s and 1990s," Richard Brown, chief executive of CIHE and co-author of the report, told The Scientist.

The plateau in funding has meant that while universities secured a growing slice of industry R&D cash during the 20th century, they "did not manage to maintain this increase into the 21st century," the report says. Businesses spent 1.67% of their research and development with universities in 1985, 2.39% in 1990, 2.51% in 1995, 2.99% in 2000 and 2.81% in 2002.

The businesses consulted by CIHE generally regard UK universities as producing good graduates and doing good research, Brown said. But there are other factors at play that put the UK at a disadvantage, such as the relatively small size of its market. For example, the UK has only 3% of the worldwide market for prescription drugs.

"What we're postulating is that an increasing amount of near-market clinical and medical research funded by these companies is going to major world markets, increasingly India and China," Brown said.

One of the major drivers of this shift is the need for firms to carry out their late-stage development where they are likely to sell most of their product, according to the report, entitled Higher education: meeting international business demand. "We have, therefore, been told and have seen evidence that an increasing proportion of this research will be undertaken overseas." As a result, the report notes that UK universities may "struggle to maintain the current volume" of late-stage clinical research.

As Brown put it: "You're not going to do clinical research for the Chinese market in south-east England."

This has become a more important issue in recent years as markets in the Far East have begun to open up, Brown said. "It's only in the past 3-4 years that companies have begun to realize the strengths and sophistication" of those markets, timing which coincides with the change in UK university funding from businesses.

A spokesman for Universities UK, the umbrella group for the UK higher education sector, agreed that UK-based businesses were spending less on British university research in real terms. "Universities have welcomed the government's commitment to an increased budget of £238 million over two years to help universities in this area."

However, the spokesman noted that increase only represents 2% of the Higher Education Funding Council for England's annual grants to higher education institutions, which amounts to over £6 billion per year. "Clearly, more needs to be done to stimulate business spending on R&D."

According to the CIHE report, universities would also benefit from trying harder to capture more company funds dedicated to earlier stages of research and development—horizon scanning, fundamental research, and problem solving. "An increasing amount of international businesses are coming to the UK universities to ask them to do some of their basic research," Brown said.

CIHE will publish its full report on the subject of business funding in UK universities in May 2006.

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