KEF – a useful framework or another straightjacket?

The Knowledge Exchange Framework (KEF) will certainly bring challenges and, it appears, winners and losers, says Frances Anderson

The announcement by the Universities and Science Minister in October of the launch of a new ‘Knowledge Exchange Framework’ (KEF) to operate alongside the existing Research Excellence Framework (REF) and Teaching Excellence Framework, appears in general to have been well received. However, some have stressed the need for the new framework to take full account of the diversity of university knowledge exchange activities and their differing economic, social and cultural contributions, both within their localities and the wider world. 

Background

University research outcomes have been the subject of review for many years. There is regular reporting on university research activities through the HE-BCI return and HESA reports, for example. There have also been a number of wide-ranging reviews including the Witty Review (2013), the Dowling Review (2015) and more recently the McMillan Report (2016). 

The increasing proportion of government research funding channelled through HEIs in recent years has built pressure to evaluate outcomes, and identify ways to employ funding more effectively. In his announcement, Jo Johnson, pointed out that half of the UK Government’s investment in research goes to universities – £4.8bn out of £8.8bn in 2015. A greater proportion of all research and development takes place in UK universities than in comparator countries – the figures quoted being 12% (Japan), 13% (US), 20% (France) and 26% in the UK.

Against this background, in November the government launched its industrial strategy which highlights key challenges for the economy – including low productivity, regional inequality, skills gaps and poor infrastructure. Universities are expected to play their part in addressing them. 

The Minister compared UK university generation of intellectual property income from research unfavourably with that of US universities. While acknowledging notable UK examples of academic research generating significant income being recycled into further research, and powerful public private collaborations in manufacturing, he said: “the system as a whole needs to find a new gear”.

The McMillan Report

This report resulted from a government request to HEFCE to develop a university knowledge transfer performance framework. Led by Professor Trevor McMillan, Vice-Chancellor of Keele University, the  report focused on the exploitation of intellectual property arising from university research, examining best practice, key performance improvement issues and international comparisons. 

The report’s findings were that wide differences between universities (what they do and how) means that there is no safe ‘one-size-fits-all’ approach to measuring knowledge transfer performance. UK universities were operating at a “world-class standard” in regard to technology transfer practice. The success of institutions like Stanford and MIT don’t offer easy exemplars, as they operate within unique industrial ecosystems built over decades. However, there was recognition of the value of building eco-systems around universities to aid knowledge transfer – including securing ‘patient’ capital in support of nascent technology businesses.

You get what you measure

The KEF is being signposted as a means for universities to reflect on their performance in knowledge exchange and raise their game. It may also lead to shifting of resources towards commercialisation activities, especially in engineering, medicine, technology and science, where outputs are arguably easier to measure. Access to Higher Education Innovation Funding, which is set to grow, will be linked to positive feedback on KEF returns, so this is not an idle concern, particularly for universities with a focus on the arts and humanities. 

There are concerns that the KEF should avoid measuring outputs too prescriptively, potentially creating perverse incentives. Another evaluation framework, the REF, has already been attacked for some of its performance measures, critics arguing that it negatively distorts research behaviour. 

Some avenues to explore now

While we await further announcements on the KEF, and what it will measure, here are some thoughts on what can be done in preparation: 

A fit-for-purpose technology transfer policy

As lawyers regularly working with university clients and spin-outs on technology transfers, at VWV, we find that the absence, or under-development, of university technology transfer policies generates uncertainty and causes delays. Sometimes this lack can allow academic parties to develop unrealistic expectations, or impair the ability of universities to fulfil their governance and legal obligations – in particular to ensure that they:

 – Receive fair value as charitable bodies,  in return for the transfer of intellectual property rights and assets to private sector partners

 – Meet complex state aid requirements

Having comprehensive guidelines for the commercialisation process allows a university to communicate clearly and consistently with its academics, other spin-out participants and prospective funders. This clarity enables everyone involved to identify early the feasibility of  proposals, how best to structure them and what to expect personally from such arrangements. 

Such guidelines can also help academics and technology transfer teams to develop their understanding of the legal challenges of research commercialisation. For example, participants might identify their shareholdings in a spin-out company as the key driver of their level of control and share of commercialisation proceeds. In fact, minority shareholders can still exert significant control through a shareholder agreement. Revenues can be generated through an intellectual property transfer agreement by way of licence fees and royalties, as an alternative to depending on share dividends from retained profits. 

Template contracts…

High on the list of complaints (from industry and academic quarters) in regard to the technology transfer process is the difficulty of, and time taken in, sorting out legal structures and contractual terms with partners. Universities engaging actively in research collaborations or facing the prospect of launching a number of spin-outs, can adopt template contracts which reflect their published technology transfer policies. This gives a better prospect of consistency between transactions, and should reduce cost and time overall in negotiating deals. 

… deployed in a pragmatic way

At VWV, we have encountered problems with technology transfer professionals taking a rigid and prescriptive approach to contractual negotiations, unwilling to adapt standard contracts ill-fitted for the requirements of an “out of the ordinary” commercialisation project. This can add unnecessary delays and costs to the process and damage goodwill between the partners. University technology transfer teams need to develop the confidence to consider alternatives and bespoke solutions, in order to get deals done efficiently while still protecting the interests of their university. 

Long-term collaborations 

Another way of reducing the time and cost of negotiating technology transfer arrangements is to form long-term partnerships with key industrial and academic partners. Operating within an agreed framework on a series of related projects in a specialist field of research or technology will reduce the ‘drag’ associated with contract negotiation, ensure consistency of approach, greater certainty, and help to build trust between partners.  

Training for staff

Academic and other staff can be supported in developing their understanding of the commercialisation process, and their role in it, through provision by their university of training materials and courses. They can also be supported in preserving the value of university intellectual property assets through balanced publication policies. 

In conclusion

The KEF will certainly bring challenges and, it appears, winners and losers. Perhaps all universities can draw some comfort from the suggestion that the KEF is in part designed to address concerns of critics within government, who might otherwise want to divert some of that large (and growing) research budget away from them. 

Frances Anderson is a Consultant at leading education law firm VWV. Frances can be contacted on 0121 227 3708 or at fanderson@vwv.co.uk. To be kept up to date on legal, regulatory and governance issues please register for the VWV  dedicated HE portal OnStream: https://www.vwv.co.uk/he-onstream/login

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