Industrial research funding

Dr Randolph Haggerty, Faculty Research Manager at the University of Leeds, examines the pros and cons of industrial research funding

In the current climate, institutions are reviewing their research portfolios to look at new funding sources in which to diversify. As many of the traditional governmental and charity funding streams have stagnated, attention is being focused on expanding into private sector sponsorship.

Recent data shows that last year, UK industry and commerce pumped £292m into university based research and this stream of funding is growing annually. Some of the big players like GlaxoSmithKline (GSK) support 500+ projects in over 50 UK universities. In addition, universities can also receive additional QR funding as a reward for working with business and last year HEFCE allocated an extra £64m to English universities.

The mutual benefits of industrially funded projects are simple; businesses get access to leading academics who can provide knowledge and new thinking, they tap into new veins of talent from which to recruit staff and additional funding is available via knowledge exchange or EU programmes to directly support their own R&D agendas. In return, universities receive funding plus access to industrial data, resources, market know-how and facilities.
Longer-term industrial collaboration supports and enhances the development of REF impact case studies, provides links to support student employment and offers opportunities for spin-out companies and IP utilisation. Considering all these positives, research leaders can see the growth of industrially funded research as a panacea to the numerous challenges facing institutions. The skill is ensuring potential pitfalls and risks are mitigated by tailored research support. 

Germinating opportunities

Industrial sponsorship tends to exist in a grey world, as chances to bid for funding are not directly publicised in the same way as Research Councils promotes their grants calls. Predominantly industrial projects develop where bilingual individuals, who speak the languages of academia and business, identify specific areas of collaboration and can facilitate the necessary contacts to take things forward. This requires charismatic, driven and focused academics, who can single out budget-holding champions within companies.

The points institutions need to consider when choosing potential industrial partners are:

✥Is the industrial partner likely to make a significant intellectual contribution to the project?
✥Does the company have a good track record of collaborating with academia?
✥What does the industrial partner bring to the table in addition to money? – access to data, facilities, product development etc.

It is also worth reflecting on the factors industrial partners are looking for:

✥Does the project fit the company’s strategic aims?
✥What is the quality of the science being proposed?
✥What does the academic bring to the table? – resources, facilities, interdisciplinary expertise etc.
✥Is there going to be commercially exploitable IP and who will own it?
✥Will the academic be able to deliver in a timely fashion?
✥Is it value for money?

Attracting industrial funding is not easy and requires a different set of skills to applying through the standard call application peer review award route. It requires the development of personal contacts, attending meetings and having a profile at industry focused conferences where the academics can sell themselves. When the chance arrives to present a business case, it needs to be punchy, emphasising the rewards and clarifying how outputs will be utilised.

Developing budgets

Once an academic has established a suitable sponsor for a project, the tricky research support begins in terms of costing the work and negotiating contracts that ensure academic freedom. Ideally industrial research should be charged at full economic costs and if the market allows there is scope to add a surplus. There are no fixed rules, as it is all there to be negotiated! Too often industry wants institutions to subsidise research and while it is fine to initiate collaboration with ‘loss leaders’, it is not a sustainable option. As many industrial funders work on a single value, fixed price basis budgets can be kept simple, as there is no need to justify every line or describe what overheads cover. A fixed price also means that any underspends remain within the institution.

If large-scale projects are an option, consider the use of Joint Industrial Partnerships (JIPs) where several industrial sponsors pool resources to fund a single project. These can be beneficial to all parties. In Leeds we run several of these with various oil companies and they have been hugely successful over the last decade with each sponsor getting access to the overall generic results and specific confidential data relating to their own sub-studies. The academic gets to publicise anonymised data. 

Contracting

Industrial contracts need to ensure the following:

✥That academics can freely disseminate the resulting data and findings. The skill is to reassure the sponsors that commercially sensitive information will not be disclosed while allowing academics to publish meaningful, non-company specific data.
✥Clarify who owns the resulting IP and the process to commercially exploit it.
✥Industry expects tight project management with timely deliverables.
✥Be clear about communication and reporting processes to key sponsors engaged, with regular meetings and updates around project milestones. 

The rewards

There are many benefits to working with business but the process needs to be carefully supported. Industry can be a significant source of additional research funding but clear management is required to ensure collaboration does not drift into routine data collection and consultancy of little academic value that recovers less than full economic cost. In the long term, there are risks associated with staff changes as academics and/or company contacts move on and these need to be minimised by constantly introducing new academics to projects and engaging with a wider number of industrial commissioners. Ultimately though, the amount of industrial funding available reflects market conditions, so here at Leeds University oil company-funded research is directly linked with rises and falls in the oil price.

Overall, Leeds University has successfully engaged with industry and associated research funding has grown 22% over the last five years from £7.6m to £9.3m. This has been coupled with an innovation programme that has seen the development of over 100 spin-out companies (seven of which are market listed), the employment of over 600 staff and the use of more than 60 technology licences. Overall, working with business can be very beneficial to both parties. 

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