Highter Education: Knowledge in the marketplace: Britain's universities are setting up their own companies and going into business, seeking to profit from the fruits of their brains. Roger Trapp reports
Thursday 20 October 1994
But then, as executive pro vice- chancellor of De Montfort University, the former Leicester Polytechnic that is commonly described as Britain's fastest-growing university, that is, in a way, what he is.
The institution's review of its first year in its new guise states that 'higher education today is very much a market'. It has recently spent pounds 500,000 on a high- profile advertising campaign designed to win it a greater share of an increasingly choosy student population.
But perhaps the greatest sign of the university's entry to the 'real world' is in the running of the company Leicester Expertise, through which it deals with industry.
It is not the only university to have such an operation - there are more than 40 with subsidiary companies more or less dedicated to supplying technical expertise and specialist equipment - but it claims to take an especially commercial approach.
De Montfort has sites in Leicester and Milton Keynes as well as more than 20 linked colleges, and has long had close links with industry, commerce and the professions.
Many of its courses are of the sandwich variety and there is much joint research work with industry. But four years ago it was decided that the ties with industry should be put on a 'highly professional' basis, Professor Brown says.
In particular, it wanted to avoid any suggestion that its activities benefited from an 'accidental subsidy from the public purse' and to escape from the notion that academics are not in the same world as business people.
'The company was set up without an investment or subsidy from the university. It stands alone,' he adds.
Professor Brown, who had previously organised a similar arrangement at Loughborough University, is the first to admit that such an attitude required a cultural change from academics. 'There's a tendency in academe for them to believe they will only get commercial work if they are very cheap. And consequently to think companies will not expect too much in the way of delivery.
'The university mustn't sell itself cheap - we give good value for money rather than a lower price,' he says, adding that Leicester Expertise should be competing with such international consulting groups as Coopers & Lybrand and PA.
A quick back-of-an-envelope calculation is generally enough to convince the sceptical that they have been charging too little and will still do better if they work through the company and sacrifice a percentage of the fee for administration costs.
The presence of separate accounts for each school or 'major trading block' also wins staff over. This ensures that each group benefits from the amount of money raised for the university in proportion to the effort they have put in.
The sort of work done ranges from art and design, through running legal training courses, to applied science. Turnover has risen from pounds 300,000 in the first year to about pounds 2.5m in the period just ended. To avoid corporation tax, the company has recently gift- aided pounds 300,000 to the university.
Such figures put it among the more active of the country's university companies. However, Dr Derek Burr, managing director of Birmingham R & D, and chairman of the University Companies Association, points out that the companies' wide range of size, from turnover of a few hundred thousand pounds to several million, is largely a result of including different activities in their operations.
His own organisation, which at eight years old is one of the oldest, last year had a total income of pounds 1.8m. This came mainly from licensing inventions but also from selling instruments to companies and laboratories and providing advice, as well as running the university's science park. But he points out that if it ran research contract income through its books - like some others - it would be far larger.
Different as they are in their operation, the subsidiary companies all have their roots in the demands over recent decades from the Government and elsewhere to increase their interaction with business. Besides making courses more relevant and therefore beneficial to graduates in an increasingly competitive jobs market, Dr Burr sees the main benefit as giving the university, and its staff, extra income without threatening its charitable status.
The practice - hitherto widely adopted by newer universities, such as Salford and Bradford - will inevitably grow. But administrators need to guard against its distracting staff and resources from the main purpose of teaching students. As Professor Brown says, 'We don't want to have the tail wagging the dog. We're not in the business of making money for the sake of it.'
The work done has to be relevant and has to fit in with the university, he adds. 'We won't be running a fleet of ice-cream vans.'
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