The Higher Education - Business and Community Interaction (HE-BCI) survey, published today, reveals that UK higher education institutions (HEIs) received £2.64 billion from business and community interaction in 2006-07. This is a 17 per cent rise from the last survey (for 2005-06).

Universities and colleges increasingly play an important part in keeping the UK connected to the global economy and attracting investment and talent to the country. Through interacting with business and the community they help turn knowledge into new companies, products and services. They also deliver professional training to improve skills, provide consultancy to solve problems and undertake projects to tackle social challenges.

Collaborative research is a crucial vehicle for universities to work with leading-edge innovators around the world. In 2006-7 UK HEIs' income in this area was nearly £670 million, 12 per cent more than the previous year. Income from consultancy and training also rose significantly.

Science and Innovation Minister, Ian Pearson, said:

"Universities are shifting up a gear when it comes to working with business and making an economic impact. In percentage growth terms, collaborative research with industry in the UK is growing at a faster rate than the Chinese economy.

"Over the next ten years the UK will increasingly compete with other countries in terms of the ability of our universities to work with business to provide a global edge.

"Companies large and small can improve their performance by drawing on the knowledge and skills within higher education. I want to see even more doing so in the future."

Higher education also develops its own entrepreneurs and produces successful high-tech companies. In 2006-07, 226 'spin-off' companies were formed out of university intellectual property and there were over 700 past 'spin-offs' still in operation after at least three years. This is an increase of ten per cent. Graduates started 1,508 businesses in 2006-07 and academic staff created 62 business start-ups.

As well as working in the commercial world, higher education helps public services and the voluntary and charitable sectors tackle critical social and environmental challenges, such as climate change and an ageing population. Around half of total income to HE in 2006-07 came from such public and 'third' sector bodies.

Much of HE's support in addressing social problems is through research with £446 million of contract research undertaken with the public and third sectors, out of a total of £783 million. (Total contract income into UK HE grew by 20 per cent between 2005-06 and 2006-07.)

Professor David Eastwood, Chief Executive of HEFCE, said:

'I am very pleased by the results the HE sector has achieved over the last year, and impressed by the year-on-year increases in nearly all indicators over the period we have been running the HE-BCI survey. This validates the sustained support we have given to the third stream agenda since 1999 through the Higher Education Innovation Fund.

'HEIs have shown their commitment by putting in place a solid infrastructure for working with businesses and the community. Over 90 per cent of HEIs now provide an enquiry point for small and medium-sized enterprises and similar percentages provide bespoke education courses, on campus or in the workplace.

'The challenges from the world economic downturn will have an impact on this agenda in future. But I believe that HE's contribution to the potential of a knowledge-based society will be even more important as a result, and we need to keep the faith in providing public support.'