Why universities need to rediscover their place in the innovation economy
Have universities forget what they were for? Ask a business leader and you’ll get the default answer: to produce graduates. But the deeper role – as the intellectual and industrial engine of our cities – has slipped from the collective imagination.
And it shows. Only 7% of university R&D in the UK is funded by business. Fewer than 2% of companies are actively engaging with universities. Meanwhile, Britain has suffered a 47% collapse in the number of firms making the global top 2,000 list for R&D investment. For a country once synonymous with invention, this is a crisis hiding in plain sight.
A forgotten mission
Our universities weren’t built as ivory towers. Liverpool, Manchester and Leeds universities were forged by merchants, industrialists and philanthropists who knew that research in science, medicine and engineering was key to competitive industries. And key to jobs, prosperity and civic pride.
That mission has been neglected. Too often, universities have retreated into silos of academic publishing and abstract metrics, while businesses have been left to fend for themselves in a hyper-competitive, innovation-driven global economy.
A different way: the Liverpool model
Liverpool is showing what reintegration looks like. A century later, Liverpool has seen a quiet grass roots revival of this mission led by the Virtual Engineering Centre (VEC) at the University of Liverpool, ripping up the old playbook of spin-outs, consultancy and licensing. Instead, it has created a standing multidisciplinary team of scientists and engineers who work shoulder-to-shoulder with ambitious SMEs, running rapid sprints to prototype new products and services.
The results? Over 700 SMEs and 121 startups supported, delivering £320m of growth, 160 new innovations and 2,500 jobs. Not theory. Not box-ticking. Tangible impact.
It hasn’t happened in isolation. Backed by Metro Mayor Steve Rotheram’s bold commitment to invest 5% of the region’s GVA into R&D by 2030, the VEC has catalysed a broader movement, catching the attention of Whitehall and the FT as an exemplar of innovation and collaboration in practice. Novel unites private businesses, universities, local authorities and civic leaders around a place-based model of innovation leadership focusing on mature, established SMEs.
What next?
And if Liverpool can do it, why can’t the rest of the UK?
The uncomfortable truth is that most universities remain passive, disconnected from the urgent needs of their regional economies. They cling to outdated models while the UK slides down global R&D rankings. Businesses are crying out for deep, applied collaboration rather than consultancy reports. Real engineering, real science and real venturing.
It’s time universities remembered their founding purpose: To create prosperity, fuel industry and drive innovation. To dare to venture.
Because if they don’t, others will. And Britain can’t afford another lost decade of stagnation.
