The UK’s Industrial Strategy places renewed emphasis on sectors that rely on advanced skills, research capability and innovation, from advanced manufacturing and clean energy to digital technologies and life sciences. If these sectors are to scale, firms need access to the talent and technical capability that allow them to innovate, invest and compete.
Universities are an important part of that system. They provide skilled graduates, research expertise, specialist facilities and collaboration opportunities that many firms cannot replicate internally. This newly published report examines how university-business collaboration supports growth in practice, where barriers remain, and what more could be unlocked if the system worked more effectively.
Understanding university-business collaboration through business evidence
For this project, CBI Economics combined a survey of 610 businesses with ten in-depth interviews with firms and university stakeholders, supported by a review of existing evidence and data on university contribution, research activity and regional economic impact.
The evidence helps move the debate beyond whether universities matter for growth, and towards how businesses use university capability in practice. The analysis focuses in particular on Industrial Strategy sectors, where demand for advanced skills, research capability and innovation is especially pronounced. Of the businesses surveyed, 334 identified as operating in or contributing to at least one of these sectors.
What businesses told us
The findings point to a clear message: universities are already supporting business growth, but the system is not yet operating at its full potential.
Three findings stand out:
- University-business engagement is most embedded in parts of the economy that rely heavily on skills and innovation: Over 90% of large businesses surveyed report some form of engagement with universities, and engagement is consistently higher across Industrial Strategy sectors than outside them, reaching 90% in life sciences and 82% in clean energy industries
- Businesses report tangible benefits from engagement: Firms describe universities helping them access skilled graduates, specialist facilities, research expertise and innovation support. These benefits are particularly important in sectors where firms depend on advanced skills and R&D to develop products, adopt new technologies and remain competitive
- Access to university engagement is uneven, especially for smaller firms: Businesses report barriers around awareness, complexity, cost and timelines. The most common barriers are lack of awareness of relevant university contacts and difficulty identifying activity relevant to business needs, which can be particularly challenging for SMEs.
Talent is a binding constraint on growth
The report also highlights a wider challenge around access to talent. Demand for technical, digital and specialist skills is rising, with this pressure especially pronounced in the UK’s Industrial Strategy sectors.
Skills shortages are already affecting performance. Among firms experiencing a skills gap, over a third say shortages significantly constrain productivity, expansion into new markets and output or sales growth.
The risks are also sharper in Industrial Strategy sectors. If universities were less able to supply skilled graduates or collaborate with business, firms in these sectors are around three times more likely than firms outside them to reduce investment in R&D or innovation, around five times more likely to increase offshoring or outsourcing, and around seven times more likely to relocate activity outside the UK.
Turning evidence into action
The UK does not need to build a university-business growth system from scratch. Many of the ingredients are already there: world-class universities, innovative firms, strong research capability and examples of collaboration that deliver real commercial value.
The challenge is to make that system easier to access, better aligned with business needs and more consistent across firms, sectors and regions. That means strengthening talent pipelines, improving signposting and brokerage, supporting SMEs to engage, and ensuring funding and incentives better support collaboration.
For the UK’s Industrial Strategy to succeed, the task now is to unlock more of what universities and businesses can deliver together.
What this means for other organisations
While this work focuses on universities and growth, the approach has wider relevance. Across skills, innovation and place-based policy, organisations are increasingly being asked to show how their work translates into real economic outcomes.
Combining survey evidence, interviews and economic analysis can help:
- Quantify where constraints are affecting business activity
- Explain the mechanisms behind those constraints
- Identify how impacts vary across sectors, firm sizes and regions
- Build narratives that are credible with policymakers, stakeholders and the media.
For organisations facing complex policy or impact questions, the strongest evidence is often the evidence that reflects how the economy works in practice.
About CBI Economics
CBI Economics is the trusted economic consultancy of choice for organisations across many industries, with a proven track record of delivering robust and independent analysis that changes hearts and minds. We are one of several organisations that can help develop the evidence base necessary to support arguments for or against changes in policy. However, what is often missing in other organisations is a deep understanding of the government machinery, the policy landscape and the media environment.
The strength of our knowledge in these areas enables us to be market-leading when it comes to the impact of our work, be that framing the analysis such that it can be most effective in opening productive discussions with government departments or in creating media impact. At CBI Economics, we have the unique expertise which brings these skills together.
Find out more about our services and read our most recent work.
Get in touch about how CBI Economics can help your business >
