New data has revealed a stagnation in the UK’s innovation landscape, with the financial value of collaborations between universities and businesses declining over the past year.

According to the latest Higher Education Business and Community Interaction (HE-BCI) survey for the 2024–25 academic year, total knowledge exchange income reached £6.1 billion. While significant, this represents a 1.4% decline in real terms, reversing the modest growth recorded in the previous period.

The downturn was more pronounced in direct commercial activity. Income from university-business collaborations—specifically consultancy, contracts, and facilities services—fell by 3.7% in real terms. The total number of professional interactions also saw a slight dip of 0.5% to 81,094.

Despite the cooling of general partnerships, the "spinout" sector—where university research is turned into private companies—remained resilient. The number of active spinouts surviving at least three years rose by 5.3% to 1,776, while 141 new spinouts secured funding during the year.

This national trend carries significant weight for the North of England, where research hubs in cities such as Manchester, Leeds, Sheffield, and Newcastle rely heavily on these partnerships to drive regional regeneration.

Dr Joe Marshall, Chief Executive of the National Centre for Universities and Business (NCUB), described the findings as a "wake-up call" linked to the wider financial instability within the higher education sector.

Dr Marshall said: “Today's data should serve as a wake-up call. The fragile recovery we saw last year has not been sustained. This slowdown cannot be separated from the financial pressures facing universities — when institutions are forced to cut the people and programmes that underpin collaboration, partnerships inevitably suffer. The UK cannot afford for this to become the new norm.”

He added: “Despite these declines, university-business collaboration remains ones of the UK’s core competitive strengths. The continued growth in successful spinouts demonstrates the global impact of UK research and entrepreneurship. But strategy without investment is not delivery. Stabilising university finances is not a sectoral concern –it is fundamental to national competitiveness. Without action, we risk undermining years of progress in building effective partnerships between universities and business, and with it, the UK’s position as a leading innovation economy.”