The UK’s flagship annual barometer of collaboration between universities and industry warns that progress is stalling, with signs of declining business investment, major corporate partnerships contracting, and growing financial strain across universities.

The State of the Relationship 2025 report, published by the National Centre for Universities and Business (NCUB), shows that while the UK’s world-class research base continues to generate new ideas, companies are investing less in turning those ideas into economic impact. Collaboration income has fallen for the second year in a row, major corporate partnerships have not recovered to pre-pandemic levels, and international industry funding continues to decline.

At the same time, the UK’s longstanding strength in research openness and collaborative excellence is increasingly offset by weaknesses in business-led R&D, advanced skills utilisation, and industrial translation, leaving the UK at risk of losing ground to global competitors.

Key findings include:

• 81,499 interactions between universities and businesses were recorded in 2023/24, an increase of 6.4% from the year before;

• An 8.7% rise in the number of university interactions with small-and-medium-sized enterprises (SMEs), reaching 56,755 engagements;

• A 1.3% increase in the number of large business and university interactions, bringing total engagements with large firms to 24,744;

• A 2.1% real-terms declined in total income from business collaboration (excluding CPD), returning overall business collaboration income to £1.34bn.

Dr Joe Marshall, Chief Executive of NCUB, said:

“The Budget last week underlined the need for the UK to drive economic growth. Our world class research base and scientific talent should be a national asset that gives us a clear advantage. Yet at the very moment we need to extract more value from this strength, we are starting to slip back."

"University and business collaboration is one of the most powerful drivers of growth, but total income from these partnerships has now declined for two years in a row. Engagement with large firms remains well below pre-2017 levels, and licensing income continues to fall. Business investment in R&D is stalling across the UK, international industry funding is dropping, and many universities are operating with less financial resilience. The result is a system that still excels at generating ideas, producing world class research, and creating high quality spinouts, but is becoming less able to secure the industry pull, co-investment and translational capacity needed for innovation to scale.”

He continued:

“Collaboration between universities and businesses remains one of the UK’s greatest assets. This year’s findings show a system that is resilient, adaptive and still delivering. The UK’s spinout ecosystem is stronger than ever, and the numbers of interactions between universities and businesses are rising. But beneath these positive signs lies a more fragile picture. Capacity on both sides is under strain with the total value reducing, and the foundations that make collaboration possible are facing increasing pressure.”

Marshall added:

“As the UK enters a new phase of industrial strategy, rebuilding capacity and restoring confidence must be national priorities. Collaboration is how missions turn into delivery, whether in manufacturing, clean energy, digital technologies, life sciences or the creative industries. Achieving this will require sustained investment, clearer incentives for business engagement, and a more coherent policy environment across government, funders and regions."

"Early moves from UK Research and Innovation suggest a shift in the right direction, but the real test will be translating these intentions into action. If we succeed, the UK can convert its research excellence into a genuine economy-wide advantage. If we fail, we risk losing ground to international competitors who are strengthening connections between research, skills and industry far more rapidly.”

About the report

NCUB’s State of the Relationship 2025 is the UK’s most comprehensive evidence base on university–business collaboration. Drawing on 25 indicators across research, innovation and skills, it analyses long-term trends, regional performance, and the evolving economic and policy landscape. This year introduces NCUB’s first Global Benchmarking Framework, positioning UK performance alongside international peers. You can read the full report here.