One of the characteristics of a financially healthy institution identified by Mike Shattock in Managing Successful Universities (OU Press – 2003) is the ability to generate non-state funding. A diversified funding base can both help to cover shortfalls in state funding and provide support for innovation and development – “seed corn” funding. Institutions which have ambitions to remain successful will have to develop strategies to harness the potential of “third stream” or commercial income. It is, however, important not to become over-reliant on income streams which might dry up.
A growing number of institutions now describe themselves as ‘business-facing’, meaning gearing their work increasingly to the needs of the local economy.
Most of the funding councils encourage the development of strategies for “third leg” or enterprise activities. Such a strategy should be considered and approved by the governing body. One key aspect will relate to governance structures. If a company or companies need to be set up a board of directors will be required. The directors will have to understand their responsibilities under company law, and clear reporting lines must be in place.
Commercialisation strategies should address the structures required to deliver, manage and monitor work in this area, resourcing and may also need to cover:
Commercialisation strategies will also set out the projects or activities to be supported by commercial income streams, such as student bursaries or scholarships, staff development work, enhancing facilities or specific capital projects.
See also Chapter 5 of Getting to Grips with Research and Knowledge Transfer
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