A University of Bath professor is warning that universities are failing to get an adequate financial return on their research and that in the UK in particular this is accompanied by a failure to fully exploit that research to the advantage of the British economy.

Professor John Hudson, from the Department of Economics, is making the warning following the publication of his paper ‘Into the Valley of Death: Research and innovation’ in Drug Discovery Today.

Professor Hudson’s research examined the interaction between the pharma industry and academia across the UK, US and Europe, and his paper outlines that this cooperation is still far from perfect.

The paper has found that too much valuable research in drug development is lost in a ‘Valley of Death’ - a phase between the completion of basic research and successful innovation - and never reaches market.

However, he does acknowledge that the situation is changing, with the pharma industry becoming much more involved with universities at an early stage of their research.

The paper outlines that a move away from linear models of innovation policy has led the pharmaceutical industry to finance and engage with academia at an early stage of research, where traditionally pharmaceutical companies preferred to keep this work in-house.

Professor Hudson said: “Governments are encouraging the pharma industry and universities to work together as they seek to bring basic drug development research to market.”

However, through assessing a number of case studies from across the UK, US and Europe, Professor Hudson found that while changes are taking place, research funders often still operate using older, linear innovation models and don’t consider the commercialisation of outcomes until too late in the process, often when a research project in near to completion.

Professor Hudson said: “While this situation is negative for drug development, there is an alternative, more positive scenario slowly emerging. We’re starting to see industry, academia, research funders and even central government cooperating on commercialisation planning at the start of a research project.

“The process of commercialising academic research in drug development is changing for the better in many ways. There is greater collaboration at the right time, and interestingly many universities are themselves taking new drugs further down the innovation chain through spin-out companies.

“All of these changes should, over time, facilitate the more efficient development of new drugs, and may also help with the provision of venture capital and other funding for bringing pharmaceutical research to market.”

However, the paper states that it is not obvious that these changes will improve upon the UK’s universities’ poor record in exploiting their own research to financial advantage. In part this is because they do not have the resources to bargain with big pharma on an equal footing and in part because such exploitation is contrary to their traditional emphasis on disseminating knowledge as widely and freely as possible.

However the universities’ loss has been industry’s gain, and where these firms are domestic then the county’s gain too.

Professor Hudson said: “Public money is being used not just to promote research per se but also increasingly as a tool of industrial and economic policy to provide the cutting edge products and services which will enable firms to compete in the global economy. This is happening throughout the EU and indeed the USA too.

“But the tool is not finely honed. It is also often the case that the firms ultimately benefitting from the research are foreign-based multinationals and, hence, the boost is to other economies. The UK in particular is failing to fully exploit its world class universities and research to its own economic advantage.”

Professor Hudson’s full paper can be accessed through the University of Bath repository Opus.