How colleges can create business innovation hubs

FE is to get an extra £1.8bn – it should be used to strengthen links between colleges and industry, says David Hughes

College investment: 'We need SME innovation hubs in every community'

The election of new Conservative MPs in Midlands and northern seats was not one of the expected outcomes of the general election, so it's little surprise that commentators have started to speculate about how it will impact on the new government.

Tes’ own Stephen Exley was quick off the blocks when he asked "Could colleges benefit from Tories' northern success?" and equally rapid was a well-argued answer from Oldham College principal Alun Francis, "Why colleges should be at the heart of local economies".

Both Stephen and Alun are on to something important, but perhaps the most important question involves turning this on its head: can the Tories get re-elected in those seats without investing in colleges? Or, to make the question less political perhaps, can the Tories meet their voters' needs without investing in colleges?


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As both Stephen and Alun eloquently point out, colleges are key anchor organisations in all the seats in question. They are often in the top four public sector employers (local authority, NHS and police are the other three) and in many towns they will be in the top 10 of all employers by number of staff (in Oldham, they come equal eighth). Investing more in colleges will mean more good jobs and, if funding rates are increased as they need to be, then those jobs will be better paid as well.

Capital investment in colleges

The £1.8bn capital investment in colleges promised in the Tory manifesto will generate local jobs and make a big impact on communities across the North and Midlands – particularly if construction companies embrace apprenticeships and local recruitment in their delivery.

Indeed, it will be no surprise to anyone to see lots of MPs and ministers donning hard hats and hi-viz to open new college buildings in the next few years. What better way for a government to show it is investing in the left-behind communities?

All well and good, but as Alun pointed out, we need more than just great education and skills opportunities in towns like Oldham. Without economic growth driving new job creation, the better-educated often have no alternative than to move out to find good employment. So, as well as improved funding rates, capital investment and a new relationship with colleges, the government needs to go further. Put simply, it needs to work with colleges to help generate jobs in those communities alongside the education, skills and training opportunities that colleges can provide.

College innovation with local businesses

This path is well-trodden in the university world and in other countries, so we don’t even need to experiment. What’s needed is a stronger linkage between post-16 education policy and the industrial strategy and a simple leap of thinking in the Department for Business, Energy and Industrial Strategy and the Department for Education to widen their view of the role of colleges.

For universities, there is a £200 million fund, the Higher Education Innovation Fund, which supports knowledge exchange with businesses. Much of this is cutting-edge research and innovation, supporting businesses to adopt new technologies and commercialise research. With the hundreds of small- and medium-sized enterprises (SMEs) relationships that each college has, imagine how much basic technology transfer they could enable, given the same sort of investment. We’re not talking about the next graphene here, but more basic, tried and tested technologies that many small SMEs are unaware of or unable to adopt because of the lack of advice, support and skilled staff.

We only need to look to Canada, where the government invests heavily in colleges and institutes to support innovation and technology adoption. College students and their lecturers there are undertaking applied research projects that refine and adapt products, services, technologies and processes. Capital investment supports state-of-the-art facilities for local businesses to learn about and learn from. The impact is clear and the Canadian government has extended the programme on the back of strong evaluations.

Closer to home, in Northern Ireland the government funds Innovation Vouchers for SMEs to work with their college or university to access advice and support on similar lines. Colleges in England are not funded to carry out this work, but many of them provide the same expert advice and business support.

Thousands of SMEs could benefit from colleges in their communities offering bespoke business change and innovation support, backed up by skills training for their workforces. We know that better skills do not always drive improved productivity; better skills are an enabler, it is necessary but not sufficient. Aligning the innovation and change with skills could help to transform local economies.

The opportunity is there. The government’s £1.8 billion capital investment in colleges, backed by modest revenue support, could provide local SME innovation hubs in every community. Working in partnership with the local authority and key business organisations like the Chamber of Commerce, the college hub could offer employers and people both the sense that they are being invested in and the reality. Just the ticket to develop the jobs which will help the forgotten towns thrive. 

David Hughes is chief executive of the Association of Colleges

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