In her report, commissioned by the Department for Business, Innovation and Skills (BIS) and compiled after regional meetings, workshops and over 210 written submissions of evidence from both academia and industry, Dame Ann says the complexity of the existing support mechanisms creates frustration and confusion and means the UK is not reaping the full potential of its opportunity to connect businesses - both domestic and international - with the excellent research being done in UK universities.

There are two approaches to streamlining the system, according to Dame Ann: reducing the overall number of schemes or simplifying the interface between the user and the scheme. She recommends that government does both.

University technology transfer offices should also set targets focused on long-term gains to get the most from their intellectual property, including patents, rather than simply short-term financial gains. Attitudes are already changing in academia: the Research Excellence Framework now gives credit to the industrial impact of research, but this needs to go further. All academics should see and feel that their university supports and rewards industrial collaboration.

Dame Ann says: "We need a change of culture in our universities to support and encourage collaboration with industry. In the UK we can be a bit dismissive about research that actually has an application, but in reality such use-inspired research can be truly excellent. Access to industry projects was cited very positively by the researchers we consulted - they want to be working on these challenging and interesting projects with demonstrable impact and excellent career prospects."

There is a gap in the market to encourage academia-industry research partnerships to grow, says the review, particularly in helping existing short-term, project-based collaborations to evolve into longer term partnerships focused on use-inspired research. The review proposes a new ‘Awards for Collaborative Excellence’ scheme that would provide pump-priming funds on a competitive basis to enable strong relationships between individuals in academia and industry to develop into group collaborations with critical mass, substantial industry funding and a long-term horizon.

Dame Ann says such schemes would be likely to provide a good return on public investment. She points to an analysis conducted in 2013 of Innovate UK’s collaborative R&D funding, which found business impacts to be twice as high for projects with two or more academic partners, at £9.67 gross value added (GVA) per pound spent, compared to projects without academic partners, at £4.22 GVA per pound.

She says: "Solutions to everyday problems could be sitting in a lab right now, but without the conversation with industry they could be missed. It is vital that research students in appropriate disciplines spend some time in industry in order to get a new perspective on their own research, expand knowledge, and build relationships. They should also receive training, particularly around entrepreneurship."

People are at the heart of collaboration and the review recommends an incentive framework for universities and businesses to promote the transfer of ideas and people between business and academia. This includes supporting students to develop business awareness at an early stage of their research careers and recognising researchers who are successful collaborators in terms of career progression and research assessment.

Dame Ann says: "Business-university research collaboration is an important part of the innovation ecosystem, but innovation is a complex, non-linear activity. This has resulted in a complex policy support mechanism for innovation that presents a barrier to business engagement, especially for small businesses. Government needs to take a systems view of these mechanisms in order to try and simplify the process as much as possible.

"Government has a crucial role to play in creating the right conditions for effective collaboration between academia and industry. For example, HMRC and BIS could help by giving much clearer guidance to businesses on how best to use R&D tax credits and how these interplay with State Aid restrictions."

Universities and Science Minister Jo Johnson said:

“Fostering greater collaboration between businesses and universities will provide the new technology and higher-level skills that are vital to raising our productivity. I want to thank Dame Ann for producing this important report. We will consider the recommendations very carefully to ensure we make Britain the best place in Europe to innovate, patent new ideas and set up a business.”