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How Knowledge Transfer Networks can help to improve the UK?s innovation performance

What is Knowledge transfer?

Within a modern, knowledge-driven economy, knowledge transfer is about transferring good ideas, research results and skills between universities, other research organisations, business and the wider community to enable innovative new products and services to be developed.

Many businesses may not make the most of their potential for innovation and often this can be attributed to a lack of awareness and access to the latest technological knowledge and breakthroughs. Networking is a well-tested method of finding out what is happening in an organisation, sector, country or even the world. Knowledge Transfer Networks provide businesses and members of business organisations (for example, trade associations), research and technological organisations with the opportunity to network and share mutually beneficial information.

A Knowledge Transfer Network is a single national over-arching network in a specific field of technology or business application. It brings together a variety of organisations, such as businesses (suppliers and customers), universities, research and technology organisations, the finance community and other intermediaries that will provide a range of activities and initiatives to enable the exchange of knowledge and stimulation of innovation among this community.

The objective of a Knowledge Transfer Network is to improve the UK?s innovation performance by increasing the breadth and depth of the knowledge transfer of technology into UK-based businesses and by accelerating the rate at which this process occurs. The network must, throughout its lifetime, actively contribute and remain aligned to the development of a national Technology Strategy.

Knowledge Transfer Networks (KTNs) have been set up by government, industry and academia to facilitate the transfer of knowledge and experience between industry and the science base. They bring together diverse organisations and provide activities and initiatives that promote the exchange of knowledge and the stimulation of innovation in these communities.

KTNs encourage the active participation of all networks operating in their areas and aim to establish connections with networks in other fields that have common interests. The first KTNs were set up in 2005 and the network continues to grow. They are active in sectors, technologies and market-based areas and they interact strongly with the government?s Technology Programme and overall technology strategy. KTNs also interact with each other, creating strong links, to maximise the benefits to the UK from successful knowledge transfer across technology boundaries.

Because innovation is a complex process, success relies on the coming together of a variety of players, such as suppliers, customers, other firms, universities, research and technology organisations and other intermediaries. Together, these players form part of the knowledge transfer system. Knowledge Transfer Networks play a vital role in making the necessary connections between these players, helping industry to access knowledge and information central to innovation growth.

There needs to be an effective two-way link between research and the market


The specific aims of a Knowledge Transfer Network include the following:

The Networks are required to develop strong links with each other to maximise the benefits to the UK from effective knowledge transfer across technology boundaries.

To enable the effective ?Networking of Networks?, networks need to use the web-based platform provided by DTI to facilitate effective networking between each of the individual Networks.

Knowledge Transfer Network Communities

Knowledge Transfer Networks have already been established in the following areas:

Knowledge Transfer Partnerships

Knowledge Transfer Partnerships aim to strengthen the competitiveness and wealth creation of the UK by the stimulation of innovation in business through collaborative partnerships with the UK knowledge base. Through Knowledge Transfer Partnerships, staff from research organisations are gaining ideas and business support for further research and consultancies, as well as deepening collaborations with developing businesses


Research Organisations

Knowledge Transfer Partnerships can help Research and Technology Organisations and Research Institutes to extend their services to business customers, enhance their levels of industrially relevant research and develop their own staff. A government grant, plus the contribution from the company partner, fully covers a Research Organisation?s costs of participating in a Knowledge Transfer Partnership; the grant also includes a significant contribution to overhead costs.

For each graduate (known as a KTP Associate) engaged for two years on a programme, no matter what the size of the company, the total funding available is around £94,000 in most cases and almost always in excess of £84,000. Through Knowledge Transfer Partnerships, research staff in RTOs and Research Institutes are able to:

KTNS help industry to access knowledge and information central to innovation growth

How are Partnerships funded?

Each Knowledge Transfer Partnership is part funded by a government grant to the Knowledge Base Partner. This contributes to the costs it incurs through participating in that particular Knowledge Transfer Partnership, while the balance of the costs directly attributable to a Knowledge Transfer Partnership Associate?s project is borne by the company partner.

What does the grant for a Knowledge Transfer Partnership and the company?s contribution pay for?

The largest part of the costs of a Knowledge Transfer Partnership is the employment costs of one or more KTP Associates and the cost of staff from the Knowledge Base Partner who are directly involved in the Partnership. The remainder includes provision for equipment and travel costs, the Knowledge Base Partner?s indirect and administrative costs and costs associated with the personal and professional development of the KTP Associate(s).

How is the amount of a grant calculated?

The amount of a grant to the Knowledge Base Partner and, therefore, the amount the company has to pay, is determined almost entirely by the number of KTP Associates to be employed, the length of their project, whether the company is, or is part of, a small or medium-sized enterprise and, in some cases, for example in London, the location of the company partner and/or the Knowledge Base Partner, and whether the company has collaborated on a TCS, CBP or Knowledge Transfer Partnership in recent years.

The financial arrangements appropriate to any potential Knowledge Transfer Partnership should be discussed with a KTP adviser.

How much should a company expect to contribute?

The budget for any individual Knowledge Transfer Partnership, and a company?s contribution to it, depends on the details of the specific Partnership. However, annual company contributions per KTP Associate employed could be at around the following levels for a first Knowledge Transfer Partnership:

* Where a company is part of a group, the company size is determined by the number of employees in the group as a whole. There are also balance sheet and turnover criteria.

What other costs are involved for companies?

Companies will need to cover the full overhead costs of their own participation in a Knowledge Transfer Partnership. These include management and supervisory effort, additional materials, capital equipment and accommodation. They are also expected to contribute to the cost of equipment purchased specifically for the use of a KTP Associate during their project work above the contribution provided for in the grant. Companies should also be prepared to enhance the salaries of KTP Associates to reflect pay levels in their organisation, business sector and location. Companies are invoiced by their Knowledge Base Partners, normally quarterly.

What benefits against costs can a company expect?

Based on the experience of TCS as reported by companies on successful completion of their TCS programmes in 2001/02, for a direct financial contribution of around £32,000 over two years, the average benefits that a company can expect from a Knowledge Transfer Partnership include a one-off profit before tax of £47,000 and recurring annual profits before tax of £156,000.

Business performance outputs vary considerably from case to case, which is understandable given the rich variety of TCS programmes. The most widely reported effect was an increase in the overall value of the company (52%), closely followed by increased overall sales (46%), sales in existing domestic markets (41%) and increased profitability (42%).

If expectations are examined, the latter three are all expected to deliver benefits to a significant percentage of company partners in the future. This suggests that these performance effects take some considerable time to emerge after the completion of the programme, whereas the increase in the value of the company and the assets are more likely to be short-term benefits delivered during the course of the programme or shortly afterwards.