A new national review has warned that collaboration between universities and industry is slowing after decades of expansion, with potential implications for digital construction innovation and the wider built environment. The State of the Relationship 2025 report from the National Centre for Universities and Business (NCUB) highlights declining business investment, contracting corporate partnerships, and financial pressures across higher education. For a sector that relies on research translation, emerging technology development, and advanced digital skills, these trends signal risks for long-term competitiveness.
Generate new knowledge
The report shows that the UK research base continues to generate new knowledge with value for construction technology, data-driven design, offsite manufacturing, and digital twins. However, companies are investing less in converting those ideas into products, services and commercial impact. Collaboration income has fallen for the second consecutive year, large corporate partnerships have not recovered to pre-pandemic levels, and international industry funding is in decline. For the digital construction sector—where progress depends on strong links between universities and industry stakeholders—this slowdown raises concerns for future innovation pipelines.
Alongside these challenges, the report warns that the UK’s traditional strengths in openness, research excellence, and knowledge exchange are increasingly overshadowed by weaknesses in business-led R&D, the utilisation of digital skills, and technology translation. These gaps pose a risk for sectors adopting advanced construction technologies, including robotics, AI-enabled project delivery, and integrated data platforms.
Mixed performances
Despite these pressures, the headline statistics show mixed performance. In 2023/24, 81,499 interactions between universities and businesses were recorded, up 6.4% on the previous year. Engagement with small and medium-sized enterprises reached 56,755 interactions, an increase of 8.7%. Interactions with large businesses rose by 1.3% to 24,744 engagements. Yet total income from business collaboration fell by 2.1% in real terms, returning annual income to £1.34bn. For digital construction firms, this divergence between activity levels and investment levels suggests that while collaboration remains active, its financial strength is weakening.
Critical period for economic growth
Dr Joe Marshall, Chief Executive of NCUB, said the UK is entering a critical period for economic growth. He noted that research excellence and scientific talent are national strengths, but the UK is ‘starting to slip back’ at a time when more value needs to be extracted from its research base. While universities continue to generate spinouts, research breakthroughs, and digital construction technologies, the system is becoming less able to secure industrial co-investment and pull-through capacity. Marshall highlighted declining industry R&D investment, reduced licensing income, and falling international funding as indicators that the innovation system is under strain.
He added that collaboration remains a significant national asset, supported by a resilient network of institutions and businesses. The UK’s spinout ecosystem continues to grow, and the total number of interactions is rising. However, he warned that the underlying foundations that enable collaboration, financial resilience, skilled personnel, and shared strategic priorities are now under pressure.
Importance of stable investment
For the digital construction sector, these findings point to the importance of stable long-term investment in construction R&D, digital built environment skills, and cross-sector research partnerships. A slowdown in collaboration risks weakening progress in areas such as building information modelling (BIM) development, AI-supported construction planning, modern methods of construction, and data-driven asset management. These areas rely heavily on strong university–industry partnerships to advance digital construction innovation.
Marshall said the UK’s next phase of industrial strategy must focus on rebuilding capacity and restoring confidence across the innovation ecosystem. In construction, this includes improving incentives for business engagement, strengthening digital skills pathways, and creating a coherent policy environment that links research, industry and regional priorities. He pointed to early signs of progress from UK Research and Innovation, although the real test will be translating intent into delivery.
State of Relationship Report
The report also introduces NCUB’s first Global Benchmarking Framework, comparing UK collaboration performance with international peers. This framework is likely to be valuable for construction leaders assessing how the UK is positioned within global digital construction markets.
State of the Relationship 2025 remains the UK’s most comprehensive evidence base on university, business collaboration, covering 25 indicators across research, innovation and skills. For digital construction firms seeking to strengthen their research partnerships, the findings underline the need for sustained commitment to collaboration, investment, and long-term R&D strategy.
As the construction industry continues its shift towards digital technologies, the strength of the UK’s university–industry relationships will remain central to delivering innovation, productivity gains, and competitive advantage. The report suggests that without renewed focus and investment, the UK risks losing ground to countries advancing more rapidly in digital construction capability.
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