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The government, so rumour has it, is considering - in an extraordinary demonstration of cutting off noses to spite faces - reducing or even abolishing HEIF as a contribution to the ?450m cuts in funding needed from BIS. The logic for reducing or abolishing HEIF funding seems to consist of two assertions - the first, that near market transactions don't need government funding because there is no market failure any longer (HEIF, this argument says, itself has seen to that) and the second, that other investments (Catapults, Innovate UK, NCUB) provide the infrastructure collectively which therefore doesn't need to be provided through HEIF at the institutional level. Both are wrong. The first argument is fundamentally flawed on two counts. Universities do not, in fact, sell knowledge exchange services but work at translating knowhow and research knowledge into resources they can sell. 'Translation' happens in a market failure context, and happens nearest to the point of research or knowhow generation - inside the institution, preferably inside the academic department or research centre. If the government conceives of this translation as being no more than a university, like a business, 'having an R&D programme', it is wrong: government has placed so many mandates on HE that academics struggle to stay the course with translation work, even in an era of reward for 'impact'. Having sold the line to the rest of the community (business and public) that universities are 'useful' first and of longer social benefit only secondarily, the government may now be steering a course toward abandoning higher value, strategically vital, translation resulting from months of solid work on both sides to achieve it for, instead, quick wins - more CPD, more EU projects, more IP licensing to fill the gap in funding. The second argument is even weaker. It supposes that the recent funding of national machinery has been a success (when without the local translation machinery, precisely nothing would have been possible), and that while the 'no market failure, no funding' argument seems to the government to hold at the level of individual institutions, it miraculously does hold at the level of national machinery. It supposes, in short, that aggregators of activity actually generate it. They do not. Above all, the government has to understand what happens with HEIF funding. It is, in effect, an investment and a loan. Put ?1 of tax payers money into a university and get ?6 back doesn't sound like a dreadful deal - particularly when we're talking about work of strategic importance for Britain's knowledge economy future. In a period of such low growth that even capital updating for technical change isn't taking place, that sounds significantly better than many other public investments being funded - three times as much as the return projected, for instance, for the ?59bn to be invested in HS2. Moreover that 600% return is realised, largely, in year. And that return only takes into account the benefit recieved, not the wider social benefit generated - some of which will never be monetized, but will be vital for our society and, yes, for our economy.