PurposeThe purpose of this paper is to explore the nature and impact of higher education institution (HEI) in a distributed, open innovation system using a survey of some 600 firms in the UK.Design/methodology/approachPrimary data are used from a postal questionnaire survey of 600 firms across three UK regions: Wales, the North West and the East of England.FindingsThe analysis reveals significant differences in firm collaboration with HEIs across the UK and the value and impact that such collaborations have on firm development. The nature and effects of such collaboration vary significantly between the type of firm involved and their location and the analysis investigates this in relation to various aspects of innovative activity and firm performance.Originality/valueAlthough much of the nature and effects of such collaboration are as one would expect, some of the results are counter‐intuitive and highlight the care we should place on assessing the role of universities and other HEIs in open innovation systems.