Over recent years governments have been placing more emphasis on innovation as a source of national competitiveness. Governments now assess their investments across many areas in terms of the contribution that such investments make to increasing innovation. This has been especially significant for education and in particular for the development of policies for universities because universities perform research as well as provide learning. The measures governments use to assess the performance of universities frequently include indicators of research-related engagement with business, or of the level of patenting, licensing and start ups. Assessing university performance by focusing on just some of the direct services or outputs that universities provide, or on narrow aspects of their individual services, seriously underestimates the contributions that universities make. Appended are: (1) The health innovation system; (2) Sources of ideas or information for business innovation; (3) Innovation-Active Businesses; and (4) Carnegie Classification of Institutions of Higher Education in the USA. (Contains 33 footnotes.)