The paper looks at the system of knowledge production and innovation in the UK from a Mode 2 perspective. It is critical of policy that focuses on science and engineering, on distinctions between basic and applied research, and that looks to notions of the entrepreneurial university. Extensive survey work of individual academics and UK firms reveals an extensive range of linkages between academics and industry, many personal rather than institutional. Formal mechanisms to link the university with the firm are rarely key initiators of connections. As key policy challenge is to design institutions and incentives that enhance the reflexive interplay between universities and external organisations and which build on the full range of interactions and disciplines.