There is a lack of high quality engineers entering industry. In addition to this, the rate of producing new generations of engineers is failing to cope with the changing demands of employment. Further development of the relationship between higher education institutions and industry is needed to avoid crucial impacts on the productivity and creativity of businesses. Sponsoring students and degree programmes is a successful example of university-industry collaboration which can be an effective way of ensuring that sufficient graduates with the right knowledge and skills enter industry. It enables employers to maintain a close relationship with students and university departments as they will be involved in the education and initial training of engineers. The results and methodology of a research project being undertaken to determine the influence of industrial sponsorship on students, academia and employers is presented. The results of a series of students, academics, and employers’ surveys are also presented. Conclusions are drawn on the outcomes of sponsorship for academics, employers and students.