"University Spinouts: an imperfect ecosystem" by Anderson Law and Linstock Communications was published earlier this month. It uses data on public and private investment in spin-outs combined with the opinion and experienced views of many PraxisAuril members to present another side of the university spin-out story. Its conclusion that university spin-outs are"a real success story" and"are thriving" are welcome ones. But the research also points to a greater need to understand the conditions for creating and sustaining spin-outs. As such, it is a welcome addition to ongoing discussions in our community, including many of those to be had at our annual conference and in response to the KEF consultation.
PraxisAuril supports the formation of university spin-outs through its New Venture Creation training courses. Booking is open now for NVC1 and NVC2 in the autumn. See our Training Pages for details.
There is much to celebrate within the UK’s university spinout sector. But could it do more? It is a timely question, given that the start of April marked the official launch of UK Research and Innovation (UKRI), an amalgamation of the seven research councils, Innovate UK and Research England. With this, UK universities’ ability to turn research into innovation is once again under the spotlight.
In many ways, spinouts are a real success story. Since the mid-1980s, UK universities have been allowed to commercialise the results of their research. Over the last 30 years, many universities have gained experience of managing their knowledge transfer activities, either in-house or through a subsidiary company, or in some cases in partnership with external companies. An important part of this activity has been setting up spinout companies and securing initial funding for their activities. Some highly-successful UK and international companies can trace their origins to UK university research.
In 2014, the commercialisation of university research received a further boost when the Research Excellence Framework (REF) introduced a requirement that university research should show “impact”. However, just four years later, research funding is facing a crossroads. Uncertainty over Brexit has left the future of many funding streams far from secure. At the same time, the government’s industrial strategy recognises the need for UKRI to benchmark how well universities commercialise the results of their research.
The time feels right, then, for scrutiny of how the university spinouts system works, in particular, the relationship between the sources of funding for academic research, and successful commercialisation of the research. It is somewhat surprising that nobody has really done this before. So, a few months ago, Anderson Law commissioned research into precisely this. The findings, summarised in our newly published report, mark the first real insight into how innovation from UK universities is being funded and how this leads to the creation of spinouts.
Overall, it’s a positive picture. Spinouts from UK universities are thriving; nine out of ten spinouts which have received private investment between 2011 and 2015 have survived. Among start-ups on the whole, only two in ten survive beyond their fifth year. We also found that the number of spinouts from UK universities is on the increase and, with this, so is the amount of investment into them from private investors. But we believe more should be done.
As UKRI begins its work, we expect that the commercialisation of research from UK universities will be a priority. We also think the government has a role to play too, giving Universities a clear policy steer on their role as innovators, as part of a national strategy for the commercialisation of research from UK universities.
A better-defined strategy for commercialising university research will also go a long way towards demonstrating the value of universities to the UK, and the economic and societal impact they can have. But there is a real need to get this right, now. The uncertainty over Brexit adds extra urgency. If the UK is to remain competitive on the international stage over the next decade, it is essential we understand what we are good at, where we are helping ideas develop into successful entities, and back those systems. If we do not, the ultimate price could be a UK struggling to produce world-beating start-ups and SMEs ten years from now – which would have real consequences for our economic prospects.
This article originally appeared on 6th April 2018 at www.IPDraughts.com and is reposted by permission of the author.
Related links:
HE-BCI data 2016/17 released (April 2018)
Spinouts Quarterly journal released (March 2018)
PraxisAuril response to 'Financing Growth in Innovative Firms' (Sept 2017)
PraxisUnico and AURIL respond to the Industrial Strategy Green Paper (April 2017)