Universities in the UK are spinning out more companies than ever before, according to a new survey carried out by the University Companies Association (UNICO) and Nottingham University Business School (NUBS). David Catton, chairman of UNICO, said the increase was largely due to the government’s drive to encourage universities to capitalise on their intellectual assets and get a financial return from their research pounds.
According to the Annual UNICO-NUBS Survey of University Commercialisation Activities, last year the UK’s universities created 175 new companies or 31 per cent of the 554 spinouts formed in the last five years. Of these companies 339 (61.2 per cent) were created with external equity finance and 139 (24.5 per cent) secured funding from venture capital firms.
The government’s University Challenge Fund initiative has almost certainly played a role in stimulating the growth of venture-backed spinouts.
Research found that much of the spinout activity is concentrated in a limited number of universities. While a quarter (26.7 per cent) of institutions created more than 10 companies each, another 25.3 per cent did not produce any spinouts last year. Catton commented: “The survey has highlighted a number of positive messages on the state of technology transfer in the UK – attitudes to commercial activities are changing within academia and there are a variety of effective and efficient mechanisms in place for unlocking commercial and social benefits of UK research. Moreover, universities are inducing investment into the technology sector.”
Although the survey’s findings are mainly positive it also highlights some of the factors holding back the commercialisation of university research. “A significant number of universities have yet to establish clear policies to enable spin-out activity. Providing university staff with the time, the resources and the incentives to engage in spin-out activity are vital if the sector is to achieve substantial growth in the coming years,” said Professor Mike Wright of NUBS and co-author of the report. Other impediments include the limited availability of pre-seed finance for establishing proof of market and a lack of rewards to attract commercial management into spinouts.
The report also enables direct comparison to US and Canadian performance and found that, relative to expenditure on research, company formation is higher in the UK. However, the UK lags behind in terms of the number of patents issued, the number of licenses granted and the income they earn (in the UK 483 licenses earned GBP16.2 million last year).
The survey is the first of what will become annual benchmarking exercise.
It achieved an 80 per cent response rate from the 122 institutions it was sent to. The participants account for 84.9 per cent (GBP1.9 billion) of the total amount spent on research in UK universities last year. The report was financed by the Economic and Social Research Council with the support of Grant Thornton.