The University Companies Association (UNICO) has published its third annual survey of UK university commercialisation activities. The survey provided UK institutions with benchmarks for the commercialisation of academic research and enables direct comparison with the US and Canada.
Survey results covering the period from August 2002 to July 2003 give a positive message about University technology transfer in the UK, highlighting encouraging figures such as the increase in generated licensing income from £22.4m to over £31.3m. Invention disclosures, licensing activity and patent applications and patents issued were also all on the increase in 2003.
The number of spin-out companies remained relatively constant with an average (per institution) of two companies formed during 2003. Over half of these new companies have raised external investment finance. A total of 151 new spinout companies were formed by survey respondents throughout 2003, compared with 158 in 2002. A significant proportion of which are part or fully owned by the institutions that helped create them. However, these figures pre-date the introduction of Part 7, Income Tax Earnings and Pensions Act 2003 (Schedule 22) and the effect of this legislation has yet to come to the fore. The legislation has introduced changes designed to close tax loopholes. Academic founder shares in spin-out companies had traditionally been given at par value and gains had been treated as capital gains payable on realisation. The Act made these shares employment-related benefits which are income taxable at time of receipt and founder academics are at risk of having to pay income tax on shares issued before having the cash with which to pay. UNICO has been working with the Inland Revenue to clarify the tax position for academic founders and Gordon Brown in his pre-budget report has addressed this issue – see VC news this issue.
A key finding of the survey concludes that while some UK universities are not engaged in the commercialisation of intellectual property, others are international benchmarks of excellence and commit significant resource to this activity.
“More investment ready ventures are indicative of the professionalism of commercialisation activity and the productive links that have been forged with the investment community,” says Dr Nick Bourne, UNICO’s chairman and deputy director of Cardiff University’s research and commercial division. While acknowledging the value of initiatives such as the University Challenge Seed Funds, he added that the availability of a permanent stream of funding would enable universities to adopt a more strategic approach and reap the longer term benefits of technology transfer.
Data for the survey was collected from 75 institutions including 25 of the top 30 UK universities, based on research income.