Universities lead the way in developing UK start-up firms
Hi-tech firms created by UK university research and development units generate jobs and growth
By Richard Wachman, The Guardian
|Look no further than Britain's universities for business success stories at a time when the wider commercial world is reeling from recession.|
Last week it was announced that Edinburgh University's research and innovation unit had created 40 new firms over the last year, up 40% on the previous 12 months. In the past five years, it has formed 131 companies, employing 300 staff.
The public sector faces unprecedented retrenchment, so the government is looking to private business to pick up the slack, but it's always a struggle for start-up firms to attract funds. Banks are notoriously reluctant to provide risk capital, so it often falls to wealthy individuals to provide the first £100,000 or so that can make all the difference.
If universities are able to convince outsiders there is a market for their ideas, "incubator" firms attached to colleges will attract interest from individual "angels" or specialist City funds. Then, new firms will have a chance to grow.
Over the past 20 years, universities have become more commercially minded, and projects overseen by academics and students are nurtured by business experts, employed by college principals.
Universities take stakes in new ventures either by acquiring equity or via licensing arrangements that allow colleges to own intellectual property rights.
Companies created by Edinburgh University are at the cutting edge on innovation, such as NGenTec, which makes lightweight generators for wind turbines. It has received more than £800,000 from the Department of Energy and Climate Change and is now seeking more funds from venture capitalists. Another Edinburgh spin-out is the hugely successful Wolfson Microelectronics, whose chips are in many of the new electronic products that we all carry around, for example Apple's iPod.
Derek Waddell, chief executive of Edinburgh's research and development arm, believes that "fledgeling operations" developed on the campus have the potential to become global players, and help to generate "economic growth and new jobs."
Those words will be music to the ears of ministers who have been criticised by unions and Labour for making rosy assumptions about the ability of the private sector to make up for lost jobs in the public arena.
The government-sponsored Technology Strategy Board says "it's vital there is a knowledge exchange between academics and people from the business world. Good ideas need to be commercially challenged, and universities are becoming an increasingly important forum where the two sides can meet to discuss projects." The TSB pumps about £10m annually into university start-ups.
Research and business development units, often specialising in technology and "green" industries, are these days attached to most leading colleges. One of the best-known is Imperial Innovations, part of Imperial College in London. It started life as a wholly-owned subsidiary of the university, but in 2005, Imperial Innovations floated on AIM, the stockmarket for smaller companies. Imperial College retains a 52% stake in the offshoot, which invests in 83 companies, mostly spawned from the university.
It will be difficult to transform the nation's ample stock of tiny, hi-tech companies into global players without substantial help from government.Everyone agrees about the need for universities to play a major role in developing businesses of the future. But development is an expensive undertaking and requires serious commitment from those on high.
Richard Wachman, The Guardian [ ]
Britain's universities, Edinburgh University, intellectual property rights, NGenTec, Department of Energy and Climate Change, Wolfson Microelectronics, Imperial College in London, Imperial Innovations