Researcher Professor Mike Wright points out: "Universities are tending to focus on creating businesses rather than creating wealth. The proportion of university spin-out companies (USOs) that succeed is tiny. Unless universities are prepared to back their spin-outs with appropriate resources, most will continue to fail."
The poor performance of UK university knowledge transfer activities including USOs was highlighted by last year's Lambert Report on university-business collaboration. Recent Government policy has encouraged universities to commercialise their intellectual property by launching entrepreneurial spin-outs. But, as the Lambert Report points out, while scope exists for wealth generation from the commercialisation of research, in practice there is plenty of room for improvement.
"The Lambert Report and other commentators have observed that there is a distinction between the creation of spin-outs per se and the creation of spin-outs that create significant wealth," Professor Wright argues.
"Few spin-outs in the UK, for example, have been sold or floated on a stock market," he continues. And, while venture capitalists expect 10-15 per cent of the new businesses they back to generate wealth, the proportion of successful USOs is currently much lower.
The success rate could be greatly increased, Professor Wright insists, if universities were more aware of the factors and processes which promote successful spin-out activity. Following a study of technology transfer in 98 leading UK academic institutions, the research team identified five phases as central to the development of a spin-out company (research phase, opportunity phase, pre-organization phase, re-orientation phase and sustainable high-growth phase). "It is evident that each venture needs to pass through the previous phase in order to progress to the next stage of development," Professor Wright explains. "But progress is not automatic and can be halted by deficiencies in social capital, other resource weaknesses and inadequate internal capabilities."
The study identifies impediments to spin-out activity including:
The effectiveness of the spin-out process might be enhanced, say the researchers, in the following ways:
"Our research clearly indicates that successful spin-out activity is not about the quantity of ventures initiated but the commitment shown by universities to achieving successful technology transfer outcomes. At present there is a mismatch between the aims espoused and universities' ability to deliver. Universities must consider the skills, resources and networks they need and begin to put these in place," Professor Wright concludes.
FOR FURTHER INFORMATION, PLEASE CONTACT: Professor Mike Wright, on 44-133-287-4045 or Email: mike.wright@nottingham.ac.uk
Or Iain Stewart, Lesley Lilley or Becky Gammon at ESRC on 01793 413032/413119/413122