University tech spinoffs 'better'

By Gary Eason
Education editor, BBC News website

A loudspeaker thin enough to roll up, devised at Warwick

How good are UK universities at commercially exploiting their technical innovations?

Maybe it is a symptom of the British Disease: academics in the UK disagreeing about the success of their universities' technology transfers.

In practice it may just be they are talking about different shades of success and, if the US is the benchmark, whether they are comparing like with like.

Research by Nottingham University's Business School in 2004 rather set the tone by suggesting that while UK universities were keen to create spin-out companies, far too few of those became successful businesses.

Three years on the researcher, Professor Mike Wright, said things had improved to an extent.

Fellowships

For one thing, universities were being more selective in creating companies they believed had growth prospects "rather than almost creating them willy nilly".

Bringing people in from outside the university sector can be quite problematical - they just don't get it Prof Mike Wright, Nottingham University

There had also been some big successes and about 26 Stock Market flotations.

And finally there had been serious attempts at least in some places to recruit more professional technology transfer officers, people with better skills typically honed in the private sector.

Prof Wright cites the Medici Fellowships in nine universities in the English Midlands as an example of this drive.

They are available to research staff, postgraduates and postdoctoral researchers and alumni interested in stimulating entrepreneurial activity in their universities.

Participants are taught business and commercialisation issues, with mentoring and practical experience.

"They then go back into the science departments to better identify options for spin-offs, and that's an attractive way of going about it," he said.

Attractive because such people could bridge the awkward gulf between two very different cultures, the commercial and the academic.

"Bringing people in from outside the university sector can be quite problematical. They just don't get it," Prof Wright said.

'Over-optimistic'

He said one of the problems in drawing lessons from US giants such as MIT and Stanford was that they were exceptional.

Universities elsewhere needed to be more realistic about whether their research was truly world class and whether they were willing - and able - to put in the necessary resources to exploit it.

"World class research gets you a long way down the road to creating world class businesses but if you haven't got this - universities have been over-optimistic in their expectations about what they can do.

"There is a disconnect between the espoused aim and the strategy to create it."

A recent report published by the University of Cambridge Institute for Manufacturing - Funding Technology: Britain 40 Years On - compared the commercialisation performance of 156 US universities and 165 in the UK in 2006. The differences are marked.

For example, 3,109 new patents were granted in the US, 371 in the UK. In the US there were 364 spin-offs, and 197 in the UK.

It concluded that policymakers should recognise that in commercialising technology the UK was two economic cycles behind the US and that its pace of change must increase.

But also, the UK could not be compared directly with the US and may not be able to copy its example entirely.

Time lag

The director of Warwick University's technology transfer office, Dr Ederyn Williams, is bullish about the UK's achievements.

His analysis has taken issue with what he called a "growing myth" - that too many spin-out companies of poor quality were being created and not enough attention was being paid to licensing technologies for others to exploit.

It is true, he said, that UK universities had fewer licences and had earned less in royalties - but that was because they had started later.

Half of the US technology transfer operations had been established by 1990, whereas in the UK it was only a quarter.

Factor out that time lag and the UK was, if anything, beating the US, he argued.

'Envied'

The latest statistics from the Higher Education Funding Council for England showed that the income higher education institutions received from business and community interactions rose by 6% from 2003-04 to 2004-05.

We should be doing better Dr Ederyn Williams, Warwick University technology transfer office

It went up by a further 8% the following year, to exceed £2.25bn.

In 2005-06, universities formed 187 spin-off companies - while the number of such start-ups that had survived for three or more years had also increased, from 625 in 2003-04 to 746 in 2005-06.

They were employing more than 16,000 people and their annual turnover was more than £500m.

In addition, revenues from licensing academics' ideas to existing companies were up, as was the amount of consultancy work being done.

Dr Williams said: "Generally the trends are still going steadily up, and the UK situation is envied across Europe. Even some US experts are beginning to admire our achievements.

"But there is still a good argument that the impact on the whole UK economy is nowhere near big enough yet, and that the speed of progress should be even faster if the UK is to prosper as a high-value-added knowledge economy against world competition."

He said the general picture masked differences between institutions - with some doing rather well and some rather badly - and between innovations.

"If you take licensing income, that can be very chancy - one mega invention can make millions and yet you can do a much better job in 20 other things and not make very much money.

"The statistics at university level can be quite distorted in that way."

Venture capital

He also said that, with cutting edge ideas, it could be quite difficult to know whether something was a viable invention or not.

He gave as an example a very thin, flexible loudspeaker developed initially in 2000 at his own university.

When it was first designed it did not produce much sound and it was not obvious what it would be used for, he said.

Now there were people making similarly flat, flexible TV screens - which were no good without compatible speakers.

So, spun out as Warwick Audio Technologies, finally the idea won £500,000 in venture capital - though the availability of such funding in the UK was also an issue, Dr Williams said.

Typically it was a long, slow process. The UK was getting better at it, he said, and was the envy of Europe.

"That's all very well but is it good enough? Given how big the higher education sector is ... my feeling is, no, nowhere near good enough," he said.

Licence income of £40m was "a drop in the ocean" - about 1% of what was spent on university research.

"We should be doing better," he said.