University commercial spin-offs fail to live up to expectations
Although universities are increasingly willing to create commercial spin off companies these are failing to become successful businesses, according to new research from the Economic and Social Research Council.
The research, which focused on the UK’s top research elite universities, said that significant changes to university culture were needed if commercial spin offs are to be successful.
It highlights five key impediments to the successful commercialisation of technology. Firstly, a lack of seed funding from the university at start up, time pressures on the academic staff, lack of suitable infrastructure, including business park space, to develop the business, a lack of a clear process to follow, and a culture which rewards academics for research efforts and does not encourage entrepreneurial spirit.
Researchers claim that the “clearest factor” in success is the commitment of the “originating academic to commercialising his or her technology.”
It suggests that academics should be offered a sabbatical period to develop commercial spin offs and perhaps should be given an equity stake in their spin off.
One of the key strands of the Government’s university policy in recent years has been to encourage universities to commercialise their research in the hope of both boosting university finances and aiding the “knowledge economy” in the UK.
They have highlighted as a model successful collaborations between business and research centres in America.
Previous reports into the commercialisation of academic research, notably last year’s Lambeth Report, said that whilst there was the possibility for significant wealth creation, improvements were necessary, particularly in the field of knowledge transfer.
Professor Mike Wright of Nottingham University Business School, who conducted the research, said: “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 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.”
“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.”
Concluding, Professor Wright said: “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”.
