News from Cambridge UK

Date: 25/01/05

New report on impact of university spin-outs

A report is published today that highlights the ways in which university spin-out companies can deliver value to universities and regional economies.

Highlighted by the recent successful floatation of Cambridge University spin-out CDT, this issue continues to attract much interest from policymakers.

The report - University spin-out companies: Starting to fill the evidence gap, by Tim Minshall and Bill Wicksteed - also stresses the need to ensure the expectations of the value these spin-out companies can deliver are kept realistic, and that there is an effective mechanism in place for monitoring their performance.

The report summarises an 18-month research project commissioned by the Gatsby Charitable Foundation, examining spin-out activity at 10 UK universities. It includes the following key findings:

There are three clear categories of spin-outs, all of which have the potential to deliver value but in very different ways:
(1) Spin-outs with identifiably high growth potential, capable of attracting venture capital investment;
(2) Spin-outs that are likely to be serious businesses in that they create employment and generate profits, but which may have limited or slower growth potential; and
(3) spin-outs that are commercial development vehicles for a technology which, in due course, is likely to be commercialised through the licence or sale of the IP.

There are marked variations in numbers of spin-outs between the large, research intensive universities, and those with smaller research budgets. However, the number of spin-outs should not be interpreted as a free standing indicator of the relevance of the university's research to the commercial world. It should also not be used uncritically as an indicator of the level of entrepreneurial enthusiasm amongst staff and other researchers.

Different categories of universities will have different strategies for commercialising their research outputs, and they need to develop appropriate systems for doing so. Seeking generic approaches - and generic measures of success - across all universities may not be helpful.

There needs to be better data on the performance and impact of these spin-out companies to ensure that public policy is most effectively targeted.

Dr Tim Minshall, one of the report's authors, commented: 'Supporting entrepreneurship in universities is a key strand of the Government's strategy to support innovation. We hope this report provides some additional understanding of the benefits that can be realistically generated from university spin-outs companies for the benefit of the individual universities, as well as the local, regional and national economies.'

Bill Wicksteed added: 'When we started the work our concern was that spin-outs were too fashionable and might be over-emphasised as a route to commercialise IP. Now the danger seems to be that they may receive too little emphasis. Data on the reality behind the numbers, collected systematically over time, would help to determine an appropriate, evidence-based balance between spin-outs and licensing.'

Copies of the report can be downloaded from: www.stjohns.co.uk/documents/usoreport.pdf. To contact the authors, please email either thwm100@eng.cam.ac.uk or wwicksteed@sqw.co.uk.

www.ifm.eng.cam.ac.uk/ctm/teg
www.stjohns.co.uk
www.sqw.co.uk

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