Home Business NewsBusiness Future of UK innovation will suffer without more support for University spinout companies

Future of UK innovation will suffer without more support for University spinout companies

by LLB Reporter
4th Apr 18 7:59 am

Study finds

As UK Research and Innovation (UKRI) officially comes into existence (1 April), new research reveals that the UK’s ability to innovate post-Brexit could suffer without greater support for university spinout companies. Intellectual property law firm Anderson Law LLP finds that UK university spinouts have a far higher success rate than UK startup companies generally. However, there is no clear strategy for the commercialisation of research from UK universities. Without more clarity, and with Brexit uncertainty leaving many funding steams far from secure, Anderson Law warns that the UK’s ability to innovate and compete globally could be compromised.

Anderson Law’s research finds that investment in UK spinouts from both public and private sources has increased by £1.1 billion between 2011 and 2017. Over £800m of that came between 2015 and 2017; in 2014, the Research Excellence Framework (REF) introduced a requirement that university research should demonstrate “impact”.

Across specific sectors, the best funded is engineering and physical sciences, which attracted £7.6bn in private and public funding between 2011 and 2017. Arts and humanities receives the least funding overall at just over £300m, followed by particle physics, nuclear energy and astronomy.

At the same time, nine out of ten university spinouts which received private investment between 2011 and 2015 have survived. This is significantly higher than the usual survival rate of start-ups more widely, where only two in ten survive beyond their fifth year.

Mark Anderson, managing partner of Anderson Law LLP, comments:

“The commercialisation of university research makes a substantial contribution to the UK’s enterprise economy. Turning ideas into commercial ventures in this way creates jobs and wealth, and scores of highly successful UK and overseas companies can trace their origins to university research. The success rate of university spinouts is undoubtedly something for the newly formed UKRI to celebrate.

“This success needs to be built upon, though. The spinout ecosystem has not been rigorously assessed before; our research marks the first real effort to trace patterns of public and private investment into UK spinouts. Furthermore, we found no real evidence of any relationship between the level of public investment into research and the level of private investment into UK spinouts – further evidence that the system is not working as well as it could.”

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