University spinouts power the UK innovation economy
The UK’s innovation economy remains the envy of Europe with start-ups securing $12.4bn of venture capital investment in the first three quarters of this year alone – almost as much as Germany and France combined. The role universities play in this should not be overlooked.
UK universities contribute materially to the strength of the UK innovation economy through spinouts – start-ups directly based on intellectual property from academic research.
Our research with Dealroom.co found that UK universities create more spinout value than anywhere else in Europe, with Cambridge and Oxford among the top three European universities for creating spinout innovation value.
The most direct benefit of spinouts is ensuring that world-class research transitions to commercially viable domestic businesses. This creates skilled jobs, grows GDP and strengthens the pipeline of future unicorns.
Loosening bottlenecks
Although the UK’s spinouts are healthy, challenges remain. Intellectual property (IP) rights can be complex to navigate, with ambiguity over who owns how much of a discovery. This legal complexity can make securing seed funding difficult.
We need standardised, transparent commercial terms that streamline IP rights between researcher, spinout and university to remove legal friction.
Another issue is cultural. Some academics may prefer to continue their research instead of striking out on their own.
Existing support programmes could be consolidated and expanded to facilitate training on entrepreneurship and commercialisation, helping give researchers the confidence to make the leap from the classroom to the boardroom.
Our role
The private sector also has a role to play, and HSBC Innovation Banking UK(opens in new window) (opens in new window) is no exception.
We’re keen to work with the UK government, research organisations, universities and investors to explore ways that the private sector can augment government efforts to connect universities with investors and corporates, building a runway for launching high-growth, high-potential tech and life sciences companies.
Spinouts are a critical part of the innovation economy and we shouldn’t lose sight of how we can support, celebrate and champion their successes to inspire other researchers to turn their academic breakthrough into the next great start-up.
A version of this article was first published by CityAM (opens in new window) (opens in new window).