No, of course not, there are so many different ways of creating impact and benefits to society from university-business interactions. It is all about knowledge exchange, knowledge transfer, valorization. Hughes et al 2016 NCUB Report shows 30 forms of interaction within the four groups of People, Community, Problem Solving and Commercialisation university-business interactions. And there are so many different types of commercial transactions with companies and investors: collaborative research, contract research, consulting, licensing to existing companies, as well as setting up spin-outs, spin-outs, spin-outs ....
But, err, actually, Yes, when you look at the news flow, the press releases, the ‘socials’, the conferences, the comment pieces, from universities, governments, research funders - it certainly feels like it is all about spin-outs these days.
There are reasons why spin-outs are more and more popular:
There are reasons why licensing to existing companies is getting harder:
And why may this matter? There are a number of reasons:
When I started in the 1990s we tried selling licences to patent applications to existing companies. We sent ‘one-pagers’ out by post, made telephone calls, attended meetings, and then started using email when that arrived. Come the late 1990s and early 2000s investors appeared, powerpoint pitch decks replaced business plans, seed funds arrived, and spin-outs began to take off. And today, more and more investors, tied university funds, accelerators, incubators, entrepreneurship programmes.
Licensing to non-spin-outs is happening, but nobody is talking about it anymore. [Some numbers - HESA HEBCI Survey data show 145 spin-outs for 2023 and 17521 Licences; four universities report over 1000 licences, suggesting yet again the gap between TTO activity and the HESA data.]
But, err, actually, Yes, when you look at the news flow, the press releases, the ‘socials’, the conferences, the comment pieces, from universities, governments, research funders - it certainly feels like it is all about spin-outs these days.
There are reasons why spin-outs are more and more popular:
- It is a trend, and people follow trends.
- Researchers want one.
- Entrepreneurship has happened. Mark Zuckerberg has happened. The explosion of interest and excitement around setting up new tech companies has spread from California across to the UK and Europe.
- The opportunity to make money and create jobs and impact and sustainable economic growth in the knowledge-based economy from new tech companies.
- The availability of money, investment finance, capital, that is now directed towards investing in early-stage tech companies, and sometimes very specifically in start-up spin-outs from one or more universities and the research base more broadly.
- The fact there are an increasing number of people whose job it is to make investments into spin-outs; these are the people at the Funds employed and highly incentivised to invest in spin-outs.
- The excellent government schemes, grants, and tax incentives that ease the flow of finance into early-stage companies.
There are reasons why licensing to existing companies is getting harder:
- There are fewer existing companies. In key technology sectors mergers and acquisitions have reduced the number of significant players.
- There are fewer existing companies nearby. If you are in the UK, and potential partners are in the US or Taiwan, it is so much harder to build the relationships and then do the deals.
- ‘Not invented here’ is alive and well in medium and large companies; and in small companies so often entirely focussed on making their thing work.
- The risk appetite of existing companies has changed. Allow venture and private finance to de-risk the technology in small and medium sized companies and then we can buy the company if it works.
- Open innovation is alive and well, but rarely involving bringing in really, really, early-stage ideas.
And why may this matter? There are a number of reasons:
- Putting the outputs of the publicly funded research base into start-ups controlled by venture capitalists (and their finance driven timescales and portfolio approach) may not be in the nation’s, or researchers’, or university’s best interests.
- Losing the skills to market and transact with large companies will take university TTOs quite a long time to restore.
- The overhead of all these start-ups, all these management teams, all these start-up costs, is high. Look at science parks - great they are full with (hopefully) buzzing and excited companies, but so much duplication. If an existing company is willing and able to sign a decent licence deal, why set up a new company? ... well, that’s the challenge - willing, able, decent ....
When I started in the 1990s we tried selling licences to patent applications to existing companies. We sent ‘one-pagers’ out by post, made telephone calls, attended meetings, and then started using email when that arrived. Come the late 1990s and early 2000s investors appeared, powerpoint pitch decks replaced business plans, seed funds arrived, and spin-outs began to take off. And today, more and more investors, tied university funds, accelerators, incubators, entrepreneurship programmes.
Licensing to non-spin-outs is happening, but nobody is talking about it anymore. [Some numbers - HESA HEBCI Survey data show 145 spin-outs for 2023 and 17521 Licences; four universities report over 1000 licences, suggesting yet again the gap between TTO activity and the HESA data.]