The UK ranks fifth out of 133 countries in the World Intellectual Property Organisation (WIPO) 2024 global innovation index. And this, amongst other things, is thanks to our universities and how they support research.

If you want to see what the future will look like, look no further than technology transfer teams in technology transfer teams and learn how they support the innovation that academics are looking to identify and test.

Our universities have long been crucibles of innovation. They are often the starting point for groundbreaking technologies and businesses that transform the way we live and do business. Central to this transformation from scholarly inquiry to market-ready products are Technology Transfer Offices (TTOs), which facilitate the commercialisation of research outputs.

Here in the UK, organisations like SETSquared, a community of six leading research-led UK universities of Bath, Bristol, Cardiff, Exeter, Southampton and Surrey, work collaboratively to turn innovation into thriving business and drive economic growth within our regions and across the UK. Their tech transfer and spin-out teams play a pivotal role in nurturing spin-out companies that drive economic growth and disrupt traditional industries.

Yet, as I’ve written before and highlighted in the Government’s Industrial Strategy Green Paper, the issue is that while the UK is ranked fifth in the WIPO global innovation index, we are ranked only 31st in knowledge absorption. This is not an issue of our universities but more of how, compared to other G7 countries like the US and Japan, the UK, for whatever reason, fails to invest in itself.

Technology Transfer Offices: Key to Turning Research into Market Success

UK universities have robust TTOs to bridge the gap between academia and industry. These offices support researchers in identifying commercial opportunities, securing intellectual property rights, and attracting investment.

For example, Oxford University Innovation (OUI) has been instrumental in creating over 200 spin-out companies, contributing significantly to the local and national economy. Similarly, Cambridge Enterprise has facilitated the formation of numerous high-impact ventures, underscoring the university’s commitment to science and innovation.

Founded in 2002, SETsquared's community has supported companies to date with £15.7 billion, with the creation of 15,600 jobs. Spin-outs from the universities of Bath, Bristol, Cardiff, Exeter, Southampton and Surrey have created companies that lead in biotechnology, quantum computing, space, life sciences, materials and computer silicon.

Global Innovation Leaders: Lessons for UK University Spin-Outs

When you look at the performance of UK TTOs against universities in international locations, several metrics are considered, including the number of spin-outs, licensing income, and overall economic impact.

• United States: American universities, such as Harvard, Massachusetts Institute of Technology (MIT) and Stanford University, have long been leaders in technology transfer. The Association of University Technology Managers (AUTM) reported that U.S. universities generated $3.8 billion in licensing income in 2022, reflecting a mature ecosystem that effectively translates research into commercial ventures.

• China: Chinese universities have rapidly advanced in technology transfer, with institutions like Tsinghua University establishing dedicated offices to commercialise research. However, while challenges remain in intellectual property protection and fostering a culture of entrepreneurship, their focus is to support their national 5-year plans, the last one of which focuses on innovation and technology, industrial modernisation, digital economy, green development and health and education.

• Japan: Japanese universities, including the University of Tokyo and the University of Kyoto, have developed TTOs to promote industry collaboration. They work toward a central national strategy designed to steer the country and its economy towards a future point of growth.

• Germany: German universities, like the Technical University of Munich, emphasise applied research and maintain strong industry ties. The Fraunhofer Society exemplifies successful technology transfer, focusing on practical applications of scientific research.

• Saudi Arabia: The King Abdullah University of Science and Technology (KAUST) has made significant strides in technology transfer, aiming to diversify the economy beyond oil. KAUST lead the years ago in recruiting researchers and business position KSA as a research university on the global stage. Their TTO has facilitated numerous patents and start-ups, contributing to the nation’s innovation landscape. I had the pleasure of working with KAUST over ten years ago and gained great insight into how they had a focus on creating an environment where IP was to deliver a return on investment to not just the university but the country.

Economic Benefits of University Spin-Outs: Why They Matter

University spin-outs significantly contribute to local, regional and national economies. However, the financial returns from these ventures vary across countries due to differences in innovation ecosystems, funding mechanisms, and commercialisation strategies.

Equally, researchers play a central role, like in sports, in selecting which universities they might work with to test and build the hypothesis that can become a viable economic and/or societal proposition. In simple terms, researchers want to ensure they will be supported.

• United Kingdom: According to The Russel Group, in 2021/22, 24 of their universities supported over 80,000 jobs and generated £17.8 billion in economic output. And while these numbers are impressive, they are not comparable to returns that US universities secure.

• United States: The US leads in commercialising academic research, with university spin-outs attracting substantial venture capital and corporate venture capital investment. For instance, in 2020, US university spin-outs raised approximately $5.1 billion in venture capital. The robust venture capital and corporate venture capital ecosystem and supportive policies contribute to higher financial returns from these ventures.

• China: China has rapidly expanded its focus on innovation and commercialisation. While specific financial returns from university spin-outs are less transparent, the government’s significant investment in research and development has led to a surge in patent filings and the establishment of numerous high-tech enterprises. The financial impact of these is growing.

• Japan: Japan’s approach to university spin-outs has been more conservative. Recent government initiatives aim to boost innovation, but financial returns remain modest compared to the US and UK. Cultural factors and a traditionally risk-averse investment climate contribute to these outcomes. Yet, the Japanese corporate community supports national innovation through many of its well-established corporate venture capital companies.

• Germany: Germany emphasises direct collaboration between universities and industry rather than forming spin-out companies. This model leads to financial returns through industry partnerships and applied research projects. While spin-outs exist, the financial impact is less pronounced than in countries like the US and UK.

• France: France has increased efforts to commercialise academic research through initiatives like the creation of Technology Transfer Acceleration Companies (SATTs). These efforts have led to a rise in spin-out activities, but comprehensive data on financial returns is limited.

Breaking Barriers: Overcoming Cultural Challenges in UK Innovation

Cultural nuances significantly influence the effectiveness of technology transfer across different regions. In the UK, a collaborative approach between academia and industry is prevalent, supported by government initiatives and a strong legal framework for intellectual property. In contrast, the U.S. benefits from a well-established venture capital ecosystem and a culture that embraces entrepreneurial risk-taking, where failure is seen as a stage in the journey that one learns from.

In countries like Japan and Germany, a preference for incremental innovation and established corporate structures can slow the commercialisation process. China’s rapid development is tempered by concerns over intellectual property rights, while Saudi Arabia’s nascent ecosystem is evolving amidst efforts to foster a knowledge-based economy through it’s Vision 2030 programme.

For spin-out companies to thrive and for our academic institutions to benefit from the investment that they make early on at a high-risk stage, strategic communications and stakeholder engagement are crucial. Strategy and communications are not nice to have, but they are a must-have to help articulate a clear value proposition and help position the potential while building relationships with industry partners and future investments.

Spin-outs and their tech transfer teams need to look strategically in order to reduce risk and position and engage with partners internationally and in the UK, a country where our business culture is more risk-averse.

Successful University Spin-Outs: Case Studies from the UK and Beyond

Examining successful spin-outs provides insight into the potential of university-led innovation:

• United Kingdom: Oxford Nanopore Technologies, originating from the University of Oxford, has revolutionised DNA sequencing technology, achieving a valuation exceeding £2 billion.

• United States: Google, initially a research project at Stanford University, has become a global technology leader, exemplifying the transformative power of university research.

• China: DJI Innovations, founded by a Hong Kong University of Science and Technology alumnus, dominates the consumer drone market worldwide.

• Japan: PeptiDream, a University of Tokyo spin-out, specialises in peptide-based drug discovery, securing significant partnerships with global pharmaceutical companies.

• Germany: BioNTech, associated with Johannes Gutenberg University Mainz, developed one of the first COVID-19 vaccines, showcasing the impact of academic research on public health.

• Saudi Arabia: Red Sea Farms, a KAUST spin-out, focuses on sustainable agriculture technologies, addressing food security challenges in arid regions.

Strategic Communications: A Must-Have for Successful Spin-Outs

The future of innovation is being shaped within university laboratories, where research and intellectual property lay the groundwork for transformative technologies.

Technology Transfer Offices are pivotal in guiding these innovations from conception to commercialisation, delivering economic growth and industry disruption.

For investors and corporate leaders, engaging with university spin-outs offers a unique opportunity to be at the forefront of technological advancement and to drive the next wave of industrial transformation.

However, growth will only be secured if companies are supported with effective communications and engagement with the right national and international partners and stakeholders.