Universities throughout the UK boast some of the best science and technology research in the world. A wealth of this can, and should, be commercialised – but in many instances this is not the case. Too often, research-generated intellectual property (IP) is simply not getting converted into tangible commercial and investible business opportunities as widely as it should be, based on the significant outputs from UK universities’ science and engineering research programmes.
True, the UK ranks higher than its European peers when it comes to commercialisation of university research. Equity investment of £2.6 billion in 2024, according to the Royal Academy of Engineering, ended a two-year decline but is still below the 2021 peak.
However, the path to get there isn’t plain sailing. Persistent barriers include falling research funding, academic career metrics that don’t encourage industry partnerships, and a lack of entrepreneurial culture.
There are some positives, with significant examples of commercial exploitation taking place in the “golden triangle” of Oxford, Cambridge and London, with data from UK Research and Innovation (UKRI) revealing that, in 2023 alone, spin-outs from institutions in these locations raised £1.4 billion. This is almost double the amount raised by universities outside this localised hub.
But why is this? To some extent, coupled with excellent research outputs, these institutions also have a culture of fostering innovation – so they have enjoyed the lion’s share of venture capital interest, C-suite expertise and access to capital needed to convert IP into commercial ventures. Geography is also a help, with many potential investors also based in south-east England (particularly London), making access to these funders more straightforward.
This state of affairs does not reflect the quality or scale of excellent research and innovation that is happening elsewhere. Indeed, there is a wealth of activity, on paper, that should have the ability, opportunity and desire to spin out, but is not. Where is it going wrong?
Outdated processes disincentivise movement
Despite the abundance of research and expertise within the UK’s academic institutions, there are limited mechanisms to encourage and incentivise movement among research-focused academics and industry, particularly within the spin-out community. Traditional academic metrics of grant income, PhD completions and publications dominate career progression, and a break from academia to pursue a commercial endeavour can often have significant detrimental impact on academic career advancement.
Even in areas where UK universities are undertaking internationally leading research – for example, in my own area of additive manufacturing – this lack of movement can stifle innovation, preventing the transition of ideas from the laboratory concepts to real-world solutions. As a result, valuable research remains underused and potential breakthroughs fail to reach their full potential.
Fostering greater collaboration between academia and industry, including via licensing or patents and spin-outs, is essential for driving sustained growth and innovation. By nurturing an ecosystem where ideas flow freely between academia and industry, we can unlock new opportunities for growth and competitiveness.
Cultivating an entrepreneurial culture
A greater entrepreneurial culture is needed among academics. Developing commercial opportunities is generally expected to take place outside research (and teaching), rather than being fully integrated within it, so many lack the bandwidth to do so or merely pay lip service to it.
Although research-focused academics are primarily judged on grant income, PhD completions and journal publications, impact from research is recognised as being vital. However, this is often achieved through collaboration with existing companies, where patenting and spin-outs are not necessarily judged as highly, and we see less channelling of invention into spin-outs.
With career progression mainly dictated by these traditional academic metrics, incentives are required to encourage the flow of research into the commercial world. For example, universities across the UK need to continue to address equity positions at formation of spin-outs to both incentivise founders and enable investment funds to engage. This is an area that’s seen recent improvement, where the average university equity stake at spin-out fell to 16 per cent in 2024, reduced from 22 per cent in 2023. But there’s clearly scope for this to go even further.
These changes need to also be underpinned by vital governmental policy changes that make both commercialisation a codified part of a university’s mandate, and licensing income a more important revenue stream for universities. We need a clear regulatory framework.
But for a country that prides itself on start-up cultivation, there’s a disconnect between developing world-class research and getting it out to market. If the government wants institutions across the UK to contribute to economic growth, it needs to make a concerted effort to encourage funding from the private investment community around the country. Encouraging signs have emerged with Midlands Mindforge (co-founded by eight research-intensive universities in the region) and Northern Gritstone (established with the assistance of the universities of Manchester, Leeds and Sheffield), which have been set up to invest in regional hubs, but these entities require scale to make a true difference, and strong governmental backing would go some way to get them fully established.
What is also clear is that for invention and spin-outs to happen, we need a vibrant research landscape and opportunities for funding – in essence, a pipeline of research that seeds future innovation and wealth generation. However, in these challenging economic times, I’ve witnessed first-hand a reduction in the availability of research grants, a situation that is not unique to my area. This speaks to a structural problem for the UK in terms of the future generation of ideas through research and later exploitation of research outcomes in general.
Overall, without forming this interface of public research and private enterprise, we’re at risk of not capitalising on our early-stage research to create growth for key sectors and country.
Richard Hague is professor of additive manufacturing and director of the Centre for Additive Manufacturing (CfAM) at the University of Nottingham. He is the founder of Reactive Fusion Ltd and Added Scientific Ltd.
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