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Inside Track Enterprise: ‘The Rise of Academic Enterprise’
By Marcus Gibson, Financial Times

Publication Date: November 28, 2002

There has been a surge of university spin-outs in the north of England...

A recent survey of the commercialisation process in universities by Unico, the UK university companies association, and Nottingham University Business School has revealed a marked increase in such spin-outs – 175 new companies during 2001, or 31 per cent of the 554 formed in the past five years. Figures so far compiled for 2002 suggest that a greater proportion has been started in the north of the country.

Tom Hockaday, chairman of Unico and director of Oxford University’s commercialisation subsidiary, says: “Attitudes to commercial activities are changing within academia and there are a variety of effective and efficient mechanisms in place for unlocking commercial benefits of UK research.”

The rise of academic enterprise north of the Cambridge-Oxford-London triangle is attracting some serious attention from the universities, entrepreneurs and the financial community. But with increased interest comes greater pressure on the commercialisation offices for results. Leeds University, for example, is looking for outside expertise to take on the work of its in-house technology transfer office.

The University of Sheffield and Sheffield Hallam aim to create up to 90 companies in the three years to November 2004, says David Catton, head of Sheffield University Enterprises. “The potential for UK universities to impact [on] our economy is overwhelming,” he says. Speaking of the government’s University Challenge Fund, launched in 1998, he adds: “If the government has spent a better £20m I’d like to know about it... It has acted as a tremendous multiplier for launching new companies.”

Biotechnology spin-outs from Sheffield University with particular potential include: Celltran, which recently won £1m in funding from various investors and is developing a tissue engineering therapy in which skin cells can grow on polymer bandages; Adjuvantix, which is creating powerful single-dose vaccines; and Asterion, which is working in human growth hormone development.

Other companies are tiny but no less inventive. Nigel Dunnett, a landscaping expert, founded and runs Pictorial Meadows, a company that dispatches special mixtures of English seeds to help councils and gardeners transform verges and wasteland.

To the west, Warwick and Birmingham universities have tried to establish strong frameworks to help form companies. For example, Warwick has established a link with Connect, the Edinburgh-based company that organises seed and venture funding events and networking for technology start-ups.

Manchester University’s recent spin-out, Nanoco, established almost a year ago, manufactures in volume “nanodots”, the essential building blocks of nanotechnology-related applications. Paul O’Brien, a professor in the inorganic materials chemistry department, started the business with help from the university’s technology transfer office, Manchester Innovations. It says it is the first company in the world to produce and ship multi-gramme quantities of nanodots. It may become the first UK nanotech company to make a profit.

Leeds University, once a pioneer of innovation in the north, is in the process of becoming the first UK university to dispense with its in-house technology transfer office, Leeds Innovations, in favour of seeking an outside provider from the private sector.

Many UK universities have discovered that the job of a technology transfer executive, often under-trained and poorly paid, is one of the toughest and that only those with extensive business experience, a weighty contact book and knowledge of the hugely complex areas of patenting and intellectual property will have any chance of success.

At Sheffield, the university is, at some cost, hiring a number of City figures who have worked as directors of publicly quoted companies.

Specialist consultancies have been emerging to assist universities. They include Lodestone IP, which is working with University College London, and David McKeekin, chairman of Company Guides. Mr McKeekin, non-executive chairman of London Fund Managers, which recently raised £50m for the government’s regional venture capital fund for London, helped Loughborough University obtain its University Challenge Fund award last month.

Company Guides, says Mr McKeekin, specialises in “guiding” companies to finance.
Billy Harkin, formerly of Glasgow University’s technology transfer office, has recently established Science Ventures. “We don’t wish to run [entire] tech transfer operations... we aim only to help universities maximise the commercial gains from a select group of their most high-value and high-potential projects,” he says.

Leeds University has projects of such calibre, especially in materials. One spin-out, a ceramics company named Ecertec, aims to develop smart materials that will allow, for example, “warpable” wings to change shape on aircraft. Also, research scientist Mira Naftaly has recently perfected and patented a way of generating continuous, tunable terahertz radiation, a breakthrough since existing terahertz instruments are very unstable.

At the once-sleepy York University, Jim Austin has set up Cybula, a company that aims to commercialise its high-speed internet search engine; the main focus for the university in the next few years will be the development of the local, and still underdeveloped, food and biosciences cluster.

Sunderland University has established Darwin Brewery, originally a spin-out, which produces 2,500 pints of real ale each week. BrewLab offers brewing industry training courses, which it believes could be vital to the survival of the small brewery sector.

And while the chemistry departments of British universities have proved to be the biggest revenue-generators so far, rather than computing or information technology, experts in technology transfer emphasise that future spin-outs must be market-driven.

Mr Catton observes: “Our research at Sheffield may focus on the lack of growth hormones in children but the economic opportunity may lie in applying that research to obesity problems in adults.”

Enterprise in northern English universities lags behind the likes of Cambridge, Oxford and London but that is changing. Mr Catton continues: “Whereas tech transfer officers down south can often wait for academics with useful research to walk in through their doors, northern universities must be proactive and go out on to the campus to seek commercial opportunities. That’s the difference between north and south.”

© 2008 Marcus Gibson