When the UK government published its response to the Independent Review of University Spinouts it was no surprise they accepted the recommendations and announced a £20m proof of concept fund to support universities and ensure future funding to de-risk much needed technology and innovation.

Why? Well, we need to start at the beginning. Firstly, the government defines a spin-out company as a start-up that is based on intellectual property (IP) generated through a university's research.

And it has ambitions for the UK to be a ‘science and technology superpower with thriving partnerships between universities and high-tech spin-out companies contributing to economic growth and productivity'.

We have blossoming examples of these beneficial partnerships in places like the UK's golden triangle between universities and industry in Oxford, Cambridge, and London.

Many new spin-out ecosystems are emerging in the Midlands and North, but those that exist between universities and investors have ‘not yet matured to the point where IP, talent, capital, and support services are truly self-reinforcing'.

The reasons are many, but the independent review recognises the financial pressure on challenging university budgets. There are many risks associated with spinouts and the financial reward is ‘modest and unpredictable' in most cases.

That's where we come in.
FIVe will stimulate innovation in the North. Combatting the topical North-South divide, our project's first home is based in Middlesborough at the Materials Processing Institute a not-for-profit research and innovation organisation developing new materials, processes, and technologies. We will accelerate innovation in an open, collaborative way that welcomes diversity and creates an environment where creative ideas flourish, stimulating a cluster of research and development excellence. We're looking for future homes so please get in touch if you see the benefits of FIVe stimulating innovation in your region.

Over a third of spinouts are in the field of engineering and 50 per cent are early stage. FIVe is working with the Foundation Industries (made up of cement, metals, chemicals, paper, ceramics, and glass) to support start-ups and spinouts that are developing materials, processes, or technologies to help these difficult to decarbonise sectors achieve net zero.

As recognised in the review and response, academics don't have the commercialisation skills needed to spin-out but 58 per cent want to grow the business themselves.

A fifth don't receive any more support than securing and licensing IP then face the main barriers around finance and deal negotiation. If companies do grow, they then face the further barriers of scaling up, securing ongoing finance, building a team, and getting their idea or product to market.

We provide flexible office and lab space, essential support services including finance, IP, legal, HR, regulatory guidance, and training and can tailor support to meet the needs of the companies of the future. What's more, we bridge the gap between incubator and accelerator making it easier for SMEs to transition and grow as their needs change.

Similarly, as recognised by government, more standardisation and transparency is needed in early-stage deal terms - something we support.

It doesn't make sense for every university to manage a Technology Transfer Office (TTO) and it's no wonder the more traditional red-brick and highly funded universities dominate the number of spinouts.

A more balanced, regional, or sector-wide approach bringing together established TTOs will ensure the best, diverse talent is supported and allows universities to focus on their core business.

The landscape and journey for start-ups should be easy to follow. By building a pipeline of talent and projects, as part of FIVe, they will be able to easily access support at each stage of their commercialisation journey.

View the Response and Independent Review

Published: 23-03-2024