NMITE’s Blueprint for Spinouts

Anyone who has worked within Higher Education or been part of a company start-up, will have come across the term ‘spin out’. This term refers to a private, independent company that an individual, team or Higher Education Institutions (HEIs) has formed as a result of research carried out. There are currently an estimated 2269 active University spinouts in the UK, and the core technology or product are their defining feature, directly originating from the university’s research and intellectual assets, distinguishing them from other startups. 

Spinouts come in all shapes and sizes, with possibly the most famous being Google, founded by Larry Page and Sergey Brin while they were Ph. D students and Stanford University. Other globally recognised spinouts include Bose Corporation, iRobot, MATLAB and Ceres Power. The majority of spinouts are from STEM disciplines, with Life Sciences taking the titled of most popular programme family to become a spin-out.

University spinouts can be hugely beneficial for local economies, driving economic growth, creating new markets, transforming high-risk research into tangible products and services, and fostering a culture of entrepreneurism. They benefit an academic parent through opportunities to demonstrate impact of applied reserach, income generation and fostering a cycle of new research ideas and capabilities.

This impact is easily visible when comparing the zones in the country where most innovation happens, and new technologies are developed. These zones normally emerge around universities and often focus on particular technology areas. For example, “Sillicon Fen” has developed around Cambridge University and includes scores of spin out companies developing new technologies in biotech and semiconductors; the science parks established adjacent to universities in Surrey, Exeter and Dundee are all word renowned as hubs for the development of technologies in  telecommunications, climate technologies and pharmaceuticals respectively. The “Golden Triangle”, the triangle shaped zone of England with the cities of Oxford, Cambridge and London at its points hosts more spin outs and new technology start ups than almost anywhere else in the world. Many of the new companies in these zones, originated within the local university; these are economic zones powered by spin-outs.

Originally, these spin outs happened because the new knowledge created within the university was simply too exciting or interesting to contain and its creators happened to have that entrepreneurial instinct to turn their knowledge into a business. But more often than not, knowledge created was treated as an academic output and its commercial potential missed. 

Now, universities take a more structured and planned approach to generating and supporting spin outs. The aim is to find the great ideas from within its academic work that might have commercial potential and then create a new business to realise that potential. This is vital to the UK’s depressingly enduring productivity puzzle and the failure, over many years, to make better use of the world class research and brilliant new ideas undertaken by its universities. It is now time put that new knowledge to productive use in the real economy.

Creating the conditions for spin-outs

HEIs support spinout companies by providing specialised advice on commercialisation, access to funding, the use of facilities and equipment and fostering a supportive ecosystem through knowledge transfer and incubator programmes. NMITE’s Future Skills Hub will provide a physical environment for NMITE to base its commercial and entrepreneurial activities, creating an ecosystem of innovative support and spinout support capability. The aim is to build on the success of the Innovation Programme, a partnership with Innovate UK that offers support to local businesses working on an innovative idea, to support start-ups, spinouts and entrepreneurs. The state-of-the-art campus building will be the perfect base for incubation, acceleration and spinouts, allowing local businesses, investors, individuals and stakeholders to discuss projects and interact with our growing number of opportunities.

The building is important. But spin-outs are powered by knowledge and ideas so within NMITE’s new hub, final year students will work on their engineering projects, many of which hold the potential to drive the next successful spin-out company. Academic expertise will be mobilised to support knowledge creation in existing local companies so that they might “spin-up” by expanding into new commercial areas driven by new knowledge

Actions planned by NMITE

There are specific actions NMITE plans to take to begin to create a culture where entrepreneurs will flourish and spin outs will be created. Below are few planned actions:

• Business incubation hub will be formed that will identify research with commercial prospects to create viable Spinoffs
• Existing Spinoffs and start-ups will be coached to grow commercially and maximise profits
• Local businesses will be mentored for growth and operational sustainability
• Core financial skills, including business start-up and entrepreneurship will be taught within our Degree Level Programmes
• Students will learn how ideas can be commercialised in the context of their final year projects
• NMITE will establish robust processes to manage Intellectual Property, business startup, investment, fostering links with investors and grant providers.
• NMITE will consider creating a working group to assess opportunities for spinouts
• NMITE will develop a network of entrepreneurs, investors, inventors across the key sectors in which it interacts
• Senior NMITE leaders will be expected to foster the culture of entrepreneurship and network within and outside the University.
• NMITE will endeavour to carry out and publish original research that contributes to knowledge exchange and innovation.
• NMITE will continue to work closely with Industry partners to identify projects for our students that have real-world impact.
• NMITE will be a Knowledge Base for Knowledge Transfer Partnerships, bringing significant government investment into companies within Herefordshire and surrounding regions.

Summary

HEIs have potential to enhance student employability and local economy through initiatives on entrepreneurship. Building the pipeline of investments for HEIs for enhancing entrepreneurship will not be quick or easy.  However, the benefits of doing so will be significant. This can also help HEIs, especially new ones, thrive through income generation from entrepreneurial activities.