A unique world-class spin-off offers valuable lessons, says Douglas Hague
Martin Wood, a graduate in engineering and mining, comes from "an ultra middle-class family", though relatives have shown striking entrepreneurial flair. He arrived at the Clarendon Laboratory of Oxford University in 1955 "more or less by accident", with the job of designing research equipment for the physics department. Increasingly, former students persuaded him to make equipment for them, employing university technicians at weekends.
Demand grew, and in 1959 he and his wife, Audrey, founded Oxford Instruments to produce such equipment commercially. The university agreed, provided that Martin continued in his tenured post there, as he did for ten years.
Oxford Instruments started modestly, with Audrey Wood doing most of its non-scientific work. But together with his university activities, it made Martin a world expert on magnets. In 1961, the Woods were in Boston at a conference on magnets when news broke of a major advance in superconductivity. Materials with no resistance to electric currents had become available, promising magnets that were much more powerful - but only if operated at temperatures close to absolute zero, which meant cooling by liquid helium.
Excitement gripped the conference, and the Woods took the momentous decision to make superconducting magnets. Forty years on, Oxford Instruments is a world leader in the technology. Magnets still dominate its activities, now through Oxford Magnet Technology, a joint venture with the electrical giant Siemens. The company is also active in other aspects of superconductivity, instrumentation and medical systems.
Magnetic Venture provides a valuable, detailed account of the development of Oxford Instruments. The book is unusual, being less the history than the autobiography of a business. Audrey - for 24 years a director and key figure - is an insider reporting events in which she participated. With her access to the firm's folk memory and records and her perceptive approach, she provides a unique account of a pioneering business.
This is a book for two audiences. Those interested in start-up companies can ponder the huge technical and management challenges that a pioneering small business faced and how they were tackled. The bigger questions are for universities, not least because the book shows one kind of university-linked entrepreneur exerting an influence far beyond his business.
I recently suggested to Audrey that Martin was not a true entrepreneur because she had told me that he prefers to get other people in to manage his ventures. She was unrepentant, reminding me that Oxford Instruments had no full-time employee until 1963. Martin continued with his university job, while "in the company he was still doing the design and the scientific work, talking to potential customers, and going to conferences. He is the sort of entrepreneur who sees that something needs doing, likes to start it off, but then to get in other people to manage it. He is very much an ideas person, very good at motivating and enthusing people. If you define an entrepreneur as a taker-between, then he is one."
This characteristic of Martin is seen locally as having sparked an entrepreneurial explosion centred on Oxford, with the Woods its heroes. Oxford Instruments led the way, while its founder prodded the university into encouraging the commercial exploitation of research discoveries through start-ups. But nothing has contributed more to the explosion than the Oxford Trust.
In 1965, when the growing company no longer needed one of its small buildings, the Woods let it to a succession of small companies under the watchful and helpful Audrey. By 1985, a growing number of start-up firms were seeking accommodation. When Oxford Instruments vacated a larger building, the Woods bought it, after selling shares made marketable through the company's flotation. This stimulated the Woods, later Sir Martin and Lady Wood, to establish and endow a charity - the Oxford Trust. To safeguard its charitable status, a separate company was established. The company links start-ups with business angels, and now has some six innovation and incubation centres.
By chance, the ideal candidate to be director of the trust appeared. Paul Bradstock had worked for a subsidiary of Oxford Instruments, was seeking another job, and sought the Woods' advice. They persuaded him to set up the trust, assuring him that he could leave once the right business job was offered to him. He remains director after 16 successful years.
While this assistance to new companies has been vital, it has not overshadowed educational work. This began by encouraging more children to go into science through projects that linked schools with local businesses. These links have survived. Through these and other activities, the trust has brought together schools, the two Oxford universities and local industry.
One handicap for those seeking to create bodies similar to the Oxford Trust is that such initiatives are rarely chronicled. Audrey is to be congratulated on doing that in the final chapter of the book. Oxfordshire has an accurate record of the trust's birth that other communities can share.
Though now an important influence on local enterprise, Oxford University was a latecomer. Elsewhere, Cambridge Instruments was founded in 1881 by Robin Darwin, youngest son of Charles Darwin, while Pye began operations in Cambridge in 1896, linked with physicists in the university's Cavendish Laboratory. Other early starters were the universities of Leeds and Nottingham in the 1970s. Today, four institutions dominate academic research spending: Oxford and Cambridge universities and two London colleges, Imperial and University College London.
By 1998, Imperial had at least 37 spin-offs, and UCL has a distinguished record too, but their local influence is diluted by the sheer size of London. Because Oxford and Cambridge are relatively small cities, the impact of university-bred entrepreneurs is more significant. There is an interesting difference. Cambridge has more entrepreneurial businesses than Oxford, but the university itself has spun off only some two dozen companies. Cambridge academics have been heavily involved with start-ups outside the university, contributing powerfully to a rich entrepreneurial culture. Despite Oxford's later start - through Isis Innovations, which organises its spin-off activities - it has had 23 spin-offs since 1998. But academics have been much less involved in outside entrepreneurial start-ups than in Cambridge.
What worked in the first 40 years of Oxford Instruments may no longer be appropriate today, but the book raises questions for universities including Oxford itself. First, the links between Oxford Instruments and the university benefited both when Martin was developing superconducting magnets. The Clarendon was eager to observe advances in superconductivity. It could not afford to pursue them deeply, but it allowed Martin to test his inventions there, developing expertise in both university and company.
Others helped, too. Academics in the electronics department designed the power supply for the first magnet and devices such as cryostats, while technicians assembled kits at home from parts that Audrey bought.
Neither company nor university could have developed superconducting magnets alone. Are university links with local companies, including spin-offs, as effective as this today?
Second, Oxford Instruments provided valuable senior officials for the university. Sir Peter Williams, until recently chairman of the company, became master of St Catherine's College and chairman of Isis. Tim Cook, the imaginative managing director of Isis, also came from Oxford Instruments. Martin has served on the Isis board. Are universities' links with managers of local businesses today close enough?
Third, the impact of the Oxford Trust, on small business start-ups and on local education, has helped produce Oxford's entrepreneurial environment. This raises more questions. Should universities be helping to establish and develop similar trusts? Should they be seeking and encouraging their own Martin and Audrey Woods? Or should they be encouraging people whose contributions, while individually smaller than those of the Woods, could collectively produce powerful networks to promote local development?
All of these are important questions. Magnetic Venture gives a timely opportunity for universities to address them and a compelling example against which to do so.
Sir Douglas Hague is an associate fellow, Templeton College, Oxford, and a visiting professor, Manchester Business School.
Magnetic Venture: The Story of Oxford Instruments
Author - Audrey Wood
ISBN - 0 19 924108 2
Publisher - Oxford University Press
Price - £35.00
Pages - 387