Creative spirit nets £31m spin-off income

December 10, 2004

The entrepreneurial spirit is alive and well in UK universities, according to figures that show the number of inventions up 72 per cent and total licensing income up nearly 40 per cent in a year.

Total licensing income rose from £22.4 million in 2002 to £31.3 million in 2003, a survey by the University Companies Association (Unico) reveals. It also found that individual universities had more than doubled their licensing income to an average £430,000 each, compared with Pounds 179,000 in 2002.

The equivalent survey for the US, released this week by the Association of University Technology Managers, shows that UK universities have some way to go to catch up with their US counterparts. The survey says that 194 US institutions together generated more than $1.31 billion (£680 million) in licensing revenues.

Unico also found that UK universities doubled the amount they spent on protecting their intellectual property. In 2003, this totalled £12.6 million, with five institutions spending more than £750,000 each.

The figures mask wide variations in performance, as some universities registered no activity.

Nick Bourne, outgoing chairman of Unico, said: "There needs to be permanent third-stream technology transfer funding. This is an expensive business.

Many leading institutions are successful because they can afford to be."

The Unico survey shows that, at 151, the number of UK spin-offs remained relatively constant between 2002 and 2003. Figures for this year are unavailable, but it is thought there will be a substantial drop in activity due to the effects of the 2003 Finance Act.

This legislation could leave academics with shares in spin-offs liable to pay hefty tax bills even before the companies start making money. It has been blamed for stifling enterprise.

Last week, Gordon Brown, the Chancellor, promised to remove the tax obstacles.

But celebrations were muted as up to 90 new spin-offs realised the legislation, which took effect on December 2, would not be backdated, which means they could still face massive tax bills.

A working group of government officials and university representatives will meet next week to discuss the legislation.

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