Internal politics hold up spin-offs

November 19, 2004

Caroline Davis attends the launch of the UK's first Enterprise Week

Departmental politics and slow decision making are among the main barriers to the creation of university spin-off companies, according to new research from City University.

Academics who have tried to set up spin-offs said that internal university problems were their greatest hurdle, ahead of securing funding and problems recruiting an experienced team.

Julie Logan of City University's Cass Business School set out with research assistant Roderick Brew to investigate what is holding back enterprise in UK universities. They polled 60 academics who have established a spin-off in the past four years and asked 14 venture capitalists about the barriers to creating such companies.

"I was surprised by the results," Dr Logan said, "because most universities say they have transparent guidelines for spin-offs and seem to be doing quite well."

Dr Logan, director of Simfonec, the science enterprise centre for a consortium of London universities, said institutions should be more transparent about the process. "If your technology-transfer office will not act, the idea may not have a commercial application. But if you still believe that it has potential, get some external validation for your idea, then go back to them with the proof.

"If they still don't act, then go to your vice-chancellor."

The research coincides with the UK's first Enterprise Week, personally endorsed by Chancellor Gordon Brown and sponsored by the Treasury and the Department for Trade and Industry.

In his speech at the launch of Enterprise Week, Mr Brown hinted that he would amend the Schedule 22 tax law, which has held up universities spinning off companies for the past 18 months.

He told delegates to the Enterprising Britain policy summit on Monday that December's pre-budget report would "examine and remove the tax barriers to enterprise such as those that hold back university spin-off companies from turning research excellence into business success".

He added that, from next year, every secondary school will offer enterprise studies to all pupils, with universities likely to follow suit as they are encouraged to place enterprise high on their curricula.

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