Source: Deryck Chan
Some universities are overvaluing their intellectual property and may be preventing spin-off companies from making it big, according to a leading figure in engineering.
Dame Ann Dowling, who is set to become the next president of the Royal Academy of Engineering, said that institutions are stifling innovation by trying to keep hold of their original share in start-ups, which discourages others from putting in the funds needed to grow the businesses.
But an expert in the commercialisation of academic research said that it is the lack of venture capital that limits spin-off company growth, not “greedy universities”.
The issue came up when the RAE discussed innovation with its fellows ahead of a government consultation on science and innovation strategy, due to be published this autumn.
Dame Ann, professor of mechanical engineering at the University of Cambridge and head of its engineering department, told Times Higher Education: “Possibly universities overestimate the value of their intellectual property.”
Universities typically buy a share in the early stage of ventures that are spun off to exploit new ideas. But as the start-up gains investment, the university’s share gets diluted and ends up being very small, Dame Ann explained.
“Universities in some cases have been stifling that onward investment by demanding that they continue to hold…a large share of the spin-out companies,” said Dame Ann.
The UK should put more effort into building small spin-offs into sizeable companies, and staff at university technology transfer offices need more training on “how to maximise the pot for everyone”, she added.
But David Secher, patron and co-founder of PraxisUnico, a network that supports technology transfer, disagreed. “What limits spin-out companies has clearly been a lack of venture capital over the last few years, not greedy universities,” he said. “I do not think that universities are overvaluing,” he added, while noting that he could not “totally generalise”.
“This is a marketplace, and one enters a market with sellers overvaluing their goods and buyers undervaluing the same goods,” said Dr Secher.