Stake in spin-offs brings capital gains

Pumping state cash into new ventures pays well, reports Jessica Shepherd.

University spin-offs have generated at least £1.3 billion for UK plc in the past three years, more than twice the sum that the Government has invested in technology transfer in the same period.

A study by Unico, the umbrella organisation for university technology-transfer offices, shows that the 24 university spin-offs listed on stock markets since 2003 are worth £1.253 billion. This, Unico says, proves that the Government's investment in technology transfer of more than £500 million since 1997 was paying off.

Among the companies listed are Wolfson Microelectronics, spun off from Edinburgh University and floated on the London Stock Exchange for £214 million, and Renovo, spun off from Manchester University and floated on the LSE for £154 million.

NeuroDiscovery, spun off from Warwick University and listed on the Australian Stock Exchange, and Cambridge Display Technology of Cambridge University, which was floated on Nasdaq, are also included.

Tony Raven, Unico's treasurer, conducted the study by calculating the worth of the companies by adding their values at flotation.

He said: "The Government has ploughed a substantial amount into technology transfer through the Department of Trade and Industry, the Higher Education Innovation Fund, the higher education funding councils and other routes.

"This study shows the return on their investment. It shows that the value we are creating in technology transfer is more than the amount that they are giving."

Dr Raven said the companies listed showed the exceptional ability of some of the UK's academic entrepreneurs. "It usually takes seven to ten years for a spin-off to reach the stage of an initial public offering, when it is floated on a stock exchange," he said. "A lot of these companies have been formed since 2002 and have grown at an amazing rate.

"These spin-offs are not just from the usual big research-led universities.

A successful spin-off can come from any university. UK institutions are producing some exciting companies for international investors.

"Technology transfer has been a big experiment. No one could say there is one way to do it, but we are focusing on the way it does seem to work. If we get all universities doing this, we will have a dynamic engine for the economy."

jessica.shepherd@thes.co.uk