Transfers prove costly

September 15, 2006

Many technology-transfer offices spend far more than they earn, reports Jessica Shepherd.

Many university technology-transfer offices are failing to cover their costs, an investigation by The Times Higher shows.

At least ten of the offices responsible for exploiting academics' ideas are spending in total over £1 million more than they generate. A similar number are making money or breaking even.

The results will make uncomfortable reading for the Government, which has poured an estimated £100 million into promoting technology transfer to boost UK enterprise.

The Times Higher asked universities for the latest figures detailing how much their technology-transfer offices cost to run and how much cash they generated.

The cost of running the office exceeded money made at the following universities in 2005-06: Open, Aston, East Anglia, Essex, Heriot-Watt and Reading.

Some universities could provide data only for 2004-05. In this period, the technology-transfer offices at the universities of Abertay Dundee, Surrey, Swansea and Teesside did not cover their costs.

Stephen Allott, former director of development at Cambridge University Computer Laboratory, said the Times Higher investigation proved that technology-transfer offices were "broadly a waste of public money" and a drain on "already strained university budgets".

Mr Allott, the chairman of Trinamo, a management consultancy firm, said: "Some of the money spent on technology transfer pays off, but millions of pounds are wasted on it. And this is proof of that.

"Technology-transfer offices waste money trying to create and produce intellectual property. Instead of trying to commercialise research, they should be trying to attract and retain the entrepreneurs of the future and providing scholarships."

Richard Harrison, of the School of Management and Economics at Queen's University Belfast, said the findings confirmed his belief that technology-transfer offices engaged in "voodoo practices".

Professor Harrison said: "The assumption is that, by focusing on technology transfer, there will be a substantive ongoing benefit to a university.

"But the problem is that ongoing positive revenue does not materialise or does not offset the costs of running the technology-transfer office."

Andy Hopper, who is head of the Cambridge University Computer Laboratory and has co-founded 12 companies, said: "I believe the experience in the US over many years is that almost all technology-transfer offices lose money.

Very occasionally, some place gets lucky and bucks the trend, but that is unusual and unpredictable."

But those in charge of technology-transfer offices defended the figures by arguing that it could take ten years or more before their investments reap financial rewards. They also provide services such as promoting entrepreneurialism within institutions.

Neil Bradshaw is chair of the University Companies Association and director of enterprise at Bristol University, where the technology-transfer office is covering its costs.

He said: "It is not surprising that many technology-transfer offices are not covering their costs. The money made from licensing, patents and spin-offs all require investment seven to ten years before they show results."

Philip Graham, executive director of the Association for University Research and Industry Links, believes that technology transfer offices should be given credit for their progress in the past decade.

He said: "In the UK, we are still far ahead of any European country when it comes to knowledge transfer. If you go back ten years, there were only 150 technology-transfer people in the UK, now there are at least 1,600.

"There is also a lot of knowledge transfer that will never generate any income but that is of benefit to UK plc."

The Times Higher investigation showed that many university technology-transfer offices were making a profit.

Imperial Innovations of Imperial College London made a net operating profit of £619,000 in 2004-05. Cambridge Enterprise of Cambridge University covered its costs by £113,200 in 2004-05, while Warwick Ventures of Warwick University made £137,000 more than it spent in 2004-05.


Some technology-transfer offices are taking bigger slices of their universities' general budgets.

* Aston University spent £1.2 million of its overall budget on its technology-transfer office in 2005-06, compared with £1 million the year before. Figures include salaries and other expenses such as patenting costs

* Leeds University poured £324,000 into its technology-transfer office in 2005-06, compared with £283,500 the year before

* The University of Central England put £642,664 into its technology-transfer office in 2004-05, compared with £541,370 the year before.

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