Research to Riches Entrepreneurial Impact Ranking 2019 Measuring the success of UK universities in converting research into successful companies
1 Introduction
Measuring the commercial effectiveness of the UK’s universities
The UK’s academic institutions collectively to improve its As the UK’s Industrial Strategy are world renowned, which is commercialisation. The UK has places a clear emphasis on reflected in ground-breaking produced a host of successful academic entrepreneurialism achievements such as the university spinouts, but there are as a driver of economic growth, discovery of DNA, the jet engine many unrealised opportunities the Entrepreneurial Impact and the world’s first electronic that have been left in labs or Ranking aims to bring all key programmable computer. The got lost on their funding journey. stakeholders together for the UK UK ranks third with the number These could be worth trillions economy to reap the benefits of of PhDs it produces (behind of pounds to the UK economy. our academic excellence. USA and Germany)1 and third The Entrepreneurial Impact in the publication of academic Ranking is an index of the The Entrepreneurial papers (behind USA and China).2 universities that are leading Over many decades, work by Impact Ranking provides the way in creating and brilliant minds in science and insights into which commercialising spinouts. medicine has resulted in the In quantifying their impact, it universities are best at UK coming second only to the creates a framework for further USA for Nobel prizes. nurturing research- transparency, collaboration and However, while our strength lies improvement throughout the based innovation. in academic research, there ecosystem. are many steps we could take
In this report we refer to a university spinout as a registered company set up to exploit intellectual property that has originated from within a university.
1 Based on OECD (2015), OECD Education at a Glance 2015: OECD Indicators, OECD Publishing, Paris, http://dx.doi.org/10.1787/eag-2015-en 2 Department for Business, Energy & Industrial Strategy (BEIS), International Comparison of the UK research base 2019, – https://www.gov.uk/ government/publications/international-comparison-of-the-uk-research-base-2019 International Comparison of the UK research base, 2019
2 Spinout success stories
Over the last 20 years, the UK’s academic institutions have shown that they can produce highly successful new companies operating in science and technology:
Name: Name: Oxford Nanopore Technologies ARM Holdings
University: University: Oxford University University of Cambridge
Speciality: Speciality: DNA sequencing A designer of smartphone chips
Founded: Founded: 2005 1990
Raised £50 million at a £1.7 billion post- Acquired by Japanese firm Softbank money valuation1 in 2018. for £24 billion in 2016.
Name: Name: Ziylo Abcam Plc
University: University: University of Bristol University of Cambridge
Speciality: Speciality: Developed glucose binding molecules One of the world’s leading producers for the treatment of diabetes of antibodies
Founded: Founded: 2014 1998
Sold to Novo Nordisk for £623 million A global business exporting to some in 2018. 140 countries with a market capitalisation of £2.3 billion.
Turning research and science into lucrative companies is an art that has been mastered by some universities better than others. Several reviews (e.g. McMillan, 2016 & Lambert, 2003) have all agreed that there is room for improvement in the UK’s approach to commercialisation of research.
The Entrepreneurial Impact Ranking is a benchmark of the universities that are leading the way in capitalising upon the economic potential of academic research.
1 Pitchbook
3 The success of leading universities in the USA in creating commercial value from academic research offers an indication as to the opportunity the UK could capitalise on. 26,000 US$2 trillion Research by the Massachusetts Institute of With a combined annual company turnover Technology has been the genesis for some of US$2 trillion. 26,000 companies. 65% 3.3 million In nominal terms, that represents 65% of These have created 3.3 million jobs. UK annual GDP from just one university.
Source: https://www.kauffman.org/what-we-do/research/2009/08/entrepreneurial-impact-the-role-of-mit Entrepreneurial Impact: The Role of MIT: https://www.kauffman.org/what-we-do/research/2009/08/entrepreneurial- impact-the-role-of-mit
4 Measuring universities’ impact
The Entrepreneurial Impact Data was sourced exclusively benchmark for understanding Ranking measures UK universities’ from the Higher Education relative performance in creating effectiveness in terms of their Statistics Agency, and there are new spinout opportunities. The production of intellectual property, no subjective or opinion-based Entrepreneurial Impact Ranking creation of spinout companies measures. The ranking is based takes an investor’s perspective and successful exits from such on the data points below, put in that it identifies the UK’s spinout companies, relative to together using data aggregated universities that produce the most their total funding. from 2009–2018. The aggregation successful spinout companies is necessary as startups, relative to their total funding. Taking its foundation from particularly spinouts, take time established academic studies to build and develop into on research commercialisation, successful companies. The combination of data the Entrepreneurial Impact points makes this the Ranking measures the most The Entrepreneurial Impact important data points that Ranking differs from any others most comprehensive influence the creation of spinout because it focuses entirely on ranking of universities: a companies from universities. universities’ capacity to produce quality, investor-ready spinout true reflection of which companies. As such, it offers a universities are punching above their weight.
Data points included are: 1. Total funding per university 2. Total spinouts created per university 3. Total disclosures per university 4. Total patents per university 5. Total sales from spinouts per university
5 Entrepreneurial Impact Ranking – the results
6 #1
Queen’s University Belfast
Over the period measured, Queen’s University Belfast has been found to be the most effective in terms of its production of spinout companies and successful exits, relative to the total funding received. Through QUBIS, the commercialisation arm of Queen’s, the university has had a number of notable successes such as Kainos, Andor Technology and Fusion Antibodies, all of whom have been listed on the London Stock Exchange. Andor Technology was subsequently purchased by Oxford Instruments in 2013 for £176 million.
Photo: Queen’s University 7 Entrepreneurial Impact Ranking 2019 - Top 10
1. Queen’s University Belfast 6. The University of Dundee
2. The University of Cambridge 7. The University of Nottingham
3. Cardiff University 8. King’s College London
4. Queen Mary University of London 9. The University of Oxford
5. The University of Leeds 10. Imperial College of Science, Technology and Medicine
8 Entrepreneurial Impact Ranking 2019
Rank University name EIR score Rank University name EIR score
1 The Queen’s University of Belfast 112.31 26 The University of Bristol 55.48
2 The University of Cambridge 95.10 27 Glasgow Caledonian University 53.32
3 Cardiff University 86.14 28 The University of Leicester 53.26
4 Queen Mary University of 85.79 29 The University of Exeter 53.04 London 30 Loughborough University 52.37 5 The University of Leeds 81.21 31 The University of Southampton 51.58 6 The University of Dundee 80.39 32 The University of Sunderland 47.55 7 University of Nottingham 79.01 33 The University of Birmingham 46.26 8 King's College London 72.99 34 Coventry University 40.76 9 The University of Oxford 72.54 35 The Institute of Cancer 35.31 10 Imperial College of Science, 68.56 Research Technology and Medicine 36 The University of Sheffield 29.54 11 The University of York 67.71 37 Royal College of Art 29.42 12 The University of Aberdeen 62.82 38 University of Plymouth 29.40 13 Royal Holloway and Bedford 60.99 New College 39 Oxford Brookes University 28.87
14 University of Ulster 59.87 40 Edinburgh Napier University 28.74
15 University of South Wales 59.35 41 St George's, University of London 28.70
16 The University of Manchester 59.26 42 Staffordshire University 28.58
17 University of Durham 58.25 43 The University of 28.44 Wolverhampton 18 University College London 57.89 44 The Royal Veterinary College 28.26 19 The University of Strathclyde 57.4 6 45 Middlesex University 28.23 20 The University of Glasgow 57.17 46 The Manchester Metropolitan 28.18 21 The University of Bradford 56.51 University
22 The University of Salford 56.33 47 University of the Arts, London 27.95
23 The University of Warwick 55.86 48 Aston University 27.95
24 The University of Bath 55.78 49 City, University of London 27.91
25 The University of East Anglia 55.64 50 The Robert Gordon University 27.85
The numeric score attributed to each university is formed from the combination of the following data points (all publicly available and sourced from the Higher Education Statistics Agency): total funding per university, total spinouts created per university, total disclosures per university, total patents per university, total sales from spinouts per university. The Top 100 UK universities by EIR Score are included in the Entrepreneurial Impact Ranking. 9 Rank University name EIR score Rank University name EIR score
51 Cranfield University 27.76 76 The University of Portsmouth 21.46
52 The University of Hull 27.68 77 Sheffield Hallam University 21.23
53 Brunel University 27.58 78 The University of Essex 20.09
54 The Nottingham Trent University 27.52 79 The Arts University 20.00 Bournemouth 55 De Montfort University 27.50 80 Birmingham City University 19.69 56 The University of Kent 27.4 6 81 The University of Greenwich 18.69 57 Falmouth University 27.08 82 The University of Westminster 18.24 58 Bangor University 26.96 83 The Open University 17.91 59 University of the West of 26.94 England, Bristol 84 Birkbeck College 17.87
60 The University of Edinburgh 26.79 85 University of Abertay Dundee 17.78
61 The University of Central 26.27 86 University of Northumbria at 17.51 Lancashire Newcastle
62 Heriot-Watt University 26.26 87 London South Bank University 17.18
63 Bournemouth University 25.94 88 The University of Lincoln 15.95
64 Keele University 25.50 89 Newcastle University 14.88
65 The University of Liverpool 25.17 90 London Metropolitan University 14.85
66 Swansea University 24.91 91 Anglia Ruskin University 14.63
67 University of Hertfordshire 24.54 92 Roehampton University 14.31
68 The University of Lancaster 24.05 93 The University of Brighton 13.82
69 The University of Surrey 23.89 94 The University of Northampton 10.74
70 The University of Reading 23.71 95 The University of Bolton 9.95
71 Aberystwyth University 23.38 96 Newman University 9.95
72 The University of Sussex 22.98 97 University of Bedfordshire 9.67
73 Liverpool John Moores 22.96 98 Goldsmiths College 9.62 University 99 University of Wales Trinity 9.13 74 The University of the West of 22.05 Saint David Scotland 100 London School of Hygiene and 8.17 75 The University of Huddersfield 21.49 Tropical Medicine
10 The Entrepreneurial Impact Ranking is unique in having a sole focus on UK universities’ track record of success with spinouts.
The prominence of the UK’s are the fuel that fire academic the ranking and some of the universities in terms of academic entrepreneurialism, and the more prestigious institutions output grew internationally over resource we have in the UK is found outside the top 20, it is the 9-year time period that world-leading. Although most important to think about this in data was collected for this people are familiar with patents, terms of efficiency of producing ranking. While our Oxbridge disclosures are less well known. quality spinouts relative to total institutions progressed further A disclosure is triggered when funding received. Nevertheless, in the top ten of the world’s a university researcher submits this helps identify some hidden leading research universities, the a new idea to their university gems, as well as some of the University of Edinburgh went technology transfer office for UK’s sleeping giants. from 54 to 31 and the University potential commercialisation The objective of the of Manchester improved from 41 and/or knowledge transfer. Entrepreneurial Impact Ranking to 33, according to the Academic A critical factor in understanding is to better understand which Ranking of World Universities. In the Entrepreneurial Impact universities perform best in essence, the UK’s universities are Ranking is that it is adjusted to terms of producing high quality improving their research output take account of the total funding spinout companies consistently, internationally, so there is no that universities receive. This and to bring the entire ecosystem better time to make the most ensures that the ranking is fair together as a whole (investors, of this excellence commercially. for all universities and doesn’t corporates, talent networks, Throughout the total 9-year overly weight in favour of well- universities, funding agencies period that the Entrepreneurial known Russell Group institutions and policymakers) to collaborate Impact Ranking spans, the UK’s that are exceptionally competitive on helping the entire ecosystem universities produced a total when it comes to winning funding. thrive, and ultimately for the UK of 38,248 disclosures and 9,526 So while some less familiar names to be a global leader in academic patents. Patents and disclosures can be found towards the top of entrepreneurialism.
11 Key factors influencing the ability of academic entrepreneurs to build spinout companies
Funding for proof of concept and prototyping
Why do only a few ventures The ranking results bear this out. The top-ranked institution, succeed where so many others Universities that have performed Queen’s University Belfast, has fail? One answer lies in the well are those that have raised a range of customer-discovery challenge of ensuring funding funds specifically to bridge this programmes within its ‘tech while taking ideas through to gap, or are closely associated transfer company’ QUBIS that proof of concept and prototyping. with funds established to help are designed to validate market For academics to get their ideas alleviate the pain point. Imperial interest in early stage research through the earliest stages of College (ranked 10), partnering discoveries. These include running development they must cross with Imperial Innovations; the Innovate UK’s Innovation to what has come to be known University of Oxford (ranked 9), Commercialisation of University as ‘the valley of death.’ allied with Oxford Sciences Research programme, and its Innovations; and the University own Lean Launchpad. Queen’s For example, Oxford Nanopore of Cambridge (ranked 2), working uses this approach to rapidly was only able to make the leap with Cambridge Enterprise and filter opportunities, and then after it received early stage Cambridge Innovation Capital, focus its support and investment proof-of-concept funding from all feature in the ranking’s top on the best companies. leading patient capital fund IP 10. The graph below shows how Group. This kind of support is very Brian McCaul, CEO at the number of spinouts has similar to university-raised early QUBIS Ltd, added: increased since Oxford Science stage funding. But whatever Innovation was established. “It is a testament to the world- form it takes, the reality is that class research and ambitious many ventures don’t have access companies that have emerged to it and fall by the wayside. in recent years that Queen’s Oxford University Spinouts Created University Belfast, via QUBIS,
25 has achieved first place in this ranking. With a history of strong 20 support for commercialisation from the University’s senior 15 management, which has included early university cash investment, 10 Queen’s is helping inspirational founders develop pioneering Oxford Science 5 Innovation technology engendered at the Established 2015 university and make their mark 0 in industry on the global stage.” 2010 2011 2012 2013 2014 2015 2016 2017 2018
12 Talent
Aside from funding, the issue of Another challenge for spinouts Nevertheless, there is more talent is consistently a challenging is that academic’s understanding that could be achieved through issue for academic-led spinouts. of the commercial world tends collaboration across the entire Generally speaking, the skills to be poor. This is due in part ecosystem and by raising required are highly sought after to the fact that academic the profile of the UK as the by many industries, and it is achievement is measured largely go-to market for academic extremely difficult to persuade by the number of publications entrepreneurs to raise highly skilled people to opt for and citations a researcher investment and build businesses. higher risk spinout companies delivers known as ‘publish or in the face of offers from more perish’ and there are limited established enterprises. In incentives for researchers to many ways, the war for talent engage with industry. is amplified in the world of academic spinouts.
13 Collaboration
Between universities:
A key aspect of the higher-ranking patients, families and the UK’s Dementia Research institutions’ work is collaboration professionals to develop and Institute, which aims to develop with other universities, leading trial new products and services connected home solutions for to positive effects for spinouts. that improve health outcomes. people living with dementia and An interesting example comes their carers. According to Helix Centre’s from arts colleges collaborating Managing Director, Daniel Dickens, Collaboration increases scale with larger technical universities. “big tech firms and startups alike and capacity, with recent The Royal College of Art (ranked are looking to innovate in developments indicating 37), working with Imperial College healthcare. Our collaborative that this is recognised by the (ranked 10), and Falmouth approach means we’re able to government. The University of University (ranked 57), working attract and retain the world- Manchester (ranked 16) recently with the University of Exeter class talent across design, received £5 million from its (ranked 29), have achieved their engineering and clinical research ‘Connecting Capability Fund’, rankings through sharing very that we need to compete.” a £100 million vehicle that different and specialised skillsets supports university collaboration to support new ventures. One of Helix’s first digital products in research commercialisation. was acquired by Google The Helix Centre shows The aim is to use this money to DeepMind, and subsequent collaboration in practice. It’s a work up a far bigger fund that solutions have recently spun out digital health innovation lab will invest in the outputs of as startup ventures. A new based at St Mary’s Hospital in Leeds (ranked 5), Sheffield collaboration now sees Helix London, launched in 2014 as a joint (ranked 36) and Manchester Centre as part of the £20 million venture between Imperial College universities. Over time, this research partnership between London and the Royal College of could create a northern Imperial College London and the Art. At Helix, interdisciplinary powerhouse specifically for University of Surrey (ranked 69) teams of product designers, university spinouts, which rests to launch the Dementia Care software engineers, clinicians and on collaboration. Technology Centre, funded by scientists come together with
Collaboration between universities allows for the wide-ranging support that spinouts need to realise their commercial potential.
Collaboration throughout the ecosystem: Understanding tech demand:
One area of particular opportunity for collaboration Corporate engagement is often the missing throughout the early stage / deep tech ecosystem component in connecting academic laboratories is between different profiles of investors. It is often with real-world problems. It is widely acknowledged assumed that all investors are the same; however, that more extensive collaboration would help focus the venture and patient capital communities break innovation efforts towards the most relevant down into specific skills sets that could complement commercial opportunities. one another through more collaboration. Combining the skills of technically excellent, very early stage investors with the financial and commercial skills of scale-up investors is a particular area of opportunity.
14 Conclusion
The UK’s universities have a conventional software-based academia’s sleeping giants strong focus on supporting startups. Similarly, the cycle are starting to stir. Similarly, spinouts, with a great deal of times to market and exit for collaborations between activity and a few notable investors are much longer. universities mean emerging successes. Clearly there is no All in all, there are far greater ventures can benefit from more lack of academic ability in the complexities, risks and expenses well-rounded support, so aiding UK. The truth is that building associated with getting world- their future success. companies from academic class scientific research into the At Octopus Ventures we recognise research is not easy. Generally commercial arena. the potential for the UK to speaking, the commercial In measuring the relative become a global leader in skillset required is far rarer and effectiveness of UK universities’ academic entrepreneurialism. more challenging to recruit into work in this area, the Our hope is that this report acts early stage enterprises. Entrepreneurial Impact Ranking as a small first step on a much Furthermore, the levels of provides some signposts for the bigger journey to ensure that the investment and infrastructure future. Infusions from funds teams nurturing the next wave of required to even get to proof of providing backing at proof of innovation in university laboratories concept dwarf those of more concept stage mean that are set up for success.
15 Authors
About Octopus Ventures About Ideas 2 Impact
Octopus Ventures is one of the largest VCs in Europe, Octopus Ventures worked with Ideas 2 Impact (i2i) with £1.2 billion under management. Our investment on this research. An innovation and fundraising team is focused on investing in the areas we believe consultancy, i2i helps organisations raise funds for have the potential to change the world. research and commercialisation, as well as putting together pathfinder teams for the development of We recognise the potential of universities to power new spinout companies. the UK economy. At Octopus Ventures, we have a whole team dedicated to investing in deep tech. We i2i’s founder Alisdair Jones has worked with know that in this area, the really significant advances universities for over a decade, both investing in early are often happening, slowly and quietly, in university stage research-based companies and producing laboratories and research centres. We believe that research on the UK’s early stage ecosystem. This is UK universities have a key role to play in providing alongside promoting the research portfolios of over more support for this work. 500 universities across 40 countries.
octopusventures.com i2impact.org
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