In this issue, we look at the UK, Sweden, Denmark and Norway.
Starting this month, Global University Venturing will be examining the technology transfer scenes of innovation hotbeds around the globe to provide an overview and ascertain trends, issues, and developments. In this issue, we look at the UK, Sweden, Denmark and Norway.
The UK
The UK has a long and rich history of innovation. Once a driving force of the British empire, research and development (R&D) in the UK now focuses on turning that technical knowledge into high-tech exports to bolster the economy.
Much of this is driven by one of the country’s main economic pillars – education.
Three UK institutions are in this year’s Times Higher Education World University Rankings: Oxford, Cambridge, and Imperial College London. Along with University College London, ranked 17, these universities form the heart of the country’s technology transfer efforts, often referred to as the “golden triangle”. Each maintains a thriving tech cluster, with Cambridge home to the largest centre of innovation in Europe – in 2012 it became the first UK university to raise over £1bn in external funding for its spin-outs. While the golden triangle tends to grab the most commercialization headlines, it would be disservice to ignore the rest of the UK.
South-west of the triangle sits SetSquared – a commercialization partnership involving Russell Group universities Bath, Bristol, Exeter, Surrey, and Southampton.
This partnership has led to 37 spin-outs in the past four years, six initial public offerings (IPOs) in the past five years with a collective value in excess of $390m, and more than $700m of external funding raised. It is incubating more than 300 companies and has provided $46m of seed financing for the its spin-outs.
Just over the border from Bristol is Cardiff, capital of Wales. The region has stagnated since the loss of its mining industry in the 1980s, but it is seeking to capitalise on the strength of Cardiff University’s biotech research with a new $150m Wales Life Science Fund. The area now has all the tools it needs to construct its own tech cluster. While the Welsh Assembly has much work to do before it can match the golden triangle, Cardiff and the surrounding area enjoy a strong graduate pool from multiple universities, and recently attracted life sciences firm ReNeuron to act as a beacon to other life sciences considering the move to south Wales. Cardiff, along with Sheffield University, uses Fusion IP to act as a tech transfer office (TTO) for its commercialisation efforts, which also works with several other UK universities to support spinouts.
A subsidiary of commercialization firm the IP Group, the firm enjoyed a strong 2012. It held its first material exit, selling drug research firm Simcyp to life sciences company Certara for $32m, netting $6.4m for Fusion, a 200- fold return on its original investment. It launched two new spin-outs, raised $16.4m in external funding, invested $4.5m in its portfolio firms, and
increased its portfolio value to $31m. It raised $30.4m for new commercialization opportunities recently, and is also supported by a $45m venture fund, IP Venture Fund II, managed by its parent.
Further north, sits the home of “wonder material” grapheme in Manchester University. Its tech transfer unit UMI3 typically spins out four to five firms a year, recently pushed its annual revenue above the £1m ($1.5m) mark, and raised $16m in external funding for its spin-outs last year.
Manchester is also supported by the largest venture fund for a single university in Europe, the $50m UMIP Premier Fund.
Scotland is currently the most active region for spinouts in the UK. Edinburgh University alone delivered 18% of the UK’s new spin-outs for 2012. In a similar story to Wales, Scotland is looking to capitalise on its life science know-how. To this end, Glasgow, Edinburgh and Aberdeen backed a $79m venture fund along with other investors earlier in the year which will support early-stage life sciences in the country.
In Northern Ireland, Queen’s University Belfast is the stand-out performer. The university is on a quest to reach the Quacquarelli Symonds’ Global Top 100 universities by 2016 (currently 166), and it is using tech transfer as a major driver in this endeavour. Despite being further down the UK rankings than other top commercialisation performers, the university is still managing to pull in significant intellectual property (IP) revenues ($8.82m in 2010-11).
Overall, the UK’s academic institutions continue to perform admirably in terms of generating new innovations which can be taken into industry. However, the UK’s performance in this area is hampered significantly by the current government’s fumbling on innovation. It has been criticized in recent reports for having “no coherent innovation policy” and making changes to policy which have left tech firms starved of growth capital. Progress has also been hampered by the government’s focus on getting to grips with the country’s economic woes. Recent data has indicated that recovery may well be on the way, but years of stagnation or recession in the UK has done little to assist commercialisation.
A lack of government support leads spin-outs into accepting funding from other sources, generally looking for quick returns. This has led to an exodus of British innovation to the US and other countries before they have the chance to take root in the UK and contribute solidly to UK economic growth and employment.
In response to this criticism, the government has taken steps to make more funding available to support spin-outs, such as a $76m investment in May for commercialization and a further $142m for biotech research and firms. It is also working with universities and industry to form a more cohesive approach.
In short, the UK’s tech transfer community continues to perform, its universities stay ahead on innovation, and the sector continues to grow. However, a more coherent policy on innovation and an increase on R&D spending – which remains behind European peers – would hardly go amiss.
UK facts
Spin-outs 2011-12 191 (2010-11: 268)
Estimated external investment raised 2011-12 $1.276bn
Estimated turnover of UK spin-outs 2011-12 $3.18bn
R&D spend as a proportion of GDP 2011 1.7%
Global innovation rank 3
Global competitiveness rank 8
Income from licensing 2011-12 $123m
Top 10 UK universities for IP income 2010-11
Cambridge University $15.06m
University College London $9.46m
Queen’s University Belfast $8.82m
Oxford University $8.35m
Open University $5.4m
Imperial College London $4.11m
Edinburgh University $3.53m
Loughborough University $2.8m
London School of Economics and Policy Science $2.47m
Oxford Brooks University $2.47m
Data provided by FundingBenchmarks.org
Technology transfer in the UK
University Technology transfer unit
Aberdeen University Commercialisation and Knowledge Exchange Gp
Bath University SetSquared
Birmingham University Alta Innovations
Bristol University SetSquared
Cambridge University Cambridge Enterprise
Cardiff University FusionIP
Edinburgh University Edinburgh Research and Innovation
Exeter University SetSquared
Glasgow University Research Stategy and Innovation Office
Imperial College London Imperial Innovation
King’s College London KCL Business and Innovation
Leeds University IP Group
Manchester University UMI3
Newcastle University Technology Transfer and Licensing
Oxford University Isis Innovation
Queen’s University Belfast Enterprise Development
Sheffield University FusionIP
Southampton University SetSquared
St Andrews Univers
ity Knowledge Transfer Centre
Surrey University SetSquared
Ulster University Office of innovation
University College London UCL Business
Warwick University Warwick Ventures
Sweden
Home to the Nobel prize, entrepreneurs behind tech firms such as Skype and Spotify, and inventions like Tetra Pak, the computer mouse, and dynamite, Sweden has an innovation lineage that easily rivals its European peers. As with the UK and other Scandinavian countries, Sweden’s climate has led to a dedication to invention as a necessity all through Sweden’s history. Now, it has evolved into a thriving and diverse scene incorporating multiple approaches to cutting-edge innovation.
From the standpoint of tech transfer, Swedish university commercialisation process differs from its peers. This is largely due to the “professor’s privilege” law, that by default the legal owner of any IP coming out of a university is the researcher or research team behind the invention. Lars Jonsson, head of Uppsala’s tech transfer unit UU Innovation, said: “It is up to them [the researchers] to decide what to do with the results and who they want to support them. It is an option for them to use our office and our holding company can than invest in their ideas under a profit-sharing agreement. This means that the university has no control over the number of disclosures and what happens to them. We only know about those who choose to come to our office.”
While this allows researchers a much greater degree of freedom, professor’s privilege remains a contentious issue for Sweden. One side of the argument is that this it is one of the forces behind Sweden’s high capacity for innovation. Others argue that it wastes tax money as governmentsponsored research results will not necessarily generate returns for Sweden.
On a wider scale, the Organisation for Economic Co-operation and Development (OECD) has made numerous calls for the abolition of professor’s privilege, citing weak commercialisation infrastructure and patenting performance as reasons for doing so. The OECD also notes that despite Sweden having one of the highest levels of venture capital investment as a share of gross domestic product (GDP), it suffers from low angel and early-stage VC investment. While measures have been taken to bolster seed-stage investment, a combination of poor infrastructure and a lack of funds will undoubtedly inhibit university spin-outs attempting to get off the ground.
Although efforts are being made it improve the statistical data Sweden maintains on tech transfer, it is nonetheless hard to come by. It is surprising given Sweden’s high investment in R&D that the ultimate results and benefits from it are not emphatically quantifiable. TTOs were also fragmented in their approach. While top performers such as Lund, Uppsala, and Karolinska were much as we would expect from a TTO, we found others to be lacking in resources, uncommunicative or, in some cases, entirely fragmented into individual commercialization ambassadors. This could either be due to professor’s privilege, or perhaps a natural clustering around the Stockholm area. To rectify this, Sweden has established venture firm Inlandsinnovation with $225m to support innovation in the country’s more northwestern regions.
Nonetheless, Sweden’s academic and innovation rankings cannot be ignored, indicating that professor’s privilege must, in some way, deliver. However, it does raise questions. Is there sufficient support for lone wolf academics to ensure their IP becomes relevant to industry, or their companies are sustainable? Is a lack of commercialization infrastructure ultimately detrimental to Sweden’s innovation output both within the country and globally? And is the country’s proficiency for invention enough to carry the commercialisation scene alone, or is the sector itself in desperate need of some innovative thinking?
Sweden facts
Spin-outs, annual average 2003-09 359
R&D spend as a proportion of GDP 3.37%
Global innovation rank 2
Global competitiveness rank 4
Technology transfer in Sweden
University Technology transfer unit
Uppsala University UU Innovation
Lund University LU Innovation System
Chalmers University Innovation office west
Gothenburg University GU Holding
Stockholm University SU Innovation
Karolinska Institute Karolinska Development
Swedish University of Agricultural Sciences SLU Holding
Umeå University Uminova Innovation
Royal Institute of Technology KTH Innovation
Linkoping University LiU Innovation
Karlstads University Grants and innovation office
Mid Sweden University MIUN Innovation
Linnaeus University Grants and innovation office
Orobo University Innovation office
Lulea University of Technology Centek
Denmark
Denmark took a big hit during the financial crisis, with the 2008 crash wiping over 8% of the country’s GDP off the books in little over a year. Denmark has yet to make a full recovery, and efforts are hampered by a productivity level much lower than its peers even before the ramifications of 2008 took hold.
In order to rectify the situation, the Danish government is pursuing an ambitious reform agenda on promoting innovation to create jobs and stimulate growth, dubbed Denmark – A Nation of Solutions.
The strategy focuses largely on three areas – innovation driven by societal challenges, more commercialisation of research through mutual knowledge exchange, and an increase in the country’s education system’s innovation capacity.
The country has set itself three aims – more people with higher education in the private sector, increase in private investments in R&D, and more innovative enterprises. To deliver this, the government has pledged a swathe of measures to boost growth through innovation. It is increasing support for tech clusters and networks, prioritizing R&D that supports Danish manufacturing, creating more start-up incubators, focusing its universities on innovation, providing greater access to patents, and attempting to bring down barriers to knowledge exchange.
So far, it seems to be working. Danish innovation is on the increase, providing year-on-year increases for licences, inventions, and patent applications – albeit with a dip caused by the financial crisis. While its spin-out rate for 2011 is lower than it was for 2010, it is around the average for the past 10 years or so, and is likely to show an increase as new data becomes available in the next couple of months.
Unlike Swedish academic’s laissez-faire approach and the UK government’s inconsistent stance on commercialisation, Denmark resonates with a strong strategy that seeks to capitalise on its innovation base. Statistics indicate it is moving in the right direction with government, academia and industry working together to overcome the 2008 setback. That said, Denmark still needs more time for healing, and it is during this recovery that we will see if the country has got it right.
Denmark facts
Spin-outs 2011 7 (11 in 2010)
R&D spend as a proportion of GDP 3.09%
Income from licensing 2011 $12.2m
Global innovation rank 7
Global competitiveness rank 12
Technology transfer in Denmark
University Technology transfer unit
University of Copenhagen Tech transfer office
Aarhus University Tech transfer office
Aalborg Tech transfer office
Technical University of Denmark Office for innovation and sector service
Roskilde RUCinnovation
University of Southern Denmark Tech transfer office
Norway
In preparation for a potential oil and gas decline in Norwa
y, the country is seeking alternate forms of revenue, and has earmarked commercialisation of research as one of the avenues it can take.
Until 2003, Norway followed a similar principle to Sweden on tech transfer, where inventors had full ownership over their inventions. This then changed to ownership of IP transferring to employers, which led to the setting up of the country’s TTOs. So Norway’s commercialisation sector is younger than its peers.
The majority of Norway’s TTOs were set up independently from the universities they represent, allowing them to be more commercially focused in a manner similar to Imperial Innovations. These TTOs are in turn supported by Forny2020, the Research Council of Norway’s programme for commercialisation – Forny is a contraction of the Norwegian for “research-based innovation” – which provides funding for both proof-of-concept and the TTOs themselves.
The result is that although Norway has a smaller tech transfer community, the eight TTOs it does operate are more accessible than their Swedish counterparts. Unlike Sweden, Norway’s TTOs offer statistics on their activities. However, as with Sweden, there is still no single source of solid information on commercialisation statistics for the country.
However, despite having the infrastructure to support innovation, Norway remains hostile to tech spin-outs and start-ups. Oil and gas income has never been higher, and the country’s energy firms are subsequently hoovering up large chunks of venture capital for oil and gas firms. Of the $150m the country attracted in venture funding in 2012, $46m went into oil and gas. A cursory look at Norway’s Venture Capital Alliance reveals that the largest proportion of members invest in oil and energy firms. Norway’s fastest-growing firms are also in the oil and gas arena. According to the Nordic Growth Entrepreneurship Review last year, while the country had a high number of rapidly developing firms, nearly half fell into the energy or aquaculture sector.
There are voices arguing for a move to a knowledgebased economy as many in the country realise resources will not last forever. Yet currently there is little in the way of incentives for angel or early-stage investors, leaving tech start-ups and spin-outs starved of cash. In a recent interview with news provider Wall Street Journal, Hallstein Bjercke, Oslo’s deputy mayor, said this was leading to early exits or relocations for small Norwegian firms.
He said: “What has been the challenge so far is that they reach a certain level of international success, and at that level they have been acquired as they have not been able to be grow further as a Norway-based company.”
So while Norway has the infrastructure in place to generate spin-outs, oil and gas tends to barge in on the opportunities, human resources and venture funding before much in the way of tech or life sciences can be achieved. With its high salary per capita and quality of life, there is a sense of ambivalence towards entrepreneurship in the country.
But should it not act to take advantage of its innovation resources, Norway may well find itself lagging significantly behind European peers when the wells run dry.
Norway facts
Spin-outs 2012 unobtainable
R&D spend as a proportion of GDP 1.64%
Global innovation rank 14
Global competitiveness rank 5
Technology transfer in Norway
University Technology transfer unit
Bergen University Bergen Technology
Norwegian University of Life Sciences Kjeller Innovation
University of Agder and Teknova Coventure
University of Oslo Invent2
Norwegian University of Science and Technology NTNU Tech Transfer
University of Tromso Norinnova TTO
University of Stavanger Prekubator
Sintef (research institute) Sinvent
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