Innovation can drive growth – but UK must invest more in commercialisation

We are today officially announcing a new coalition – comprised of TenU, Knowledge Exchange UK, the Russell Group, and University Alliance – and representing over 120 UK universities, as well as other technology transfer organisations.

We are united by a shared goal: to overcome barriers to university commercialisation and economic growth, with a particular focus on the critical need for proof-of-concept (POC) funding.

The UK’s world-leading research base is one of our greatest assets, powering innovations that transform lives and spark economic growth. The Oxford-AstraZeneca Covid vaccine demonstrated the global impact of UK university research. Similarly, spinouts like Exscientia, which uses AI for drug discovery, and Ceres, a leader in clean energy technologies, highlight how cutting-edge research can be harnessed for public benefit.

It’s no surprise that the UK Chancellor Rachel Reeves placed innovation at the heart of her growth mission in yesterday’s speech – highlighting the huge potential of the Oxford and Cambridge super-cluster.

But to unlock this value, we need an ambitious vision for public investment that supports every stage of research commercialisation, from proof-of-concept to market-ready technologies.

Progress has been made. Since 2014, 1,300 UK spinouts have attracted £20.1 billion ($25bn) in investment and created 29,000 jobs. Investment in university spinouts has increased fivefold since 2014. However, regional disparities in funding and ecosystem maturity persist, limiting innovation potential in parts of the country. Tailored regional support is essential to ensure every region benefits from this economic opportunity.

UK POC funding is small compared with other countries

The UK government’s 2024 Autumn Budget allocated £40 million over five years for POC funding. While this is a positive signal, it equates to just £8 million annually for all UK universities – a fraction of what is needed. For comparison, a single Belgian university receives €20 million annually from its regional government for POC funding.

A more substantial and targeted commitment to POC funding would dramatically boost the number of licences and spinouts reaching investment readiness, driving job creation and productivity across the UK.

A preliminary analysis suggests that a 14-fold increase on the government’s current yearly funding proposal would be transformative, and we will work with government to consider what is possible in the current climate.

Evidence from UCL Business shows what increased POC funding can achieve: after launching a £7.5 million POC fund in 2023, the number of spinouts it supports has doubled. Similarly, US data reveals that every dollar invested in POC funding attracts $29 in follow-on funding. The UK, with its internationally recognised research capability, is poised to achieve similar returns.

Consider the case of Autolus Therapeutics, a UCL spinout developing life-saving immunotherapy treatments for cancer patients. Between 2010 and 2014, UCL Business provided £183,000 in POC funding, enabling the development of the technology’s therapeutic applications. Since its founding in 2014, Autolus has raised $921.6 million in funding, employs 450 people, and operates a 70,000-square-foot production facility in Stevenage. This is the transformative power of POC funding in action.

Over the coming months, our coalition will convene a working group of experts from technology transfer organisations, businesses, and venture capital funds to develop a detailed proposal for implementing POC funding. Our aim is to ensure this funding reaches every high-potential technology, fostering innovation across the UK in the most cost-efficient way.

This new working group will explore a range of options and models for how funding should be allocated and will actively seek sector-wide input.

With a relatively modest investment in commercialisation, the UK could significantly increase the number of research projects achieving real-world impact. This would create jobs, strengthen regional clusters, and bolster our competitive edge on the global stage.

We urge the government to join us in developing a shared vision for an industrial strategy that fully harnesses the UK’s strengths in research. With the right support, our universities can continue to be engines of innovation and drivers of economic growth, transforming ideas into impact across every corner of the UK.

Ananay Aguilar is the head of TenU, a group of 10 leading universities formed to advocate for best practices in research commercialisation.