Government Allocates £30 Million to Expand Spin-Out Activity Beyond Elite Universities

Cambridge Leads UK in Spin-Out Innovation, but Report Reveals Regional Disparities

The latest register from the Higher Education Statistics Agency (HESA), part of the UK’s education-focused tech agency Jisc, offers valuable insight into the distribution of university spin-out companies across the country. This data highlights the crucial role certain universities play in driving innovation and entrepreneurship, revealing a pronounced concentration of spin-out activity among a select group of institutions. According to the report, out of 2,269 spin-outs, including social enterprises, half originate from just nine universities. Furthermore, five institutions have each established more than 100 spin-offs, reinforcing their dominance in commercialising research and fostering start-ups.

Leading the rankings is the University of Cambridge, which has generated 299 spin-offs since 2012, demonstrating its strong influence in translating academic research into commercial ventures. Oxford follows closely behind with 183 spin-outs, while University College London ranks third with 152. Other major contributors include Swansea (139), Manchester (122), and Imperial College London (97). Meanwhile, further down the list are Bristol (64), Royal College of Art (72), Coventry (50), Queen’s University Belfast (52), Newcastle (45), and both Nottingham and Glasgow, each with 44 spin-offs.

To expand spin-out activity beyond the top universities, the UK government allocated £30 million in March to support four regional hubs: Merseyside, East Anglia, the Midlands, and the North East. Although the number of new spin-outs declined from a peak of 201 in 2020/21 to 160 last year (excluding nine in “stealth mode”), experts anticipate a potential reversal of this trend. Universities are now being encouraged to lower their equity stakes to 10–25%, providing founders with greater incentives to scale their companies.

Notably, Jisc stated that the HESA register is the world’s first to compile university-provided data on spin-outs, listing all UK university spin-outs since 2012, along with older ones that remain active. These companies, established to commercialise university-developed intellectual property, are widely regarded as pivotal in transforming research into real-world impact. Furthermore, a 2023 review led by Oxford and Cambridge recommended that universities reduce their equity stakes to better incentivise founders and attract investors, aligning their practices with those of leading U.S. institutions.

Observers have noted that UK universities are increasingly adopting lower equity stakes to enhance spin-out success, mirroring top U.S. institutions. The Royal Academy of Engineering reported a drop in average university ownership from 21.5% in 2023 to 16.01% in 2024, marking the lowest level in a decade. While spin-out investment increased to £2.6 billion, the number of deals declined, reflecting wider market caution. Parkwalk emerged as the leading investor, with 325 deals and £1.84 billion invested since 2015. Ultimately, these developments underscore the evolving landscape of university-led innovation in the UK, highlighting both opportunities for growth and the challenges of sustaining long-term investment in spin-outs.

Editor's Note:

The latest report from the Higher Education Statistics Agency (HESA) highlights how universities in the UK are turning research into real-world businesses through spin-out companies. These companies play a key role in bringing academic ideas to life, but most of them are coming from just a few top universities like Cambridge, Oxford, and Imperial College London. This raises concerns about fairness, funding access, and whether smaller or less well-known universities are being left behind. While it’s expected that research-heavy universities lead in this area, the large gap between them and others shows that many universities may not have the resources or support needed to grow similar businesses. The government’s recent £30 million funding to help more universities get involved is a good start, but it’s unclear if it will be enough to even the playing field. Another positive step is the push for universities to take smaller shares in spin-out companies. This could encourage more founders and investors to get involved. Still, universities need to make sure they benefit in the long run too. Even though investment in spin-outs is rising, fewer deals are being made, showing that investors are still cautious.

Skoobuzz highlights that as this sector grows, it's important that the focus shifts to supporting all universities, not just a few. Innovation should be spread more widely so that the whole country benefits, boosting the economy and scientific progress across the UK.