Innovation is the name of the game as 40 businesses are spun out

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FORTY companies were created by staff and students at Edinburgh University last year, a record for a Scottish institution, with some of the latest heralded as having "global significance".

The new firms together raised more than 3 million in funding from public sector bodies and private investors.

Over the past five years, the university has formed 131 companies, 85 per cent of which are still operating, employing more than 300 staff between them.

Companies created by Edinburgh Research and Innovation (ERI) - the university's commercialisation arm - include NGenTec, which makes light-weight generators for wind turbines.

The equipment made by NGenTec - which recently won an 800,000 contract from the UK government's Department of Energy and Climate Change - is said to be easier to manufacturer and cheaper to maintain than current turbine gear.

The firm is now seeking 4m of funding to help commercialise its technology.

Derek Waddell, chief executive officer of ERI, said: "As well as the unprecedented increase in the number of companies formed, the quality of the companies created is at a higher level than ever.

"Several of the firms present real potential not only to contribute positively to the Scottish economy, but also to become globally significant - potentially helping to generate further economic growth and new jobs."

Other firms created by the university in the past year include Skoogmusic, which produces musical instruments for disabled children, and Actual Analytics, which uses video analysis to help develop drugs.

Grant Wheeler, ERI's head of company formation and incubation, said the end of the Edinburgh Pre-Incubator Scheme (Epis) next month would have an effect on next year's numbers.

But he expected the number of companies coming out of the university's Launch.Ed, which supports students' businesses, and the Edinburgh Technology Transfer Centres to increase.

Figures from the Higher Education Statistics Agency (Hesa) showed that in 2008-9 - the last year for which data was available - Edinburgh was already streets ahead of other universities.

Edinburgh created 26 firms, with Strathclyde founding 15 and Glasgow launching ten, contributing to the Scottish total of 63 new companies.

A spokesman for trade body Universities Scotland said: "The rise of start-ups is great but its just the tip of the iceberg.

"This demonstrates the strength of the research and development going on in universities and how it contributes 'knowledge services' to the economy.

"Of the 2,000 jobs created last year via foreign direct investment, 1,000 of them were in research and development."

As well as launching companies, Scotland's universities are working with existing businesses on products and services.Interface, the body set up to match business inquiries to university researchers, has received 629 requests for help in the past year, up from 570 in 2008-9.

A total of 98 collaborations have been launched in 2009-10, compared with 80 last year.