How Scotland’s universities rank in new study of commercial spinout activity

Scotland has the third-highest regional concentration of UK university spinouts with the University of Edinburgh leading the way north of the Border, a new study has found.

Publishing the fifth edition of its annual Spotlight on Spinouts report, the Royal Academy of Engineering also noted that the past year had seen a reduction in equity stakes taken by educational institutions in associated spinout companies. In 2024, the average university equity stake was 16 per cent, down sharply from 22 per cent in 2023.

London has the highest regional concentration of the UK’s spinouts, hosting 19 per cent (384) of the spinout population identified. Its status as a leading financial hub and access to funding networks continues to make it an attractive spinout base, the research notes. The south east of England follows with 16 per cent (321 spinouts), then Scotland in third spot with 12 per cent (243 spinouts), and the east of England with 11 per cent (218 spinouts).

The study, which looked at the universities that are the best at commercialising their research work, placed the University of Edinburgh in eighth place.

Parkwalk Advisors remains the top investor by value and number of deals, and most of the top five investors - in number of equity deals - tend to prioritise funding for spinouts in their region, notably Scottish Enterprise, Cambridge Enterprise and Oxford Science Enterprises, according to the findings.

The study, which looks at the universities that are the best at commercialising their research work, found that Scotland had three institutions in the top 20: Edinburgh University (eighth), Strathclyde (16th) and Glasgow (19th).

The report’s companion paper “UK spinouts - a status update” shows that more than 50 universities are aligning with best practice, but varied practices are still in place. The Academy recommends that a more equitable distribution of equity between key contributors, including the university, senior faculty and spinout leadership, is needed to grow commercial success.

Last year saw UK university spinouts securing more than £2.6 billion in funding, 38 per cent more than in 2023. This compares favourably with the wider equity market for high-growth companies, which faced a near 16 per cent decline in the same period, the survey added.

Royal Academy of Engineering enterprise committee chair Paul Taylor said: “It’s encouraging to note that average university equity stakes are now at a decade low of 16 per cent and are moving towards the recent recommendations from the Independent Review of University Spinout Companies. This aligned with much of what we have long called for as an independent advisory body.

“Tracking this progress will help us to understand how it will impact the founders we support, as well as how we will continue our independent contribution to the policy landscape.”

The report also found that some 75 per cent of spinouts have all-male founding teams, with 17 per cent mixed-gender and 7 per cent solely female founders. More gender diversity is seen at director level with male and female directors of spinouts at 43 per cent and all male directors at 54 per cent. Previously that figure was 52 per cent for all male directors and 45 per cent for male and female directors.

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