David Lott: Universities ‘can do’ business success

Scotland has more world-class universities per head of population than anywhere else. Picture: TSPL

A key sector with an economic impact of more than £6 billion each year, Scotland has more world-class universities per head of population than anywhere else.

What is perhaps less well known is how, day in day out, universities are working with Scottish companies to help them grow, and are also working with academics and students to create businesses of their own. Each year sees other organisations invest in more than 25,000 contracts for research consultancy and CPD contracts with the sector.

Universities also assist staff and students on the challenging road of company creation and growth, many of them finding commercial applications for the cutting-edge knowledge emerging from research. Indeed, Scotland’s universities account for a 28 per cent share of all spin-out companies formed in the UK in the past three years. The nearest rival is London, with an 18 per cent share. The Global Competitiveness Survey put Scotland ahead of Germany, Finland and the US among others for university-business engagement. However, there is an appetite among universities to do more.

Helping companies along this path is core business for universities and the government agencies that facilitate such links. Some companies, such as Microlase, a spin-out from the University of Strathclyde building solid state lasers, move from university incubation facilities through to private investment for expanded facilities within a science park. In that case an investor, US-based Coherent Inc, a global supplier of photonics products and solutions, bought out the company. Coherent Scotland continues to expand, with Glasgow as its world centre for development of its highly successful ultra-short pulse laser systems, employing more than 100 people and turning over  £35 million.

This is just one of the success stories emanating form our universities and reflects the long-term nature of partnerships. It can take two to four years to develop a research-generated technology from invention to first investment.

During development, companies draw on the support of commercialisation offices and the expertise in the university community more broadly, for example through strategic appointments to company boards. As companies grow, they naturally look to the university’s graduates to meet their recruitment needs and to get involved in specialist institutes.

Meanwhile, where a university receives a return from the sale of its shareholding in a spin-out, these funds are reinvested in a variety of ways, from the development of education and research infrastructure to providing early-stage finance to spin-outs at the highest risk stage.

Innovation from university and business joint partnerships is a strategic goal around the world and success is founded on continued adaptation of approach. At the national level, we continue to see relatively low levels of business R&D activity in Scotland and so stimulating business “demand” remains vitally important.

Similarly, the recent RSE, ICAS and Scottish Financial Enterprise report on growth capital for high-potential companies points us to possible solutions to another vital strategic concern. Building on the joint-working evident in the new Innovation Centres, there is room for further alignment of government support mechanisms. For universities, there is work ongoing to refine pathways for business interaction, be they general, such as standard contract terms or “easy access” IP, or bespoke to company or industry needs.

Universities will continue to be a central player, stimulating and supporting innovation in our diverse business base. To succeed, collaboration between all elements of the triple helix of university-business-government is crucial.

• David Lott is deputy director of Universities Scotland www.universities-scotland.ac.uk