Bring on the risk-takers
Ian Ritchie speculates that it’s the risk-averse nature of university researchers which stalls spin-outs
DESPITE SOME HYSTERICAL media criticism of its performance, Scottish Enterprise achieved 21 out of its 22 performance targets last year. The one failure was for university spin-out companies – only 46, where the goal was 50. The less ambitious target of 35 for this year might well also be missed.
It is not easy to see where the problem lies. Scottish universities remain extraordinarily inventive. The most recent independent Research Assessment Exercise reported over 50 per cent of Scottish researchers working in departments of “international excellence”. So in key areas, such as life sciences and microelectronics, Scotland still punches way above its weight.
It can’t just be the old problem of lack of funds: the Proof of Concept and Enterprise Fellowship schemes have proved successful at backing winners, and Scottish Enterprise’s £20 million co-investment scheme has just been doubled by additional European money for Scottish start-ups.
Surely it can’t be the lack of skills: in the last couple of years, the Scottish Institute for Enterprise has created courses in entrepreneurship for Scotland ’s science and technology students.
So why are there so few spin-outs being created in Scotland ’s universities?
The real problem might lie in the relative risk-averse attitude of our researchers. On a recent visit to one of our leading research universities, I heard about world-leading achievements in millimetre-wave integrated-circuit technology. Only a few years ago this highly commercial project would certainly have led to a well-funded spin-out business, but this one remains firmly locked up within the university laboratory.
The main reason for this is that none of the researchers involved want to leave their secure posts in the university to take their chances in the commercial world. The recent technology boom and, particularly, the bust, seems to have taken its toll of potential entrepreneurs. Too many technology spin-outs have failed recently— high profile ones such as Essient Photonics and Terahertz boasted excellent technology but they didn’t make it as businesses. Not the role models we need.
If the Smart Successful Scotland strategy is to survive and deliver economic results, we need to find a solution to this problem. We need to make the most of our successes, such as Wolfson Microelectronics. Originally a university spin-out, it was the first technology IPO to break the stock exchange technology ‘drought’ and is now worth over £250 million.
But we also need to find the entrepreneurs who will successfully take our world-class technology out of our universities, and let’s admit that these entrepreneurs are most unlikely to be our academics.
We need to find a way to bring back some of the thousands of well-qualified Scots, who leave even year and build successful careers internationally, to work with our university researchers.
Otherwise, Smart Successful Scotland might well stall.