Europe's fastest growing university-born companies are not based in the EU.
As sad as it is. What’s with all the EU funding being thrown into creating or supporting ecosystems to make innovation thrive?
Having immersed in an innovation ecosystem concept and digging deeper daily to understand the phenomena, I can see why.
Tom Nugent at Sifted (https://sifted.eu/articles/15-fastest-growing-university-spinouts-in-europe) lists fastest growing university spinouts in Europe, with the UK and Switzerland taking the whole chart, but it misses an important deal of the story. And the story is on “Why”. What is that making University of Cambridge ETH Zürich King’s College London and likes the European leaders in coming up with innovation that scales into fast growing business?
I have a privilege to learn from some of the most developed and long standing ecosystems across the globe, Silicon Valley where I am engaged with Alchemist Accelerator as its judge and sales coach, and Boston area, where I have committed to a half-year-long run of online and in person programs and workshops at Massachusetts Institute of Technology, on the engagement of Corporates, Policy Makers and Universities in Innovation Ecosystems.
When discussing innovation ecosystem engagement, MIT’s professor Fiona Murray and Dr.Phil Budden set out different founding principles of universities and whether the university is a scientific research or real-world application oriented. While it might seem obvious that a university’s mission and the whole its (team) spirit should go to either innovation or inventions, or fundamental research to clearly communicate to the world its principles, values and reason for existence, that would attract like-minded people from across the globe, the example of the University of Cambridge and the number of high growth spinouts speaks against the hypothesis. U of C is among the world’s leading research institutions generating a large volume of high impact publications and publishing its own academic journals (over 400!). Such universities do not necessarily, or usually, lead the innovation scene for the real world.
Now, let’s have a closer look at the U of C case. Located just an hour’s drive from London, one of the world’s financial, business and innovation growth powerhouses, which leads the innovation and entrepreneurial landscape with all the open data strategy and developed investor and corporate – startup ecosystems, allowing anyone to get involved in solving daily to large problems, U of C has its foot on the ground with the whole world. Being able to attract many of the world’s brightest minds and making its brand speak for itself, the U of C can afford playing in numerous fields, in this case, contribute to the science and allow for some venturing.
If you are that rich (U of C’s annual budget is over 7 billion British pound, seeing revenues over 2 billion (close to $3b), you can afford teams that do both engage with innovation ecosystems AND science magazines & conferences. Holding one of the world’s most powerful databases of knowledge (the university’s libraries hold approximately 16 million books, plus all the online databases) allows for a great deal of knowledge to be used for the sake of future innovation without spending years on background research. After an in-depth research on the U of C, MIT states that the one of the world’s most powerful innovation hubs, the University of Cambridge, generates around 50 billion pound (over $60b) worth of high technology economy around it. That is much more than Estonia’s GDP, or almost equal to Costa Rica’s!
How do you make such an impact, without lots of public funding as it happens in the EU, and being based on an island located off the coast of the continental Europe? Let’s have a look!
- No EU funding. False. The companies now showing these numbers are still often EU-programs funded. While the UK Brexited a while ago (who knows what is the exact date), it still benefited (and still does in some cases) from ongoing EU programs, and institutions, companies and individuals were able top participate in calls or finish what was confirmed for long-term.
- Smart use of resources. Understanding that resources are limited and any resource was given by someone or somewhere (natural resources, taxpayers, etc.) make you think of how to apply them in the most efficient way. Governments and regional organizations along with universities and innovation driven enterprises should do best to assess the amount of resources required and how to use them for the desired outcome. The countries hosting universities with the fastest growing innovative enterprises are known for their ability to focus. While an openness to wandering is nice in many cases, keeping one focus helps to use resources efficiently and see outcomes soon enough.
- Founding principles, or WHY the university exists. Whether the university was founded to
- serve science,
- generate number of people with diploma,
- use national funding to make a university,
- or support societies,
- or fill gaps of what’s necessary for industries,
determines the institution’s and so its ecosystem’s interests, capabilities, strengths and weaknesses. As discussed before, MIT groups all universities in 2: theologically or technologically founded. Universities are trying to balance between the both, and their ability to do so defines their success in both, the high impact publications created and innovation driven enterprises created or supported.
4. Equity ownership. Not all universities are interested in keeping an equity in a spinout. The report (https://www.ifm.eng.cam.ac.uk/research/uci-policy-unit/uci-news/uci-report-on-university-approaches-to-spinout-equity/) by U of C’s UK Policy Evidence Unit for University Commercialisation (UCI) emphasizes the effectiveness of a university keeping an equity in a spinout. The report’s authors have found strong evidence that the ownership motivates universities to further support the enterprise, through its channels, partner networks, and public image.
5. IP rights sharing. It is common for universities and research institutions across Europe to protect IP rights and sell them. How do you think how does the motivation of employees of the research centre differ depending on whether the university keeps full IP rights, share them with employees behind the potential invention, or grant full IP rights to individuals while keeping a stake of an outcome – an innovation driven enterprise coming out of the lab? There is a loud debate on who should keep the ownership of an invention in Europe https://sciencebusiness.net/news/universities-voice-concerns-about-european-innovation-councils-ip-regulations.
5. Process defined. Universities love researching, but do they know how to make money with what has been found or invented? Does a university sell the invention, the information leading to innovation, an IP, or support creation of companies and growing them to a particular stage, at a university’s incubator and further accelerator program?
Or the university does not have any process defined, and each case is just a result of wandering of individuals, and some luck.
Anything else would you add? If you are a part of one or another university among those leading the fastest growing innovation driven spinouts, or your university is not on the list, or if you represent a startup firm that has tried or has successfully collaborated with a university, please share your thoughts.
