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Universities shouldn¡¯t ¡°rely¡± on money from spin-outs to fix their financial problems, but investments in these kinds of businesses can generate long-term returns to drive further innovation, the expert tasked with?commercialising research at the University of Surrey has said.

In January, Jim Shaikh was appointed inaugural managing director of Innovate Surrey, a body established to help bridge the gap between the research happening at the university and its real-world applications.?

It comes as cash-strapped British universities increasingly focus on diversifying their income streams and follows a government-sponsored review of spin-outs that urged institutions to take a smaller stake in these businesses to drive private investment.?

Some institutions hit back at the recommendations, arguing that shares in these companies are important sources of revenue. Universities¡¯ intellectual property (IP) raised more than ?329 million of income in 2021-22, including ?86 million from the sale of spin-offs.

But speaking to Times Higher Education, Shaikh, who previously worked at Imperial College London, warned against seeing spin-outs as quick financial wins.?

¡°I was running my business for 12 years before I was able to sell it,¡± the entrepreneur and former academic said. ¡°You can¡¯t rely on this income. What we can do, if you set it up, it can replenish the plot to fund more spin-outs.¡±

A recent review found that just 10 universities account for more than half of the UK¡¯s spin-outs. In his new position, Shaikh hopes to help Surrey¡¯s academics better understand what funders, including venture capitalists, are looking for and ¡°what projects can be developed into something that¡¯s investable¡±.

¡°Quite often with the academics, they think, ¡®That¡¯s IP, that¡¯s brilliant¡¯,¡± he said. ¡°But what you find ¨C and what I found when I¡¯ve done my business ¨C is, IP is great but if you haven¡¯t got the right market, the right product market fit, the right value proposition, understand your customers, all those things, it¡¯s actually not worthwhile.¡±?

As Surrey county plans to reorganise the local government in line with the national government¡¯s wider devolution agenda, the university also hopes to better link up with local businesses to form an innovation ecosystem of the sort that exists in metropolitan areas like London and Manchester.?

The university already owns Surrey Research Park, which hosts about 200 businesses, including start-ups, and connects them to the university. Perhaps the university¡¯s greatest commercial success story is?Surrey Satellite Technologies Limited, a satellite engineering company first founded as a university spin-out in 1985, which was acquired for ?50 million in 2008. The company¡¯s headquarters are still based in the research park.?

¡°We¡¯ve got so many¡­technical resources ¨C can we open those out somewhat to the local businesses?¡± Shaikh asked. He believes there are more opportunities for local businesses to interact with academics and connect with students, so ¡°the region itself can drive forward innovation¡±.?

While these connections normally happen through ¡°personal relationships¡±, this could become more ¡°systematic¡±, he said, so ¡°in some sense, businesses move here to access facilities and resources¡±.?

¡°Being in a non-metropolitan area, we¡¯re quite a big player in the local region, and so the aim would be, especially with the research part ¨C can that be the core of an ecosystem that will drive innovation, not just within universities but outside?¡±

helen.packer@timeshighereducation.com