Research & Knowledge Exchange in the UK
TechnologieAllianz, Berlin, 16-17th April 2013
Dr Dave BemboChair of Council, Association for University Research & Industry Links, UK
Cardiff University, Research & Commercial Division [email protected]
Tel: + 44 29 20 875159
Scope:
AURIL: structure and function, activities
The UK research base
Drivers of Knowledge Exchange KE activity
Knowledge Exchange KE in the UK: statistics and current trends
Proof of concept and securing early stage investment: latest information from the UK
A non-exclusive list!
AURIL Structure
AURIL is a Company Limited by Guarantee. We are an SME!
Chair of Council 2013-14: Dr Dave Bembo. Executive Director: Dr Alasdair Cameron. Offices & support staff based in University of Strathclyde, Glasgow.
15 Members of Council (expanded in 2012), including Executive Director, arepresentative of universities in Eire and one co-opted member.
Institutions (not individuals) are members: Universities, Public Sector ResearchOrganisations, other public sector and companies .
Circa 1,600 people on electronic mailbase.
Membership is entirely optional. Around 90 subscribing members currently.
Prof Oisin MacNamara launches AURIL’s revised CPD Framework, 2012 Conference.
Annual conference a major activity, held in October each year.2011 in London, 2012 in Sheffield, 2013 in Cardiff.
150-200 delegates. Networking, talks from Governmentpolicymakers and funders, workshops, consultations.
In addition to Annual Conference, also workshops & discussion fora, e.g. Directors Cut; guidance and policy documents; consultation with Govt & other KE stakeholders, UUK, CBI, Funding Councils & Research Councils, etc.
Core focus for AURIL:* Advocacy, Influence, Promotion & Representation for KE Professionals;* Self-help and good practice sharing network for KE/KT/TT/ILO Professionals.
Of AURIL’s member organisations, >90% are universities.
AURIL increasingly working in collaboration with other professional bodies in the UK such as PraxisUnico & ARMA.
Examples of AURIL activities in 2012-13:
Recruited new Executive Director, Dr Alasdair Cameron
Moved AURIL Office & assets from Belfast to Strathclyde
AURIL 2012 Conference, Sheffield
Launched CPD Framework for Business and Community Engagement
Scottish Government Single Knowledge Exchange Office SKEO consultation & Innovation Centres in Scotland
Contributing to evaluation of the impacts of Lambert Toolkit
2011 update to IP Guide for Universities
UK Intellectual Property OfficeUniversities UKAURILPraxisUnico
Available at:
http://www.ipo.gov.uk/about/press/press-release/press-release-2011/press-release-20110519.htm
Managing Intellectual Property for HEIs – in 2011
Original 2003 Guide – more of a how to guide or ‘recipe book’ for IP assessment and protection.
2011 Guide – encourages HEIs to consider their strategic focus and formulate & adopt IP policies which support this. One size doesn’t fit all.
Staff resources for KE should be configured to match strategic and operational priorities... and budgets!
“The issue is not simply one of protection in order to encourage commercial investment. University researchers require continuing access to the results of their research for use in future (research) projects and teaching. (These may be more important than IP exploitation income.)
Effective IP management is required to ensure that this is the case……. Negotiations and agreements therefore need to be structured so that future needs of the university can be accommodated.”
“There is undoubted potential for universities to generate surpluses from the IP management function, although there is a need for realism over the scale of returns.”
Knowledge Exchange policies and their intersection with other university policies, e.g.:
Human resources (IP ownership; sharing of revenues on successful exploitation)
IP generated by students - balancing clean IP position versus duty of care
The 2011 Guide is intended to provoke debate within institutions in order to allow HEIs to make better informed judgements about how they manage IP and how they expect to benefit from this activity.
University Sector in the UK
115 universities inc ‘post 1992’ (+ 50 other Higher Education Institutions)
Over 180,000 academic staff
1.9 million undergraduate students; 578,000 postgraduates
Total sector income of £26.8 billion [see next slide]
Strong science base: 8% of publications on Web of Science, 12% citations, 14.4% of World’s top cited publications.... especially given relatively low investment of circa 4% Gross Expenditure
HEIs are major contributors to UK economy (HEFCE’s Higher Education – Business and Community Interaction Survey)
Source: HESA, UUK, HEFCE, 2009-11; Evidence 2011
UK HEIs, huge diversity in size and mission:
24 HEIs with income <£20 million22 HEIs with income £20-50 million48 HEIs with income £50-150 million 71 HEIs with income >£150 million
From highly active in research and KE (e.g. 20 Russell Group members) to highly teaching focused
e.g. Funding Council Quality Research QR funding is part of Dual Supportand is based on RAE research quality * volume * subject weighting. In Wales alone (10 universities) QR ranges £139K - £39.9 million for 2011-12 (280x) [QR]
With so much variation in research capacity & quality, clearly KE resources and priorities will differ hugely also.
0
20
40
60
80
<£20M £20-50M £50-150M >£150M
Evidence, 2010
The External Environment: Funding for research
Investments under pressure
Budgets under pressure
Govt CSR2010 UK science fundinga 10% reduction in real terms
Wakeham ReviewWarns of the need to maintain not grow the volume of research funded under Full Economic Costs FEC
Focuses on Full Economic Costs FEC base of HE research activities ; driving down overheads rates – and increasing efficiency
Research Equipment and Asset Sharing; ‘Grand Challenges’, Big Projects & Consortia
UK Research Funding base: Research Councils and EU
Science budget protected in 2010 CSR, butpressure on Research Council budgets has resulted in ‘Demand Management’ measures.
‘Shaping Capability’ by the UK Engineering & Physical Sciences Research Council, EPSRC. Prioritising funding for specific areas of science, cutting the availability for others.
Huge interest in EU funding among UK HEIs. Opportunities in some regions to align EU Structural Funds and H2020.
H2020 represents a great opportunity for universities and private sector to build collaborative projects.
Research Excellence Framework REF2014
Government assessment of quality of research, every 6 years or so (2001, 2008, 2014). Managed by Higher Education Funding Council for England, HEFCE (also in devolved regions).
REF is a major influence on all aspects of research in UK universities. All-pervasive.
REF influences: recruitment, investment, reputation, financial sustainability.
Quality Research QR funding awarded by allocation on previous RAE and now REF results (plus volume measure & subject weighting).
KE and Research Funding: REF2014
REF scores Research on: i) The quality of research outputs (with citation information in some areas); ii) The vitality of the research environment; and for the first time iii) The wider Impact of research.
Increasing emphasis on demonstrating the economic, societal and health Impact of the UK research base. Case studies used, arising from ‘quality research’, with verifiable data.
Change in focus of REF is achieving the intended aim: more current interest from researchers in engagement with e.g. private sector. Long term game.
Influencing demand for input from KE professionals. Influencing roles? Creating new ones? ‘REF Impact Officers’.
No Professorial Privilege exists
IP generated by academic staff (professors, lecturers) and researchers is primarily owned by the university as their employer (under the UK’s Copyright, Designs & Patents Act, 1988)
Ownership of IP generated by postgraduate researchers such as PhD students can be less certain
UK Universities are generally free to determine appropriate commercialisation & dissemination routes
Universities usually (84+ %) have generous policies for royalty income sharing with inventors
Spin-out companies provide good opportunities for founding academics to take equity, often with buy-out of time / consultancy arrangements
Ownership of Intellectual Property generated by UK universities
Annual survey of KE in the UK. Managed by HEFCE.
“.... examines the exchange of knowledge between universities and the wider world, and informs the strategic direction of 'third stream' activity that funding bodies and higher education institutions (HEIs) in the UK undertake”
Surveys collect financial and output data per academic year, i.e. to 31st July in the UK.
Annual reports include information on commercialisation of new knowledge, delivery of professional training, consultancy and services, to activities intended to have direct social benefits.
2010-11 data published by HEFCE in 2012, the 11th successive year.
Higher education-business and community interaction survey (HE-BCIS)
http://www.hefce.ac.uk/whatwedo/kes/measureke/hebci/
Collaborative research income up16% to £872M. Contract research income up 7% to just over £1 billion.Consultancy income up 2% to £370M. Continuing professional development income up 5% to £606M.
HEBCIS 2010-11 data - trends
©HEFCE, 2009
Net income from licensing: increase of 6% to £61M.2010-11 decrease in share sales; 2008-09 peak due to one case.
Income from intellectual property 2003-04 to 2001-11 (real terms)
©HEFCE, 2009
Costs should include staff resources, which are requested in the survey.
Income and expenditure on intellectual property 2003-04 to 2010-11 (real terms)
©HEFCE, 2009
Disclosures and patent numbers 2003-04 to 2010-11
©HEFCE, 2009
Spin-off companies formed 2003-04 to 2010-11
©HEFCE, 2009
International comparison (Association of University Technology Managers ,AUTM)(based on $1.546 to £1.00)
US universities
AUTM survey
UK HEIs
Finance/HE-BCI survey
Total research resource (£M) 33,849 6,364
IP income including sales of shares in spin-offs (£M)
1,142 69
IP income as percentage of total research resource
3.4% 1.1%
Spin-off companies formed 606 268
Research resource per spin-off (£M) 56 24
Patents granted 3,968 757
Research resource per patent (£M) 9 8
Industrial contribution (£M) 2,433 432
% industrial research 7.2% 6.8%
US cashed-in equity/UK Sale of spin-off shares (£M)
22 8
(Cashed-in equity/sale of spin-off shares) as a % total research resource
0.07% 0.13%
©HEFCE, 2009
Not all HEIs have sufficient technology to warrant a dedicated unit of specialist staff (such as IP lawyers) to commercialise research, which has led to a growth of collaboration between HEIs and private sector intermediary organisations.
In 2010-11 around half of HEIs (49 per cent) reported in-house capability; 11 per cent relied solely on an external partner; and 26 per cent of HEIs had both internal and external options.
External ‘partnership’ options in IP management & commercialisation include companies such as, e.g. Fusion IP. Increasingly an option for universities which already have strong in-house teams.
How UK universities manage IP (HE-BCIS 2010-11)
©HEFCE, 2009
Fusion IP owns the rights to 100% of university-owned research
generated at University of Sheffield and Cardiff University (andsoon Nottingham & Swansea) .
No affect on contract research or activities where there is a contractual obligation to a funder. Important to promote this accurately!
Universities are shareholders in Fusion IP. Exclusive 10 year agreements to access new IP generated by research.
Integration & co-location with university technology transfer teams.
Very credible and professional team – important for confidence in investors & venture capitalists which may have been reluctant to work with a university.
Ringfenced investment fund of up to £20 million but has attracted more in co-investment. And £20 million of new funding secured in 2013.
Very effective partnering and synergy, adding a new dimension to university tech transfer and also very efficient in sharing resources and bringing in new expertise.
Easy Access IP – a current UK initiative in technology transfer
University of Glasgow, with Bristol , King’s College London and others.
Partnership established March 2011 with £80,000 from UK Intellectual Property Office
One page licence agreements, freely accessible online, non-exclusive or exclusive, royalty-free with the obligation to report on exploitation
Managed as a knowledge exchange offering, alongside technology transfer
Recognises the wider benefits of increasing the volume of university IPRs in evaluation and use in industry (Impact agenda) and that IP exploitation has a greater value to universities than simply income generation
http://www.easyaccessip.org.uk/
Comes from a variety of sources in the UK:
Funding for Proof of Concept work
Follow on Funding
Specific schemes include:
Impact Acceleration Accounts
Developmental Pathway Funding Scheme
Early stage Proof of Concept funding in the UK can even come from funders of basic research
Issues for Research Commercialisation in the UK:Bridging the Valley of Death (UK Government, 2013)
Bridging the Valley of Death
Uk Government’s Science and Technology Committee
The Science and Technology Committee is appointed by the House of Commons to examine the expenditure, administration and policy of the Government Office for Science and associated public bodies.
Started work in December 2011. Questions included:
What are the difficulties of funding the commercialisation of research, and how can they be overcome?
Are there specific science and engineering sectors where it is particularly difficult to commercialise research?
Should the UK seek to encourage more private equity investment into science and engineering sectors?
The valley of death describes the point where a business, often a technology based business, has a working prototype for a product or service that has not yet been developed enough to earn money through commercial sales. The company needs to find sufficient money to develop the prototype until it can generate sufficient cash, through sales to customers, that would allow it to be self sufficient and grow. Growing companies will generate both jobs and wealth, a key objective for any government.
“…. some discomfort with the phrase “valley of death” which implies that it is only necessary to get through this particular stage. In fact successful innovation is an interactive process in which commercialisation plans have to be effective in all stages and sometimes simultaneously” (University of Manchester)
Finding the cash to do business
Equity capital and public market finance
Venture capital, AIM – often results in loss of control, possibly to overseas investors before a company grows to medium size
Current, often short term nature of equity investment – where the next funding round is uncertain (lack of ladder financing)
Failure in the marketplace to provide significant long-term capital (‘patient capital’) to enable companies to develop and grow.
Many UK institutional investors had withdrawn from the UK stock markets. Pension fund and insurance companies in 1994 owned about 60% of the UK stock market; now less than 20%.
Non-equity based capital
Grants highly competitive & bureaucratic
Banks looking for significant loan securities despite Government injection of cash (i.e. £20 billion for loans in 2012)
PraxisUnico Spin-Out Survey: Annual survey, long-term, comprehensive dataset on UK spin-outs, well-informed commentary
2012 Survey comments: demanding times; process of spinning out companies and nurturing their development has become more specialised:concentrated on those universities which have sufficient experience to be effective; supported by investors which focus specifically on this sector.
Several new investment funds for spin-outs: Orion Fund for University College London and universities of Edinburgh & Manchester (& MTI Partners), now aims to raise £50M (was £150M). Other specialist investors: Imperial Innovations Group completed a £140M fundraising in late 2010. These are major universities and consortia.
PraxisUnico Spin-Out Survey (continued)
Investors encouraged by some high value exits: $1 billion sale of Biovex to Amgen in January 2011;recently the sale of Simcyp to Certara for $32M gave early stage investor Fusion IP a 200x return on investment.
The result has been a stream of high value investments; over the past 18 months the Survey has identified 14 investments of £5 million or over, ranging as high as £60 million secured by Circassia in April 2011 from a consortium led by Imperial Innovations.
The companies attracting this level of interest are predominantly in the life sciences sector (over ten years, accounting for between a third and a half of all spinouts). In the past five years, renewables and cleantechsectors have become a larger part of the spinouts population.
