The North East of England needs to create more jobs and higher quality employment. One way we are supporting this at Newcastle University is through our company creation initiatives… and they're working.
Universities are an essential part of government’s efforts to level up research and innovation right across the United Kingdom.
One of the many responsibilities universities have in this effort is that of ‘technology transfer’, the process by which research results and findings are moved into business opportunities.
The value of creating new businesses
Technology transfer generally takes place in one of two ways:
- licensing new technology to an existing company
- setting up a new company – a ‘spin out’ – to take the opportunity forward
There is a conventional and widely-held view that the licensing route is generally faster and easier than the spin out route (Hockaday, 2020). It is a typical example of weighing up effort versus reward.
However, spin outs can hold huge rewards in terms of the potential to deliver significant and sustained social and economic impact in the university's local area. A licence, on the other hand, could see intellectual property and value being exported out of that area to other locations.
The reward of company creation is clear, but before making the decision to take this route, it's important to consider the following questions:
- does the business opportunity warrant the intensive effort to create a new company?
- is the expertise available to nurture the company and give it the best possible chance of becoming established and growing?
To help support the creation of new businesses in our region, Newcastle University is collaborating with the universities of Durham, Northumbria and Sunderland on Northern Accelerator.
Enabled by £4.9m from Research England’s Connecting Capabilities Fund, Northern Accelerator builds upon an initial European Regional Development Fund programme to embed entrepreneurial business leaders into university start-ups at the earliest stage.
The long-term vision is to deliver sustainable impact, further develop a new £1.7m seed investment fund, and establish a vibrant community of businesses created through the programme
Northern Accelerator has delivered a step change in Newcastle University spin-out activity: from an average of one per year in the three years to 2016 to an average of 4 per year in the five years to 2021.
Newcastle University will create eight new companies during the Covid pandemic. In the same lockdown period, nine Newcastle University spin outs have raised £12m of venture capital funding.
Newcastle University currently has 31 active spin out companies employing over 200 people.
Student Start Up programme
Of course, company creation is not limited to the staff of a university. The Newcastle University Careers Service ‘START UP’ programme provides support and guidance to student entrepreneurs looking to form their own company.
At the end of July 2020, START UP was supporting 191 actively trading student and graduate start-ups and social enterprises, with a combined turnover of £99m, employing 672 FTE staff and attracting £35m in total external investment.
Together, Newcastle University’s company creation, careers and business development teams, in partnership with Northern Accelerator, are delivering sustainable, scalable businesses. This provides high-quality jobs, retains and draws talent to the region, and attracts investment. It is a significant contribution to the North East Local Enterprise Partnership’s strategy of “more and better jobs.”