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25 July 2017

PraxisUnico challenges universities to collaborate

Students once dreamed of headlining Glastonbury, but today’s cohort “want to headline TechCrunch”

Author: Thierry Heles, editor

PraxisUnico, a UK-based professional association for public sector tech transfer staff, held its annual conference last month, bringing together university and industry professionals to discuss the future of the domestic ecosystem.

Trevor McMillan, vice-chancellor of Keele University, was the first keynote speaker at the conference, held this year at Sheffield Hallam University. McMillan provided an overview of his report into knowledge exchange frameworks, published in September 2016.

McMillan made several noteworthy points, including the fact that an institution’s focus simply on spinouts and intellectual property (IP) was not sufficient, and missed a bigger point – universities also needed to play a role in areas such as human capital development.

The importance of such a wider approach to the ecosystem would become increasingly important over the next two years and beyond, as the UK faced challenges caused by Brexit. McMillan also pointed to the Conservative Party’s manifesto for the general election earlier this month, saying the document called for a regulatory framework to encourage innovation, build an investment fund and foster larger aggregate funds.

Gregg Bayes-Brown, marketing and communications manager at tech transfer office Oxford University Innovation and a former editor of Global University Venturing, picked up on that point during his panel discussing international benchmarking of university venturing funds (UVFs).

Bayes-Brown largely agreed with the notion there would be a growing number of UVFs in the ecosystem. He said he expected more collaborative funds crossing universities’ boundaries as well as nationwide and continent-wide proof-of-concept funds.

He also – perhaps boosted by Oxford’s recent success in signing up internet company Google for a seed round in biotechnology spinout SpyBiotech – explained that an increased corporate involvement would be beneficial.

Bringing incubators into the equation and creating tax incentives for UVFs – perhaps inspired by those of New York governor Andrew Cuomo’s Start-Up NY program – would also be a welcome development and help foster a bigger impact for funds.

When a member of the audience claimed that, since the Brexit referendum vote in June last year, there had been a significant increase in foreign investors, particularly from China, Asia and Canada, Bayes-Brown challenged the idea.

He pointed out that investment had been falling drastically since the Brexit vote, though life sciences appeared to be an exception. Echoing McMillan’s point from earlier in the day, Bayes-Brown said reduced immigration made no sense to the ecosystem.

You could not, he said, claim to support innovation and at the same time cut immigration and place a cost on immigrants working for a UK company, concluding his argument with one of the starkest moments of the conference – that approach “will damage us”.

Brijesh Roy, investment manager at commercialisation firm Mercia Technologies, who joined Bayes-Brown on the panel, agreed there were many organisations “claiming to introduce you to Chinese money”, but that was not the same as securing the capital.

Anne Dobrée, head of seed funds at tech transfer office Cambridge Enterprise and a fellow panellist, shrugged off the comment, saying her unit had so many investors coming through the door that it was impossible to connect with all of them.

The panellists, who provided an overview of the global history of UVFs and their own respective organisations, agreed that a merger between commercialisation firms IP Group and Touchstone Innovations – a much discussed topic in the industry – was not the best way forward.

Bayes-Brown, who claimed it was a fundamentally bad thing, said the UK would be better off with more regionally focused funds, while Roy noted that investors overlapped and the ecosystem needed more diversity at shareholder level.

Dobrée, meanwhile, noted that one big firm posed an inherent risk. Having one large firm that relied on only a few investments for its valuation exposed much of the ecosystem to the possibility of that single spinout crashing.

The panel also discussed other topics, including the emergence of equity crowdfunding – a model that Oxford University Innovation tried recently and “was a challenge for all involved”, according to Bayes-Brown, while Roy said that a democratisation of finance was generally a good thing, as it was desirable to have as many people as possible at the smaller end of the scale providing capital.

Roy and Dobrée both agreed that equity crowdfunding created an issue around valuation – the more inexperienced an investor, the higher the valuation he ascribed to a company. Dobrée pointed to angel-led syndicates as a way of obtaining the required expertise while opening up the funding process to less experienced investors.

Student startups were a much discussed topic at this year’s GUV:Fusion conference, and was also picked up several times throughout PraxisUnico’s conference. It was particularly interesting to see that while Bayes-Brown and Dobrée both underlined their support for these companies – the former through an incubator, the latter through investments – Roy said Mercia had no particular focus on these endeavours.

He said although Mercia would invest in student startups, the firm did not understand these businesses as having any crucial link to a university apart from the fact that a founder happened to be studying for a degree at the time – it was a simple startup and there was no university IP involved in the process.

Bayes-Brown noted that students once dreamed of headlining Glastonbury, but today’s cohort “want to headline TechCrunch”. He said incubator SetSquared had been so successful specifically because it supported student entrepreneurs.

Roy conceded that fewer research-intensive universities would have to rely more on student entrepreneurship, with Bayes-Brown pointing out that a building block of entrepreneurship was collaboration – which may also foster greater collaboration between students and academics.

Other panels at the PraxisUnico conference focused on topics such as the Industrial Strategy Challenge Fund, which Global University Venturing previously considered in February in a report of a conference organised by the Westminster Higher Education Forum on the future of innovation in the UK.

The fund, launched by the UK government in November 2016, aims to capitalise on research strengths in areas including artificial intelligence and biotechnology. It is expected to provide £2bn ($2.5bn) in additional R&D investments annually by mid-2020.

The fund has hit several roadblocks since then, as several speakers pointed out, due to the uncertainty caused by the Conservative Party calling an early election and losing its majority earlier this month. Many of the initiatives and papers expected to have been published by now have been held back by the challenges created by an environment in which it is still not known what the new government will want to focus on.

The Queen’s speech, which outlines a government’s key focus point for the year ahead, had been delayed by several days and the Conservative Party remained in discussions with the Democratic Unionist Party aiming to secure a majority in parliament.

A panel on knowledge transfer in arts and humanities – made up of Heather Williams, knowledge exchange strategy and development manager at the Arts and Humanities Research Council, Anne Sofie Laegran, knowledge exchange manager at University of Edinburgh, and Brigid Howarth, senior impact and partnership development manager at University of Exeter – meanwhile took a look at a sector often undervalued by the tech transfer ecosystem.

Williams pointed out that the creative industries were a valuable source of revenue. The Harry Potter franchise, she noted, had generated more in UK exports than pharmaceuticals and telecoms, two sectors traditionally cited as British strengths.

Howarth, however, claimed the important sector was heritage rather than the creative economy – partly because her university places research focus largely in the business school.

Laegran noted that a challenge she repeatedly encountered was that businesses expected universities to provide resources free and without recognition – a problem exacerbated by the fact that, as Williams stated, humanities were generally the toughest knowledge exchange area, relying on collaborative bids for projects.

A key point, during a panel on industrial strategy and impact on demand for university-business engagement, revealed an interesting possibility for institutions concerning the Industrial Strategy Challenge Fund. A question from the audience was would spinouts be able to bid for projects, which need to be led by industry under the fund’s rules? The answer, yes, showed that there may be more to play for from that initiative – as long as the Conservative Party can secure a deal with the DUP and the UK does not end up with another election later in the year that delayed everything again.

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