Degrees of enterprise

British universities are set to help foster innovation and enterprise and build an entrepreneurial culture in the UK. The key role is marked out for them in the Government’s Competitiveness White Paper. A funding initiative is under way. A £40m University Challenge scheme was launched last March to encourage them to get innovative ideas out […]

British universities are set to help foster innovation and enterprise and build an entrepreneurial culture in the UK. The key role is marked out for them in the Government’s Competitiveness White Paper.

A funding initiative is under way. A £40m University Challenge scheme was launched last March to encourage them to get innovative ideas out of the lab and into the market. It will provide seedcorn funds to help universities commercialise ideas and projects arising from research work.

Out of 45 funding applications, 24 bidders, involving 60 research institutions and universities, have been asked to submit final business plans. The winners will be announced in March.

But by bridging the ‘equity gap’ the University Challenge goes only part of the way to creating an enterprise culture within universities, says the Government. The new drive is to encourage research scientists and engineers to be entrepreneurs, and to learn commercial and business skills.

This is the aim of the Science Enterprise Challenge, launched by the government’s Office of Science and Technology (OST) this month. Under the £25m scheme, universities will bid for funds to set up eight world-class centres of excellence for commercialising research and for teaching entrepreneurship in science and engineering courses. The centres will be expected to excel at turning good ideas into good businesses.

The precise form of the centres has been left deliberately vague to avoid restricting ideas, says the OST. But it wants to see universities become more active in turning the results of their research into productive and profitable businesses, either on their own account or in partnership with others. And it wants them to build entrepreneurialism into the science curriculum.

Launching the scheme, science minister Lord Sainsbury pointed to a number of US universities as possible role models.

The Massachusetts Institute of Technology (MIT) runs courses in entrepreneurship as well as a $50,000 competition among students for the best business plan for a new firm. The California Institute of Technology’s course in entrepreneurship includes lessons in patents, basic law, stocks and bonds, mergers and acquisitions, dealing with Wall Street, and human resources. Students have to work up a viable business plan. The best gets $10,000 seed capital.

At Stanford University, the school of engineering runs an entrepreneurship club that also sponsors a business plan contest. And at the University of California, San Francisco, students can attend courses on topics such as ‘entrepreneurial issues in biotechnology’.

In a recent research trip to the US, a team of UK academics found that entrepreneurship is endemic within many US science faculties. At MIT, for instance, commercial activity, teaching and research are not regarded as conflicting fields.

According to John Preston, co-director of the the MIT Entrepreneurship Center, the brightest and best students in the UK go to work for large companies. In the US they want to start their own businesses. As a result, he says, MIT is referred to as ‘millionaires in training’. He says many other US universities are now making efforts to promote their entrepreneurial ethos.

UK universities have welcomed the Science Enterprise Challenge. ‘It should assist in enabling the economy to benefit from the world-class research carried out in UK universities,’ said Diana Warwick, chief executive of the Committee of Vice-Chancellors and Principals.

However, there are fears that the OST’s plan to look for a significant step forward to world-class practice so-called additionality may count against those universities which are now ahead in commercialising their research work and promoting enterprise within their campuses.

And there are concerns that the title Science Enterprise Challenge reflects a desire to exploit fashionable basic science, such as genetic engineering and biotechnology, at the expense of engineering.

Cranfield University is likely to put in a bid, says vice-chancellor Professor Frank Hartley. But he is worried about the growing number of similar competitions for funds and their impact on strained resources. ‘We certainly think we have a lot to offer, but with only eight centres we will need to look at our likelihood of success and how many resources we can put into a bid.’

Another bidder will be Cambridge University. Its engineering department, under Professor Mike Gregory, runs a series of lectures by well-known entrepreneurs and is developing a one-week summer school on entrepreneurship. Gregory believes each enterprise centre should reflect local needs.

‘Cambridge, for example, needs to ensure the right support system is in place for pre-start-up companies. There needs to be the right education system to make researchers aware of entrepreneurial opportunities and to provide them with business skills,’ he says.

Warwick University is a potential bidder says Nick Matthews, a Fellow at the Warwick Manufacturing Group. He’s pleased the scheme identifies the problem of bringing business and research skills together, and welcomes the OST’s intention to allow universities to offer different solutions. ‘But it’s not rocket science, it’s more social science.’

John Bates, Senior Fellow at the Foundation for Entrepreneurial Management at the London Business School, will also be putting in a bid. The Foundation runs a student business competition with the leading European business schools. ‘The Enterprise Challenge is a very good start. It recognises the management gap in exploiting research and is a step in the right direction. The problem now will be identifying what is world-class practice.’

Collaborative research with industry is just as much part of a university’s entrepreneurial culture as the creation of ‘campus companies’, says Dylan Evans-Jones, professor of entrepreneurship and small business management at the University of Glamorgan.

Yet in a recent study into technology transfer at European universities, Evans-Jones found collaboration is being stifled by increased teaching duties, administrative pressures and the need to maintain high research ratings. ‘Many teaching staff simply do not have the time to undertake collaborative projects with industry,’ he says.

He believes the stronger research-oriented universities may have a better chance in the Enterprise Challenge. ‘But most of the applied, near-to-market work is being done by the new universities, the old polytechnics,’ he says.

Nevertheless, Glamorgan is likely to put in a bid, says Evans-Jones, based on the ‘Team Wales’ idea, in which a number of public- sector institutions in Wales are combining to help improve local competitiveness.

‘The Higher Education Funding Council in Wales has already said that it is vital to include entrepreneurship in the university curriculum,’ he adds.

Bidding for a business break

Winning bids for the Science Enterprise Challenge will be expected to demonstrate:

* ability to establish a world-class centre for providing training and exploitation based on best practice;

* an impact on teaching and knowledge transfer;

* a credible business plan leading to self-financing in five years;

* links with high-quality science and engineering research and teaching;

* integration within the university and with other bodies such as business support organisations;

* good processes for identifying projects suitable for exploitation;

* innovative proposals for teaching enterprise techniques to scientists and engineers at different stages of their careers

* challenging performance targets

* value for money

* expertise and a track record for individuals appointed as centre managers, especially in the formation of start-up companies.

At least half, but preferably two-thirds, of board members of a centre should have direct experience of working in small entrepreneurial businesses or start-up companies, says the Office of Science and Technology.