Increased funding could help UK universities create more spin-out companies, according to the Russell Group.

A submission outlining the research-intensive mission group¡¯s hopes for the country¡¯s forthcoming industrial strategy says that one institution has estimated that funding shortages have prevented six in 10 of its potentially viable spin-outs from being developed.

The Russell Group highlights the importance of England¡¯s Higher Education Innovation Fund (HEIF), which supports institutions¡¯ commercialisation activities. This is currently worth ?260 million, and the maximum allocation is limited to ?5.7 million per university.

¡°This cap restricts the scale of innovation activities many universities can undertake,¡± the Russell Group says, highlighting that every ?1 invested in the fund has been found to generate ?14.80 of economic return for the UK ¨C a figure that approaches ?20 for the biggest institutions.

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¡°Increasing the value of HEIF would enable universities to significantly step up their commercialisation and business engagement capacity and substantially increase the number of high-growth spin-outs,¡± the report says.

The Russell Group also advocates for the creation of a ¡°Spark fund¡± designed to close the gap in early-stage funding for spin-outs, supported by co-investment from universities and private sources.

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Other recommendations include:

• Reforming VAT rules for new university buildings which will be used to undertake collaborative research projects with businesses
• Including research facilities and business incubators in any streamlined planning regimes envisaged under the industrial strategy
• Allowing employers to spend up to a quarter of funds raised under the Growth and Skills Levy on non-apprenticeship training, with this proportion potentially being increased to half in future
• An early declaration of intent to associate to the European Union¡¯s next research framework programme
• A welcoming environment for international students and staff.

Writing in the report¡¯s foreword, former Cabinet minister Greg Clark, now the executive chair of the Warwick Innovation District, says universities can make a ¡°unique contribution¡± to the industrial strategy via their research and innovation activities.

¡°Taking a strategic approach to supporting UK industrial strength is the right choice given the wide-ranging challenges the UK faces: from insufficient investment in infrastructure across housing, transport, energy and digital capacity, to difficulty for new businesses in accessing financing,¡± Clark writes.

¡°The industrial strategy provides a unique opportunity to drive the necessary changes with urgency and at scale. This means putting partnership between government, business, the public sector and universities at the heart of the strategy.¡±

Plans for the industrial strategy are expected to be set out as part of June¡¯s spending review.

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chris.havergal@timeshighereducation.com