An initiative driven by University of Dayton’s business school will see a new corporation launched focused on helping commercialize technology.
Leonardo Enterprises is the latest example of the education sector turning research into business, with ideas focused around science spun-out of top academic institutes including Stanford University and Oxford and Cambridge in the UK.
UD’s schools of engineering and law join the business department in building an independent enterprise that moves research technology from the idea phase into a commercial operation.
“There are a lot of ideas that are born out of class projects, but the students don’t have a lot of opportunities to pursue them outside of the classroom,” Eddy Rojas, dean of UD's school of engineering, told the Dayton Business Journal.
UD joins the growing global chorus of excitement around university spin-outs.
North American universities, hospitals and research institutions formed 914 start-up companies last year, up by 12% on 2013, according to AUM, the technology transfer association formed by more than 300 universities.
Over a 15-year period Stanford University took equity as part of its licensing agreements with 140 spin-out companies, according to an academic paper by Jon Sandelin, senior associate at the Office of Technology Licensing at Stanford.
Spinouts UK, which tracks early-stage research ventures from UK universities including University of Manchester and University of Edinburgh, has more than 2,000 start-ups in its database.
The UK’s University of Oxford in May launched a £300 million joint venture with Isis Innovation to develop research from the university’s mathematical, physical, life sciences and medical sciences divisions, and turn ideas into companies.
The £50 million Cambridge Innovation Capital fund similarly channels funding into research ventures.
And Imperial Innovations, the technology transfer company of Imperial College London, which is listed on the London Stock Exchange, has raised about £200 million from investors to accelerate research start-ups.
There have been successes.
Spin-outs from Stanford in California have contributed at least $100 billion in revenue to Silicon Valley, according to estimates by Professor Robert Byer at Stanford’s department of applied physics.
According to data from Spinouts UK, 14 British spin-out companies have floated on the stock market over the past three years.
Cambridge University has produced at least 14 companies valued at $1 billion alone, including Nasdaq-listed ARM, whose tech is used in 95% of the world’s mobile phones.
Universities’ business schools provide the commercial acumen and sometimes the funding research projects need to become business enterprises.
Joanna Mills, deputy director for Cambridge Judge’s Centre for Entrepreneurial Learning, said Judge is “at the heart” of the university’s entrepreneurial scene.
“We get an ecosystem developing of alumni coming through the business school and university,” she said. “A lot of those are entrepreneurs and they spin out ideas into start-ups.”
Other UK spin-out successes include Imperial College’s Circassia, a biotech company which raised £200 million from its IPO last year, and Oxford spin-out NaturalMotion, which was acquired by Zynga for $527 million in 2014.
The UK government has pushed for more private investment in spin-outs, including with the Enterprise Investment Scheme and the patent box, which offer tax breaks.
“The tax breaks in the SEIS and EIS schemes have encouraged business angels to come forward and this has meant there has been a greater flow of funds into early-stage ventures,” said Dr Shailendra Vyakarnam, director of the Bettany Centre for Entrepreneurship at Cranfield School of Management.
However, Hagan Bayley, professor of chemical biology at Oxford who has developed companies from research, said at a recent even that there is “huge pressure” on universities to justify their research funding with commercial results.
He said there is a pursuit of “artificial goals” to justify research funding for basic science in the UK, but “you just simply can’t predict what is going to come up”.