Why is academia suddenly so obsessed with business? The answer is straightforward – the lure of wealth and job creation. According to a recent survey in the UK, turnover from spin-off companies rose from $395 million to $538 million and the number of staff employed increased from 10 500 to 12 000 during 2001-2002. The amount of income received by UK institutions climbed from $33.5 million to $61.5 million for intellectual property (IP), from $192 million to $227 million for consultancy, and from $495 million to $611 million for contract research over the same period. A statistic that has become extremely popular with UK funding agencies is that UK universities currently identify one spin-off company for every $28 million of research expenditure as compared with $82 million in the US. (This rate, however, will be severely curtailed if proposed changes to UK tax law are implemented.)

But is the UK approach on the right track? A recent report by Richard Lambert, former editor of the Financial Times and member of the Bank of England's monetary policy committee, documents the recent change in attitude toward business-university collaboration in the UK. “I am very positive about the economic potential which business in the UK can harness through developing stronger collaboration with universities,” he says. But adds, “I am also clear that realizing this potential will require concerted action by universities and business, with support from government.” There is no lack of ideas emanating from universities, he says, but there is lack of demand from industry. In terms of R&D spending as a proportion of gross domestic product, the UK lags behind Germany, the US, France, and Japan. According to Lambert, the business sector has been the biggest contributor to this decline. There are a couple of notable exceptions to this trend; in pharmaceuticals/biotech and aerospace/defense, the UK's R&D intensity is higher than the international average. This precarious dependence on a small number of companies in a narrow range of sectors has pushed academics and universities toward the spin-off route.

But there has been too much emphasis on spin-offs, says Lambert, a good number of which will not prove sustainable in the long-term. Instead, there should be more focus on licensing technology to industry. But how can universities attract the interest of industry? First, there needs to be more actual human interaction between the two, he says, which sounds like a familiar rallying cry. Universities often overvalue their IP, which can be a disincentive to industry involvement, and would do well to remember that public-funded research is intended to benefit the economy as a whole, not just a single institution. Even successful US universities acknowledge that the main reason for such third-stream activities is to serve the public goodrather than generating revenue for the university.

Oxford and Cambridge Universities get a special mention as being critical to the economic and intellectual life of the UK. Oxford, in particular, is working hard to foster a culture of entrepreneurialism and has just launched its second business plan competition (www.science-enterprise.ox.ac.uk).

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DOI: 10.1016/S1369-7021(04)00162-2