Government must ramp up ‘spin-out’ investment to capitalise on AI boom, top chief warns
Government must ramp up investment in the UK’s ‘spin-out’ ecosystem to ensure Britain capitalises on a wave of artificial intelligence research and so-called deep tech coming out of universities, a tech chief has said.
Gerard Grech, the former boss of startup body Tech Nation and new chief of Cambridge University’s Founders programme, said the UK had an opportunity to commercialise a wave of research from universities.
Grech was appointed boss of the new Founders programme on Monday after Tech Nation wound down earlier this year when the government pulled its funding.
“I think now it’s time to be doubling down and investing in our universities to ensure that they find the right pathway for their discoveries to be commercialised,” he told City PM
“I don’t think there’s ever been a better time to support universities in their commercialisation efforts, bridging the gap between between research and the market, which means investors take a longer term view of the market and take more risk with scientific breakthroughs coming out of our universities.”
The comments come as ministers look to tap into universities and unlock a new wave of innovation in areas like artificial intelligence and deeptech. The government is set to publish a deepdive into the UK’s spin-out ecosystem this year in their efforts to turn the UK into a science and tech superpower.
Standardisation across academic institutions and “more transparency of terms between universities” would help boost the health of the ecosystem, Grech said.
The comments come amid a funding slowdown for British spin-outs, however, with the industry suffering its first consecutive period of decline through 2022 and 2023 after a decade-long investment boom, according to research from investment firm Parkwalk and analysts Beauhurst.
Total equity investment into spin-outs fell from £2.73bn in 2021 to £2.34bn, and £743m in the first half of 2023.
The slowdown triggered warnings from UK investors last month over the health of the industry.
“Growing political support for unlocking for the full commercial potential of the UK’s science base, gives cause for optimism, but the job is not yet done,” said Moray Wright, CEO of Parkwalk, the most active spin out investor in the UK.