The UK government has announced a £30 million investment aimed at accelerating university spinouts in four key regional research hubs. This initiative intends to boost tech growth and innovation outside the well-established “golden triangle” of London, Oxford, and Cambridge, helping to unlock the untapped economic potential of academic research across the country.
Supporting Four Regional Hubs for Innovation and Growth
The £30 million funding package is set to support four regional hubs, each with a specific focus and timeline for development:
- SCENE (North East England) – With £8 million allocated over five years, SCENE will strengthen the local ecosystem by engaging businesses, sector organizations, Catapults, and investors to commercialize university research. Durham and Newcastle Universities play a key role in this initiative.
- Midlands Hub – The Midlands will receive £10 million over five years to address talent and skills shortages. This hub will create a Talent Pool, appoint investment champions, and build innovation networks in key sectors such as Health, Advanced Manufacturing, Net Zero, and Creative and Digital. Aston University in Birmingham will lead the project.
- BRITE (Merseyside) – Over three years, BRITE will receive £4 million to develop a sustainable life sciences ecosystem, including vaccine development. This initiative aims to bridge gaps in product development, scaling, and commercialization through collaboration among universities, industries, and civic partners, with Liverpool University as a key participant.
- ACE (Lincolnshire and East Anglia) – The ACE hub will be allocated almost £5 million over three years to establish a leading Agri-Tech research commercialization cluster. The project has support from Barclays Eagle Labs, local LEPs, and commercial partners.
The Growing Importance of University Spinouts
University spinouts play a crucial role in transforming academic research into commercially viable ventures with significant real-world impact. These companies, built on intellectual property generated within universities, are becoming an integral part of the UK’s innovation ecosystem.
According to the Royal Academy of Engineering’s “Spotlight on Spinouts 2025” report, UK university spinouts secured over £2.6 billion in funding, marking a 40% increase compared to the previous year. Investment in university spinouts has significantly grown, rising from £1.06 billion in 2014 to £5.3 billion in 2021, positioning the UK as a leader globally, second only to the US.
However, despite this growth, regional disparities remain. The “golden triangle” continues to dominate the spinout landscape, and spinouts outside this region face challenges in accessing funding. Only 40% of spinouts outside the golden triangle raise equity capital, compared to 53% within it. These spinouts typically raise £1.4 million in their eighth year, compared to £5.7 million raised by those in the golden triangle.
Addressing Barriers to Spinout Success
The government’s £30 million investment aims to tackle key barriers to spinout growth, particularly outside the golden triangle. Issues such as bureaucratic hurdles, talent shortages, and limited access to funding are major obstacles to developing viable, growing businesses in regions without established financial ecosystems.
University ownership in spinouts has evolved, with UK universities holding an average of 16.1% of their spinouts in 2024, a decrease from 21.5% in 2023 and 27.6% in 2017. The variation between institutions is significant, with the University of Cambridge holding an average of 8.8% and the University of Leeds holding 42.9%.
Alongside the £30 million investment in regional spinouts, the government has also introduced new guidelines to help public sector organizations commercialize research. The Knowledge Asset Spinouts Guide offers detailed advice on creating spinouts from public sector intellectual property, highlighting the potential for creating high-quality jobs and attracting investment to energize local economies.
This initiative is part of a broader strategy to harness the UK’s research capabilities for economic growth. Spinouts are pivotal in generating wealth by creating jobs and attracting investment, with the funded projects focusing on key sectors like life sciences, Agri-Tech, advanced manufacturing, net zero, and digital industries.
A Promising Future for Spinout Investment
Investment in spinouts is showing signs of recovery, with £1 billion raised in the first half of 2024. Key sectors for equity deals include application software, pharmaceuticals, biotechnology, and medical devices.
The UK government’s £30 million investment reflects a strategic effort to tackle regional imbalances and leverage the economic potential of university research. By supporting four major regional hubs and providing guidance on public sector commercialization, the government is setting the stage for a more diverse and resilient innovation ecosystem. Success will depend on overcoming funding access, talent development, and ecosystem challenges beyond the golden triangle. With university spinouts proving resilient compared to other equity-backed ventures, this targeted investment could solidify the UK’s position as a global innovation leader while ensuring more equitable distribution of economic benefits.
