From virtual reality to mobile payments, some of the best new innovations started life in academia.
What do Apple and Facebook have in common with British universities?
Over the last few years the tech giants have both come to the UK for the same reason, to buy up innovate new companies founded under the stewardship of Imperial Innovations.
As its name suggests, Imperial Innovations started life in 1986 as part of Imperial College, an experiment to see if the university could better turn the research and ideas being developed by staff and students into actual businesses which could then be spun off or sold.
Or as those in higher education call it, the “commercialisation of research”.
Imperial was ultimately so successful and profitable as a spin off business generator, turning research from the fields of engineering, Medtech, therapeutics, and ICT into actual businesses, that the university in turn decided to spin off Imperial Innovations as a separate company in 1997.
Today Imperial Innovations doesn’t only work with Imperial College but, since a shift in strategy in 2011, also with Oxford University, Cambridge University and University College London (UCL).
This year US tech giant Apple quietly acquired two of Imperial’s portfolio companies, big data analytics group Acunu and music data group Semetric, while Facebook bought British virtual reality group Surreal Vision to bolster the launch of its upcoming Oculus VR headset.
Altogether Imperial Innovations made over £15m in profit last year, while investing an additional £60.8m across its portfolio of 98 companies.
But how is Imperial so successful at turning research and ideas into multimillion pound businesses?
The Memo spoke to Russ Cummings, Imperial Innovation’s CEO, to find out.
Russ Cummings: We’ve become a really important part of the university ecosystem because we’re creating value directly for universities who will often have founding stakes in the companies that we create or share the revenue that is generated.
Also in terms of universities attracting the very best academics from around the world and attracting research funding, if they’re able to demonstrate that there may be commercial spin offs, an impact on the economy or on society from that research.
RC: They are all getting better. Our mission is to change the perception that the UK isn’t very good at commercialising research or science and prove that we are very good at it.
The four universities we work with do have the advantages of a critical mass of research activity, particularly in the STEM areas, management talent, investment communities and spin out activity already taking place around them.
The real key innovation was granting us commercialisation rights… to commercialise all the intellectual property coming out of Imperial college for 15 years.
Imperial College really is the MIT of Europe, it’s Europe’s strongest science and technology university and one of the top 10 universities in the world for research.
Now with the addition of Oxford, Cambridge and UCL we’re now operating across the top 4 universities in the UK.
But we still have to be very disciplined, very professional in our approach and highly selective. There’s a lot of very interesting technology out there, all of it world-class from these four universities, much of it worthy, but only a small proportion of it is going to make sense for forming a company.
And if the companies we have invested in are not making progress or if the challenges they face are insurmountable to overcome, then we will sell out of these companies early on.
There are four trends in ICT which we’re focusing on. Firstly the confluence and convergence of analytics and big data, basically either looking at small volumes of high value data or large volumes of low value data for anomalies or trends.
There’s also a big trend within IT security at the moment following this summer of hacks and attacks.
One of our businesses that straddles the two is FeatureSpace, they’ve got a predictive analytics algorithm which looks at transactions individuals are doing… and can predict the next transaction that person is going to do, which can be used to combat fraud.
Obviously there’s a great Fintech (financial technology) cluster of companies in London, and finally the artificial intelligence sector is also of interest to us.
Sometimes they might straddle the university community, like FeatureSpace which did have an academic heritage in the engineering team at Cambridge University, but others often are people-centric.
We track where research funding is going, so if we see a professor of computer science we’ll strike up a relationship and find out about the exciting research they’re doing.
They tend to be more engineering-led, rather than the consumer-focused startups which more of the business school and student startups are.
For the time being we’re choosing to stay focused, but that’s a choice of ours because there’s such a rich seam of entrepreneurs and research in this cluster in the south east of the UK.
We constantly get inbound calls, particularly from continental Europe and the US because they are looking enviously at our model.
One of the constraints we have is that starting up these businesses is labour-intensive and it’s tough to do even on our doorstep in Cambridge and London where we’re based.
The further afield you try and do it you compound those challenges, so for the time being we think the right thing to do is to stay focussed.
There are plenty of opportunities and universities who are looking enviously at what is going on right here in the UK.