A panel representing entrepreneurs, investors and students has highlighted the major barriers for young people pursuing entrepreneurship, during a debate at the Royal Academy of Engineering in London. Panellists argued that Offices of Technology Transfer (TTOs) could do more to ease the formation of spin out companies by updating their approach to IP and equity, and the greater provision of access to university facilities.
To augment the support already provided to entrepreneurial students, young entrepreneur Peter Brewin, founder of Concrete Canvas, also suggested that young entrepreneurs should have access to advice from experienced business leaders, as well as full-time academics. Brewin specified that advice from someone who has merely studied for an MBA qualification is not sufficient.
The panel event preceded the annual Innovation Hothouse competition final, which showcases the very best final year student design projects in a series of Dragon’s Den style pitches, and awards £5,000 to the winner to develop their project. This year’s winner was James Eaton of Brunel University for his adjustable sprint shoe for junior athletes, which addresses the issue of athletes discarding usable shoes that no longer fit.
Engineering contributes £481 billion to the UK economy annually, and encouraging entrepreneurship and growth in this sector is vital to the long-term sustainable economic growth of the country.
Ian Shott CBE FREng, Chair of the Royal Academy of Engineering’s Enterprise Committee, pointed out that the support currently in place for university students commercialising their work could be improved. He suggested that individual universities do not always have large enough communities to warrant individual TTOs, and that the UK’s network of TTOs could instead be consolidated into fewer, more effective operations. Peter Brewin added that they should be focused on delivering a public service, rather than primarily focusing on protecting their IP. Brewin went on to say that, while UK universities have fantastic resources, many are hindered by bureaucracy and debilitating issues with IP law.
Serial investor David Gammon added that he has generally tended to avoid university spin outs because the IP position is often too complicated. David argued that this situation needs simplifying and recommended that any company spun out of a university, or that has benefited from using university property, equipment and expertise, issue a 2% standard “golden undiluted share” to the university.
Matt Clifford, CEO of Entrepreneur First, suggested that some universities can also impede their own support for entrepreneurship by being reluctant to damage their post-graduation employment figures, and occasionally even refusing to support companies with team members from other universities.
Responding to the panel’s comments, Arnoud Jullens, Head of the Royal Academy of Engineering’s Enterprise Hub, said, “The UK is an IP rich country and universities have already made a significant contribution to encouraging young people’s entrepreneurial spirit by supporting spin-out companies. For some institutions, this support network is still evolving, and the Royal Academy of Engineering is in a prime position to bring TTOs, the investment community, and entrepreneurs together to identify the areas where existing support for young entrepreneurs can be augmented, and barriers can be removed.
“The Enterprise Hub was established to play precisely this role. Through the Hub, the Academy hosts events and discussions, provides policy advice, and ultimately utilises the unrivalled expertise of the Academy’s Fellowship to ensure that the country’s brightest entrepreneurial minds are given the best possible chance to succeed. The ability to create wealth from innovation is essential in building a strong, competitive economy in the UK.”
Beyond universities, wider challenges were raised during the debate including patent protection. Brewin suggested that the UK should increase protection for SMEs against large corporations by, for example, taking a punitive damages approach to ensure the risk is balanced.
For many entrepreneurs, access to funding is seen as one of the biggest challenges. Gammon argued that capital is widely available in the UK, but finding it and successfully pitching a case remains a major challenge. Current ‘angels’ look for the most outstanding opportunities, creating a limited market. To help counter this, he suggests encouraging more people to become angel investors, and mandating UK pension and life insurance companies to invest up to 1% of their UK-sourced assets in early-stage companies. Life and pension funds have a need for long-duration assets which early-stage companies match. This, he proposed, could completely revitalise the current UK model, which lags significantly behind the US.
“For a small country, the UK has an outstanding university heritage and there is a real opportunity to leverage this talent,” said Shott. “Universities are already willing to provide support to students, but some could take greater responsibility still for supporting and nurturing our bright young entrepreneurs without inhibiting the process with any ‘gatekeeper’ bureaucracy. Today’s debate, and the Academy’s wider Engineering for Growth campaign, reflect our ambition to create a vibrant hub for enterprise and entrepreneurship that will encourage the long term sustainable economic growth of the country.”
Following the roundtable debate, judges gathered at the Academy to view this year’s entries for the Innovation Hothouse final, a competition that encourages final year students to pursue entrepreneurial endeavours. Following six strong finalist presentations, judges announced that James Eaton of Brunel University had been awarded first place for his adjustable sprint Velok Sprint shoe, which is 20% lighter than competitor shoes and can accommodate up to three sizes within one shoe.
Klayton Palmer of Queen Mary University won second prize for his new type of construction toy made up identical modular pieces that enables construction without glue or nuts in three directions while still providing flat surfaces on all faces. Third place was awarded to Chris Ranson of University of Glasgow for his Ultra-Portable Acoustic Guitar, which is small enough to fit into onboard hand luggage for aircraft.
Notes for editors
The Innovation Hothouse competition is run by The Royal Academy of Engineering, Institution of Engineering Designers, Institute of Materials, Minerals and Mining, and Institution of Mechanical Engineers.
As well as a trophy, the £5,000 'J C Gammon Award for Innovation' prize is awarded to support the individual or team in developing their project after the event. Runners-up prizes of £3,000 and £1,000 are also presented. The ultimate aim of the scheme is that participants are encouraged to create flourishing businesses. For more information about the finalists and competition, please visit:
Founded in 1976, The Royal Academy of Engineering promotes the engineering and technological welfare of the country. Our fellowship - comprising the UK's most eminent engineers - provides the leadership and expertise for our activities, which focus on the relationships between engineering, technology, and the quality of life. As a national academy, we provide independent and impartial advice to government; work to secure the next generation of engineers; and provide a voice for Britain's engineering community.
About Engineering for Growth
Engineering for Growth is a partnership campaign to promote the economic impact and societal benefits delivered by engineering and to raise debate on how engineering can make an even bigger contribution. Engineering for Growth is led by the Royal Academy of Engineering in partnership with Atkins; BAE Systems; EADS; Lucite International; Rolls-Royce; McLaren Group; National Grid; Engineering and Physical Sciences Research Council; Technology Strategy Board; Institution of Chemical Engineers; Institution of Engineering and Technology; and the Department for Business, Innovation and Skills.
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Richard Lambert at Proof Communication
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