Peter Jelfs and Helen Lawton Smith
In this paper we show that much can be learned from studying all the university spin-offs (USOs) in a particular region. In this case the study compared the survival rates of USOs formed by the 12 universities in the UK’s post-industrial West Midlands region between 1983 and 2013 with what might have been expected from previous studies. Three things stood out:
- First, survival rates were found to be significantly lower than in previous more general studies despite the existence of prominent research universities within the region. University spin-offs collectively added little to regional economic development and specifically few jobs were created, and little wealth was generated.
- Second however, part of the explanation lies in the methodology used. It is very possible that this study included USOs that may have been omitted using different methodologies. Nearly all previous studies rely to some extent on institutional memories where selective amnesia can be a factor and so data may be less reliable. In this case financial data on individual firms were collected from 4 main sources: the university’s published accounts; the university’s technology transfer office; commercial databases, and an independent specialist database.
- Third, probably survival is not a particularly useful comparative performance metric. A category ‘twilight firms’ (zombies) which can have little or no activity for some time but are not killed off in the same way that non USOs would be, perhaps retained so that universities can attain some internal or external indicator, helps to explain why survival rates have been found to be higher in other studies.
Thus, while poor performance of these spin-offs presents missed opportunities for regional economic development, further research is needed to identify the extent to which it is factors related to the quality of the firm and its management or implicit impediments in the region.
Full article: A comparative study of the survival of university spin-off companies (USOs) in the post-industrial UK West Midlands region (tandfonline.com) by Peter Jelfs and Helen Lawton Smith Studies in Higher Education, Volume 47 Issue 10
