While there are signs that UK universities are leveraging their intellectual property and world-class research, the survey on spin-out and start-up ventures conducted by the Financial Times suggests that most academics still have one foot firmly in the ivory tower.

This is in stark contrast to the US where the MIT, whose related companies clocked up global sales of $232bn in 1997, has become a renowned world leader for making money from academia.

The university - whose academics, students and faculties have spun out more than 4,000 companies - received $61.6m in sponsorship from business in 1999, has partnerships with some of the top global companies, including Microsoft, Ford Motors and Merck, and signs more than 100 patents a year.

While there is much more variation in the quality of universities under the US system than in the UK, institutions there have been far more tuned in to the commercial value of academia than their British counterparts.

As Rohit Millstein, an American and executive of the London Business School's venture capital arm, put it: "There has been a cultural chasm in the UK; until recently, it was not the job of a gent to say he was in business."

The survey, which had 59 returns from 100 universities and included some of the UK's top ten institutions, revealed that only 258 companies had been spun out from the sample in the past three years, while start-ups accounted for a further 138 companies.

A spin-out was defined as a company set up to exploit research from the university and which had raised external finance from investors. A start-up was defined as an independent company in which the university had taken a share of equity.

Universities were asked to value those stakes based on funding rounds or actual/potential revenues of the companies. The combined value was £142.9m (though the real figure, including those that did not participate, will be higher).

While a handful of institutions, often spurred on by government-backed schemes, had spun off some highly successful companies, ten had not spun out any companies at all, while 29 had no stakes in start-ups.

Two-thirds had either made no money or less than £1m from their commercial activities, with 14 valuing their portfolio at between £1m and £10m. Only six had a portfolio above £10m.

Spin-out companies were concentrated in the information technology/telecoms arena and the industrial sector, with 32 and 33 of the universities having spin-outs in these two areas respectively. Twenty universities had ventures solely in these spheres.

Twelve institutions had spun out consultancy businesses, while the London School of Economics and Oxford were the only two to have spun out finance and banking ventures.

The University of Salford had the most diversified portfolio. It had spun out 12 companies across seven sectors and had taken stakes in 32 start-up companies, valuing its stakes as £2.51m.

UCL also had a wide-ranging portfolio, with 17 spin-offs across six sectors. While it had no start-up stakes, the value of its portfolio was £11.2m.

Another good performer was Umist - the University of Science and Technology in Manchester. It had built up a £25m portfolio with 15 spin-outs across three sectors - consultancy, IT and telecoms and industrial applications. The main chunk came from Umist's 30 per cent stake in Photo-Therapeutics, which was valued at £45m last November.

It also had a2per cent stake in the listed Knowledge Support Systems group, a software company, founded 12 years ago by Professor Madan Singh which floated last March. Umist said it had realised £11m from this investment.

Like Umist, the London Business School has a venture capital arm dedicated to spin-off funding. To date, Sussex Place Investment Management has invested £3m of its £25m fund in 20 companies and has made a return of £8.5m.

Bath's portfolio was bolstered when BlazePhotonics, a fibre optic spin-out, raised £6m in first round funding last month. Its portfolio is worth £21.8m, despite having only four spin-offs and a stake in one start-up.

The University of the West of England is a new university which has done better than some of the UK's leading academic institutions, creating a portfolio valued at the time of the survey at £12m.

Instead of incubating and funding spin-outs from the outset, it encourages staff to research and develop ideas in-house, reserving the right to buy a stake once the company is off the ground. "We won't waste a lot of money for hundreds of spin-outs," says Linda Skinner, director for the centre of research, innovation and industry. "We let a lot of fires burn and see which lasts, then back that one."

Universities with spin-outs and start-ups
Sectoral concentration
Sector	Number of universities	Sector	Number of universities
Industrial	33	Finance/banking	2
IT/telecoms	32	Public sector/non-profit	2
Consultancy	12	Other	2
Media/marketing services	8	Retail	1
Transport/communications	7	Training	1
Biotech	5	Pharmaceutical	1
Medical (medical sciences)	4	Optoelectronics	1
Utility	3	Agriculture	1
Source: FT
Based on the responses of 59 UK universities and higer education institutions

One older university out-pacing the rest was Oxford. It has been spinning out companies since 1959 and estimates its current commercial activities are worth about £2bn. It has spun out a further 20 companies in the past three years - worth £9.5m - through its commercial arm, Isis, which was founded in 1988.

Five Oxford-born companies - Oxford Asymmetry, Oxford Instruments, Oxford Molecular, Oxford GlycoScience and PowderJect Pharmaceuticals - are listed.

Meanwhile, Cambridge, at the heart of the silicon fen, has generated only £5m from eight spin-outs and two start-ups in the past three years. This is because the university hasn't tended to take stakes in spin-outs in the past, focusing instead on the importance of such companies for the economy, says to Dr David Secher, director of research services at Cambridge.

"There are billions-worth of companies that have benefited from research in the university but in which Cambridge does not have a shareholding. It has tended in the past to have a liberal attitude," says Dr Secher, who adds that in the future the university will be taking financial stakes in such companies.

It is well placed to do so, having built a potentially lucrative tie with MIT in the form of the Cambridge-MIT Institute (CMI), founded in 1999 with a £68m grant from government.

Such financial backing from the government, coupled with changing sentiment within universities, adds to the sense that a spin-off sea change is under way. "It is a hugely exciting time," says Dr Secher.

"We have seen a massive cultural change over the past ten years in the way academics, scientists and technologists see their research. It has changed from being a minority interest at the entrepreneurial end to a majority interest," he adds.

The government is also taking steps to foster an entrepreneurial ethos in universities through initiatives such as the Science Enterprise Challenge, which earmarked £25m to set up enterprise centres in the UK.

Peter Reid, chief of the government-funded Centre of Scientific Enterprise executive of the LBS and UCL, has set up a series of schemes to try to engender change among the student body. He wants dons to become more entrepreneurial. Academics "don't understand how to commercialise their research," he says.

But as public funding drains away from higher education, universities are having to find ways to support themselves.

Essex, which has spun out two companies to the tune of £1.6m, plans to build a science park for this exact reason. "It will help develop the university's future. That is really important to us in the current funding regime," said Bill Huston, director of the business development and regional office.