This essay has been written by Professor Geraint Rees, University College London, and forms part of a publication entitled ‘Perspectives on the role of London’s higher education sector in global AI leadership: A collection of essays’ which is being published on the London Higher website one part at a time.
London’s position as a prime global destination for startup and spinout investment is driven by its world-class universities. No other ecosystem in the world brings together world-class higher education, globally leading R&D across many disciplines, a diverse talent pool drawn from across the world and a global financial hub. The capital’s rich ecosystem of world-class universities such as UCL, Imperial , King’s College London, Brunel University of London and the Institute of Cancer Research, generates a constant stream of cutting-edge research and talented graduates. This academic foundation, coupled with initiatives like Tech City UK and the Knowledge Quarter, creates a fertile ground for spinouts and startups.
Over the past five years, universities in London have undergone a dramatic transformation in their approach to research commercialisation. This shift has been driven by a combination of factors, including increased competition for funding, government pressure to demonstrate economic impact, and a growing recognition across business and financial sectors of the potential for academic research to drive innovation and economic growth. Key initiatives include the establishment and growth of dedicated commercialisation units, an increased focus on entrepreneurship education, enhanced industry partnerships and investment in incubators and accelerators.
This transformation has driven results. For example, at UCL our spinouts, formed to commercialise and scale up innovations in research, have created more than 2,200 new jobs and attracted almost £3bn in investment in the last five years, ranking second in the UK. We currently hold 2,558 active licenses for innovative technologies. And our student start-ups number over 450, attracting over £460M in investment and employing more than 2,000 people. These figures have grown dramatically over the last five years, mirroring a success story across London universities.
And yet in an era where innovation drives economic growth, London’s universities find themselves at a critical juncture. How can we build upon this successful foundation that bridges the gap between academic excellence and market success? How can we now accelerate progress to become globally leading? Two areas of focus are crucial.
The first is the need for long-term investment in creating a robust pipeline to market for deeptech technologies. A prime example of this approach’s success is UCL’s recent breakthrough in cell and gene therapy for severe haemophilia. This revolutionary treatment, which recently received both US and European licenses, promises to transform the lives of patients suffering from this debilitating condition. However, the journey from fundamental research to clinical application was far from overnight. The development of this therapy required almost two decades of painstaking research, rigorous testing, and continuous refinement.
This extended timeline highlights a critical point often overlooked in discussions about university spinouts: the importance of patient capital. While the end result – a groundbreaking medical treatment – captures headlines, the years of foundational work that made it possible, and the decade of translation that followed, often remain hidden from superficial analyses.
The investment that enabled this pipeline came from multiple sources. At the earliest stages, the ability of the university and public sector to invest in early-stage commercialisation aligned well with availability of pre-seed and seed capital from private investors. But at latest stages, companies also benefit from longer term and larger investments from patient capital particularly in areas like life sciences where the route to market takes many years. And private sector investment in the infrastructure that surrounds and services fledgling companies in this sector.
Fostering such long-term and structured investment at UCL has now enabled over 22 cell and gene therapies to enter our pipeline – either developed, licensed, or spun out and currently in clinical trials. This portfolio stands as one of the strongest not just in the UK, but globally. Creating a pipeline from research to market creates long-lasting opportunity.
A second key focus should be on developing the tremendous potential of inter-university collaboration to drive commercial investment. While individual institutions can achieve remarkable results, a coordinated ecosystem of universities, hospitals, and research centres can create synergies that far exceeds the sum of its parts.
This collaborative approach is particularly evident in London, where UCL is exploring partnerships with other leading institutions and NHS hospitals in channelling capital investment into early stage companies. By pooling our research pipelines, we can create a diverse portfolio of opportunities that is significantly more attractive to potential investors. Large pools of investment capital for startups and spinouts with diversified portfolios attract global capital and enable productivity, jobs and growth. We hope that the London Growth Plan can help accelerate and realise this potential.
Collaboration doesn’t just involve sharing investment but entails creating a critical mass of innovation that can compete on a global scale; an ecosystem of opportunity. This approach allows us to tackle more complex challenges and attract larger investments. It fosters cross-pollination of ideas, enables sharing of expensive research infrastructure, and creates a talent pool that can move fluidly between academia and industry.
Central to this collaborative approach is its ability to effectively leverage public funding to attract private sector investment. By presenting a diverse and robust portfolio of research projects, universities can demonstrate a higher probability of commercial success, thus “crowding in” private capital. And as outcomes are created, they benefit productivity, jobs and growth across the UK. A recent report from RAND highlighted that universities in the South East “export” two thirds of their impacts, more than any other region in the UK. Thus investment in London benefits the entire UK.
By showcasing the commercial potential of academic research, London’s universities can make a compelling case for both public and private investment in innovation. Collaboration not only shares risk but creates a more compelling value proposition.
Today we are in a strong position to drive commercialisation in London. But with long-term investment and a step-change in collaboration we are poised to become the world’s leading location for research and innovation, creating productivity, jobs and growth for the UK.
