HE-BCI results 2009/10

The HE-BCI figures are available given in a press release on the HESA website, and paint an interesting picture.  According to HE-BCI, a total of 273 formal spin-offs (the term used by
HE-BCI) were formed in 2009/2010, a 27% increase on the previous year.  There is a total of 6,690 active companies formed as spin-offs or start-ups (formal spin-offs account for 1,340, or 20%, of these), which employ some 28,000 people on a FTE basis (formal spin-offs 16,942, or over 60%).

HE-BCI categorises companies formed by HEIs into four groups (we have used the same categorisation in the PraxisUnico Spinouts UK Survey):

  • Spin-offs with some HEI ownership
  • Formal spin-offs based on IP from the HEI, but not
    HEI owned
  • Staff start-ups, not based on IP from the HEI
  • Graduate start-ups, ditto

The following table shows for the two years in the latest report that formal spin-offs, although only a small proportion of the total companies formed, are by far the most important group in terms of employment, turnover, and fundraising.  There is no doubt some undercounting for start-ups, which are inherently more difficult for HEI technology transfer offices to track, but the overall picture is clear.

Spin-offs as proportion of all HEI company formation

 

 

2008/09

2009/10

new

9%

10%

active

22%

20%

employment

57%

61%

turnover

82%

84%

investment

96%

98%

 

The figures for formal spin-offs in the two years covered by the HESA Press release show a relatively unchanged number of active companies, but strong advances in commercial activity, particularly in the level of investment raised.

Growth in spin-off activity

spin-offs

2008/09

2009/10

growth

new

215

273

27%

active

1,311

1,340

2%

employment, FTE

14,180

16,942

19%

turnover, £m

£1,511

£1,762

17%

investment, £m

£700

£1,139

63%

The HE-BCI figures include a breakdown by region.  Although England as expected dominates the absolute numbers, with 70% of the active spin-offs, the HE-BCI figures for employment, turnover, and investment can be computed with the numbers of active firms to give some interesting averages.

Regional differences

 

2008/09

2009/10

average employment, FTE

 

England

11

13

Wales

4

5

Scotland

13

13

N Ireland

20

20

ALL UK

11

13

average turnover, £'000

 

England

£1,233

£1,440

Wales

£237

£326

Scotland

£1,143

£1,006

N Ireland

£1,994

£2,135

ALL UK

£1,153

£1,315

average investment, £'000

 

England

£682

£1,089

Wales

£76

£112

Scotland

£94

£172

N Ireland

£1,135

£1,079

ALL UK

£534

£850

 

Note that these are averages, and can hide a wide variation; indeed, if there are any major ‘outliers’ a median measure could have been more appropriate, but this level of detail is not available in the figures reported.

This table shows that although Northern Ireland has relatively few active spin-off companies (60 in 2009/10, or under 5% of the total) these companies have stronger employment, turnover, and investment averages than the rest of the UK, possibly implying that they are a little more established, which is consistent with the low level of new spin-offs formed.

There has been a considerable increase in the formation of new spin-offs between the years reported, and yet the increase in these commercial parameters indicates a ‘maturing’ of the group of active companies.  The turnover figures for Wales, and the investment figures for Wales and Scotland, look unrealistically low, but could be affected by the number of pre-revenue and pre-investment companies included in the group.

 

If you would like a copy of the full spreadsheet on which this analysis is based, please email research@ycf.co.uk

 

Posted on Thursday, 24 November 2011