Britain’s universities are a vital economic asset, but they could be exploited far more effectively than they are being at present. There are opportunities here for investors.

It’s been a tough two decades for UK-listed firms. BP, Shell and HSBC have dropped out of the ranks of the world’s largest listed companies. Britain’s current largest firm, AstraZeneca, doesn’t even make the global top 40. At the same time, the reputation of British universities has gone in the opposite direction.

“We now have more universities in the global top ten than we had 20 years ago,” as Robin Bagchi, chairman of the London Technology Club, points out. UK universities “continue to punch well above their weight in terms of producing world-leading research”, which is an important economic asset, says James Witter, head of Sarasin Bread Street. More than 2,000 active start-ups have been spun out of UK universities. Little wonder that a sovereign-wealth investor has said that British academia is “our equivalent of Gulf oil”.

The cutting edge of the “golden triangle”

Such economic excellence is built on a foundation of “incredible institutions that are focused on applying science and technology to solve fundamental problems”, says Ed Bussey, CEO of Oxford Science Enterprises. He puts Oxford University at the top of the list of such institutions, pointing to the fact that every year Oxford comes up as one of the leading research universities, with a history of more than 70 Nobel prizes in a wide range of disciplines. “When I go out to lunch I’ll be standing in a queue and the person behind me will be a world leader in this, and then I’ll be walking back to the office and another will walk past me and they’re the Nobel winner in another area.”

Such a concentration of elite academics can help create an environment that ends up being worth more than the sum of the individual academics
involved. Having a “cosmopolitan and multinational” atmosphere “attracts other great minds” – and a lot of investors willing to put money into early stage
enterprises stemming from Oxford research. This in turn creates a “virtuous circle” where the quality of research attracts capital, which in turns encourages more talented academics to move to Oxford.

Andrew Williamson, managing partner of Cambridge Innovation Capital, emphasises Cambridge’s reputation and heritage as a major competitive advantage in attracting the best scientific talent. “We’ve existed for nearly 800 years, which means that we’ve been doing this for longer than almost anyone else in the entire world,” he says. It has leveraged its infrastructure and culture of “cutting edge science” to create links between “the academic world, the start-up world and the biggest global technology companies”.

Oxford and Cambridge are not the only points of excellence in British academia. Commentators increasingly talk about the “golden triangle” of Oxford, Cambridge, and Imperial and UCL, rather than just “Oxbridge”. Indeed, as Bagchi notes, when it comes to science, technology, engineering and mathematics (STEM) subjects, “some recent rankings put Imperial College London near the very top of the global table, ahead of Oxford, Cambridge and Harvard”. University College London has also had Britain’s universities are a vital economic asset, but they could be exploited far more effectively than they are being at present. There are opportunities here for investors. Matthew Partridge reports a lot of success when it comes to creating interesting spin-outs – DeepMind is one example.

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