Can UK universities do more to exploit their ideas or is it British industry that is missing a trick? Ayala Ochert reports

When Alexander Fleming discovered that the blue mould in his petri dish could kill bacteria, it was a great day for British science. The discovery did wonders for the health of the nation, but it did not do much for the wealth of the nation. Fleming ran out of research money and penicillin was developed in the United States.

It is the British paradox - the country is rich with good ideas, just not very rich. According to the Japanese government's own estimates, 57 per cent of Japan's major technological innovations originated in the United Kingdom. "The strong UK science base does more than its share in helping create wealth around the world. But this is not consistently translated into strong industrial performance within the UK," says government chief scientific adviser Robert May.

It is a situation that the government clearly finds frustrating. "I have looked in awe at how our competitors on the other side of the Atlantic have left us standing when it comes to developing business ideas, especially as spin-offs from colleges and universities," says Helen Liddell, minister for competitiveness in Europe.

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When it comes to numbers of patents filed - one measure of how well basic research is exploited commercially - the UK is almost at the bottom of the pile, so it seems that Liddell's grim assessment of university performance is borne out by the numbers. Or perhaps not.

A 1998 study carried out by the Policy Research in Engineering, Science and Technology unit at the University of Manchester paints a very different picture. It found that the number of patents held by UK universities doubled in six years and that income from intellectual property rose by 58 per cent between 1996 and 1998.

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A similar picture emerges from a survey carried out by Bob Smailes, director of Edinburgh University's office of innovation and research, as reported in The THES earlier this year. Smailes compared six large Scottish universities with 132 US universities and found that the Scottish universities do just as well when it comes to capitalising on inventions. In the US, it takes an average of $4.2 million of research to produce one patent. In the Scottish universities it takes just $3.2 million. And the Scottish universities are also better at creating spin-off companies. They generate one spin-off company for every $25.5 million of research funds, compared with the $93 million required by the average US university.

UK universities such as Cambridge have begun to emulate institutions such as Stanford University and Massachusetts Institute of Technology, says Richard Jennings, industrial liaison officer for Cambridge University. The big US universities generate about one patent per million dollars of research funding. Cambridge, says Jennings, is generating close to one patent per million pounds of research funding. Ten years ago, Cambridge was producing just a handful of patents each year. "There has been a remarkable increase," he says.

Jennings's counterpart at Oxford University, Tom Hockaday of Isis Innovations, the university's technology transfer company, agrees. "If you look at the data, it is probably true that the best in the US is better than the best in the UK. But it is also probably true that the best in the UK is better than the majority in the US."

So which picture is the right one? Judging by recent government initiatives the problem would seem to be in universities. The University Challenge Fund, the Science Enterprise Challenge and the ÖйúAƬ Reach Out to Business in the Community fund are all aimed at helping universities better exploit their intellectual property.

Although he welcomes such initiatives, Hockaday says: "I think it would be useful to put the spotlight on companies and ask what they are doing." Jennings notes that technology transfer only works if you have somewhere to transfer your technology to. "There's a huge raft of industry that just doesn't exist in Britain."

Sir Robert May agrees:"The UK is below par in chemicals, engineering and telecommunications."

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Moreover, British businesses are more reluctant than their US counterparts to invest in research and development - from which patents have historically emerged.

If the problem is British industry and not the universities, where great changes have occurred over the past 20 years, one oft-touted solution is the US model of offering tax breaks to companies that engage in research.

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The government may be considering this option. Sir Robert recently wrote in Science: "It is interesting that countries that introduced tax credits over the past decade - Australia, Canada and the US - have all seen strong growth in industry-financed R&D investment."

Just how "interesting" remains to be seen.

TRACK IDEAS AND MAKE THEM PAY

Keeping tabs on patents.

There is one area in which the US clearly outclasses the UK - the collection of data. Since 1991, the Association of University Technology Managers has sent questionnaires to 132 US universities, 26 US hospitals and research institutes, and 20 Canadian institutions, asking them about the patents they have produced and licensing income they have generated. The results for 1998 show that for the $24 billion of public and private funds invested in research, universities produced $34 billion in economic activity and generated 280,000 jobs in the process.

Since no one collects this data in the UK, it is impossible to say how the countries compare. The Office of Science and Technology recently sent out a questionnaire to universities that applied for the University Challenge awards, but there are no plans to release the data. Oxford University's Tom Hockaday hopes this will change. "It is important that we start publishing data," he says. "It is part of what goes towards convincing people that spending public money on universities is a good thing."

A quantum leap to riches.

Three years ago, Joel Martin was approached by a Silicon Valley venture capital firm with $1 million and instructions to find the next big thing. Martin, a seasoned entrepreneur with several high-tech start-ups under his belt, began trawling the leading science journals. He was looking for a technology with big commercial potential that was sitting in a university, just waiting to be mined.

What he found were quantum dots - tiny semiconductor crystals that glow brightly in a range of different colours. Research by chemists Paul Alivisatos of the University of California, Berkeley, and Shuming Nie at Indiana University, had just opened up new possibilities for the technology. They showed that quantum dots could bind to proteins and DNA, and so could be used as sensitive markers for basic cell research, diagnostic tests and even genetic analysis.

Quantum Dot, the start-up, was founded and Martin signed up all the key researchers, offering them a financial stake in the company. He recruited PhD students from labs to develop the technology, and Quantum Dot secured licences from universities to use the technology.

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Since then, the company has attracted $38 million of venture capital. They already have huge clients lined up, including the National Human Genome Research Institute, Novartis, Roche and Genentech.