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Innovation Intersections: The Role of Spinouts in the Research Ecosystem

Jan. 2, 2024—Every time you’re asked to prove you’re not an internet bot by selecting the right images in a reCAPTCHA prompt, you’re interacting with a university spinout. reCAPTCHA originated at Carnegie Mellon University as a platform to digitize books that were too illegible to be directly scanned by computers. reCAPTCHA Inc. became its own company in 2007, later acquired by Google in 2009. It is one of the best-known examples of a university spinout, an independent company arising from academic research generated within a university.

Spinouts are created by universities or established companies, and while they do not directly impact university-industry research partnerships, they can be a valuable force for driving innovation and discovery.

Spinout starts

Academic spinouts begin in university labs, eventually maturing to bring groundbreaking innovation to market. They commercialize intellectual property generated within the university and leverage it to create new products, services, or technologies. The path from lab to market is heavily supported by the university of origin, often through technology transfer offices facilitating the transition. The process must balance the protection and licensing of intellectual property and also frame the strategy for a self-sustaining business capable of thriving for years to come. Carnegie Mellon University keeps close ties with its spinouts, continuing to add to its list by placing individuals, licensing key technologies, and connecting spinouts to industry, venture capital, and economic development funders.

Cross-sector connections

While originating in the academic side of research, spinouts shift into the industry realm as they develop, bridging the gap as they mature. Spinouts directly benefit their university of origin; they help drive economic growth, attract top entrepreneurial talent to the university, generate revenue from technology, and may even help develop research partnerships with other entrepreneurs and companies down the line. Supporting spinouts so they stay near the university also contributes to the local innovation ecosystem. A UK report on university spinouts reviewed their impact on the research ecosystem and underscored their importance. The report recommendations were recently accepted by the UK government for future implementation.

Industry has a role to play in the maturation and development of spinouts. Some companies look to corporate accelerator programs to help nurture spinouts and start-up companies. Corporate accelerators vary, but most provide support through mentorship, connections, capital, and more. One example is Microsoft for Startups, which provides access to AI services, expert guidance, and other startup-essential technology services. These accelerators can be pivotal for academic spinouts, as they can provide industry-specific insights and connections to help fine-tune products and technologies, increasing the chances they become marketable and scalable.

Why it matters

Academic spinouts are players in the research landscape, providing an impetus for faculty and students to pursue technology development. They’re often supported by university incubation early in their entrepreneurial journeys, later acting as a magnet for industry engagement and acceleration. As they mature, spinouts can become an opportunity to forge and strengthen connections in university-industry collaboration, especially when managed to optimize opportunities for industry to support their evolution early (through collaborative incubation within the university) and later, when products and services are ready to respond to market needs.

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The 3-Minute Read is a UIDP member information piece and does not represent the opinions of our members or representatives. We welcome your comments on our LinkedIn profile.