Universities will receive a £20m investment to help them “modernise” research into commercial enterprises, the Treasury has announced ahead of the Autumn Statement.
The funding is intended to support the “next generation” of university spin-outs, which see academic institutions commercialize their research, and raised £5.3 billion in 2021/22.
Chancellor Jeremy Hunt said: “Innovative, globally competitive businesses like Oxford Nanopore make a huge contribution to our economy.
“It is critical that we harness this potential and give universities the tools they need to translate cutting-edge research into exciting UK businesses that start and grow in the UK.”
Biotech business Oxford Nanopore, founded at the University of Oxford in 2005, has been flagged as a success story by the Treasury and is valued at around £1.7 billion.
The £20m investment follows an independent review into university spin-outs, which has recommended a range of policies to make such businesses easier to start and more attractive to investment.
Vivienne Stern, chief executive of Universities UK, said: “We welcome recognition of the positive impact and important role that spin-out universities play in driving growth and supporting the national and local economy.
“We support the ambitions of the review for universities, investors and government to collaborate and work together to maximize opportunities for university activity.
“Universities create thousands of jobs across the UK and will play an important role in driving the economic growth and local regeneration that the country needs.”
Dr Anne Lane, chief executive of UCL Business (UCLB), said: “For 30 years, UCLB has created successful spin-out businesses from UCL's ground-breaking research, which have raised £2.75bn of investment in the last few years alone five years.
“In addition to job creation and economic impact, these spin-outs scale solutions to complex societal challenges, from reducing carbon emissions to treatments for rare inherited diseases.
“The recommendations published in this review will help universities harmonize the creation of spin-outs.
“We look forward to working even more closely with other universities, government and the investment community to ensure a healthy and sustainable flow of investment back into academic research, while supporting the emerging businesses that are changing the world over the next 30 years.”
Mr Hunt accepted the review's recommendations and plans to announce a package of measures in the Autumn Statement designed to support UK-based science and technology companies.
These measures include an extra £50m for research and development companies and vehicles to support pension fund investment in science and technology businesses.
Pension funds will be able to invest in a new Growth Fund within the British Business Bank and other funds created through the Long-term Investment for Technology and Science initiative, which will receive £250m.
Louis Taylor, chief executive of the British Business Bank, said: “This package of measures has the potential to unlock billions of pounds of additional investment for the UK's fastest growing and most innovative companies, boosting the economy and increasing returns for savers pensions. “
Mr Hunt hopes these will allow pension funds to invest up to £75bn made available through regulatory changes announced in a Mansion House speech in July.
The chancellor said: “Innovation is key to our future success as a nation and it is vital that we do everything we can to help companies start, scale and grow in the UK.
“Tomorrow's Autumn Statement will be a huge step towards delivering the Mansion House reforms and unlocking the full potential of our pensions industry.”