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The public sector spinout landscape

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Author: Jacob Coker

Big innovations and even bigger impact

Imagine the UK government in the 1980s and you might be forgiven for not picturing the dawn of innovative companies being spun-out of cutting-edge innovation and research.

But the scale of this activity and the economic impact of commercialising numerous public sector innovations are brought together in a new independent study published last week. It is the first ever review of spinout activity from the public sector.

Spinning-out is a route to impact for Knowledge Assets (including inventions, expertise, software, R&D outputs and data), which is surprisingly well-trodden in the public sector. A spinout company is set up to commercialise a Knowledge Asset, where the public sector body that developed the Knowledge Asset takes equity and/or a fee-bearing license, so that they can share in the potential benefits.

Whilst university spinouts receive a lot of focus, spinouts from the public sector have also been attracting billions of pounds of investment and employing 1000s of people for decades!

Significant economic impact of spinouts in the public sector

From industry-leading project management tools in the Cabinet Office, to optical sensors for extreme environments in Science and Technology Facilities Council (STFC) – valuable innovations are developed across the breadth of the public sector.

In total, 84 spinouts were identified in the study, with the earliest founded back in 1980 - and clearly there’s been backing for the commercial potential of them, with spinouts having raised a total of £5.1bn funding as of September 2023.

And these have been businesses that have grown in scale, employing 7,370 people as of 2021.

Why we undertook this research

Whilst some organisations like UK Research and Innovation's Medical Research Council (MRC) and STFC, and the Defence Science and Technology Laboratory (Dstl) are prolific generators of spinouts, we know there are many more government innovators out there trying or wanting to try to establish spinouts.

In the Government Office for Technology Transfer (GOTT), it’s our mission to help public sector organisations realise the potential value and impact of their Knowledge Assets, so we commissioned this study to understand what’s happening, what works and how can we help.

Available support

Deciding whether to establish a spinout and then actually doing so is no mean feat- thankfully, GOTT is on hand!

If you’re thinking about how you can realise the full potential of an innovation you’ve helped develop in the public sector, get in touch with us at: The team at GOTT can provide expert advice, access to dedicated grant funding, funded external support, training and more.

And if you’d like to connect with other people working with Knowledge Assets across the public sector, sign-up to the Knowledge Asset Network.

Finally, a huge thank you to the teams at Wellspring (IP Pragmatics Ltd) and the Policy Evidence Unit for University Commercialisation and Innovation at University of Cambridge for undertaking the study, and to all our colleagues across the public sector and partners who provided their time and input to make it such a comprehensive report.

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