Creating Entrepreneurial Universities
in the UK: Applying Entrepreneurship
Theory to Practice
ABSTRACT. In the modern knowledge economy higher
educational institutions are being required to operate more
entrepreneurially, commercialising the results of their research
and spinning out new, knowledge-based enterprises. Like most
large organisations, particularly those operating in the public
sector, they are not traditionally suited to this role and often
face the same sort of barriers to intrapreneurial activity as their
counterparts in the private sector. In this note, the theories of
entrepreneurship and intrapreneurship development are used to
identify what needs to be done and a case example is provided.
Keywords: entrepreneurship, intrapreneurship, universities
JEL Classification: M130 – Entrepreneurship (New Firms:
Startups), I280 – Education: Government Policy, L200 – Firm
Objectives, Organisation, and Behaviour: General, L330 –
Comparison of Public and Private Enterprises
1. Introduction
Early evidence of the growth of technology-based
firms around universities such as Cambridge
(Segal, 1986) and Stanford and MIT (Roberts,
1991) suggested that the spin-out of new ventures
could be easily replicated. This is not necessarily
the case. As Birley (2002) has recognised the pro-
cess is more complicated than it might have been
assumed, initially. In the context of the UK,
Wright (2004) stresses the need for Universities to
focus on how they can overcome their existing
cultural values, a point recognised in the US by
Kenney and Goe (2004). Hence, this practitioner
note uses entrepreneurship theory to explore the
changes required to take place if universities are to
create a culture that supports enterprise creation
1
School of Management, University of Surrey
Guildford, Surrey, GU2 5XH, UK
E-mail: D.Kirby@surrey.ac.uk
Journal of Technology Transfer, 31, 599–603, 2006.
Ó Springer Science+Business Media, LLC 2006.
David A. Kirby1
and the spin-out and start-up of new ventures. A
case example is provided.
2. Barriers to entrepreneurship development
Universities are not the most entrepreneurial of
institutions. There are numerous reasons for this,
largely relating to the inherent nature of large or-
ganisations, in particular:
– The impersonal nature of relationships.
– The hierarchical structure and many levels of
approval.
– The need for control and the resultant adher-
ence to rules and procedures.
– The conservatism of the corporate culture.
– The time dimension and the need for immedi-
ate results.
– The lack of entrepreneurial talent.
– Inappropriate compensation methods.
Universities face all of these traditional barriers,
and several more. Unlike many large private sector
corporations, most have never had to be entre-
preneurial and are not based on a tradition of
enterprise. Accordingly, many staff believe that
being entrepreneurial ‘‘will drive out their other
more fundamental university qualities, such as
intellectual integrity, critical inquiry and commit-
ment to learning and understanding’’ (Williams,
2002, 19). Also, most academics see their roles as
teachers and researchers and not as entrepreneurs,
and many university managers are concerned
about the likely negative impact on their institu-
tion’s research performance if their leading aca-
demics become involved in entrepreneurial
activity. Thus although some of the leading
research universities are among the most successful
600 David A. Kirby
entrepreneurially, in terms of spin-outs (Etzko-
witz, 2003), for many in higher education the
concept provokes ‘‘an image of shady villainy, a
fifth column gnawing away at the basic values that
define a university, a wolf masquerading as a
milch-cow’’ (McNay, 2002, 20).
The issues do seem, therefore, to be ‘‘more
complicated and difficult to solve in a university
than anywhere else’’ (Birley, 2002, 134). However,
as Laukkanen (2003, 380) has recognised, ‘‘faculty
do not necessarily categorically oppose corporate
co-operation or academic entrepreneurship per se,
as is sometimes assumed’’ and ‘‘academics should
never be under-estimated’’ (Birley, 2002, 152).
Indeed, research at the University of Surrey (Hay
et al., 2002) suggests that academics are perhaps
more similar to entrepreneurs than might be first
expected. Where they differ most is in their pro-
pensity to take risks, suggesting the need to create
a secure environment in which risk is perceived to
be minimized.
3. Overcoming the barriers
Traditionally, efforts to create more entrepre-
neurial universities in the UK have focused on
funding ‘‘initiatives’’ (the offering of fiscal
inducements) and in recent years British universi-
ties have seen the introduction of a number of
targeted initiatives, namely:
– The Higher Education Innovation Fund (HEIF)
intended to encourage universities to build links
with the business community and form
partnerships to develop innovation centres, for
example.
– The Science Enterprise Challenge Fund
intended to encourage the teaching of entrepre-
neurship to science and engineering students.
– University Challenge Fund intended to provide
university staff with access to seed funds in
order to assist the successful transformation of
good research into good business.
While the importance of these cannot be denied
there are doubts about their long-term effective-
ness and their ability to transform the modus
operandi of the country’s universities, especially as
not all universities have received such funding. To
effect such a change lessons can be learned, per-
haps, from entrepreneurship theory, in particular
the Cognitive Models of Entrepreneurial Devel-
opment and the Theory of Intrapreneurship
Development (i.e. corporate entrepreneurship or
entrepreneurship in the large organisation).
Cognitive models of entrepreneurship development
Cognitive theory explores the situations that lead to
entrepreneurial behaviour and are based on Ajzen’s
(1991) theory of planned behaviour. According to
this, individuals will activate their entrepreneurial
potential if they believe they have the ability, there
are environmental possibilities and there is social
support. Thus, it is necessary
– For society in general and the institutions in
particular to have favourable attitudes towards
such an objective.
– For academics to believe they have the ability
to do it.
– For the academic staff to believe it is intrinsi-
cally rewarding.
This is beginning to happen in the UK. Since
2000, business and entrepreneurial development
have been listed as one of four strategic goals for the
country’s universities (Universities UK, 2000), the
universities are beginning to develop programmes
that equip their staff and students with the knowl-
edge and skills to commercialise their intellectual
property through new venture creation (Brooks-
bank and Thomas, 2001), and policies are being
developed with respect to the ownership of intel-
lectual property and the rewarding of staff. Nota-
bly, the level of spin-out activity has increased
considerably (UNICO, 2003).
The theory of intrapreneurship development
Intrapreneurship theory (Pinchot, 1985) suggests
that if established organisations are to re-discover
their entrepreneurial drive, there needs to be:
– Senior Management Commitment to Entrepre-
neurship.
– A Corporate Model for Entrepreneurship.
– The development of an Intrapreneurial Culture.
– The identification of Intrapreneurial Talent.
 Applying Entrepreneurship Theory to Practice
– The Monetary and Non-monetary Rewarding
of Intrapreneurs.
– An identifiable system for administering and
evaluating projects.
What the theory suggests is that it is necessary
not just ‘‘to have clear and fair policies and pro-
cedures, and to communicate them positively and
enthusiastically’’ as Birley (2002, 152) contends,
but to address the barriers that are preventing
entrepreneurship within the organization and to
create an environment that is supportive of, and
conducive to, its development. In order to effect
this, theory proposes the formulation of a high-
level strategy that demonstrates the university’s
intent, makes it clear that the university encour-
ages this form of behaviour, provides the univer-
sity’s staff with the knowledge and support to start
their own businesses and creates an environment
that reduces the risk involved. The sort of actions
involved in such a strategy is shown in Table I.
4. A case example
Based in the South East of England, 30 miles
south of London, the University of Surrey has a
long tradition for promoting innovation and new
ventures. In 1986 it opened a £70 million Science
Park (The Surrey Research Park) which houses its
incubator (the Surrey Technology Centre). Since
its inception the Park has contributed significantly
to the economic development of the region and to
technology transfer, as well as fostering innova-
tion. Tenant companies employ over 2,500 staff
and many feed technology into local companies
with which they have partnering arrangements.
Approximately two-thirds have links with the
University. Not only is the Research Park itself a
successful venture in its own right, but numerous
other enterprises have been developed, including
Surrey Satellite Technology Ltd, the world’s
leading provider of small satellites. In the aca-
demic year 2000–2001, the University created six
spin-outs and signed 14 licence deals, providing
£120,000 of revenue and the potential for future
royalties.
To strengthen its activities in this area, the
University has utilised recent Government support
in a number of ways. First, it secured funding from
601
Table I
Strategic actions intended to promote enterprise
Action Activity
Endorsement At the highest level. Senior staff act
as role models
Incorporation Into University,
Faculty/Departmental and personal
plans
Implementation Setting targets that are monitored
Communication Publication & dissemination of the
strategy and consultation on it
Encouragement Hard support—enterprise
and support laboratories, pre-incubators,
incubators, science parks, meeting
rooms, computing support,
office support services and seed corn
funding
Soft support—training, mentoring
and advice, signposting to sources of
external support, ongoing technical
and management support once the
venture is launched
Recognition Equity sharing, promotion, etc
and reward
Organisation Cross-disciplinary research and
teaching groups, educational
partnerships, a multi-disciplinary
Entrepreneurship Centre
Promotion Business plan competitions,
entrepreneurship ‘‘halls of fame’’.
Cases, role models
the Higher Education Innovation Fund and
appointed three ‘‘Innovation Network Managers’’
(technology transfer officers) to identify commer-
cially exploitable intellectual property within the
University and the region. Also, it has appointed
an intellectual property adviser and devised a
sliding scale for sharing net revenues with the
academic inventor, giving the inventor 70 per cent
of the net revenues up to £50,000 down to 35 per
cent on net revenues in excess of £500,000.
Additionally, it has developed links and part-
nerships with similar institutions in its region and
has been successful in obtaining collaborative
funding under the University Challenge and
Higher Education Innovation Funds. The former
has resulted in a Venture Capital Fund (Cascade)
that complements the University’s own £1 million
seed fund and provides ‘‘stimulus funding’’ of up to
£30,000 for proof of concept, market studies, etc.,
as well as a ‘‘growth fund’’ providing investments
of up to £250,000 for growing a promising venture.
602 David A. Kirby
Further funding is being made available through
the regional and national business angel and ven-
ture capital networks.
Finally, a collaborative bid to the Higher
Education Innovation Fund resulted in the crea-
tion of the Southern England Technology Triangle
(SETsquared) under which a pre-incubator
(SETsquared Centre) has been established on the
Research Park to facilitate the commercialisation
of research from both within and outside the
University. Like its partners at the Universities of
Bath, Bristol and Southampton, the Surrey
SETsquared Centre is intended for nascent entre-
preneurs with a sound business idea that shows
high-growth potential and links into the knowledge
(technology) base of the four universities. It offers
managed workspace and, importantly, business
and technological mentoring, training and net-
working opportunities. These are provided both
locally and through the consortium. An important
and integral part of the service is a regular
3-monthly monitoring and review process that
charts their development and advises on what skills
need to be acquired and what needs to be done,
including guidance on exit strategies. As the advice
is provided by experienced entrepreneurial mentors
and representatives of a panel of specialists from
the public support sector and local professional
service organisations (accountants, banks, solici-
tors, etc), the members are networked into the local
business community.
Having put in place a complete incubation
process, the University is now raising awareness of
the opportunities for new venture creation amongst
its staff and students. Apart from Entrepreneurship
modules on its Bachelor and Masters programmes
in the Management School, the University has an
innovative undergraduate degree (BSc in Entre-
preneurship, IT, technology and Business) in the
School of Engineering and a level 1 (30 credit)
business start-up module available on-line. Addi-
tionally, non-accredited extra curricular courses
(FUSE-Future University of Surrey Entrepre-
neurs) are offered through the Students’ Union,
while there is a Summer School for those wishing to
start their own businesses on graduation. This
complements short courses and ‘‘boot camps’’
intended for academics and the employees of
technology companies who wish to commercialise
their research and/or start their own business.
Finally, three ‘‘user-friendly’’ CD-ROMs enable
users to work at their own pace in order to develop
the plans to Start, Grow and Market their busi-
nesses. In doing this, the University is attempting
to create a completely integrated incubation pro-
cess in which its pre-incubator, incubator and
science park become ‘‘the entrepreneurial schools
of tomorrow’’ (Albert and Gaynor, 2003, 20). In
order to continue this process the University has
bid for, and obtained, a further £3.2 million of
funding under the second round of the Higher
Education Innovation Fund (HEIF 2). This will
enable it to create enterprise laboratories for
its students and a Centre for Entrepreneurship
Development that will co-ordinate and integrate
the academic and practitioner approaches to
entrepreneurship across the University.
All of these activities are integral components of
the University’s strategic plan and are endorsed by
the Vice Chancellor and Chief Executive who,
apart from being an eminent Professor of Elec-
tronic Engineering, was the joint CEO of what is
probably the UK’s most successful university
spin-out company, Filtronic plc. He sees them as
major strategic developments for both the Uni-
versity and the UK and in this he is supported by
the University’s Governing body.
5. Conclusion
Much has been achieved at Surrey and there is more
still to be done. The case demonstrates what can be
achieved, however, and how entrepreneurship the-
ory can inform practice. Creating entrepreneurial
universities is not easy as, even in the US, ‘‘within
our organisations, we have spent years learning
how to routinize and control things, how to build
equilibrium [but] we are very unskilled at altering
organisational structures that have outlived their
usefulness....’’ (Quinn, 1996, 5, quoted in Guskin
and Marcy, 2002, 35). To succeed universities must
do precisely that and those mandated to effect the
changes will need to understand and embrace the
principles of entrepreneurship development. It is
not simply a case of incentivising institutions
through the introduction of short-term funding
initiatives nor of putting in place the requisite
infrastructure. A culture of enterprise is required
that both encourages and enables academics and
 Applying Entrepreneurship Theory to Practice
students to commercialise their intellectual prop-
erty and inventions. Universities need to recognise
that entrepreneurial behaviour should pervade the
whole organisation and be recognised as an integral
part of their missions. The note has shown how,
theoretically, this might be achieved and how one
UK institution is responding.
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