More than Policies: Bricks, Mortar, and Entrepreneurship

Science commercialisation activities at the university-industry boundary are key drivers to high-growth, sustainable university-centred entrepreneurial ecosystems (UCEEs). To support the commercialisation of university science, universities have invested in their built environment, including the construction of innovation centres.

In this European Business Review article, authors David Johnson and John Mackenzie, CEO of Roslin Innovation Centre, discuss the business innovation gateway located on The University of Edinburgh Easter Bush Campus, to explore the role of the built environment in driving science commercialisation and UCEE development, and suggest important recommendations for stakeholders responsible for fostering entrepreneurial activities and challenged with developing high-growth UCEEs.

The high cost and complex science commercialisation pathways, particularly in life sciences, has led universities to focus on the built environment to support science venturing at the university-industry boundary. In particular, some universities have invested in the construction of innovation centres to help drive science translational and venturing activities.

Research has demonstrated how university policies increase entrepreneurial activity and the commercialisation of university science. However, it takes more than university technology transfer policies to drive science commercialisation at the university-industry boundary. Without a focus on nurturing the built environment, including understanding how scientists and entrepreneurs dynamically interact with the built environment, UCEEs will struggle to evolve.

Across the globe, entrepreneurial universities have stated intent to facilitate science commercialisation. Whilst university technology transfer strategies and policies have been implemented to achieve this, some universities have made significant investments to develop their built environment in an attempt to drive science commercialisation and develop high-growth UCEEs.

The built environment consists of the university’s physical infrastructure, such as laboratories and classrooms. More recently, in an effort to drive academic-industry engagement and market-facing activities, universities have further invested in their built environment through the construction of science parks, innovation centres, research hotels, incubators, and accelerators. However, whilst the built environment is a critical element of UCEEs, its direct contribution to UCEEs remains fuzzy.

A UCEE forms when knowledge spillovers, including technology transfer activities, generate a cluster of entities associated with a specific technological field or sector (e.g., animal health). In particular, UCEEs are embedded networks of actors and the built environment, which reinforce specific technologies (e.g., stem cells), or related technologies (e.g., health care treatments), towards attainment of functional outcomes (e.g., improved health). The development of UCEEs is the function of individual, organisational, and institutional relations (i.e., the aggregation of the successes and failures of individuals, organisations, and institutions). Healthy UCEEs remain vibrant even when technological and commercial pathways for specific individuals or organisations are frustrated or blocked.

To further understand the role of the built environment to the development of UCEEs, we studied the Roslin Innovation Centre, which forms part of the University of Edinburgh’s UCEE. The Roslin Innovation Centre, which became operationally ready in 2017, was constructed with the core vision to create a building that would bring together clinical research, teaching, and enterprise activities at the heart of the University of Edinburgh’s Easter Bush Campus – Europe’s largest concentration of animal science expertise. The Roslin Innovation Centre has positioned itself to be the business location of choice for ventures engaging in strategic, commercial, and collaborative research within the Animal and Veterinary Science, Agri Tech, and One Heath Industries.

We embarked on a 7-month ethnographic study of the Roslin Innovation Centre. Specifically, our study involved observing the day-to-day operations and activities, interviews with tenant firms and key stakeholders of the Roslin Innovation Centre, attending strategy and operational focused meetings, and included full confidential access to the Roslin Innovation Centre’s strategic documents, including Board documents.

Recommendation 1: Focus on building legitimacy

A key element of venturing activity is establishing and maintaining legitimacy, which is especially important for entrepreneurs and ventures operating within high technology sectors, such as the life sciences. Legitimacy is “a generalised perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions.” Entrepreneurs and ventures that are seen as being legitimate and credible have been shown to be more successful in acquiring and leveraging critical resources, and in venture growth.

Whilst legitimacy of nascent ventures is important, building and maintaining legitimacy of the specific built environment structure (e.g., the innovation centre) is as equally important. Our study reveals that the legitimacy of the Roslin Innovation Centre provides tenant entrepreneurs and ventures with legitimacy and credibility, in part due to the legacy of Dolly the Sheep (the first mammal cloned from an adult somatic stem cell), the widely internationally renowned ‘Roslin’ brand, and even the wider aesthetics of the Roslin Innovation Centre building.

In particular, tenant entrepreneurs and ventures described their decision to locate at the Roslin Innovation Centre being predominantly based on the legitimacy afforded to them by the built environment itself. Specifically, the legitimacy of the Roslin Innovation Centre was providing tenant entrepreneurs and ventures with legitimacy, which in turn was supporting them with increased collaboration and partnership opportunities, as well as increased sales and investment opportunities. Whilst this legitimacy accrual may be of lesser importance to larger, established venture tenants, it indeed plays an important role in venturing activities for small and medium-sized enterprises (SMEs) and start-ups ventures.

Recommendation 2: Nurture an entrepreneurial culture

Recommendation 3: Allow for flexibility but manage this accordingly

Whilst the provision of ‘turn-key’ space is important for entrepreneurs and nascent ventures, flexibility to adapt this space as ventures scale is critical to support science commercialisation and sustainable UCEEs. Our study findings emphasise the importance of flexible space for venture growth and scale-up.

For example, the Roslin Innovation Centre has created a Research Hotel to provide flexible space for startup ventures, providing them with the opportunity to develop at their most vulnerable time within the venture development process. At the same time, the Research Hotel provides flexible space for more established organisations as they grow and scale, or as organisations transition between facilities and locations. Additionally, within the Research Hotel, our findings highlight informal mentoring and sharing of resources between organisations of differing sizes and differing stages of venturing. Such activity is essential to startup success. This informal and somewhat sporadic mentoring activity is a key driver of innovation and, ultimately, a thriving UCEE.

Flexible organisational space that supports open innovation is also extremely beneficial to driving science commercialisation. However, innovation centres must be mindful of how they create and manage such spaces to nurture open innovation. On the one hand, open plan office and laboratory spaces creates operational risks for organisations. In particular, concerns around intellectual property protection and client confidentiality need to be carefully managed within innovation centres that promote open innovation. For example, solutions to mitigate these challenges, such as easily accessible break-out/meeting rooms, can be useful to overcome these challenges. On the other hand, open-plan co-working spaces drive knowledge exchange, collaboration, and innovation.

Recommendation 4: Location, location, location…

Location matters! The physical location of built environment structures plays a critical role in driving innovation and economic growth. Sitting at the heart of The University of Edinburgh’s Easter Bush Campus, surrounded by research and clinical institutions (e.g., the Roslin Institute and The Royal [Dick] School of Veterinary Studies), we observed entrepreneurs and venture tenants leveraging this location to expediate knowledge exchange activities, collaborations, and partnerships.

Within a UCEE, the close proximity of innovation centres to academics is particularly important to ensure a healthy pipeline of commercial activity. University academics play an important role in commercialisation activities. Yet, academics often perceive clear tensions between commercially orientated activities and academic research policies and practices. Such tensions often result in the hybrid academic entrepreneur; the academic who remains within their research role at the university but who also plays a key role in a commercial entity. Accordingly, the proximity to academic research and clinical institutions is important since it enables these hybrid academic entrepreneurs to effectively manage their hybrid academic-entrepreneur role and is particularly important in driving forwards science commercialisation. At the same time, close proximity to research and clinical institutions provides a continued flow of postgraduate student talent. Given the challenges of human capital resources for early-stage ventures, this is particularly important.

Recommendation 5: Align stakeholders

To drive innovation, entrepreneurship and, ultimately, sustainable UCEEs, stakeholder alignment is essential. For sure, whilst stakeholders, more often than not, have alignment and agreement on the wider outcomes and value, the route to achieve these outcomes and value often differs. Yet, aligning stakeholders is no easy task. The built environment of the UCEE is a complex web of research, teaching, and enterprise focused metrics and outcome measures. Innovation centres should work closely with university and government stakeholders to ensure that decisions to drive innovation and entrepreneurial activity do not default in innovation centres becoming, primarily, an extended research base of the respective university. Doing so will likely stifle commercial activity and have unintended consequences for the development of UCEEs.

Universities often shelter nascent innovations and ventures, “shielding” them from market forces.  Innovation centres should work with university stakeholders to discourage this. Venture failure is a valuable process within UCEEs since it supports learning, adaptation, innovation, and entrepreneurship. At the same time, failure redistributes critical resources within and across UCEEs. Spaces, such as Research Hotels, can help rapidly drive innovation and, importantly, support early-market feedback.

Recommendation 6: Embrace the dynamic, two-way interactions between individuals and the built environment

Whilst university policies promote entrepreneurial activities in theory, they may not always do so in practice. When these policies challenge (or are perceived to challenge) science commercialisation, scientists, entrepreneurs, and ventures may circumvent these policies and the challenging commercialisation environment.

For example, some may bypass university commercialisation structures and norms to drive forwards science commercialisation;  Others may act directly on the university to shape science commercialisation pathways. In these situations, university policies, and even UCEEs, co-evolve around individual behaviours.

University technology transfer policies alone are not enough to drive science commercialisation and high-growth, sustainable UCEEs. Instead, university and government stakeholders should also look to their built environment.

Our study emphasises the deep connection between the built environment and UCEEs. Specifically, as a critical component of the built environment, innovation centres play an important role in supporting both science commercialisation and UCEE development. However, a UCEE does not emerge organically; technology transfer policies and the built environment require careful nurturing, including being mindful of the importance of the individual entrepreneur to UCEE development.

Our research has revealed key recommendations that can support stakeholders tasked with managing innovation centres, which, in turn, can help drive science commercialisation and foster thriving UCEEs.

Published in The European Business Review, 1st December 2021