The number of spin-out companies formed by UK universities, and start-ups created by students and recent graduates, has continued to decline, according to new data, stoking concerns about the country’s national competitiveness.  

by the Higher Education Statistics Agency (Hesa) show 141 unique spin-out companies were founded in the 2024-25 academic year, down from a peak of 202 in 2020-21. The number of new spin-outs has declined continuously every year since then. 

In total, there are 2,537 active spin-out companies on the register, excluding 28 that are not registered due to commercial sensitivities. 

The register shows that the University of Cambridge has the highest total number of active spin-outs among all UK universities at 305, followed by the University of Oxford at 244. 

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While progress on increasing the rate of new spin-outs created may have stalled, analysis by the National Centre for Universities and Business (NCUB) found the number of these companies remaining active for at least three years reached 1,776, a 5.3 per cent increase year-on-year.

Nonetheless, “today’s data should serve as a wake-up call”, said Joe Marshall, chief executive of the NCUB. 

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“This slowdown cannot be separated from the financial pressures facing universities – when institutions are forced to cut the people and programmes that underpin collaboration, partnerships inevitably suffer. The UK cannot afford for this to become the new norm.”

It comes as approximately a third of British universities posted financial deficits last academic year, with many turning to staff cuts to deal with ongoing financial challenges. 

The release, which provides an annual snapshot of universities’ commercialisation activities, also shows that 4,687 start-ups were founded by current and recent students in 2024-25, down from a peak of 4,908 in 2022-23.

In addition, UK higher education providers were granted 1,548 patents last year, down from 1,779 the previous year. 

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Their total revenue from intellectual property, including patents, copyright, design, registration and trademarks, amounted to £299 million, down from £305 million in 2023-24. 

The data also looks at research income, which bucked the trend of decline. Income from contract research grew by 2 per cent to £1.9 billion in 2024-25, while income from collaborative research involving public funding grew by 5 per cent to £1.4 billion. 

Despite the downturn in some areas, “university-business collaboration remains one of the UK’s core competitive strengths”, said Marshall. 

“The continued growth in successful spin-outs demonstrates the global impact of UK research and entrepreneurship. But strategy without investment is not delivery.”

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Stabilising university finances is “fundamental to national competitiveness”, he continued. 

“Without action, we risk undermining years of progress in building effective partnerships between universities and business, and with it, the UK’s position as a leading innovation economy.”

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helen.packer@timeshighereducation.com