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My parents met at school in Greenock, home of shipbuilding on the River Clyde. They brought me up within a Scottish culture that revered both arts and sciences, and celebrated not merely Scotland’s academic achievements but its track record in commercialising science and financing innovation. Without the Scots, the industrial revolution would never have amounted to much.
Little wonder then that, both as a child and in later life, I was inspired by another son of Greenock, James Watt, who transformed the power of steam and thereby the world.
From an early age, Watt displayed an aptitude for mathematics. Like many Scots before and since, he found his way to London, studying mathematical instrument-making before returning to Scotland to begin a business. Lacking a traditional apprenticeship, and thus denied access to the local guild, he was rescued by academia: offered a workshop within the University of Glasgow, he became the protégé of the eminent scientist Professor James Black who is best remembered for discovery of latent heat.
Working on the University’s Newcomen engine, Watt established that, condensed by an injected stream of cold water, most of the heat in the cylinder was wasted. His key invention divorced the piston and condensation chamber, conserving much more heat in the process, greatly enhancing the efficiency of the steam engine.
By 1765 he needed capital not only for development but commercialisation. Protecting intellectual property rights in those days was expensive, not least because a patent required an act of parliament. Without modern-day venture capital funds, Watt had to earn his living as a surveyor.
Eventually, he formed a partnership with Matthew Boulton, owner of a Birmingham foundry. The Boulton & Watt partnership prospered, making numerous improvements to the original design. By 1824 they had produced more than 1,000 steam engines. Boulton the entrepreneur and Watt the inventor both became rich.
James Watt’s improved steam engine transformed the Newcomen engine into the power source for the Industrial Revolution. More efficient, smaller, more portable, it revolutionised factories, transport, and productivity. It gave rise to modern cities and accelerated the globalisation of the age. In recognition of the achievement, Watt became a fellow of the Royal Society of Edinburgh and of the Royal Society in London.
Watt was not the only pioneer of the past millennium, so why did his example mean so much for me? Partly an affirmation of civic and cultural identity with my home city of Glasgow, in which I was raised to take pride in Scottish engineering and its immense influence on the world.
Partly because Watt epitomises the mutual leverage that academia and commerce derive from one another. The step change for steam was first glimpsed neither in a factory nor in a garden shed but in the one of the greatest university labs of its day. It was devised by an innovator pioneering the use of mathematics in instrument making. But its delivery was also a commercial accomplishment requiring persistence, capital, and determination.
It was Matthew Boulton, not the University of Glasgow, who had the financial muscle to see development through to full commercial success. This unfortunately has been a recurring theme of UK academic invention over the centuries. But it is beginning now to change.
Today, many universities invest in the commercialisation of their inventions through dedicated spin-out companies. However, as development of an idea progresses, more and more money needs to be raised, from proof of concept through to final production. All too frequently, the university’s early stake is heavily diluted as outside investment is needed to complete the later stages of development. When market success finally arrives, the university and its academics hold only a tiny stake.
At Imperial College London, we have adopted a different approach, investing in our spin-outs for longer in the development chain, thereby reducing dilution of our stakeholding by venture capitalists. Our spin-out holding company, Imperial Innovations, floated on the stock market in 2005, holds not merely the rights to our current spin-outs and licence agreements but also the pipeline to 15 years of Imperial’s inventions, thereby giving us the cash to invest in our own success. And, as if James Watt was smiling from the grave, in 2006 the first UK University to follow Imperial’s lead was none other than the University of Glasgow.
Like James Watt, our ambition should not be to produce knowledge for its own sake but to make a difference to people’s lives, delivering practical solutions for business and accessible management training to a wide audience. By fostering a culture of enterprise in our great universities, a process greatly assisted by business schools embedded in those campuses, we not only drive the commercialisation of inventions. We also give our students a unique opportunity to examine the role of intellectual property in the knowledge economy, preparing our future business leaders for the challenges they must overcome if they are to serve as models of inspiration for subsequent generations.