Knowledge-intensive companies refer to companies that started as a result of dependent venture foundation, i.e. the spinoff/out of a core technology from an existing organisation. In contrast to independently-founded ventures, spinoffs and spinouts are formed as a result of investment in knowledge-intensive activities (e.g. R&D or applied research) by so-called ‘parent organisations’. When companies have a university as their ‘parent’, they are often referred to as academic spinoffs, while those than spun out from a corporate are considered corporate spinouts.
Why do we need knowledge-intensive companies?
The knowledge valorisation that comes with startups developed within a university-centered entrepreneurial ecosystem(academic spinoffs) brings a significant contribution to the market in terms of new technology and innovation,by bridging the gap between academia and industry (read more about our research into knowledge-intensive startups in the Netherlands and the universities’ entrepreneurial ecosystems here). On top of this, a recent McKinsey study suggests that companies that prioritise business building tend to grow faster than their peers, respond with greater resilience to volatility and economic shocks, and, as they gain experience building businesses, see more success from it.
“Business building offers a unique opportunity to incumbents: the chance to marry a start-up’s agility and rapid growth potential with the resources and wisdom of an established company. That is a powerful combination.” – Collins &Libarikian(2020),Why business building is the new priority for growth – McKinsey & Company.
Fast-growing knowledge-intensive companies in Europe
Data from the European ScaleUp Monitorsuggests that only around 5% of fast-growing companies in Europe are spinoff/spinout companies, meaning that only a small fraction of fast-growing companies based in Europe spun out of an existing organisation. When it comes to the top 5 invested knowledge intensive companies based in Europe (see Figure 1), they are all spinout companies originating from large corporations. They also seem to be well-established corporates themselves since, with the exception ofNovo Banco, they are all founded more than 15 years ago. Only whenwe look at the youngest fast-growing companies (those founded in 2017), do wesee university spinoffs.As a top university investor (see Figure 2), it is not surprising thatone of the top invested young spinoffs (PredictImmune) is from the University of Cambridge.
The top European spinoffs and spinouts are not always based in the same country as their parents.Berlin-based Xayn for example, is a spinoff from Oxford University in England. Almost a third of Europe’s fast-growing spinoffs and spinouts are based in England, while almost half of them operate within the Industrials vertical, which is more or less in line with the European scaleup landscape (according to the European ScaleUp Monitor). What stands out though, is that Oncology and HealthTech are among the top 10the verticals for spinoffs and spinouts, which is only gaining momentumamongst European fast-growing companies overall.
University-backed fast-growing companies in Europe
The top university-backed companies in Europe only constitute a fraction (less than 5%) of European fast-growing companies.This is striking as a notable proportion (18.6%) have at least a member of the founding team with a PhD. The top industry verticals for fast-growing university-backed companies are LifeSciences and HealthTech, which is similar to the trend that we see in the European ScaleUp Monitorof healthcare scaleups gaining momentum. This is promising as it suggests that, given the right conditions, we can expect growth in the number of university-backed scaleups in the coming years.