Tony Blair Institute calls for £100m annual research startup fund and university spinout reforms

New UK innovation proposals include a 5% university equity benchmark, changes to doctoral training and a target to double investment-ready research businesses by 2035

The Tony Blair Institute for Global Change has proposed reforms to UK university spinout funding, intellectual property agreements and doctoral training to increase the number of research-intensive businesses attracting investment.

The Tony Blair Institute for Global Change (TBI) has called for the UK government to increase proof-of-concept research funding to £100 million annually by 2029 and introduce a 5% benchmark for university equity stakes in spinout companies, arguing that Britain's research strengths are not translating into enough commercially successful businesses.

The proposals form part of a new report, From Discovery to Startup: Strengthening the UK Innovation Ecosystem, published in October 2026. It sets a national ambition to double by 2035 the annual number of research-intensive companies securing at least £2 million in cumulative external equity investment within five years of formation.

TBI's analysis of PitchBook data found that an average of 164 UK research-intensive companies per annual founding cohort met that investment threshold between 2019 and 2021. Achieving its proposed target would mean increasing the figure to approximately 330 companies per cohort.

The report identifies university commercialization practices, academic career structures, funding gaps and limited entrepreneurial experience as obstacles to converting scientific discoveries into businesses capable of attracting investment and reaching customers.

Although the UK has one of the world's strongest university research systems, TBI argues that its commercial research base does not match that scientific performance. The report notes that university spinouts founded since 2010 have generated approximately 27,000 UK jobs and reached a combined enterprise value of £49 billion, while identifying significant opportunities to improve company formation.

£100m funding proposal targets early-stage research gap

A central recommendation is to substantially increase the funding available to researchers testing whether scientific discoveries have technical and commercial potential.

TBI estimates that the UK faces an annual proof-of-concept funding gap of approximately £100 million, leaving promising research projects without sufficient support to establish their viability before seeking private investment.

UK Research and Innovation (UKRI) already operates a £40 million Proof of Concept program spread over five years, equivalent to £8 million annually. The institute recommends scaling the central funding pool to £100 million per year by 2029.

It also proposes faster funding decisions, with applications for awards below £150,000 processed within 60 days.

Geographic distribution is another concern. According to the report, London, Oxford and Cambridge, commonly described as the UK's golden triangle, attract 74.5% of national university spinout investment, with median funding for spinouts in those areas four times higher than elsewhere.

TBI recommends directing at least 40% of the proposed proof-of-concept funding to institutions outside the golden triangle.

Universities urged to adopt 5% spinout equity benchmark

The institute also wants national standards introduced for university spinout agreements, addressing differences in equity expectations, intellectual property arrangements and negotiation processes.

It recommends a benchmark university equity stake of 5%, with higher stakes permitted where the nature and importance of university-owned intellectual property justify them.

The 5% figure is a proposed starting point rather than an absolute limit, with different arrangements envisaged for life sciences, software, digital technologies and intellectual property-intensive deep technology businesses.

The report cites the 2023 Independent Review of University Spin-out Companies, which found that 39% of surveyed founders considered their university agreements fair and balanced, while 43% disagreed.

TBI argues that inconsistent terms and lengthy negotiations can discourage founders and investors, even where individual institutions provide substantial commercialization support.

It proposes standardized documentation and greater transparency, alongside allowing researchers to choose external venture builders, accelerators or other commercial support rather than being required to use services attached to their university.

The recommendations would also shift some attention away from the number of patents and spinouts created toward longer-term outcomes, including whether companies survive, attract follow-on investment and generate economic value.

Venture Doctorates could reach 1,000 funded places annually

Changes to doctoral education form another major element of the proposals.

The institute recommends developing UKRI's existing £25 million Venture Doctorates program into a national pathway combining doctoral research with entrepreneurship, commercial training and company creation.

Under the proposed model, doctoral researchers would work with customers, founders and industry specialists while developing scientific projects, identifying commercial applications and testing routes to market.

If the initial programs demonstrate positive results, TBI recommends increasing provision to at least 1,000 funded places annually by 2032. It estimates the program would require £100 million to £150 million a year at full scale.

The report also supports expanding Enterprise Fellowships, which would provide researchers with dedicated time to establish new ventures while preserving opportunities to return to academic careers.

Another recommendation is to increase the Royal Society's Entrepreneur in Residence program to 100 active placements nationally by 2030, requiring approximately £4 million to £5 million annually.

These placements would connect experienced entrepreneurs and industry specialists with universities, giving researchers access to commercial expertise, investor networks and potential founding partners.

Keegan McBride, Director of Science and Technology Policy at TBI and one of the report's authors, highlighted the challenge in a LinkedIn post announcing the research.

"Britain has many world-leading universities, but these same universities often struggle to turn this excellence into successful companies," he wrote.

The institute's recommendations are policy proposals rather than measures already adopted by the government.

Its proposed timetable calls for national default university spinout agreements to be finalized by mid-2027, with adoption across publicly funded universities expected by the 2028–29 academic year.

ETIH Innovation Awards 2027 open for entries

The ETIH Innovation Awards 2027 are now open for entries, with 26 categories recognising companies, institutions, projects and individuals making a measurable impact across education technology. The global awards span AI in education, digital learning, higher education, skills and workforce, inclusion, education operations, evidence and impact, with entries managed through ETIH’s new online awards platform.

Entries are open worldwide, with the early-bird deadline on Friday 18 December 2026 and the final entry deadline on Friday 26 February 2027 at 23:59 UK time. 

Explore the 2027 categories and judging criteria, read the How to Enter guide or start an entry through the ETIH Innovation Awards 2027 platform.