MBA start ups - why the spin-outs are hot (Guardian Rise supplement 21 May)

A recent study by Nottingham University Business School identifies Tanaka Business School, part of Imperial College London, as a successful model of technology transfer.

The fleeting fortunes of the dotcom boom made fools of many business schools. Those tempted to take an equity stake in high-tech start-ups quickly came to regret it as their newly established incubators turned into commercial graveyards. Today, the clever money is on knowledge transfer - university business schools leveraging the work of research scientists to spin-out growth businesses.

A recent study by Nottingham University Business School points to the potential for greater collaboration between business schools and universities' own research scientists via government funded technology transfer offices. But developing synergy between the business schools and the boffins is harder than it might seem.

Academic rivalries hinder the progress towards finding commercial applications for cutting edge research and innovation developed under the university's own roof. Professor Julian Birkinshaw professor of strategic international management at London Business School comments: "It's clear that in the past a lot of business school spin-outs simply didn't deliver the goods."

Nottingham's report identifies Tanaka Business School, part of Imperial College London, as a successful model of technology transfer. The close link between the business school's entrepreneurship centre and the university's technology transfer office, Imperial Innovations has been very productive. Over the last four years Imperial Innovations has handled 60-70 spin-outs including the award-winning bio-engineering business Ceres Power whose shares were floated for pounds 66 million on the AIM market.

MBA students round off their study of the core modules with a business plan competition in which they have to work alongside science, engineering and medical researchers to develop business plans. Tanaka principal David Begg says: "Given that Imperial is rated fifth in the world for engineering and fourth in the world for bio-medical research our enterprising MBA students would be missing a trick if they didn't help us harness the best of this research."

Unlike the incubator model, Tanaka is broad-minded about how best to commercially exploit the university's intellectual property. Ideas and patents are more often than not licensed to a big company to develop in return for a royalties, or sometimes the rights are sold outright.

And just to prove it is on top of the spin-out business, Tanaka raised pounds 20million in March by selling a part stake in Imperial Innovations to a consortium of City investors and the a share of royalties to Imperial College research over the next 15 years. David Begg says: "It's a result. pounds 10 million has come back to Imperial College and pounds 10 million has been invested in Imperial Innovations. This will help us increase our already substantial deal flow and help protect our start-ups from the VC vultures."

Like Tanaka, successful models of knowledge transfer will involve the business school helping academics get the best deal from private enterprise rather than encouraging them to start-up their own businesses. There is plenty of scope for rewarding the inventor without thrusting them into the business driving seat. Chris Saunders, deputy MBA director of Lancaster University Management School, says: "It's very rare across the sector for academics to start-up businesses. They are academics because they want to research: they're not business people. But academics may be partners or directors of companies where they can have intellectual input."

Lancaster University's technology transfer office Infolab is part funded by the North West Development Agency and exists to help small and medium sized businesses across the region implement technology. It puts academics in touch with firms who can help them apply their research and reward them.

The management school's MBA course contributes business expertise by offering the services of its students to work as consultants to high tech start-ups through two week placements and summer consultancies to recent start-ups who are trying to move on to the next stage.

Said Business School, part of Oxford University, works hand-in-glove with the university's own knowledge transfer company Isis Innovations. Said's approach is to run an eight week evening course in business skills for entrepreneurship parallel to the MBA attracting university researchers, executives from high tech growth companies and MBA students.

Currently the course has attracted 230 students drawing heavily on the enterprise and vitality of Silicon Spires. Fiona Reid director of Said science and technology centre says: "There are 1,500 small high tech companies around Oxford and a lot of their executives will come to us for business events as well as our MBA. The sector is so lively and there is so much office provision that we have no need of incubators."

Said completes the virtuous circle for business start-ups with its annual summer business plan competition. Open to all UK entrepreneurs and micro-businesses, it is a totally science and technology event. Teams of MBA students compete alongside scientists to develop commercial technology.

But some business schools want to go even further in boosting the performance of spin-outs. Professor Julian Birkinshaw from LBS is, with colleague Gary Hamill, setting up a new service for business to leverage the creativity coming out of business schools including opportunities for spin-outs. It is called the Management Information Laboratory and it is due to be launched in June.