Exploring the barriers faced by South African universities in establishing spin-out companies

Abstract

This dissertation critically examines the barriers that impede spin-out companies' successful establishment and growth within South African universities. The study's primary objective is to identify and analyse these barriers and propose actionable strategies to enhance the commercialisation outcomes of university-based research. Through a qualitative research approach, semi-structured interviews were conducted with key stakeholders, including TTO representatives and university staff, to gain deep insights into the challenges faced by spin-out companies. Five key barriers emerged from the analysis: financial constraints and funding limitations, organisational and bureaucratic inefficiencies, inadequate leadership and entrepreneurial culture, limited adoption of technological tools and digital transformation, and misalignment with the United Nations Sustainable Development Goals (SDGs). These barriers are critically analysed using theoretical models such as SWOT analysis and the Business Model Canvas, providing a structured understanding of the complexities within the commercialisation ecosystem. The study also examines the impact of leadership styles within TTOs, explores the potential of digital transformation and artificial intelligence (AI) to enhance commercialisation processes, and investigates how spinouts can contribute to SDGs. Findings reveal that ineffective leadership and complex regulatory environments exacerbate the challenges faced by spinouts. At the same time, the absence of a robust ecosystem and limited industry partnerships further hinder their success. Based on these findings, the study presents strategic recommendations to address each identified barrier. These include establishing university-linked seed funds, simplifying bureaucratic processes, fostering an entrepreneurial culture through training and mentorship, leveraging digital tools for efficiency, and advocating for policy reforms that support spin-out development. Additionally, aligning spin-out activities with SDGs is proposed to enhance societal impact and attract sustainability-focused investments. The study’s conclusions emphasise the need for a holistic approach that integrates leadership, policy, technology, and sustainability considerations to create a conducive environment for spin-out companies. The recommendations will guide university administrators, policymakers, and TTO leaders in fostering a vibrant and sustainable spin-out ecosystem within the South African higher education sector. Future research directions are suggested to explore external stakeholders' perspectives, conduct comparative studies with international contexts, and quantitatively assess the impact of digital transformation initiatives on spin-out success. This dissertation contributes to the growing body of knowledge on academic entrepreneurship. It provides practical insights for enhancing the commercialisation of university research in South Africa, ultimately supporting national innovation and economic development goals.