I run a university spinout - this is how the Government needs to help firms like mine: Dr Rob Ward

The report says 61 per cent of tech leaders cite skills gaps as a barrier to AI adoption. True enough.

But there’s another skills gap that matters more for spinouts like mine: the shortage of people who can bridge the academic world and the commercial one.

Universities are fantastic at producing research papers. They’re less good at teaching you how to close a 12-month enterprise sales cycle or navigate procurement at a major manufacturer. These hurdles can kill a startup before it gets off the ground and those skills don’t live in academic departments. They live with people who’ve built and scaled technology companies before.

This is where models like Yorkshire AI Labs, run by David Richards MBE, make a real difference. It’s not a university commercialisation office. It’s not a short-term accelerator programme. It’s embedded commercial expertise that stays with companies through the difficult bit, the transition from research project to revenue-generating business.

You work alongside people who’ve actually done it. Who know how to position technology so customers understand it. Who can help you price properly and build a business model that works in the real world, not just in theory.

The uncomfortable truth about public spinout funding is too much of it flows straight back to universities through overheads that can hit 50 per cent or more.

The justification is that it supports research infrastructure. But if you’ve already spun out, you don’t need more research infrastructure. You need to find customers. You need sales capability. You need someone who can explain what you do in a way that makes a CFO want to sign a contract.

Those skills aren’t in universities. And funding that gets absorbed by institutional overheads never reaches the people who can provide them.

The Government keeps talking about turning research into commercial success. Fine. But then fund the things that actually drive commercial success. Fund companies to hire experienced salespeople. Fund access to venture builders who can provide hands-on support. Fund the messy middle stage where technology gets refined into something customers will actually pay for.

Stop channelling it back through grants with massive overheads and wondering why more spinouts don’t scale.

Yorkshire AI Labs demonstrates what’s possible when you structure support properly. Rather than hoping research finds commercial application, they start with market problems and build companies around solving them. The technical capability still comes from world-class institutions, but it’s shaped from day one by commercial reality.

That approach works because it acknowledges something policy often ignores: academic research optimises for novelty, commercial products optimise for value and ease of integration. Getting from one to the other isn’t automatic. It requires different skills, different thinking and different funding.

Early-stage capital funds proof of concept. Growth capital expects evidence of traction. The gap in between, where you’re trying to turn something technically impressive into something commercially viable, that’s where companies struggle and where support is weakest.

If government is serious about AI productivity and Industrial Strategy, a few things would make a material difference:

Cap how much spinout funding universities can claim for overheads. If a company has spun out, academic infrastructure costs shouldn’t consume half the capital meant to support commercialisation.

Fund access to commercial expertise directly. Support companies to work with venture builders and experienced operators who can help them gain customers and achieve product-market fit.

Get large companies in priority sectors to actually work with UK spinouts, not just talk about innovation while defaulting to established international vendors.

Track outcomes that matter. Not papers published or patents filed, but companies that scale, revenue generated and people employed.

The committee’s report is well-intentioned. The ambition is right. But implementation depends on addressing how money flows and whether it reaches the skills that actually drive commercial success.

Yorkshire has the research base, the manufacturing heritage and models like Yorkshire AI Labs that prove what’s possible. The question is whether policy will recognise what works and fund it accordingly, or keep pushing money through structures designed for a different purpose entirely.

Dr Rob Ward is the CEO of DigitalCNC, a University of Sheffield AMRC spin-out company delivering AI-powered CNC machining solutions for aerospace and defence manufacturers.