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It is widely recognised that, despite excellent higher education research and training expertise, the UK is generally weak in transferring this knowledge into marketable products. In particular, there is serious under‐utilisation of science and technology graduates by the increasingly important small and medium enterprise (SME) sector. The aim of this paper is to explore the potential for absorbing the “know‐how” of science and technology graduates into the SME sector. Special consideration will be given to the attitudes of these graduates towards SME employment, while business start‐ups as alternative career options are also explored. The data are derived from a survey of 250 Manchester‐based science and technology students. The paper concludes with relevant policy recommendations.

Since the onset of the industrial revolution in England during the late 18th century, it has become increasingly clear how advances in technology have played a pivotal role in delivering wealth-creating economic growth, ranging from major advances in the generation of industrial power, initially through steam engines (e.g. successively by Nucomen, Watt and Trevithick), to the design of labour saving industrial machinery and working practices (Smith, 1776; Marx, 1867; Solow, 1957; Denison, 1967; Mansfield, 1968; Freeman, 1982). These advances have not merely resulted in industrial progress but have triggered changes in industrial location (e.g. water powered to coalfield sites in the cotton textile industry) (Riley, 1973), dictated population distributions and fixed the positions of major industrial cities within national and world regions. Indeed, perhaps, the most ambitious attempt to establish the major impact of revolutionary technological change on macro-level industrial performance was the explanation by Schumpeter of Kondratiev's ‘long wave’ industrial cycles (Kondratiev, 1925) in which upswings in world economic activity were linked to the introduction of pervasive new technologies caused by their ability to reduce unit prices, increase efficiency and be broadly applicable across large sectors of industry (e.g. stream and electric power) (Schumpeter, 1939; Freeman, 1986).

The chapters in this volume have been derived from the best papers presented at the annual International High Technology Small Firms (HTSFs) Conference held at Enschede, The Netherlands, and organized by Nikos, the Dutch Institute for Knowledge Intensive Entrepreneurship in May 2008, with the collaboration of Manchester Business School. The present volume is the ninth in the present series of “new millennium” volumes from this conference and book series that began in 1993. As Oakey and Cook wrote in the introduction to Volume 8, government policies in developed Western economies remain focused on emphasizing innovation driven by entrepreneurship as a major vehicle for future economic success. In particular, many European governments support such entrepreneurship by emphasizing the key role of new firm “gazelles” in producing the disruptive innovations and inventions that will create future new industries. This approach in the Netherlands has led to the creation of special Chairs of International entrepreneurship at three technical universities, namely, The University of Twente, the Technical University of Delft, and the Technical University of Eindhoven. These chairs have now been filled and are held at the University of Twente by Shaker Zahra, the Technical University of Delft by Paul Trott, and the Technical University of Eindhoven by Anthony di Bennedetto. The objective of these appointments is the stimulation of technology-based entrepreneurship in the student populations of the Netherlands university sector, and to increase our detailed knowledge of technology-based enterprises, involving a strong focus on the research problems of internationalization, particularly among, university-derived HTSFs.

As observed above, the problems of HTSF financing have been a major development issue for HTSFs and the HTSF conference since its inception in 1993, and have often provided a subject for substantial sub-sections in the book series. However, in this instance, a single offering is provided in Chapter 2 by Xia and Minshall. This work gives a very detailed and comprehensive review of the problems that have existed for many years with the funding of new high-technology firms. There is a very well-balanced view presented on the roles of public and private sector capital and, in particular, on how these two types of investment funding might be best combined to provide the better future support of HTSFs.

In Chapter 2, providing a contextual introduction to the issue of university spin-offs, Hogan and Quan Zhou seek to construct a better definition of what the term ‘spin-off’ should consist. After a wide-ranging review of previous attempts to define and classify aspects of the spin-off process, the authors offer their own ‘three-point’ checklist which seeks to clarify and define the ‘spin-off’ process. In conclusion, their paper seeks to assess the advantages and drawbacks of the system they recommend. This initial paper in this section is welcome since it illustrates that not only do academics differ over how to assist the ‘spin-off’ process, but they also often do not agree on how this process is to be defined.