Universities are a hotbed of academic, business and technological know-how, so when it comes to setting up shop there can be few more desirable starting points. The college campus, say business experts, is an ideal location for high-tech, start-up companies.

The campus company concept is already well developed in the US. The massive multinationals Hewlett-Packard and Sun Microsystems both started out as campus based firms. Since the idea caught on here 10 years ago great strides have been made. Today, there are 140 such companies employing more than 500 people at colleges across the State.

Perhaps the most prolific of these Irish campus companies was Iona Technologies, the software solutions firm set up by former lecturer Dr Chris Horn.

In 1991, aided by the Industrial Liaison Office in Trinity College, Chris set up his enterprise in a low cost incubation unit on campus.

Since leaving the relatively safe environs of the campus, Iona Technologies has gone from strength to commercial strength.

In 1995, the company experienced a 300 per cent growth in sales and more recently it was floated on the Nasdaq exchange. Iona currently has offices in Ireland, the USA and Australia, and employs over 200 people, many of whom are top class graduates. But how does the enthusiastic entrepreneur go about establishing a campus company and what are the benefits of such a move?

Normally these enterprises are set up by people who have some sort of academic association with the college but this is not absolutely necessary, says Sarah Bourke of Forbairt. "A more recent trend is for nonacademics to locate on a college campus," she points out. The obvious benefits of campus based activity are "gaining access to college equipment and expertise".

Forbairt, the organisation established by the Government to provide support to indigenous industry, plays a significant role in the campus company initiative.

Last year, it launched the Campus Companies Programme, designed to promote the concept of campus enterprise. A key part of this is the provision of financial support in the form of a CORD (Commercialisation of Research and Development) grant. This allows fledgling companies to "assess the commercial viability of a project," says Sarah.

Forbairt has recognised that lack of incubation space and seed capital are the two main inhibitors to campus company growth. To this end the agency has recently approved a £5 million grant package to assist the development and expansion of campus incubation centres. Seed capital has been secured through Forbairt's involvement in a number of venture capital funds and one which concentrates solely on campus companies.

Leo Casey is managing producer of AV Edge, a campus company which specialises in the development and production of media resources for education and training. AV Edge uses a combination of television, video, CD Rom and the Internet to stimulate learning. One of the company's flagship productions is the RTE LearnNet series presented live at 12 noon each Saturday by Cynthia Ni Mhurchu. Leo was the head of Educational Media Production at UCD's Audio Visual Centre when he decided to set up his company last year.

"It was a natural move which allowed us to keep an association with the college while developing our work in educational communication," he says.

The college boasts a TV studio and an editing suite, along with other facilities required by a company such as AV Edge.

Leo's first move was to go on a course run by the University Industry Programme (UIP). The year-long course trained Leo in the skills he would need to run a business and gave him the "support and confidence" he needed to establish AV Edge.

The company is located at the Campus Innovation Centre (CIC) in UCD. Pat Frain of the UIP says that the CIC offers "advice regarding expertise, equipment and facilities on campus as well as secretarial and other services". One of the programme's key aims is to develop a spirit of entrepreneurship among UCD staff and students. "Companies benefit not only from the services available but also from the interaction with other start-up companies," he says.

Immediate plans for AV Edge include "expanding the client base in Ireland while working with a number of international partners on future productions".

Another company whose commercial work has been made possible on campus is IdentiGEN. The company was formed last year by a group of five senior academics in the Department of Genetics in Trinity College Dublin.

Managing Director Ciaran Meghan says that for the last 10 years the department had been conducting valuable research into the genetics of tropical cattle. "With the advent of BSE our research had a commercial value that it lacked up until then," he says.

There were a number of benefits for a laboratory based company which would be located on a college campus.

"First of all the rent in an outside laboratory would have been much higher. Then there are the special licenses and the money required to have the lab fitted out with the specialised hardware. There are also the obvious benefits of being located so close to the scientific community," he says.

The Department of Agriculture has expressed interest in a number of the products IdentiGEN has to offer and recently a successful industrial demonstration of their DNA testing technology in association with Anglo Irish beef processors and Superquinn was completed.

"Outside of the campus environment our development would have been difficult," says Ciaran.

Now Forbairt is giving approval for around 30 projects annually the college campus.