Simon King, former research scientist, now on the Octopus Ventures team, outlines some of the challenges faced by the UK’s innovators operating within the twin fields of technology and science.
Before joining Octopus, I was a research scientist investigating novel materials for photovoltaic applications at Imperial College in London. So I can say with an element of certainty that there’s no lack of science, research and innovation talent in our universities. The UK’s track record in spinning out such talent into commercial reality is where the block seems to be – particularly when it comes to Deep Tech, which includes innovative sectors such as artificial intelligence, robotics, virtual and augmented reality and ‘the internet of things’.
As the Government’s latest Industrial Strategy White Paper demonstrates, there’s clearly a willingness to lend further support to areas of innovation, and the high growth small businesses that are driving these changes. It would certainly help if the Government did more to promote ‘non-dilutive’ grant funding (funding that doesn’t require the sale of the company’s shares), and encourage more private sector investment into enterprises that might be both fragile and rich in Intellectual Property (IP). Before jumping to top-down policy, however, we also need to look at the start of the story.
“Investing in science, research and innovation – we must become a more innovative economy and do more to commercialise our world leading science base to drive growth across the UK.”
Industrial Strategy White Paper, HM Government
It starts with universities
Talent often leaves the safety of higher education and is gratefully sucked up by the financial sector and the US tech giants. For nascent high growth small business potential to have a greater chance of conception and growth, there needs to be more viable options for would-be founders.
Software companies are well-provided for by the venture capital community, but Deep Tech is a different story. Returns can be just as good, but risks appear higher and more patient money is needed.
With the decline in manufacturing, there’s been a corresponding loss of R&D centres in the UK over the past couple of decades, further narrowing the options for those considering going commercial. That’s a wider area of discussion, but highly relevant at government level.
Universities have good intentions, but there’s a need to tighten up on commercial realities. For example, more could be done to improve technology transfer offices. At the moment, they lack experience, funding and thought-leadership. Bad agreements are often struck due to a lack of understanding of later stage growth: IP can quickly become less valuable once a venture touches the market and universities’ attempts to claw back the IP, or cap returns, can be detrimental, if not fatal, to the health of early-stage startups.
No single viewing point
Sources of expertise across the UK are scattered. There’s no one place you can go to get a clear picture of the UK’s Deep Tech landscape. Yes, Government-sponsored institutions such as Porton Down and Rutherford Appleton Laboratory are top of their game and producing headlines, but the trickle down is minimal.
Positive actions to build upon
Government’s engagement with the Deep Tech sector is good, however. Discussions on such topics as autonomous vehicles, fintech and health and safety regulations for drones are well underway. There could be more inclusion of investors here, but the startups themselves are being listened to. Innovate UK is a genuinely positive source of funding and support.
The Government is also ideally placed to work through important areas such as diversity, as well as directly tackling the manufacturing issue. The regulatory framework is still not yet hammered out, but the intention and willingness to engage should be recognised and built upon.
Talent – access and flow – is the hot topic across all sectors, and none more so than within Deep Tech. Attracting and retaining talent will, of course, be crucial in establishing the UK’s place in the still-forming ecosystem. Anything Government can do to reassure amid uncertainty, and then create stable channels for talent to flow in, will be welcome.