Before joining Octopus, Simon was a research scientist investigating novel materials for photovoltaic applications at Imperial College in London. Today he has an active interest in Deep Tech businesses and in particular those focussing on IoT, AI and hardware. We asked him for his views on the strengths and weaknesses of today’s UK Deep Tech situation, as it relates to the Government’s latest Industrial Strategy White Paper.
There’s no lack of science, research and innovative talent in our universities. Our track record in spinning out such talent into commercial reality is where the block seems to be — particularly when it comes to Deep Tech. Government could help by being non-dilutive in grant funding and more encouraging of private sector investment in fragile but IP-rich enterprises.
“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
Before jumping to top-down policy however, we also need to look at the start of the story. 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 need 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’ intentions are good, but there’s a need to tighten up on commercial realities. Universities’ technology transfer offices could be improved for example. 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 sector is good however. The regulatory framework is still not yet hammered out, but the intention and willingness to engage should be built upon. 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. It’s also able to embrace issues such as diversity as well as directly tackling the manufacturing issue.
Talent — access and flow — is the hot topic across all sectors, and none more so than 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 uncertainty, then concretise stable channels for talent to flow in, will be welcome.