I have had the pleasure of being in post at Innovate UK now for a little over ten months and so it is a good moment to reflect on both the key lessons learnt and the opportunities ahead. Particularly as in May, Innovate UK will have a new CEO, Dr Ruth McKernan, and the United Kingdom will have a new Government.
Innovate UK asks itself 4 key questions before it invests in new opportunities:
1) what is the size of the global market associated with the opportunity;
2) what are the strengths which will allow the UK to lead in this market;
3) why now, is the timing right; and
4) why does it require public money?
Simple but penetrating questions, which I have learnt to value.
Markets lie at the heart of every journey from concept to commercialisation and it is the new global markets of the future, which are targeted by the significant investments made through our Challenge programme across a wide array of priority areas – from energy to enabling technologies, from health+care to space, from high value manufacturing to agriculture & food.
By understanding the UK’s strengths in addressing these market opportunities, we can strive to ensure that investments made through our programme, lead to economic growth in the UK. Those strengths may come from our world-class research base, as they do in the case of cell therapies and regenerative medicine; or from combining existing strengths in new ways as they would in areas like smart infrastructure; or they may reflect a shared ambition spanning research, industry and Government, as with our programmes on low impact buildings.
Many of us have experienced working on new technologies ahead of their time. Timing is important and therefore we may start a new area with feasibility study competitions in order to understand the quantity of high quality ideas, which are out there. Finally, there is the key question of why public money? If there is such a strong market opportunity and it is ready to be addressed by UK strengths, why does it need any public sector investment at all – wouldn’t the investment simply be what the economists call a deadweight loss?
Some people like to talk about the barriers to innovation and the investment of public money to overcome them. I prefer to think about the steps Innovate UK needs to take in order to build clarity and consensus - so that we can “crowd in” private sector investment. It also follows from this, that Innovate UK needs to be just as good at stepping back when private sector investment is accelerating, as it is at stepping forward to trigger that investment in the first place.
So what of the opportunities ahead? What are the steps we need to take in order to lift the activities of Innovate UK to the next level? The 2x2 grid in my last blog provides a useful framework with which to explore the answers, ensuring that Innovate UK has a balanced approach to its investment opportunities.
If we start in the top left we are thinking about the revolutionary opportunities created by technology push. This isn’t an easy path to commercialisation, as it will often require completely new business models and ecosystems. However, the breakthroughs when they do occur are often dramatic. It’s an area where our world-class research base gives the UK a structural advantage and is recognised in Government policy through the 8 Great Technologies. Our partnership with the Research Councils, has allowed us to build up a good momentum in this quadrant, for example through joint innovation centres with EPSRC & BBSRC and very early stage collaborations, as being pioneered in Quantum Technologies.
Moving to top right, we have the evolutionary opportunities from technology pull. This isn’t about incremental innovation where the business case is already clear. It’s about transforming industries and businesses to address the new challenges of the future where the UK can take a leadership position. That might be through bringing together existing capabilities such as with construction and digital or through focusing on opportunities created by resource efficiency and the circular economy. Alternatively, it might be through supporting other organisations in the delivery of industrial strategies, as we do in Aerospace and Agritech.
Bottom right is societal pull, a source of great opportunities for Innovate UK. Societal trends can act as a very powerful proxy for the shape of future markets and when Government, research and industry are all aligned, there is a very real opportunity for the UK to take a leadership role. It is particularly relevant to the priority areas that dominate all of our lives, such as transport and health+care. Societal challenges have been the motivation for some of our most successful programmes, such as in our programmes to develop low carbon vehicles.
Last but certainly not least is societal push. For me, the opportunity here is captured in the phrase “redefining needs and desires”. If you can do that, the commercial opportunity is vast – you only have to look at Apple’s recent world record profits. Our work with the creative industries is impressive, whether it’s with leaders in visual effects such as Imaginarium and Double Negative or start ups nurtured through IC tomorrow and our digital & creative launchpads.
So, if you want game changing answers, ask the right game changing questions.