I spent Guy Fawkes Day in London helping to plot an explosive and exciting future by joining cabinet ministers, civil servants, business managers, academics and financiers at Innovate UK 2014.
This event was put together by UK Trade & Investment (UKTI) and Innovate UK (previously the Technology Strategy Board). I wasn’t quite sure what to expect, but my main reason for attending was to listen to a number of talks about ‘Smart Cities’, and to assess how I might discuss Pelipod’s inclusion as part of the Smart City agenda.
Any scepticism I may have had ahead of this excellent spotlight on UK innovation was completely unfounded. Firstly, the location was a great choice; Old Billingsgate. This Victorian building was London’s main fish market until 1980 and has now been refurbished into an architecturally interesting, light, airy, cool exhibition centre. So much better than a stuffy basement in a central London hotel. It also made for a stunning counterpoint to the 21st century products being showcased.
In this space more than 120 companies chose to show their wares at Innovate UK 2014. The majority were focused on B2B products although there were a few B2C focused companies there, my favourite being Agility Global, the creators of the effortlessly cool Saietta R electric motorbike. I signed-up for a test ride! Many of the themes were perhaps more predictable – defence, environment, sustainability, engineering. But there was also a sizeable body of attendees happy to provide information about how the UK government will look to support innovation, both financially and with advice.
What is abundantly clear is that the UK certainly does not lack innovators. Delegates were told that per capita, we are now one of the leading countries for innovation. You could almost say it is one of the UK’s best kept secrets. This then begs the question: if the UK is so good at innovation then why don’t we see major technology companies succeeding and expanding at the rates of similar businesses in the USA, China, South Korea or Germany? From my perspective I believe one major factor holding our innovators back is a gap in the support necessary to help our companies grow from promising innovators into sustainable, viable and influential businesses.
There is a fair amount of support available at an early stage, for example to help young companies to build an idea out through to a prototype. Generally those innovators must be prepared to slow down and work at the pace of funding bodies and put up with extensive auditing and reporting requirements. Dr Vince Cable’s announcement of a further £67 million to be invested in this area still only covers the early stage. But some support is certainly in place early on the innovation journey. The more damaging gap is in a lack of provision of any framework to support those early stage businesses that have proven they have a commercial product, but need working capital to support the growth.
For too many early stage businesses, the commercial ‘Valley of Death’ is post launch. New businesses are in most need of financial support and domain expertise (e.g. marketing and production) once they have actually begun trying to sell the product. Success demands additional investment to fund expansion and meet new demand. Without that cash, smaller enterprises are doomed to grow painfully slowly at rates sustained solely by internal cash flow.
Compare this situation to alternative models supported elsewhere, where governments will underwrite and support investment in order to allow promising companies to grow. Without similar trust and confidence in the UK, there is a danger that our innovators will continue to produce brilliant ideas, only to see them either sold to large overseas companies to the detriment of the UK economy or, worse, see an overseas competitor with more cash copy ideas before stealing away new markets.
Is Innovation the UK’s best kept secret? Definitely. Why? Because right now we seem to be doing everything possible to keep it that way.