Picking winners amongst UK innovators

3 min read

Innovate UK has been in the news recently, thanks to the Government’s decision to increase its investment in UK research and development. That news, included in the Chancellor’s Autumn statement, was welcomed by Innovate UK’s chief executive Dr Ruth McKernan. “The Industrial Strategy challenge fund in particular is a substantial increase to the amount of grant funding available to businesses through Innovate UK. It complements our plans to evolve our funding models and broaden the range of support available for innovations at all stages of development.”

I spoke with Paul Mason, interim director of emerging and enabling technologies with Innovate UK, during the run up to Innovate 2016, which took place in Manchester at the beginning of November.

“We have a fantastic science base in the UK,” he contended, “but we have to turn that science into money. So Innovate UK sits between the science based and companies, looking to speed innovation.”

He gave some statistics to back up his contention. “Although the UK has only 0.9% of the world’s population, we produce 15% of the high quality research. That’s something to be proud of. But that means there is also good stuff going on elsewhere and we then have to ask how do we get ‘first mover’ advantage for UK companies?”

The body has reorganised recently into four sector groups: emerging and enabling technologies; health and life sciences; infrastructure systems; and manufacturing and materials.

The emerging technologies sector is all about trying to create $1billion companies, Mason said. “The enabling technologies efforts are something like ‘Intel Inside’. They underpin all parts of the economy.”

And figures from organisation such as Beauhurst suggest the UK is not in as bad a shape as some might think. “We have three times the number of spin outs from our economic base that in the US. But how do you gauge their quality? If you look at follow on investments, these companies get as much as similar companies in the US, so we’re good at creating spin outs.”

One of Innovate UK’s early investments was in 2009, when it backed Swiftkey and its predictive texting technology with two grants worth £65,000. “We didn’t do too badly,” Mason noted. “When we started talking to the company, it was two PhDs at Cambridge. It now has 300million users and was bought earlier in 2016 for $250m.

“But it didn’t sell for $5billion, so are we ambitious enough in the UK? The issue is how you get companies through that gap.”

High growth company researcher Beauhurst says that, in 2015, the UK saw £4.9bn invested in start ups, with a record 2959 transactions. “Compared to Europe, early stage investment in UK companies is successful,” Mason noted, “but the challenge is stark.”

That challenge is growing them and Innovate UK’s approach is to encourage start ups to partner with larger companies in its open competitions. “Everyone has to bid for money,” he said. “We design a race – picking areas where we think we can win – but it’s up to the companies themselves to get to the startline. But we’ll back good ideas.”

One area where Mason sees opportunities is photonics. “It’s incredibly important for the UK; it generates £10.5bn a year and employs 70,000.

“Polyphotonics came to us with a brilliant idea about using light to slow the progression of sight loss, due largely to diabetes. The problem is that too much sugar in the blood causes vessels in the eye to rupture and that affects sight. Polyphotonix found that, if you shine light into the eye at night, it keeps the oxygen level in cells at a suitable level and that protects against damage. Its technology is now in a large scale NHS trial as a result of Innovate UK saying ‘come to us with good ideas’.”

He is also excited about quantum technology. “We’ve identified its potential as extraordinary, but the first thing we have to do is articulate our excitement to industry.”

More recently, Innovate UK has established the Compound Semiconductor Applications Catapult. This is intended to help industry sector to the advances made by UK researchers over the past two decades. “It’s interesting technology,” Mason observed, “but it’s not new. However, the applications are becoming clearer.” Amongst key applications are healthcare, energy and transport. “Compound semiconductors also have advantages for energy efficient lighting,” Mason pointed out.

One of the first things on the agenda will be to build the supply chain. “It’s the most important thing,” he continued. “If you have compound semiconductor chips, how are you going to use them?”

Innovate UK is proud of its record. “People have tried to assess our effect,” Mason said. “So far, the estimate is that we’ve invested about £1.5bn since 2009 and this has added between £11 and £13bn to the UK’s economy. We’ve worked with around 7600 companies and this has seen the creation of about 55,000 new jobs.”

Not surprisingly, he thinks it will only get better. “Much of our work is long term and we will see the benefit in 10 to 20 years,” he concluded.