Innovation is not a Magic Sausage Machine

The UK’s House of Commons Science and Technology Committee published its report on Managing Intellectual Property and Technology Transfer this week, something that grew out of the initial inquiry about the commercialisation (or lack of it) around graphene.

Focussing on graphene was an excellent starting point, but it soon became apparent that the UK has a problem with linking its world class academic sector with the rest of the economy. The same issues appear in relation to every branch of science and engineering where world class research generates patents and industries elsewhere, returning very little value to the UK economy which initially paid for the work.

A Dozen Reviews, No Progress

A worrying aspect of this report is that, as pointed out in the conclusions, it is a well-known problem and has been studied multiple times over many years and still nothing has been done about it.

Indeed, the evidence base is strong and well-developed due, in no small part, to a succession of high-profile, often Government-sponsored reviews (at least 12 at the last count) reporting over the last 15 years. While successive Governments have made sustained efforts to illuminate the obstacles to research commercialisation and technology transfer, it is disappointing to see these endeavours tail off, and enthusiasm dwindle, when it comes to taking action to address these obstacles.

The committee is scathing claiming that “the ‘review culture’ in this field has obscured an ‘implementation deficit’ and a sluggish pace of change”

So, what did anyone really expect? Getting a bunch of MPs and academics to review the landscape is not going to change it, and this review merely suggests that “the Government should task UK Research and Innovation (UKRI) with publishing annual progress reports” – so more reviews of the reviews.

But Some Good Ideas

But buried in the report, among the universities complaining about lack of interest from industry and VCs complaining about lack of risk free businesses there are some good ideas which may make a difference.

Firstly the committee recommends that “a small proportion of the Industrial Strategy Challenge Fund should be set aside to provide support for business training and mentoring, in order to maximise the success rate of the awards that are made.” A recognition that successful technology businesses are more about people than technology is welcome.

Secondly there is a recognition that Local Enterprise Partnerships who are tasked with setting local economic priorities should be obliged “to work with their local universities and build on the strengths of the university enterprise zones or else reassign a proportion of their funding sufficient to roll-out a national university enterprise zones programme.”

Certainly, my recent dealings with the Northern Powerhouse revealed a total lack of interest by LEPs in developing tomorrows economy, focussing is instead on pouring concrete for infrastructure that will be outdated before it is finished.

The Magic Sausage Machine

But my biggest concern is reserved for the view of innovation held by politicians and academics alike. This seems to be a magic sausage machine whereby government money goes into Universities at one end and high technology is transferred to the UK economy at the other end. There seems to be little understanding, or interest, in the bit in the middle which is often the critical part. Viewing this as a black box or witchcraft as many seem to do misses the real issue.

Technology is rarely transferred directly from universities to large industry, and like sausage making involves a number of rather messy and unpleasant steps. Getting the technology out of a university is one, and while the report highlights that technology transfer offices need to do better (there are some excellent ones by the way) they are often a barrier that needs tenacious entrepreneurs to overcome. Early stage funding is another messy bit, where negotiations over valuations can kill an idea before it even starts. After twenty years on both sides of the table I’ve had founders refusing to give up equity and investors wanting so much of a business that the founders would be financially better off working at McDonalds.

Large organisations are generally poor at innovating. That’s why they effectively outsource innovation to start ups who are later acquired. That’s good for large organisations who are poor at managing early stage innovation, and good for entrepreneurs and their investors who can find an exit. And that’s what provides the energy to drive the sausage machine.

Unfortunately, until the workings off the magic sausage machine idea are opened up and examined more closely, I fear that we may well have another dozen reviews and inquiries into commercialisation of intellectual property in the UK with little impact.

 

 

 

 

 

 

 

 

 

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