Procuring innovation

This month we ‘go live’ on our latest SBRI competition, with three separate calls run jointly with the Strategic Health Authority for the East of England. The competition’s three themes are managing long-term conditions, patient safety and keeping children active. Details are here and on the Health Enterprise East website. I think all three calls provide good opportunities for small businesses outside the health sector, in both social and technology innovation, to engage for the first time in 100% funded health development projects.

This competition moves us into the next phase of the SBRI transformation project and it seems a good time to share this progress with you and outline our vision for this important part of the overall Technology Strategy Board toolkit.

The SBRI initiative has had a chequered history over the past 5 years in the UK, but it has consistently had its champions, both for the process and for the impact it can have. A notable example is David Connell, through his work at the University of Cambridge Centre for Business Research. His report Secrets of the World’s Largest Seed Capital Fund examines how the successful SBIR (Small Business Innovation Research) scheme in the US works and how it provides real market pull-through for small US companies, many of which have gone on to become successful and well-established firms. It was David’s proposal for action here in the UK which formed the basis of Recommendation 8.8 in Lord Sainsbury’s report The Race to the Top - that the UK’s SBRI scheme should be reformed, adopting many of the principles of the US SBIR scheme. This action, to relaunch and champion SBRI in the UK, was placed with the Technology Strategy Board to implement in early 2008.

During 2008 the Technology Strategy Board worked closely with the Ministry of Defence and the Department of Health to pilot a new process and pave the way for the reformed SBRI process to be launched in May 2009. Both pilots have successfully completed, providing good input to the reformed SBRI process, as well as providing successful business solutions in their own right. The Department of Health projects, for example, identified areas of focus in the search for new ways to tackle the serious problem of hospital-contracted infections. The competition attracted over 50 new ideas with proposals from a diverse range of sectors – not just healthcare and bioscience but other companies from sportswear manufacturers to novel companies from the physics communities.

In essence the new SBRI programme has the same objectives as the original. It aims to use government procurement to bring innovative solutions to specific public sector needs whilst providing real business opportunity – a fundamental objective of the Technology Strategy Board. The UK public sector spends a staggering £160bn a year on goods and services. SBRI provides a way to enable departments to use just a small percentage of this money to drive innovation through development projects. It allows them to procure new technologies faster, often bringing in companies outside their normal operating sector who have innovative technology solutions which otherwise may have gone unnoiticed. The process brings benefits both to the government department and to business and so is in everybody’s interest.

The process starts with a department identifying a specific challenge or ‘unmet need’. This is turned into an open competition for innovation and companies with potentially interesting technologies and ideas are invited to submit an application. These ideas are assessed and a number of companies are given fully-funded contracts to develop the product ideas through feasibility and evaluation. Ideally, after a period of development, this could turn into a full procurement - the big carrot for business. A two-stage process is adopted for the feasibility and development phase leading to a full competitive procurement process. Phase 1 is feasibility, lasting around 6 months with contracts of between £50k-£100k in value; the most promising go through to a product development phase of around 2 years with a typical value between £250k and £1m.

Our plan for 2009/10 is to have around £40m worth of SBRI competitions across a number of Government Departments. Competitions currently launched include defence, health, transport and buildings. The Ministry of Defence competitions will be managed through the Centre for Defence Enterprise. We have good alignment with the MOD and the competitions build on topics in the Defence Technology Plan, covering subjects such as power requirements for the foot soldier and the use of novel materials and technologies to reduce the weight soldiers carry. In health, as well as the three East of England calls, the Department of Health is looking to extend SBRI competitions into further topics as part of its i4i programme.

A new and exciting topic for SBRI is the competition for retro-fitting social housing. This aims to have about 50 houses fitted with the latest low carbon technologies to improve their environmental performance and is run in partnership with the Department of Communities and Local Government. Part of our Low Impact Buildings Innovation Platform, this is initially set as a 10m competition. However this concept is very scalable and it is hoped to be able to extend it during the course of the year. Further SBRI competitions will also be rolled out this year with the Department for Transport and the Home Office, building up a strong portfolio of projects.

Our objective, going back to the Sainbury recommendation, is to increase SBRI competitions across all government departments to at least £100m by 2011. There are arguments for and against ring-fencing this budget. A lesson learned from earlier attempts to introduce SBRI was that it failed because the benefits to government departments were not well understood and so many treated it purely as an administrative accounting process. As is typical for a change programme, I believe as much effort needs to go into promoting the benefits to the departments as goes into selling the undisputed potential benefits to business. It will also be important to showcase SBRI success stories as they evolve. We will do so through the year via events, the internet and other social media.

A common question raised is whether SBRI is the right brand for the programme or whether its history will work against it. After much debate we have decided that delivery will be more powerful than brand and we have stuck to the SBRI nomenclature but with an upgrade to the branding. SBRI competitions will be co-branded with the departments we are working with. Most importantly I see SBRI fitting in very well with our whole challenge-led innovation approach. SBRI is not just another stand-alone initiative but will become an integral part of our toolkit, particularly useful within our Innovation Platform framework. It is a tool that can sit alongside collaborative R&D and alongside our KTNs and KTPs, and be part of a range of solutions to help business grow and succeed - whilst achieving innovation benefits for government.

Already we have had a number of other countries’ governments take a look at what we are doing.

I believe that following the successful pilot phase over the last 12 months, SBRI will become an important and respected part of our interventions for the future. I am interested in hearing first hand people’s experiences and thoughts about the process and how to move it forward. We will keep you posted on further progress and the programme’s achievements.

 

Last updated on Friday 24 February 2012 at 10:35

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