The right tool for the job

Over the last few weeks, I have been asked quite a few times about how companies can get support from the Technology Strategy Board. Most have been well-intentioned but there has been the occasional edge, with the questioner seeming to think there is some magic formula to get money and we only share it with a privileged few.

Although I usually answer directly and start describing our mechanisms, I have come to realise that the question is actually too simplistic to answer properly. The progression from a simple idea to a commercial product is often characterised as a long and tortuous journey, and each stage requires a different kind of support. Over the last few years (technically 2 years, 7 months and 8 days) we have tried to find the right kind of support to offer to companies at the stage they find themselves at. This is obviously very difficult, because we don't have the resources to provide a bespoke service for every company that we come across, but we have learnt some ground rules.

Perhaps the first part of the explanation revolves around the aims of the Technology Strategy Board and how they are different from other government goals. Our aim is to help innovative UK-based companies to be more successful. The use of innovative systems and the development of innovative products and services have been shown time and time again to enable companies to grow and make more money. As a result of this, they usually pay more tax (the Treasury especially like this aspect of growth and success!) and the cycle is complete.

This is not the same as what is often called "industrial policy" where government intervenes to support specific sectors that it believes are important to its overall industrial portfolio. Although these aims do intersect in new or growth markets, they can also act (at best) orthogonally or in opposition where support for an existing sector, or its current players, can inhibit the development of new sectors or players than might compete for business.

Perhaps our biggest discovery has been in leveraging government policy more effectively in some areas. The concept of Innovation Platforms, which was invented by our first Board in 2005 and which has been developed ever since, is disarmingly simple. Governments exist to answer the larger challenges to society. They develop policy that reflects what success would look like and then move to implement it. In doing so they change markets. We have learnt to work with the policymakers and interpret their ambitions in more commercial terms, take that interpretation to the companies who could potentially supply to the markets they will change or build and then support the more innovative companies to deliver against that challenge. The actual selection of the most innovative companies is carried out by independent assessors using some simple and widely disseminated guidelines.

This is simple, but it is never really that way! Markets differ drastically. We all happily fly in airplanes built up to 30 years ago, but (especially if we are young) would not be seen dead with a mobile phone more than 18 months old. The planning, development and use cycles for different markets are so different that we end up having to provide different types of support for different markets - and then take account of the different size of the companies who supply that market. We therefore end up supporting all sizes and maturity levels of companies.

Even large companies need and get our support. Many markets are global and, to compete successfully, companies need to organise themselves along similar lines. Large or complex products require extensive supply chains to ensure that all the components and subsystems are built to the highest quality but at the cheapest price. In some cases that leads to overseas sourcing of some bits of a new product. Countries themselves, or rather their governments, are often in competition with one another to host the most successful companies and that leads to a bit of a commercial arms race! If the components are large or heavy, it makes commercial sense to keep your supply chain local - to minimise transport costs. Large companies plan on a larger scale, so that - when they come to us for support - they often are talking about large, complex projects that involve complex inter-related supply chains. Given that we are investing taxpayers' money into the future of UK-based businesses, we take more care with larger sums of money. Over the years we have developed a process for projects over about £5m that involves more interaction with the consortium and a fair amount of challenge on both sides, and leads to a more focused project with clearer and more measurable outcomes. These large projects also usually involve the science base (and thus Research Council funding) and implementation somewhere (and thus Regional Development Agency funding). Even with the best will in the world, the discussions and agreements take time. However, it is better to be a few months late with a better proposal - as long as the target market doesn't slip away from the consortium and make all the effort wasted.

At the other end of the scale, small and micro companies (which make up well over half our funding at the moment and are increasing their presence in our portfolio) need more than money. They need links to someone to buy their products and services. Buyers can be larger companies, government departments or even other small companies further down the value chain. The complementary funding for this end of our portfolio often comes from venture capitalists, business angels and the like. They are often new to the world of government funding and require a modicum of handholding through the checks and balances that are necessary because we are using public money.

Putting these two worlds together is also often difficult. Large companies in markets with slower cycle times still need fast-moving suppliers, but often develop technologies that they never actually use, but need to evaluate. Small companies with limited finance can sometimes be frustrated with the speed of large organisations - be they private or public. Transferring technology from a fast-moving market to a slower-moving one can be particularly difficult - but ultimately very rewarding.

It is this complexity which makes it problematic to answer the apparently simple question "how do companies access your support?" It is our goal to continue to develop our understanding of the markets and our mechanisms of support to get closer to a bespoke support mechanism for the most innovative companies in the UK. In the meanwhile, the best answer is that if you think you have a good idea, come and talk to us. If the idea fits with our current focus areas - where we see strong potential for success - then we can match you to the right competition and the right support mechanism. If it doesn't, you have made a contribution to our thinking and if the evidence tells us that it is an area ripe for support, we will, one day, support it - as long as we have the resources!

 

Last updated on Friday 24 February 2012 at 10:09

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