The difficult second album

The present incarnation of the Technology Strategy Board started on July 2nd 2007, so we have just passed our fifth birthday.  On that day 5 years ago, we were around 50 souls (of the allowed headcount of 75) trying to work out how to start an organisation more or less from scratch, but fully aware of a juggernaut of competitions that we had been bequeathed to us by the Department of Trade and Industry as it metamorphosed into the Department for Innovation, Universities and Skills and we were spun out.

Over the last 5 years, we have grown to about 150 people, moved to a larger office, doubled the number of competitions, increased the amount of money we use to support innovative UK based companies and steered our activities to what we hope are more productive areas and types of support. Last year we released our second “strategy” and last week we published our second Delivery Plan from that strategy.

Over the same time, we have also come to terms with the fact that, although we mostly came from business and state that we are business led, we are a public sector organisation and subject to different expectations – put simply, we are using taxpayers money and are therefore subject to a different level of scrutiny – both by parts of Government set up to do so, but also by the media and more personal commentators.

One of the things we have come to understand – perhaps better than when we started – is the role we have to play to help drive economic growth.  If you are in a company, growth is not the result of doing the same things as you currently do.  Growth can come from new products and services, it can come from adding a different service wrapper to an existing product, it can come from entering new markets (both in terms of function and geography), but it invariably comes from doing something new.  Inevitably, therefore, growth involves risk, and our role is to help companies mitigate that risk to levels that they then find acceptable.

Our strategy, “Concept to Commercialisation”, has a high level list of the things that act as barriers to growth (the snappy version of the list is on page 5) and starts to make the links to what we do to help address those risks.  Our Delivery Plan 2012-13 explains those links in more detail and more specifically in the thematic areas.

Much of the focus of what we do is on the grant funding we use to support innovative projects in areas of activity we think the UK has real strength in.  That strength can derive from an understanding of our home market, it can derive from the power of our academic base, or it can derive from the capability of the companies that are already addressing the market.  We are now refreshing the individual “strategies” in those areas to update our understanding of what companies tell us they are capable of, what research councils and universities tell us are the latest scientific developments that could impact on those areas and what government departments tell us are their intentions to regulate or procure in those areas.  The first, covering High Value Manufacturing came out a month or so ago and was the result of a thorough reappraisal of the previous version, in the light of our overall strategy and a consultation across all the markets engaged in “making things”.  More will follow over the next year or so.

As we grow, the tension between our goals and our source of money is beginning to be apparent to many – both inside and outside the organisation.

Our goal is to support companies that will contribute to economic growth.  That means (see above) that what they will be doing is risky.  Things won’t go to plan and plans will have to change to accommodate changed circumstances.  To support them, we need to be flexible and accept that some of the things we support will not work.

However, it is taxpayers’ money that we are using and there is a need to demonstrate rigour in how we select how we “invest” it and how we monitor its use.  That is why we ask for proof of financial robustness of the companies we support.  That is why we pay in arrears.  That is why we ask for a project plan and a spending plan.  It is also why we ask – after the project is over - what the companies will do next with what they have learned.

This could be in direct conflict with the goal.  However, we are developing the types of support we give to small and early-stage companies where the tension is most pronounced.

We inherited the Smart programme from the Regional Development Agencies and, for the first year, ran it very much as they had done.  We have learned from that experience and are changing how long it takes to go from decision to money in the bank.  For companies with cash flow “challenges”, we can pay monthly in arrears and offer an upfront payment.  We are using more assessors with investment experience as well as technical and business experience.

We ran out first Launchpad in 2011 and learned a lot from that.  The idea of giving the money upfront and letting the companies use that promise to find matched private sector funding was basically a good idea, but we didn’t provide as much support after the decision as they needed.  Next time, we will.

We are running more Feasibility Studies competitions before we run major Collaborative Research and Development competitions to allow companies and consortia to try out new ideas before they commit to major – and expensive – programmes to develop them.  We even use the SBRI funding process in cases where the end product will be used by government to be able to pay 100% for this type of activity.

As we enter the second phase of our development, we know we haven’t got it 100% right yet, but we have learned a lot and are learning to balance the tension between what we need to achieve and what sort of organisation we are.   As Iain said in the video we made for our first strategy “we are on a journey, join us!”

 

Last updated on Thursday 09 August 2012 at 06:12

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  • David Bott|12/08/12 at 3:47 PM

    John

    If I understand your comment correctly, I agree with it. As I tried to explain in the previous post, we start with the big, societal challenges where not only can we confidently predict the size and growth of the market but also we can (as a government agency) get a head start on understanding how government intends to tackle them.

    I also agree that people have used words like invention and innovation interchangeably – and therefore inaccurately – more and more. Our approach is that invention is used to describe the developed of a new idea and innovation its development and wider use. It has been captured, somewhat mischievously, as “invention is the turning of money into ideas, and innovation the turning of ideas into money”.

    I believe that one of the things the Technology Strategy Board has achieved over its first 5 years is a better understanding of how we can support innovation – but there is still more to learn (and implement).

    David

    David Bott|09/08/12 at 6:25 AM

    David

    Although I understand your frustration with our processes, they are there for a reason – and one I tried to explain in my post. We are not claiming to be perfect and recognise that we can improve – hence my final paragraph.

    Smart is a new activity for us and, like the collaborative research and development programme we inherited from the DTI in 2007 and have developed to be more suitable and responsive to the needs of business, I am sure it will evolve. It is aimed squarely at supporting early stage projects in SMEs. We started by using the application process developed by one of the RDAs, but will transition this to the same _connect based system we use for our other programmes soon. We have already shortened the time taken between approval and the start of funding. We are working to ensure that assessment is carried out by people who have a deep understanding of the area – so that those proposals that are unsuccessful can receive feedback that will help them improve their offering and can be used (as I note you do) to influence other investors. We are also looking at how the Smart programme can act as a “front end” to our other support mechanisms, where we offer a more complete programme of support.

    As far as I can work out from the documents you sent to Phil, you have mainly applied to competitions run by the DTI – we didn’t become a stand alone organisation until 2007, and we actually spent the first year trying to work out where the levers were on the system we inherited, so I think you have only really applied to us once. Sadly, Smart has been heavily oversubscribed so far – there are several reasons, but we are trying to address them as we develop the programme – and that means there are a larger number of disappointed companies than we would wish. We are using this interest to lobby for extra money in this area but until this comes, the process is competitive based on technical and business risk – as presented in the proposal.

    I would caution against criticising other companies because you may not be aware of the whole story about their proposal. We primarily assess the project proposal – in many cases, it is a move by the company into a new area for them and carries a strong element of risk that they wish to mitigate by applying for Smart funding.

    I understand from your comment that you do not want to engage with us any more, but you might consider contacting the Environmental Sustainability Knowledge Transfer Network, another one of the support mechanisms we provide to help SMEs.

    Whatever you decide, I wish you good luck with your business.

    David

    Mr John B. Leonard|09/08/12 at 3:06 AM

    The TSB is the latest incarnation created to overcome:"The UK is one of the most inventive nations in the world but fails to innovate (develop)many into its economy."
    The TSB needs to first understand: Why is this happening?
    Worthwhile Inventing and Innovating process (es) start by finding a 'Hurt/Need' in society that needs a solution Invented (created). In this way the risk is reduced by knowing the likely market size and Companies can see: How they can make a profit? All these processes, from market identification of 'Hurt/Need', to Inventions (material products, services and systems) being Innovated (developed)back into any Economy as Innovations (n).
    This set of processes must be understood and followed if the TSB expects to improve the uptake of Inventions Innovated (developed) into the UK economy.
    PS: There is nothing written in the literature about Inventing! The words around this topic are constantly misused! How can this topic area be properly understood when there is no empiric research published?

    Mr David Bamber|01/08/12 at 11:01 AM

    Dear Mr. Bott - your above mission statement like everything I/our company has experienced at first hand from the TSB is all very laudable, encouraging and exciting. However the reality is the usual 'TCD' (Texan Cow Dung).
    We as a small innovative SME company with a world beating technology have been applying for support from the TSB/DTI for over seven years and have applied more than 5 times for a grant. The result is always the same, large corporate consortia dressed up to be SMEs are selected for funding. Please refer to my letter of 08/03/12 to your Chairman Mr P Smith (who never read the letter) and the subsequent reply and correspondence with a Dr. G Rickett. As an organisation you do not take risk with small companies who by their very nature are financially weak. You minimise that risk by insisting that such companies join forces with large corporations. How does that ethos nurture the budding Microsoft or Google in the UK. It doesn't and you only have to look closely at the January/February 2012 Smart award grant to 'Greenbottle' to confirm my criticism. In brief, you awarded £250,000 to a supposed SME who already had received a previous £4.5 million investment, had a commercial contract with Wallmart and was backed by an EU subsidised farming co-operative and a $billion dollar international corporation. With those sort of resources how on earth do you expect a genuine SME to compete! Yet the feedback to our failure to gain support from the TSB was so positive that we now use it to attract private investment and absolutely everyone; academics, scientists, engineers and investors all comment on why the TSB did not fund us when the TSB were so positive about the application!
    Please review our web site at www.eclips-uk.com to see who we are and what we are trying to achieve or you can reach me at my email address or 023-9264-9666 if you wish to discuss further but as far as our company is concerned we have absolutely no faith in the TSB's alluring but illusory offers and are thoroughly disenchanted by the whole process.
    After our last attempt at support we have in fact become very cynical and unsupportive of the TSB, have complained to our MP and do not intend applying ever again as we know it is complete and utter waste of valuable time, energy and financial resources and now advocate to other genuine SMEs that we meet not to waste their time looking for support from you. I also intend contacting the FSB and writing an article to them of our poor experience regarding TSB support.
    Regards Mr D Bamber

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