Picking the right races - and shortening the odds!

One of the questions we are increasingly asked is how we choose where to invest.  Given the scale of the challenges we are facing and the amount of funds we have to address them, we have to have a process that selects – in a logical and consistent manner – the areas where we put our support. We have used the same approach more or less from the beginning – and it all starts with the four criteria we have used from the outset:-

1. How big is the market?  This involves understanding the current size of the market, its likely growth, the requirements for successful products or services and the competition both at home and overseas.

2. What is our capability?  This looks at our underpinning capability in universities and research organisations (and in terms of both ideas and people), our business capability, both existing and potential, and the possibility of re-aligning capability currently aimed at another market to address more valuable needs.

3. Is the timing right? This looks at the growth of the market needs and the rise of the capability to meet them and the likely intersection of those trajectories.

4. Why should government support this?  This looks at the degrees of risk associated with the area, the potential impact of government activity and likelihood of it proceeding without support because of the risk-reward balance.

Let's start with the top-line markets we have chosen – energy, healthcare, built environment, food and transport. They are all societal in nature and therefore liable to grow – either with population or because our needs expand. Their prominence and importance also means that we have invested in understanding them over many years and our knowledge base is strong in these areas.  They are also all areas where government is expected to look after its citizens and therefore aspects of the markets will be controlled, or at least influenced, by government action. The amount of money we allocate to each of these markets is set to take account of the market size and the effort required to deliver new products and services.

Underpinning these markets, and linking them to the technologies we support are the competencies – high value manufacturing and digital services.  We had already identified manufacturing as a translational competence linking technologies to markets, and realised that the high value parts of manufacturing would continue to develop strongly and offer opportunities for differentiation. With the increasing digitisation of markets, we have realised that there are parallels with manufacturing and so place digital alongside manufacturing in our approach.  We are considering whether design fits in this part of our activities.

The basic technologies – materials, biosciences, electronics, sensors & photonics and information & communications technologies – were historically the main area of activity within the Innovation Group in the DTI before 2007, but as the new Technology Strategy Board focused more on "challenge-led" activities, these underpinning technologies became an important link to the knowledge base.

We also have an activity that looks at new opportunities.  Much of this is about evaluating new areas within our existing markets, competences and technologies, but we also have an activity looking at emerging technologies and industries.  Here, because of the uncertainly associated with many future markets, we look at technologies with a broad potential set of applications.

Once we have decided how to allocate resource at this high level, we need to drill down into each of these areas.  Within each, we analyse the available data, consult the communities and play back our understanding of the opportunities and barriers to achieving them as a means of making sure we have identified the most important areas where our support could make a difference.  We often use technology road-mapping to structure these interactions, but always remember that the further out we think the markets will change, the less precise any predictions will be.

We publish these analyses as our "strategies" and then select the opportunities or barriers with the most impact for our activities.  We may provide support through competitions, where we select the most valuable proposals to support (both financially and through our extension networks of expertise and assets) or we may use networking or communications to achieve the impact.The original idea for the Catapults came out of an analysis of the right mechanism to support activity in some areas – but that's another story!

Then, within our competitions, we use the same criteria to select the most appropriate proposals to support.  The questions we ask are aligned with the criteria.  The guidance to assessors suggests assessment against the criteria and the panel discussions are all about the same criteria. 

As I said earlier, those same criteria have been there since 2007 and, I believe, our growing impact across many fields is because we have applied them – based on as much evidence as we can assemble – in a consistent and transparent manner.  Sometimes, keeping it simple does work!

 

Last updated on Thursday 01 March 2012 at 10:58

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  • David Bott|18/04/12 at 8:30 PM

    Tony

    Having trained as a scientist and worked in industry for 27 years in large companies and been involved with small companies for 5 years before joining the Technology Strategy Board, I think I have recognised that risk - and therefore the reasons projects do not progress - comes in many forms. As you have observed, making things in quantity requires the skills of manufacturing. To this I would add that selling new things to people requires the dark arts of marketing and sales, making the most of financial assets requires the (to me) arcane skills of accountancy, and bringing it all together requires that rarest of skills - leadership. I cannot comment on your specific example because I do not know the details, but I do recognise that many good technical projects do not get supported because the additional arguments that turn good science or engineering into good commerce are not always well made,

    As to your point about the same rhetoric being used over long time periods, I would suggest that the problem is not necessarily that the logic is wrong, but it might be that application has not been consistent. It often takes many years of sustained commitment to turn concepts into commercial products or services and it is easier to shut things down than to build them up.

    David

    Tony Smee|16/04/12 at 12:50 AM

    Hi David,
    Thanks for the pointer, it did cut me off, but the personal blogs for group members are longer.
    I do seem at odds with the general views & trends on this site, perhaps my particular path in life.
    I'd like to share another posting to a couple of national newspapers, trying to change the approach to innovation which I claim has not worked in 60 years:

    This is the story of a nation that went from workshop of the world to a nation in debt.

    Clement Atlee recognised the opportunities created by the war and formed the National Research Development Corporation (NRDC) in 1948. Then in 1975 the National Enterprise Board was founded “to stimulate innovation and create jobs and growth”.
    Now in 2004 we have the Technology Strategy Board with the target “to stimulate innovation and create jobs and growth”.
    So why after 60 years of stimulating innovation to create jobs and growth has very little happened, in fact most of British industry is foreign owned, unemployment rising and growth hovering around zero.

    I have lived through it all, Clement Atlee, Harold Wilson, Margaret Thatcher, and the words do seem remarkably the same. We were always going to improve education in maths & science, more apprenticeships, investment in new technology, more exploitation of our cutting edge university research and cutting down red tape and barriers to innovation.

    Here is one story out of hundreds of similar ones:
    There is an idea being developed at Aberdeen University to seal an oil well blowout in a much shorter time than is normal in the oil industry. Eagerly grasped and understood at the engineering and academic level this has been blocked by the slow funding processes at the top. The idea was proposed to BP at the time of the Macondo Gulf of Mexico disaster and considered but not implemented. We think the technique has a 90% chance of success, so if it succeeds it means that the Gulf of Mexico oil leak could have been sealed in 3 weeks instead of 3 months, perhaps an embarrassment for BP. A typical innovative idea, but who will check it out, who will fund a proof of concept?
    Will the funding be forthcoming for this experiment? The people at ITF the oil industry’s own innovation body feel very positive, so do the academics at Aberdeen University, we chat on the phone & e-mail regularly . But from past experience the answer to the funding is "probably not".
    A 90% chance is too much of a risk for the people with the cash.
    In fact what we need are people who will take a risk with a 50% chance of success or less, because every big world beating idea by its nature looks risky or even crazy to most people. If a jet engine principle was obvious then Frank Whittle would not have had a hard time convincing the RAF top brass, if everyone could see the possibilities for a cyclone vacuum cleaner then James Dyson wouldn’t be where he is. If the above story is typical then we are not short of innovation or ideas, just the risk capital to see if they work or not.



    David Bott|15/04/12 at 11:15 AM

    For those interested

    Sadly, Tony's post was truncated by the system (there to encourage precision) but you can read the full version here - https://connect.innovateuk.org/web/engineertony/blogs/-/blogs/david-bott-picking-the-right-races-and-shortening-the-odds;jsessionid=ED08C6FE3E8BA055DEE4061853339276.MekushUdbew4 on _connect.

    David

    Tony Smee|13/04/12 at 1:00 AM

    Hi David,
    Sorry if I appear negative, and that you cannot see the points I am making, both here and in _connect.
    Perhaps in a word, I’m trying to help.

    I try to stimulate discussion, interest and debate in _connect. You won’t be getting much feedback or debate from experienced practical skilled engineers with 50 years in a very broad range of industries, simply because we are a retired or dying breed. Perhaps I can be of some help to those TSB staff who clearly have very limited practical industrial experience. The IET asks engineers to try to hand on their skills, experience and enthusiasm for engineering so I try.

    Perhaps a little background will help.
    I've had a long hard and very positive life in heavy engineering, much of it in oil & gas, process & production industries and construction. With over 50 years of practical engineering experience and thousands of problems and solutions, and perhaps 40 years of inventions, patents, presentations & meetings. So I feel I can help when _connect articles are written in my own areas of experience.

    I am the guy who designed the production lines, I am the guy who starts up the process, sorts out all the problems and hands it over to the client. I am the engineer who works around the clock to find out why production has stopped and can get it started again. I am the guy who reads diagrams and drawings as you might read a newspaper.

    This is a long story and it is written out in full on my TSB blog, https://connect.innovateuk.org/web/engineertony/blogs

    Starts in 1941, the National Research Development Council in 1948, the National Enterprise Board in 1975, the Department of Trade and Industry, only the names have changed in 60 years of technology for growth & jobs, so I think history may have some lessons for us all.
    Experience cannot be found in books, courses, consultants reports or committees of inquiry.
    Tony

    David Bott|12/04/12 at 8:09 AM

    Tony

    As with your other post (and your many posts in _connect) I am not sure what point you are making. The Technology Strategy Board is comprised almost entirely of scientists and engineers from business - many with very successful careers. If you have been unsuccessful in persuading your past employers of the validity of your ideas, then I am sorry, but I know that there are many small, medium and large UK based companies that have benefitted from Technology Strategy Board support and acknowledge that products and services would not have existed were it not for that support.

    David

    David Bott|12/04/12 at 8:09 AM

    Tony

    As with your other post (and your many posts in _connect) I am not sure what point you are making. The Technology Strategy Board is comprised almost entirely of scientists and engineers from business - many with very successful careers. If you have been unsuccessful in persuading your past employers of the validity of your ideas, then I am sorry, but I know that there are many small, medium and large UK based companies that have benefitted from Technology Strategy Board support and acknowledge that products and services would not have existed were it not for that support.

    David

    David Bott|10/04/12 at 9:43 AM

    John

    The perceived problem with Government picking winners is that most people seem to remember them picking losers! If they made good decisions, we tend to forget them. Our approach, which is to use markets that government can influence and where we can see that the UK has the capability or the potential and apply assessment procedures used in industry seems to make a difference, but all these things take time.

    I disagree that universities focus on blue skies research. What I see is a balance between ideas that will pay off in the future and the development and underpinning of ideas that are closer to market. There are not many products or services that cannot be traced back to academic work - the only variable seems to be the time taken.

    When I started in industry, we had "corporate laboratories" where industrial scientists could spend time interacting with universities to keep up to date and spot the new exploitable ideas. Sadly, very few of these still exist and we haven't found a new way of achieving the same interaction.

    Is your work published anywhere? why not make it widely available if it would help us all?

    David

    Tony Smee|06/04/12 at 6:54 PM

    This kind of thinking means that if Microsoft, Apple, Google, Facebook or any other of the global giants swamping the UK, if these people had started from a garage in the UK with £10,000 pounds of credit card debt then they wouldn't have had a chance of success with the TSB.
    Picking winners without a doubt is difficult, and in my own field of electrical engineering, automation & robotics I can see from the results & case studies, that it is impossible.
    After 50 years in heavy industry, mainly oil & gas and process plant, I have hundereds of solutions to the practical problems I have been faced with over the years. Alas although eagerly and positively understood and accepted by engineers and university academics they are never accepted at the management or funding level.
    My explanation is the total lack of experienced practical skilled engineers at the top, in government, on company boards, and at all levels of enterprise and innovation quangos including the Technology Startegy Board.

    Mr John B. Leonard|03/04/12 at 1:21 AM

    The UK has for some time been one of the most Inventive Nations in the the World but has failed to Innovate (Develop) many into any Economy (A). There are at least three parts to this:
    1. Government do not, can not nor want to attempt to 'Pick Winners'
    2. Universities are wedded to 'Blue Sky' Research and the results from this research have been shown to be no better than anyone else at turning them into Material Products Services or Systems in any Economy.
    3. Business, whose primary function is profit, is also no better at using the results of University Research as they are also part of the general failure (A) above.
    Therefore unless we change the way each (1,2 and 3.) functions then nothing will change for the better. I wrote a paper based on my PhD research: "Inventing and Innovating: The Platinum Key To Business Success", which identifies many of the barriers, in 1,2 and 3, that inhibits the uptake of worthwhile Inventions into any Economy.

    David Bott|02/04/12 at 2:06 PM

    Carol, I totally agree and actually say in the post "our business capability, both existing and potential, and the possibility of re-aligning capability currently aimed at another market to address more valuable needs". However, aiming to build capability with no foundations is fraught with problems! David

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