A new kind of centre

Over the last few months there has been lots of attention focused on centres - the type discussed by both Hermann Hauser and James Dyson in their recent reports on innovation in the UK.  Both singled out the need for physical centres as an important part of the innovation ‘system’. 

In October, the Coalition Government announced an investment of more than £200m over four years to set up a network of centres, with the Technology Strategy Board responsible for making it happen. And this month we published our initial prospectus for the establishment of these new technology and innovation centres.

Since this was what is sometimes called “new money”, we have had many suggestions from people who think that what they are already doing is the basis of a technology and innovation centre.  However Hauser’s definition is actually quite specific.  Each centre should have an annual income of around £20-30m, made up of a third from Government as support for infrastructure, a third from competitively-won projects (such as those we and the European Union support) and a third from direct private sector investment.  Each should also be internationally recognised as a centre of excellence and should be unique within the UK.

One of the most frequently stated purposes for centres is to bring together scientists, technologists and engineers (and others) from many different disciplines to address a common goal. But there is also a perceived need for large-scale – or rapidly evolving – equipment that enables the testing, validation or implementation of the area of work carried out by the centre.  This concept works well for more established areas of technology, where the physicality is an important part of the offering.  For example it is difficult to imagine developing new forms of manufacturing technology without being able to test them by making actual products; or developing new biological systems without access to laboratories and sophisticated analytical equipment.

However, there is a rapidly growing area of technology where large-scale equipment is not really necessary and where many seem to work quite happily without the need for well-equipped laboratories.  Software development only needs, as one observer put it, “a large capacity Internet connection and an endless stream of coffee”.  The level of organisation required to develop a technology and innovation centre is probably anathema to the sorts of people who excel in this area. 

Since this digital world is one of the fastest-growing global markets, what do we need to do to support this side of the house?

Although having serried ranks of programmers in a digital factory is almost certainly not the way to go, it is important to establish communities in digital as in any other form of technology.  Judging from the cluster that is growing in East London and the success of centres like TechHub within it, those new to the field seek out the company of others in a similar situation.  People who have had some success willingly help those who are starting out on their commercial journey.  But how do you begin that journey?

Many current support mechanisms assume that you have money – and then match that money to enable development to go faster or further. But in software, if you have an idea for a new application, you probably already have the necessary computing power and the skills to develop the application.  What you need is to know people with links to the relevant market; advice on how to build a business case;and support to tackle filling in the various forms needed to register a company, open a business bank account, register for VAT and the myriad of things you never knew you had to do.  All this costs little real money, but requires the kind of community that people instinctively seek out when they start in this area.  It is this capacity for self-assembly that explains why there is a burgeoning digital community in Shoreditch and around the Old Street roundabout. 

In this kind of area, perhaps rather than setting up a new centre to provide things the community may not actually need, we should aim to provide the sort of support the companies already in place say they wish they had when they started.  What they mainly seek is help to continue doing what they already do – which inevitably does involve money, but also takes community building.

One thing such companies are used to doing is explaining what they do and why they think it will be good business.  This was apparent from our LaunchPad feasibility studies competition last year, when we used a simple 2-minute video as the first stage selection mechanism; without much publicity and in a very short timescale, we had over 500 submissions.

We are now thinking about how we might develop similar competition mechanisms to support companies around these types of communities, and to test our ideas in the East London cluster.

One route we are considering is to adapt the Launchpad competition model to include collecting feedback from the community as part of the initial assessment process. We would achieve this if the videos were posted with the facility for comment, so that the community can provide constructive feedback to help develop the basic idea and provide input to the assessment process.

Then, once we have selected them down to a manageable number, we would ask for a basic business plan that answers our four criteria for support.  These address basic questions such as understanding of the market, how the capability of the company addresses the needs of that market, how the timing of their new offering matches those evolving needs and – the question many seem to find difficulty with – why should they get taxpayers’ money to help them

Another development could be that rather than those successful getting 50% funding for their proposed project and being required to start right away, they would have the offer of 50% funding if they can find the other half of the money.  They would have 12 months to do so. 

To help them achieve this, we then would work with the relevant community (whether TechHub or another cluster) to organise a meeting where these companies would present their ideas to the rest of the community.  We have used this approach in our Collaboration Nation events for feasibility studies competitions – and many companies have found both financial and commercial support through this route.  Another idea could be for part of the prize to be working space in the cluster; that way these new companies could join an existing community.

If this model works, we could see value in running such a competition annually, as what companies tell us is that they need more predictability about funding routes than they have had up until now, and replicating the model in other cities where similar clusters exist.

So to conclude, the process of developing a mechanism to establish the technology and innovation centres has also made us ask ourselves a wider set of questions about the role of centres in different areas.   The kind of community competition I have outlined is just one example of the sort of response we are considering; we will continue to listen to these various communities and think about the most appropriate forms of support to help them contribute to UK innovation and growth.

 

Last updated on Friday 24 February 2012 at 10:15

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  • John Murray|27/01/11 at 4:17 PM

    Lets imagine a technology innovation centre that is built around world leading technology research excellence. Lets further imagine "Big Industry" are interested in investing in a TIC to exploit disruptive technology innovation. Lets also suggest that the area of shared interest between the Industry partner and the Research partner is the technology (more specifically its wealth generating potential). World leading RTD is cross-functional. As history shows us, talented people co-located and collaborating produce non-deterministic technology outcomes (IP). It produces "surprises". To the industry partner, the disruptive technology so produced from their investment could be core, non-core or unfamiliar to their business. Likewise, to the research partner, the technology (IP) could be core, non-core or unfamiliar.

    Therefore, to support these "operational" modes, What capabilities would such a TIC need to convert "surprising" disruptive technology into impact?

    Industry Unfamiliar, Technology (IP) core, the TIC needs to be capable of managing:

    Joint Venture
    Contract R&D

    Industry Unfamiliar, Technology (IP) non-core, the TIC needs to be capable of managing:

    Venture Capital
    Internal Venture Fund

    Industry Unfamiliar, Technology (IP) Unfamiliar, the TIC needs to be capable of managing:

    New Enterprise Creation
    IP Sale

    Industry non-core, Technology (IP) core, the TIC needs to be capable of managing:

    Joint Development

    Industry non-core, Technology (IP) non-core, the TIC needs to be capable of managing:

    Licencing
    Equity Stake

    Industry non-core, Technology (IP) unfamiliar, the TIC needs to be capable of managing:

    Venture Capital
    Internal Venture Fund

    Industry core, Technology (IP) core, the TIC needs to be capable of managing:

    Internal Development
    Consultancy

    Industry core, Technology (IP) non-core, the TIC needs to be capable of managing:

    Internal Development
    Licencing

    Industry core, Technology (IP) unfamiliar, the TIC needs to be capable of managing:

    Joint Venture
    Contract R&D


    It could be suggested the primary mission is building TIC's with broad capabilities to maximise commercial and economic impact. It is clear there are major societal challenges driving industry, academia and the public sector and in turn Information and Communications Technology. In that regard, it could be observed that an ICT TIC is no different from other more capital intensive "STEMM" TIC's.

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