Picking the right tool for the job

Over the last three years, the Technology Strategy Board has had the role of encouraging UK based companies to be more innovative.  One of the ways we do this is by co-funding research and development, and in this time we have learned the obvious – that it’s not a “one size fits all” task.  We started with a single funding mechanism – a two-stage collaborative research & development grant – and now have a set of tools, each of which is designed to fit the task we have identified.  And we will probably need to develop more over the coming years to make sure we give companies and consortia the right sort of support.

So, what are the variables we look at before selecting the most appropriate support mechanism?

 The first criterion is fairly obvious; it is the distance from the market.  This can be viewed in two ways – the evolving articulation of the market needs and the development of the technology (or technologies) towards satisfying those market needs. 

Markets tend to learn what they need in an evolutionary sense.  Mostly, they want more of what they currently have and they (usually) want it cheaper!  This means that developments near to market are moderately easy to define in terms of performance and price.  Examples here are the development of low carbon cars or energy efficient buildings.  The further back from the market, there is usually more uncertainty about which of several competitive systems might be finally successful.  This makes the more timid companies hold back until standards are evolved.  No-one wants to make a product or service that the customers won’t buy! Even further back, it may not be apparent at all how the need will be satisfied. 

The development of a technology is different.  When it is first invented, any new technology has huge potential – mainly because its drawbacks aren’t yet known.  As it is developed – usually against some early market requirements – problems are identified and sometimes overcome, but new potential applications are also discovered. We have seen that it is those who have a profound market understanding and who are in touch with technological development who can introduce products and services that truly disrupt the market.

The second criterion is related to the first but more subtle.  It is whether the true market requirement is defined or whether people take it for granted without thinking about it.  Taking the example of cars, the assumption is that they are capital items bought every 5 or more years and they all look pretty much the same.  What if we all “borrowed” cars like the London Transport bikes?  Would we personalise them as much?  Healthcare is also a great example – we really want not to get sick in the first place, but our current system is about treating illness once it occurs!

The third criterion is about the capability in the UK (these are our criteria for our role!).  Very few products or services involve only one company, and very few companies are capable of supplying a whole country, so there needs to be a supply chain to develop the components and sub-systems and a number of companies operating to supply the same market, or it all gets very flaky.  Evaluating this criterion quickly leads to the question of whether there is a technological or business community and whether knowledge transfer occurs within it.  And this, in turn, raises the question of the maturity of that community.  If the market doesn’t yet properly exist, then it is difficult for the companies who one day might be strongly bound into a supply chain to even know of one another’s existence.

 Applying these criteria leads us to be able to select the most appropriate support mechanism, which to some extent tracks the development of a project or company.  Early stage companies often have a really good idea for a product or service but need to develop that idea in the context of the market they are targeting.  They need links into that market that will be receptive to the potential change.  They often need money and more expertise than they currently have.  As the idea is developed, they might need more specific links to potential customers, or suppliers who can give them access to important components in their product or support services they do not need (or have the capacity) to develop.  And they probably need more money!

 As they get nearer to market, they might need to work with other bits of Government, such as UK Trade & Investment, to gain access to export markets or inward investment.

This progression of support is nothing new, and mirrors the approach used by other government innovation agencies around the world.  There are, however, other mechanisms we have used that offer other ways to drive innovation.

We have used the process of ideas factories (also known as “sandpits”), which have had some success in the hands of the UK research councils.  This mechanism is particularly suited to situations where there is known to be a challenge but it is not well understood or articulated.  The process involves gathering together about 30 people who have expertise in an area which is thought to be relevant to the challenge, taking them through a multiple divergent-convergent problem-solving technique process until they agree on a small number of potential solutions, and then funding them to develop those ideas.

We have also adapted the “prize” approach, but with a twist.  Many prize competitions are aimed at providing a solution to the challenge rather than developing the innovative capacity, and work on the principle that the likely participants have both the expertise and the resources to tackle the challenge from their own funds.  This slightly biases the competitions towards existing players, and probably larger ones.  To address this difference between the accepted practice and our goals, we have funded a “design” front end for well-defined challenges and then chosen those particularly promising ideas for implementation.  There is not one prize, but many.

To address the specific needs of SMEs in fast moving areas of activity, we have run competitions for shorter projects, and required that the results are fed back to the wider community.  This has usually taken the form of “collaboration nation” events which often result in the ideas being funded outside the Technology Strategy Board – and the companies moving into the commercial world sooner.  This is a good thing.

Innovation is not an easy thing to do.  It requires insight into a challenge (and hopefully one that not many others have had), it requires resource, both human and financial, to develop the idea into commercial reality and it involves making links with the customers that make up the market in a timely and effective manner. 

We have spent a lot of time over the last three years listening to what works and what doesn’t, and changing what we do accordingly.  We have not got it exactly right yet, but I would argue we’re a lot closer than we were when we started.

 

Last updated on Friday 24 February 2012 at 10:06

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