Innovation is not a magic sausage machine
Posted on 27 March, 2017 by Tim Harper, chair, northern region of the Bessemer Society
Tim Harper looks at the recently published "Managing intellectual property and technology transfer" government report and asks why a dozen reviews have failed to lead to changes.
The UK’s House of Commons science and technology committee this month published its report, Managing intellectual property and technology transfer, something that grew out of the initial inquiry about the commercialisation – or lack of it – of graphene.
Focusing on graphene was an excellent starting point, but it soon became apparent that the UK has a problem with linking its world class academic sector with the rest of the economy. The same issues appear in relation to every branch of science and engineering where world-class research generates patents and industries elsewhere, returning very little value to the UK economy which initially paid for the work.
A dozen reviews, no progress
A worrying aspect of this report is that, as pointed out in the conclusions, it is a well-known problem and has been studied multiple times over many years and still nothing has been done about it.
Indeed, the evidence base is strong and well-developed due, in no small part, to a succession of high-profile often government-sponsored reviews – at least 12 at the last count – reporting over the past 15 years. While successive governments have made sustained efforts to illuminate the obstacles to research commercialisation and technology transfer, it is disappointing to see these endeavours tail off, and enthusiasm dwindle, when it comes to taking action to address these obstacles.
The committee is scathing in claiming that “the ‘review culture’ in this field has obscured an ‘implementation deficit’ and a sluggish pace of change”.
So, what did anyone really expect? Getting a bunch of MPs and academics to review the landscape is not going to change it, and this review merely suggests that “the government should task UK Research and Innovation [a government funding strategy body] with publishing annual progress reports” – so more reviews of the reviews.
But some good ideas
But buried in the report, among the universities complaining about lack of interest from industry and VCs complaining about lack of risk-free businesses, there are some good ideas which may make a difference.
First, the committee recommends that "a small proportion of the [government's] Industrial Strategy Challenge Fund should be set aside to provide support for business training and mentoring, in order to maximise the success rate of the awards that are made". A recognition that successful technology businesses are more about people than technology is welcome.
Second, there is a recognition that local enterprise partnerships (LEPs – council-business strategic bodies tasked with setting local economic priorities) should be obliged “to work with their local universities and build on the strengths of the university enterprise zones or else reassign a proportion of their funding sufficient to roll out a national university enterprise zones program”.
Certainly, my recent dealings with the Northern Powerhouse revealed a total lack of interest by LEPs in developing tomorrow's economy, focusing instead on pouring concrete for infrastructure that will be outdated before it is finished.
The magic sausage machine
But my biggest concern is reserved for the view of innovation held by politicians and academics alike. This seems to be a magic sausage machine whereby government money goes into universities at one end and high technology is transferred to the UK economy at the other end. There seems to be little understanding, or interest, in the bit in the middle which is often the critical part. Viewing this as a black box or witchcraft, as many seem to do, misses the real issue.
Technology is rarely transferred directly from universities to large industry, and like sausage making involves a number of rather messy and unpleasant steps. Getting the technology out of a university is one, and while the report highlights that technology transfer offices need to do better – there are some excellent ones by the way – they are often a barrier that needs tenacious entrepreneurs to overcome.
Early-stage funding is another messy bit, where negotiations over valuations can kill an idea before it even starts. After 20 years on both sides of the table, I have had founders refusing to give up equity and investors wanting so much of a business that the founders would be better off financially working at McDonald's.
Large organisations are generally poor at innovating. That is why they effectively outsource innovation to startups which are acquired later. That is good for large organisations that are poor at managing early-stage innovation, and good for entrepreneurs and their investors who can find an exit. And that is what provides the energy to drive the sausage machine.
Unfortunately, until the workings of the magic sausage machine idea are opened up and examined more closely, I fear we may well have another dozen reviews and inquiries into commercialisation of intellectual property in the UK with little impact.
– This an edited version of an article that first appeared on LinkedIn and has been republished with permission from the author.
See more from this Government Report: UK
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