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Giving a push to good ideas

The stereotype of an entrepreneur is that of a highly motivated individual driven by a desire to create something of their own, to make a mark in their field and to generate ever-increasing amounts of money. The reality, of course, can be very different.

At a debate I chaired at the Royal Academy of Engineering this week, the suggestion was put to me that only one in four small businesses have any interest in growing and that government efforts to expand the economy by supporting new technology firms would always be limited by the calibre of the people involved.

I’ve no idea if it’s an accurate assessment but it’s certainly true there are plenty of businesses out there content with continuing in their own little world. Then you have the serial entrepreneurs who love starting companies but rarely stick around long enough to see them grow.

Equally, however, it’s never hard to find someone with great ideas and dreams who just can’t get the financial support to make them happen. When this time last year I wrote about the need for greater aspiration among Britain’s startup firms, we received numerous comments from readers stuck in this exact situation.

From today there’s a new funding opportunity for small businesses, as well as large firms and academic researchers. Horizon 2020 is the EU’s latest research funding programme, an €80bn (£65bn) pot of money up for grabs over six years for those who put forward the best proposals for international collaborations addressing the biggest problems in science and industry.

The UK tends to do pretty well from European research grants, receiving around 15 per cent of funding in the last three programmes, more than any other country except Germany. A huge number of the projects we cover on The Engineer tend to have some money from FP7 (the most recent programme) involved.

It’s far from a perfect system, as anyone who has grappled with the EU bureaucracy could tell you. I‘ve encountered some fascinating and wildly impressive projects from FP7, but also some that left me thinking: ‘You spent three years and half a million pounds on that?!’. Some telehealth and robotic projects that I’ve encountered, in particular, have produced results that I struggled to believe anyone would ever use, especially when compared to the products created by the private sector in the same time frame.

Still, for some companies, Horizon 2020, which the EU claims comes with a much simplified application and review process, could provide a fantastic opportunity to expand their business.

The organisers of the programme are keen to stress that it’s not for those who are only looking for money. The aim of Horizon 2020 is to enable research and development with commercial potential, but it should be seen as an investment, a way to de-risk good ideas, create access to international partners and improve the skills base, not just as a cash pot to help take a product to market.

There are bound to be problems that will emerge as more and more people apply to Horizon 2020. The organisers have already indicated they are worried about a flood of unsuitable applications from European academics who’ve had their national funding slashed. And some companies, especially more established ones, will still struggle to justify joining a project that doesn’t provide a clear way for it to make a profit.  

But for anyone with a good idea that needs some help, some extra expertise or a way to make investment less risky, Horizon 2020 could be the tool that starts a new era for their business. And we need as many of those as we can get if we really want to grow the economy through technology.

Readers' comments (14)

  • I am a serial inventor with several Patents filed, and many different products made over the years. Probably 1 in every 10 products actually turns a profit, however this probably has more to do with poor marketing and ‘our’ (not just my business but the UK in general) inability to sell its products. The greatest initial problem is protecting the idea in a cost effective/safe manner. I have dozens more ideas, prototypes, etc which I’m sure would be of value to someone (hopefully made in UK), but cannot afford to protect everything before consulting with industry. Thus most prototypes gather dust and never see the light of day (there must be hundreds more like me)? If we could have a UK Gov backed scheme where we could present the ideas to potential investors, in a ‘protected environment’,… many more ideas would come to market. I see this as ‘speed dating’ for inventors to investors, where ‘someone’ with Gov authority ensures the process is carried out in the proper manner, at low cost, protects both parties and hopefully keeps track of projects to ensure the fruits bear labour in the UK.

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  • In engineering profession it always pays when you the right people around, looking for changes and new ideas. Unfortunately in the present economy all over the world every industry, particularly small ones, are interested in recruiting engineers with limited knowledge and without any drive for innovation or improving methods. Unless this changes it will be very difficult in infuse changes with good results and higher profitability. If one wishes to see higher profitability he/she should be willing to take risk.

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  • This idea of 'speed dating' of ideas! brilliant.
    Unfortunately, as always the greatest barrier to common sense such as you propose is the 'interests' of m'(not-very) learned, wigged and gowned friends! -who will truck no dilution of the absolute power over the so-called 'protection' of good ideas that they have lived off for several hundred years.

    The solution:
    if what they offer is so vital, let patent agents and the barristers they brief (though 'long' is more appropriate a word to describe what they do!) offer their skills and services free, and take a percentage of the eventual profits!

    Unfortunately far too many Members of Parliament are lawyers, and all judges are! : and applying common sense in modifying present laws or their interpretation to deal with a problem such as inventors and innovators have and Adam describes would be letting the side (should be trades-union?) down!

    Having the facility to Offer/register your ideas with/ to the appropriate professional institution or some other technically competent regulating body and who knows what the benefits may be. We surely care, as do the 'share-holders of UK plc : but it appears that the 'professional?' advisers could not give a toss! 'heads they win, tails...they win!
    Is that an analogy or a simile -I am but a simple engineer.

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  • Anyone who invents a new idea or device of technology should be able to patent that idea without the kind of costs involved at the moment. Who can afford to pay £20,000 plus per year for 20 years just to protect their patent. This has got to change so that engineers can come up with new technology and have their idea protected on a global basis. Then we may be able to profit from it and our ideas are actually produced.

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  • First decide: What's the right definition of a good idea?

    "You spent three years and half a million pounds on that?!"

    Many bad ideas have been given tax-payers Euros in the past. Horizon 2020 will be no different, because its remit is to fund R&D on the basis of its "commercial potential". Bureaucrats are easily conned by fantasy business plans. They would not be so easily conned if they were required to judge a project on its technical merit, informed by the science. Engineers should be making these decisions, not business consultants or the incumbent industry lobby. Many of the greatest advances in human history never made a profit for anyone. Nothing wrong with that at all.

    Ideas in receipt of public money should ONLY be judged on the benefits they bring to society as a whole, NOT on the profits they'll generate for a fortunate few.

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  • Martin goes straight to the heart of the problem.

    Ten years ago, Wim Kok wrote the same damning indictment:-

    “Companies will only invest in innovation and Rd&d if they have the certainty that they will be able to reap the rewards of that investment. An essential prerequisite for this is a legal framework for the protection of IPR that is accessible at low cost to European SMEs and academic institutions. That is manifestly not the case.” That's STILL true today, but zero cost is the only way to go.

    For individuals it's unaffordable and unworkable, even when they can do the Rd&d themselves, whereas big business can afford to file dozens of 'spoilers' to bolster their dominant position in the IP 'market'. The purpose of patents was to reward and protect IP in order to bring it into the public domain, but that has been corrupted beyond recognition. Just like Adam, I have valuable IP that's been stuck on the secret shelf for two decades. The system as it stands is the opposite of what is required for economic growth:-

    "95% of patents will never leave the drawing board. Large companies in particular obtain them as a defensive measure to prevent competitors from developing a similar product."

    People at the forefront of new technology, from Microsoft to Sir James Dyson, all say the same thing. i.e. The lawful recognition of an individual's intellectual property should cost NOTHING.

    The CBI report, ‘The Colour of Growth’, placed the section on “intellectual infrastructure” last on its list, when it should be the first item. That's their dumb business judgement of the value of IP.

    This problem is an insurmountable hurdle. It needs a concerted effort from all member states to force the EU to enact radical reform of the law. Otherwise Horizon 2020 is a waste of money.

    And for 'Big Ideas' 20 years is simply not long enough.

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  • It is clear the current Patent system is ridiculously expensive for all but the largest companies.
    Companies can (and do?) buy patents purely to shut them down to protect their own possibly inferior and more expensive product.
    Drawing on all the comments above I suggest two changes to the current patent laws.

    1) All Patent registrations and approvals are funded entirely by a percentage of net profit from the patented items or their developed replacements. Perhaps for a given period.

    2) Any company buying a patent not of their own devising has 1 year to launch the product or prove development and manufacturing is in process. Failure would mean the patent reverts to the original owner.

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  • Should we take the opposite tack, to harvest better winds?

    Let's stand the headline on its head - "Giving 'the push' to bad ideas." But not just the bad R&D projects - after all, that's yet to be 'proven', one way or the other!

    Necessity is the mother of invention. If we focussed on what's bad about existing design, it would identify what's necessary to reach a better solution. The science says that burning any fossil fuel is a bad idea. That's a good start, a sound fundamental principle that no amount of denial can alter.

    Many myths have a grain of truth, even 'zombie' myths such as "Windmills are useless."

    Current offshore designs aren't viable. NB: The Argyll and Atlantic Arrays. Somewhere between the industry's assertion that, "The only way to bring the cost down per unit of energy generated is to make the turbines bigger." - and the idea that "easy curtailment" is a 'success story', their train of logical argument comes off the rails, because compared to the latter the former is immaterial.

    I wrote a broad outline for a marine renewables future strategy five days ago:-

    The TSB is treading water, with no vision to the horizon. Their strategy has no compass to give it direction nor focus to make it cost-effective. There's only ONE necessity they need to address - energy storage. The fundamental principle is - Electricity storage = bad. Before-generator energy storage = good.

    The problem remains. If the ORE Catapult doesn't own the IPR it's impotent. It'll have "a huge role to play in enabling" the incumbent (foreign) industries to maintain their grip on the UK's renewables resources. EU state aid rules prescribe such an outcome. 'Investing' Horizon 2020 money that way will damage our economy. Can we be that dumb?

    This thread is a bit short of comments, on issues affecting the very soul of creative engineers. Is that because these deeply entrenched injustices depress the spirit?

    Lord Drayson wrote (16/10/09) - "Mr. Smart is known to the Department." (BIS) Makes one feel like a criminal. On the previous occasion (2003-05), the Department was known as the DTI.

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  • Adam comments “however this probably has more to do with poor marketing and ‘our’ (not just my business but the UK in general) inability to sell its products". NO we in UK are very bad at "buying" in the B to B markets....Our government is the biggest purchaser and the worst at supporting proven innovation with contracts! So here is my idea.

    It is recognised the UK is rich source of innovative thinking and ideas yet so few reach successful exploitation to become new generation global companies. It should also be recognised that technology innovation can involve many years of R&D. Whilst there are many initiatives that support the early stage of innovation there is a “chasm” to cross once a product has been developed and ready to be commercialised. This paper sets out ideas as how an Innovation Exploitation Hub (“IEH”) could work to help to encourage and support home grown innovations, which often sit outside institutional structures, at this critical stage to create new companies contributing to economic wealth creation.

    Purpose and Objectives

    1. Identify those innovations that are ready for commercial exploitation which by definition must have a proven product with early adopters.

    2. Provide active support by leveraging Government spend to both aid Government efficiency and providing solid base to support expansion.

    3. Contribute to Government becoming the “intelligent customer” as recommended by the Public Administration Select Committee.

    4. Provide access to appropriate government departments to encourage addressing overseas markets.

    5. Government seen to lead by example to encourage the private sector to be more open and receptive to supporting innovation.

    6. Encourage investors that proven added value innovation has a clear support path to both increase chances of success and speed up commercial exploitation.

    7. By reducing barriers and speeding up commercial exploitation encourage indigenous growth with UK headquarters.

    IEH Operational Plan
    This will be a “virtual” operation linking people and organisations digitally. There will be 5 steps and with allocation of various roles to contribute to achieving objectives.

    1. An online questionnaire will be created that will not only ask appropriate questions but be able to score and dynamically reach decisions on eligibility of applicants. It will be very clear that applicant must have proven their innovation and have early adopters attesting to its added value capability. Responses will be created automatically and reports created as required.

    2. The successful applicants will then be allocated to an appropriate person and or organisation with appropriate knowledge to review and make contact to check the innovation and its proof of claimed capability with early adopters.

    3. Those applicants that reach “approved” status will then have their innovation published as a capability that deserves attention. This may involve a “skunk works” type approach to demonstrate relevance in a particular sector.

    4. This knowledge is distributed to Government departments articulated in such a manner to permit intelligent procurement. It will also be distributed to the appropriate Government contractors as an innovation that Government is aware exists and as such should be on their offerings as a capability. The Innovators will be directed to the appropriate contractors. This will all be controlled and reported on digitally giving transparency to progress (or otherwise!)

    5. The successful applicants will be allocated “special” status to accelerate active support from introductions to the various government departments that could “help” with overseas initiatives. Such special status could be extended to tax reliefs.

    The cost to set up an Innovation Exploitation Hub as described would be low yet the rewards by accelerating success of UK based innovation could be very high. It puts into tangible action quickly something that few have addressed with real understanding.

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  • An "IEH" misses the point, as previous initiatives have. Let's be clear on a few fundamentals:-

    The commercialisation 'Valley of Death' is a well recognised problem, but new products often only need design right protection and the favourite strategy of entrepreneurs is 'first to market', which is impossible when you have to do Rdd&d. It's a peculiarly British obsession that start-ups are considered the best way to market. Licensing is the better (sometimes the only) option and patent protection is then almost unavoidable.

    "government efforts to expand the economy by supporting new technology firms would always be limited by the calibre of the people involved" (in running the business)

    "new technology firms" aren't the best way to grow new ideas. They're always vulnerable - ripe for a bargain price buy-out once the product is 'proven' - so you take the risk and do all the hard work and a foreign incumbent grabs the rewards. (or shuts you down - whichever suits them best.) The benefit to the UK economy is zero - taxpayers foot the R&D bills and the profits are off-shored.

    More important is the calibre of the people involved in formulating, implementing and funding "government efforts". Some say the Lambert Review was a "game-changer", but that was in respect of the university 'culture'. "The myth that universities do not respond to business need endures," The fact that business does not respond to societal need is undeniable.

    The 2003 Review's two most salient paragraphs have been ignored:-

    4.5 The rationale for using public funds to support proof of concept activity for licensing IPR is much stronger than for early stage investments in spinouts.

    4.55 Private investment is difficult to attract into proof of concept funding, precisely because the potential of the technology cannot be known before this preliminary work has been done. This lack of finance is a barrier to licensing, since industry needs to see that the concept has been proved.

    Licensing is the Cinderella of British innovation. The prospects for many of our best 'Big Ideas' are zero, if they try to go down the SME start-up route. In successful institutions, such as MIT and the Fraunhofer Gesellschaft, licensing has a very high profile and generates a vital income stream.

    "there are plenty of businesses content with continuing in their own little world. Then you have the serial entrepreneurs who love starting companies."

    SMEs generally make sound business decisions. A business plan that includes a high level of development costs is almost certainly a con. The ROI is a figment of the imagination, and I've lost count of the number of entrepreneurs who've told me - "I would never entertain a new product that relied on patents. The cost of 'protection' puts my business at risk." (and the Chinese will steal it anyway!)

    Serial entrepreneur Sir Terry Matthews has a similar focus on start-ups to that of government and university, but he's made two telling remarks; the business case should plan to generate revenue in a year, and "I don't care who pays for the R&D." which implies - "As long as it's not me!"

    Public/private partnerships, such as the Energy Technologies Institute are part of the problem. They are structured - their remit is - to provide funding to help the demonstration of those products that private companies CHOOSE to develop. They don't do strategic technology planning - they don't design anything - they don't even evaluate new ideas, unless they're backed up by well funded business proposals. And universities only provide such services on a commercial basis.

    The ETI's "Request for Proposals" for floating wind stipulated the wrong specification of turbine and platform. It is simply repeating the failed 'Hywind' demonstrator. GIGO. A complete waste of time and money.

    "The ETI’s public funds are received from the Department for Business, Innovation and Skills through the Technology Strategy Board and the Engineering and Physical Sciences Research Council (EPSRC)." So all that money should be spent on British infrastructure and British industry, not on bolstering our competitors' profits. The CEGB was responsible for the design, construction and funding of the National Grid. There is no other viable way to do it.

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