Light years ahead of the competition

David Payne, chairman of £37m spin-off Southampton Photonics, sees a bright future for UK optical technology

Southampton Photonics, a spin-off from the Optoelectronics Res-earch Centre at Southampton University, recently secured £37m in venture capital funding, making it the largest university spin-off in the UK. The chairman and founder of the company, professor David Payne (above), led the research team that in 1986 invented the optical amplifier, the technology behind the growth of the internet. Payne, who is also director of the ORC, was jointly awarded the Benjamin Franklin Medal in the US in 1998 for his work in developing the amplifier.

How were you able to secure £37m in funding?

It helps if you’ve been in the field for 33 years, as we have at Southampton. Having a track record like ours, and some of the top people in the field, has been immensely helpful. But it’s also the quality of the management, who are very experienced in working in start-up organisations in the US. They convinced our investors that we needed this amount of backing if we are to become a global player.

What is so special about the technology you have developed?

Most start-ups have one idea – we have dozens. We’ve got extraordinarily precise filters which allow us to separate the channels in dense wavelength division multiplexing. We have a transmitter which generates multiple wavelength channels with exceptional purity. And we have an advanced version of the optical amplifier, generating higher power and integrating multiple amplifiers in one package.

Do you agree that photonics developers and manufacturers have become so popular with investors that they are the new dot.coms of the stock market?

I would certainly not encourage a comparison with dot.coms. I think the press is mistaken in referring to them as technology companies – they are service companies. If you look at what’s happening on the stock exchange, you find that dot.coms, because they only provide services and not products, go up and down all over the place. True technology companies are much more stable. They are selling things that people need.

Lord Sainsbury has said the UK leads Europe in optical communications. Why is this?

We invented the technology – which always helps – and also developed it until the early 1970s when the Americans got involved. UK governments and the Engineering and Physical Sciences Research Council have funded this area consistently and strongly.

Why are universities so keen to spin-off their research into start-up companies?

Governments all over the world fund universities to do research because they want to promote manufacturing industry and wealth creation.

Technology transfer requires a recipient. In the UK, although there are universities that are happy to transfer technology, there isn’t always a company to take it on. The photonics industry is the fastest growing the world has ever seen, and there is an immense shortage of qualified people to work in it.

The US industry is the fastest growing of all, and they are raiding the UK. Why are people keen to leave? They are joining start-ups with very attractive salaries and share-option schemes in the US. If we want to stop this, then we need to develop these alternatives within the UK.