The UK’s undoubted ability in the arenas of innovation and start-ups needs harnessing to create a set of world-beating businesses writes Dr Hayaatun Sillem, deputy chief executive of the Royal Academy of Engineering
Setting out the case for business support in its recent green paper Building Our Industrial Strategy, the government hailed the UK as a “success story for start-ups”. Some 350,000 new enterprises were registered in the UK in 2014, it explained, going on to acknowledge that we need to marry start-up culture with the right support and investment to raise productivity.
Some of the UK’s most innovative new companies have been built around technology developed in our universities, and it is encouraging to see government directing attention towards supporting these businesses through their initial stages. By exploring the impact of different university commercialisation approaches, including the varying size of equity stakes taken, we hope that the government can facilitate the sharing of valuable ‘best practice’.
The UK scores highly in innovation league tables – it came third in the 2016 Global Innovation Index – and one of the factors underpinning this success is undoubtedly the strength of its universities. In recent years, substantial progress has been made in university technology-transfer activities and some UK universities, Cambridge being perhaps the most notable example, are looked to as exemplars of global best practice. But technology transfer continues to be a topic of interest and debate, as illustrated by the current House of Commons Science and Technology Committee inquiry.
The Royal Academy of Engineering’s experience of supporting academic entrepreneurs suggests considerable variation in the approaches adopted by UK universities, not all of which can be explained by the different levels of support they have provided. We have also found that academic entrepreneurs can be disadvantaged in negotiations on IP and equity due to their lack of prior experience and knowledge of the spinning-out process. Bridging this information gap would help to make the process fairer and more transparent. We also believe that the maturing of technology-transfer support in the UK provides an opportunity to create a more vibrant market in this arena. As is already the case in some universities, academic entrepreneurs who feel that they can access the support they need beyond their university’s technology-transfer office should be able to do so, and the equity stake then taken by the university should reflect this.
While appropriate funding is essential to get a business off the ground, other factors may determine its longer-term viability. The advice of a seasoned entrepreneur in navigating business growth can be invaluable, as can access to strong networks. The Royal Academy set up its Enterprise Hub to help provide this missing link. Now in its fourth year, the Hub offers financial support to entrepreneurial engineers, as well as intensive business training and invitations to exclusive networking events with corporates and investors. It also – uniquely – draws on the support of the nation’s leading engineers, who serve as mentors for Hub entrepreneurs. These experienced business leaders, most of whom are Academy Fellows, offer expert advice at the time it is most needed. Their support is provided pro bono and neither the academy nor the mentors take any equity.
As the government’s green paper says, support and investment are both vital, and this wider package of mentoring, training and networking can be the key to making an entrepreneur investment-ready. Since 2013 the Hub has supported over 40 start-up companies which, between them, have created over 150 jobs and raised over £30m in follow-on funding. It also provides support to help established SMEs navigate the scale-up process.
The Royal Academy has been busy over the last year developing a physical home for the Enterprise Hub. The Taylor Centre opens this month and will provide facilities for enterprising engineers and their stakeholders to work on commercialising their innovations and building successful businesses. It is appropriately named after the entrepreneur Dr John Taylor OBE FREng, who invented the thermostatic control used in cordless kettles.
The engineers responsible for a series of innovations with similarly global impact have just been announced as the winners of the 2017 Queen Elizabeth Prize for Engineering. Four engineers who pioneered three generations of innovation in digital image sensors share this year’s £1m prize. Michael Tompsett from the UK, Nobukazu Teranishi from Japan, and Eric Fossum and George Smith from the US made seminal contributions to capturing and distributing images.
The engineering profession will be coming together under the Engineering the Future initiative – a grouping of the 38 organisations representing UK professional engineering – to prepare a profession-wide response to the government’s green paper on industrial strategy. How we can harness the UK’s engineering strengths to ensure that, as well as creating innovative technologies, spin-outs and start-ups, we grow more world-beating businesses and industries of the future, will be at the heart of that response.
Dr Hayaatun Sillem is deputy chief executive of the Royal Academy of Engineering