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      Commercialising ideas in the Arc

      As a nation, we have earned a reputation for often failing to capitalise on our originality and commercialise our ideas.

      17 Feb 2022 Prof Bill David, University of Oxford and Harwell, UKRI-STFC

      The United Kingdom was the first country to fan the flames of the Industrial Revolution and, to this day, we are a nation known for our inventions and innovations. But we have also earned a reputation for often failing to capitalise on our originality and commercialise our ideas.

      For example, in 1935, the Air Ministry department of UK government famously refused to pay £5 to renew the turbojet-engine patent of Frank Whittle, RAF inventor and future Air Commodore. This setback was compounded because public financiers and conventional banks of the time deemed speculative proposals with no immediate value to be untouchable. It was left to the investment partnership O.T. Falk & Partners and steam turbine specialists British Thomson-Houston to fund a first prototype. But it was too late. When the Air Ministry finally expressed interest, the patent for world’s first jet-powered aircraft had been filed in Germany. 

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      How is government supporting innovation? 

      Investment into new ideas is increasing. UK Research and Innovation (UKRI), founded in 2018, invests in cross-disciplinary R&D and has awarded over 4,000 research and innovation applications and fellowships in the period 2020-21, amounting to a commitment of £3.1bn. This funding has been essential to the UK tech start-up and scale-up ecosystem which Tech Nation reports to now value $585bn, more than double the next most valuable ecosystem, Germany, at $291bn.

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      What can we learn from? 

      The issue circles back to the UK’s approach to funding, and the extent to which public expenditure complements and uplifts private investment. Within the UK Innovation Strategy, the Government seeks to commit to a £10m ‘innovation seed fund’ to meet early-stage patient capital requirements, which is a proportionally small sum to catalyse and commercialise emerging ideas. 

      Navigating away from the fallacy of sunk costs is another barrier which public decision-makers must overcome, the shadow of which lingers in the form of historically poor and scattergun financing as was apparent by analogy in the aviation industry. There is much to be learned from academic institutions within the Arc in this respect, particularly Oxford and Cambridge whose total value of spinouts amounts to over £10bn, with a raised-to-value ratio of £3.1bn and £1.3bn respectively. Both ancient universities have vast and accessible investment frameworks offering funding, consultancy and business advice, formally and through campus initiatives. In Cambridge, for example, the Office for Translational Research and its Enterprise initiative offer mentorship and contacts, while at the other end of the Arc, the Oxford Seed Fund, Enterprising Oxford, IDEA and entrepreneurship networks create a loose coalition of support networks. These structures buttress the crucial foundations and growth stages of start-up companies, enabling innovators to develop their research and technical ability into a commercial enterprise.

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      Statistics [*] 

      • UK R&D spending and international comparisons as a percentage of GDP 

      Ranking of university spinouts and value (here); R&D spend per capita (here) 


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