Incubators and Science Parks

A warm and cuddly environment for companies sounds wonderful. A way to encourage the innovative economy that a high cost country such as the UK needs to sustain. We should see Incubators as the Nursery schools for companies and Science Parks as the Secondary schools. Although rather less emphasis on testing and CRB checks!

Physical Infrastructure is the description on the Innovation Map, a bit dry and a limited shorthand necessary on such an overview. Looking at real life the offering from successful Incubators and Science Parks is a lot more sophisticated, as they keep telling me, so apologies to friends in the incubator and science park movements if I simplify.

These facilities represent the proving ground for companies and the label is shorthand for all of the opportunities and support they offer for developing and expanding commercial entities. i.e. not just the physical aspect but the peer group possibilities, business advice, administrative and support facilities like telephones, guidance and connections to external support such as lawyers, IP professional, property specialists and government support e.g. for export through UKTI and manufacturing industry support

An exploration of best practice and a few favourite examples will provide a flavour of a very successful part of the UK approach to developing innovate, fast growing companies.

My perfect Incubator

A not for profit enterprise in partnership with, and supported by, local and regional public sector, umbilically linked to local Universities and with key links to industry.

Providing the primary needs of administration, web support, laboratory space with; infrastructure and expertise to help with business development. The latter through experienced people capable of nurturing small businesses, either on site or available on call.

Peer mentoring, experienced entrepreneurs and SME anchor tenants; recognising the gold mine that is serial entrepreneurs.

A good incubator should also have a sector focus although this will often include a variety of technology, software and design creatives all focussed in a particular direction.

Direct access to specialist University and public sector or industry facilities may also be critical in areas such as biosciences and materials/chemicals.

My perfect Science Park

These offer a more robust and wider support for developing substantial companies rather than proto companies. The teenagers coming from the feeder incubators.

The ideal Science Park provides focused resources to help, not prop up, developing businesses. The physical facilities, availability of flexible space and renting terms will form the bedrock of the offer. Then we see a range of other possibilities such as :-

Opportunities for funding networking

IP professional access

Legal access

Trade advice and support to overseas markets through UKTI. This includes the local representation (International Trade Advisor), National sector teams and their sector and market specialists and the overseas UKTI teams in consulates and

Visibility to large inward investors

access to large companies looking for suppliers and Open Innovation Partners

Local Authority regional body visibility and connectedness e.g. for planning

International visibility

Privileged links to universities and research centres,and access to bespoke facilities and leading-edge equipment with dedicated support from specialised on-site business advisers.

Strategic Approach

Both Incubators and Science Parks need clear strategies and rules to support companies not smother them or prop up the failures. The success rate of 80% + is seen as a strength but the question of what to do with the failures and the ones who grow out of their space is critical. A clear exit strategy is necessary; like a nestling bird you can't have a dying company or an over rumbustious one forever in the same space.

A collection of growing companies provides a greater range of players for coordinated efforts, such as seed camps where new business ideas are pitched to a panel of experts. The winners can then receive a plethora of tools including financing for equity, temporary office space and infrastructure as well as key mentoring and coaching. Those that show promise can be given subsequent funding to help them grow.

Examples

An example of a successful Incubator is the Millbrook Technology Campus in Southampton supported by the University and the collection of Universities, Set-squared.

For Science Parks a good example is St Johns Innovation Centre set up by St John's College in Cambridge and originally led by Walter Herriott. An ideal example with a range of small start ups, network organisations and large company presence. A case study demonstrating that leadership is everything to a successful Incubator and Science Park.

Finally there is one of the two National Science & Innovation Park, Daresbury in the North West. Giving access to major Research Council dedicated expertise through STFC, linked with regionally supported accommodation and key links with major local Universities, including world leaders such as Manchester University. The offer to emerging and growing companies and large companies offshoots is a potent hothouse mix.

Representative bodies

UKBI and UKSPA as the key national bodies represent members and promote their approaches and ideas. They provide local and central governments, and agencies with the realities of life for this key part of the innovation economy. Along with examples of successful companies including start ups and micro divisions of larger companies.

Influencing Government is always a difficult balance as I know from personal experience. A hectoring or pushy approach to government officials or Ministers often leads to resistance, Best practice is evidence and supportive arguments. Changing policy direction is like the proverbial oil tanker and shouting shrilly about the lack of an Emperors clothes might not lead to a Russian style beating but might be just ignored.

UK Success

The successes of the UK approaches are seen in the international reach. In trips to India, Central Europe and South America I've seen how much UK experience is valued and how successful our current setup has become. Expertise sharing on an international scale not only provides income for commercial consultancy companies but also visibility of best practice in the UK links for collaboration and easy access for overseas companies looking to expand into the UK

The Incubators and Science Parks are the critical node in the Innovation ecosystem and deserve full support and additional engagement from central government both directly and in terms of policy development.

Finance, sources and thoughts on reality

Finance needed or the avoidance of becoming a funding junky.

Many people talk about finance and the Innovation Map provides an outline of finance providers . Below is also a simple aide mémoire of funding sources, and sources of resource which is what money provides.

Own resources

Incubator support

friends and relatives

bank loans

Angel funding

Lottery winners, you can hope!

European funding eh Regional funds

local/regional funding

central government funding and loan guarantee schemes

Venture capital

stock market both AIM and the main stock exchange

Private equity

pension funds

charities

Large company venture funds e.g. Microsoft

large company co funding e.g. GSK

partnering for external resources e.g. swaps for equity.

All quite straightforward and in the UK finance is much more accessible than in virtually any other country other than the US. There are always a number of issues commonly expressed:-

a mid range funding gap

the non venturesome approach of Venture capital

the excessive caution of pension funds

undue focus on local opportunities e.g. London but also other centres such as Leeds, Edinburgh

But, and it is a large but, although finance is often seen as a major issue in early stage funding the main need is a strong business plan and focused application of resources; then there is likely to be a substantial chance of support. Importantly there needs to be a focus on creating a business with real prospects of generating money. I've come across too many companies whose business model seems to be where is the next grant coming from or the market will come to me because I believe in my idea or invention.

Which bring me back to my 15 years of insolvency experience where you can see the common failures of lack of attention to detail and control of money flow are just that, common.

The world doesn't work like that and the critical aspect is always where is the market, who will pay for it and how do you persuade customers that they want your stuff. There are lots of selling tricks, and as a former bed salesman I know several, but the key line is the customer must want to buy.

So before you look for finance find your business and as a side line the major role of entrepreneurial training must start and end with those basic messages.

Christmas Blog - Government for Innovation

Government departments provide the backdrop to a national approach on innovation. The interaction of programmes, and policy approaches give a landscape within which players can leverage their capabilities, work with industry and commercial interests and deliver innovations to markets.

As the financiers of the public research base, regulators and supporters of industry and cheer leaders of UK base industry they play a positive, and negative role. Within the UK we expect government approaches to support

industry in a impartial fashion, and the advantage that offers to building small companies and a competitive economy is critical to UK success.

We also see how various departments with a focus on regulation and with non-commercial policy objectives can hamper the development of industry in a haphazard and uncoordinated way. The realisation within government that regulation and diktat may be counter productive and that a partnership approach within industry can deliver policy goals more easily. An example is the Waste Electric approach where working with industry has provided a more effective delivery of goals to recycle and reduce hazardous waste.

The subtleties of government effect on the commercial environment may be missed in Government circles but the existence of industry government relations teams and lobbying efforts demonstrates that large companies and industries bodies recognise the importance of the public sector.

Other countries with inefficient or corrupt government demonstrate the importance of incorruptible, evidence based policy and regulation in creating a stable and supportive environment for commercial interests. The correlation between the corruption indices and the creation of small companies as a major driver of innovation is instructive.

The final point is that government has to be seen as more than a provider of funding and more a provider of a supportive environment for the development of successful growth focussed innovative companies.

number 4 - Standards

Taken for granted is standards both physical, process and regulatory. However without an approach that sets out the appropriate physical and process requirements the cost of business is higher, and the barriers to trade even more daunting.

An example from the 19th century is of the individual area times where one town could be 10 or 20 minutes different to a neighbour. With the onset of trains timetabling this became a nightmare and provided another impetus for standardising clocks around Greenwich Mean time. As technology progresses the opportunities and needs meant that time accuracy became more important leading to the setting of the second based on an atomic clock based n the vibrations of a caesium atom from work done at the National Physical laboratory in Teddington. Ever more accurate time keeping is at the heart of current satellite global positioning and mobile networks.

Other standards in various manufacturing and service industry e.g. through the British Standards Institute not only provide a stable and clear setting for business but a route for global standards and a setting for new developments.

An example in technology settings for wireless led by the group forming Cambridge Silicon Radio provided them with the vast majority of the market in the provision of Bluetooth capability to hardware users.

Looking at the organisations creating, maintaining and developing standards in the UK from those mentioned above and others, including the Intellectual Property office, Health & Safety Weights and Measures and the Laboratory of the Government Chemist, we see UK organisations providing world renowned expertise that allow UK based companies to be part of the standards process providing a kitemark of capability that helps trade for British companies and overseas companies locating in the UK.

A welcome initiative recently has been the efforts by the various standards bodies to present their services together as a UK offering offering rather than sub-optimal individual marketing. Another place where partnering together raises the profile and reach of UK PLC.

Finally it is worth mentioning the philosophy of organisations which is worth a much larger piece, maybe later. Every one of these major organisations develops and grows, or decays, dependent on leadership of both the political, management and imagination. An institute in this standards space clearly going places is one holding copies of all patents, and a repository of collected written wisdom, the British Library. Their recent approaches reaching out to a much wider audience and playing a strong part in business development as well as a culture deserves to be better publicised. If the current head of the Library moves on to a commercial company I'll buy shares!

Discussion Forums

This is the simplest part of the UK innovation approach but one of the more subtle, and important.

Without an open discussion between different organisations there is a tendency to silo thinking; focusing on individual sector priorities without the recognition of other possibilities. Brazil is a good example with strong Universities, strong innovation policy drives and approaches within government, and large successful companies, but they all focus on their own directions and fail to optimise joint possibilities.

Within the UK places like the R&D Society and NESTA have provided platforms for people networking in policy and evidence for policy decisions. A network of networks that can provide a cross organisationally approach to optimise innovation approaches.

A note of caution is to overcome the tendency of key people in sectors such as Universities, Royal Societies, or standards bodies to believe their sector is the most important and that their expertise has direct read across to all other sectors; but as a generalist Ex Civil Servant I would say that!

Christmas Blog - networks

A short piece for simple boxing day digestion.

Looking at the complexity and complexity of modern developments we can see how may strands need to be brought together to deliver individual innovation, especially in the technology space. However for current approaches utilising cross cutting fields from finance through design to business practice and standards there needs to be forums for the development of trust, the exchange of ideas and the process of forming collaborations. 

In the UK we see local networks through Chambers of Commerce and civic approaches. One of the most interesting is the Science City concept pioneered in York bringing together industry, civic authorities and Universities to develop coherent approaches than drive networks and deliver coordination and innovation.

On a national scale there is the development of the current 15 Knowledge Transfer Networks (KTN). Emerging from the previous 24 KTNs and the former Faraday partnerships. These provide a unique and admired model than links together researchers industry and interested parties all interested in specific areas, two examples are the Electronic Sensors and Photonics KTN and the Creative Industry KTN. 

An exemplar of KTN activities was the recent Technology World event where a majority of KTNs brought their membership into a forum that showcased UK expertise to a global audience for commercial outcomes. A more common event was the Photonics event in London in December bringing large and small industry and researchers into a two day event to explore where this set of emerging technologies is going and where industry interests are developing. With examples of plastic photovoltaics and the reverse in low energy lighting it is possible to see how the dynamic and strong environment of the UK offers real possibilities in emerging technologies and industries. Indeed this area offers spectacular possibilities in art and other creative industries. The talking posters of Blade Runner are closer than you think!

On a larger European and global scale we can see other networks developing, including within individual multinational companies. Indeed the realities of the Open Innovation movement reaching out from inside secretive R&D centres are critically dependent on good networks.

Within the UK Innovation approach we see an ideal mix of sufficient scale to deliver many possibilities, strength to deliver global interest and optimal community sizes to allow easy networking. A contrast to smaller countries such as Norway or large countries such as the US. The message for interested people is to tie yourselves into these networks e.g. the e-Connect site of the TSB, and get networking.

First christmas blog - the funders

Over Christmas I'm exploring the various parts of the UK Innovation landscape. The start point is the work mapping innovation organisations that provide the underpinning for an economy based around innovations i.e. new products and services to market. Pausing only to recognise that new ideas and inventions aren't the same as innovation we set off to explore the twelve Innovation Map themes developed originally.

Lets start with funding agencies that support everything from blue skies to industrially specific research. A short, but not exclusive, list includes:-

Research Councils, All seven of them!

Charities e.g. Wellcome Trust, Cancer Research, AIDs Research, RSPCA, Sports bodies

Technology strategy board

Government departments DEFRA, DFID, MOD, DoT, DCLG, DFES and DTI (oops I mean BIS)

Personal resources of individual and groups eg Dyson

Royal Society

company specific programmes

It is worth noting that a substantial amount of funding is from industry, on some measures over 40% of which about a third comes from foreign owned companies, i.e. inward investors.

The most interesting part of monies for research is the trend towards joint funding and therefore a commonality of objectives. Examples include Wellcome and Research Council funding of Diamond, joint approaches by Research Councils and the TSB and partnerships between Research Councils, industry and charities in medical application.

Looking into the future the UK Centre for Medical Research and Innovation(UKCMRI) with resources from the Medical Research Council, Wellcome and the government headed up by Paul Nurse is pregnant with possibilities. If they could only ensure that they include an incubator and a small Science Park. With a close tie to that doyen of public bodies the British Library next door and the leverage from the greatest University city of the world (London) we could see a Technology Innovation Centre development, with limited TSB funding.

Underpinning this is the recognition of the UK status as a country with a well developed and coordinated funding set up for innovation. We often look for flaws and improvements needed but the bottom line is that the UK approach pulls in overseas research and investment because we are one of the best innovation nations in the world.

What does the research base do for the UK, or an exploration of the impact agenda

The key point here is Knowledge Exchange for innovation, where innovation is the delivery of new products and services to market. We are therefore looking for mechanisms to develop commercial outcomes in business, new and existing. In my view the best engagement with industry is a strategic partnership which will often be long term and involve continuing multiple engagements.

In order to understand engagement it is sensible to consider the research base offer alongside the main interests of a commercial partner. We can consider how Universities and other public sector research establishments (PSRE) support industry in four main strands, noting that the first one is by far the most important.

1/ The first and most important is people and the development of skills. PhDs , masters , graduates and CPD. Not to forget technicians, short term training, senior academics to industry, and vice versa, and joint appointments with people in both camps. Then we can look at wider and more direct skills developed in the Research base including the development of entrepreneurship awareness and training provide the underpinning of a successful industry base whether that be in high technology, design, creativity, or cross disciplinary areas.

2/ networks linking academics and industry people in trusted networks to share information and develop joint approaches and ideas. Simple but critical. These can be on an informal basis involving regional, national and international commercial interests. An example is the developing Local Economic Partnerships in England formal networks might include the highly effective Knowledge Transfer Networks (KTN) driven by the Technology Strategy Board.

3/ IP has to be created and used whilst recognising that use might take place over many years and range from highly profitable industry applicable data, socially useful research, and blue skies research.

IP exploitation can take place by the support of spin outs thorough guidance, physical premises, funding and links to outside organisations. Next is the exploitation of Intellectual property by licensing either of underlying IP or by joint ventures or access to new developments and ideas. Another approach, which has been the default academic approach, is to release the underlying ideas to ensure take up and spread of IP i.e. without a direct financial claim upon IP. This model can use IP as a method to spread knowledge and to attract strategic industry involvement. The latest example is Graphene released to the world by two researchers in Manchester (Professors Geim & Novoselov http://www.manchester.ac.uk/aboutus/news/display/?id=6192).

Taking account of other possibilities when looking at IP we could consider that a publicly funded research base is there to provide the underpinning IP for industrial development, not to become a weak equivalent of a VC firm. The amounts of money realised by IP exploitation are limited even in the most commercially focussed Universities such as MIT and Imperial.

4/ Contract work either as one-off offers or on a continuing basis. This needs to be carefully managed to ensure that the researchers and departments don't become a poor equivalent of a commercial entity but offer their unique qualities alongside business. We could also include here the use of University expertise as voices of authority through the media and to government.

Having dealt with these four elements we want to consider the taxpayer questions, why bother. This aspect is at the forefront of many people in the UK and elsewhere in the world, and we need to accept that there is no right answer. We can project forward but a real picture will only emerge with historical analysis. The current agenda of ensuring that research has impact is a critical aspect, that also needs to accept that impact may be tangential or long term. The current Research Excellence Framework being developed to assess the impact of Universities is the latest in many attempts, and it looks fairly promising.

Most people looking into the UK see the curiosity driven cross disciplinary approach is a major strength of the UK Research base and it provides a powerful attractant to top class brains from across the world who want their ideas and interests to reach a wide audience, so the impact assessment should be a key attractant.

In persuading people and organisations to come to the UK the possibility of successful exploitation and delivering impact should be trumpeted. The proof of UK success is the flows of inward investment. Especially over the last few years the successes in persuading large corporates that the UK is the place to develop their R&D.

In my view best value comes from a wider consideration of how to work with industry. This might be via strategic partnerships with industry, providing the underpinning for new businesses, supporting local small and medium companies or working with internationally mobile companies. The latter being a key opportunity to bring new ideas, capital and industry into an area.

The Research/higher education/PSRE investment by the UK, the culture of openness, and the general appreciation of the possibilities in the commercial world provide a key resource, to deliver skilled resourceful economically active populous, and successful commercial industry.

Having set out a view of what the research base provides how could this work more effectively? Watch this space!

Innovation clusters

An Innovation cluster has various characteristics, including an expanding number of companies at the leading edge of a sector. This can vary from technology eg around medical technologies, to virtual products such as design or art.
Everyone has heard of Silicon Valley, but the UK examples include Stoke in the C18 (ceramics) Glasgow in the C19 (engineering) and Cambridge in the C20 (life sciences).
The complete characteristics of a good cluster are often missed,and while many commentators reference components of an environment, we can look wider. There is often a focus on IP protected knowledge and newness that neglects the real asset - people and loses the historical strengths that underpin a cluster. Silicon Valley is not new look at HP set up in the 1920's!
Any innovation cluster generates or pulls in people and puts them into a particular innovation milieu. History and the long-term advantages of an area underpin current successes.
As a proponent of an innovation ecosystem there are a range of capabilities needed. Clearly you need a supportive environment of resources both virtual and real. Money, space, stable regulatory environment, absence of government blocking, cultural support and real expertise.
The developments that led to the C18 industrial revolution in the UK showcase the contrast, between the blocking effect of industry cluster eg guilds, to the open and competitive environment of real innovation clusters.
In my view you need to consider places that provide all 12 parts of the thematic map I developed a few years ago. Greenfield development or regeneration are really hard if you are starting from scratch and without all of those elements in different degrees you are whistling in the wind.
Which is why I'm not scared by BRICs and CIVETs - bring on the competition, and potential collaboration of course.

Open Innovation - a naive primer

Reiterating, Innovation is the delivery of successful products or services to market. In my view Innovation falls into four various distinct classes incremental,  developmental, new approaches, and disruptive and the most cost effective way to deliver is often risk sharing.

Innovation appears in large, small or brand new companies. However it is proven that most innovations comes from small companies with limited resources rather than larger cash rich companies. So how do we deal with these problems?
The most successful innovative companies are often ones who are able to work with outside bodies to develop ideas, provide manufacturing, design or marketing capability. The idea of Open Innovation  is to encapsulate this need to work across organisations with a clear approach to ensure that all parties understand what they are bringing to the party, what is their risk and reward. 

Open innovation is a way of tapping into other's efforts through partnering and is more difficult that doing it all yourself. However in partnership you can use less money and more importantly time getting to market. An example - enterprise with a product based around ICT design for the energy market - budgeted approx 1 million for technology but in partnership with a specialist new company their costs reduced by 90%. Who loses? Only the people who try to keep everything in house.

Worth considering the forthcoming Relationship Management standard BS11000, launching in December. Providing a systematic approach to understanding your own interests, finding a partner and getting results.

Final point if it doesn't make money it fails, so risks shared are more likely to support more innovation, and eventually successful companies.

Purpose and success

October 2010 offers a new start to some of the Civil Service, including me. Just before the silver watch, but who's counting, so now a chance to really push the importance of Innovation to the UK and to build its reputation and output.

 Lets start with defining  innovation as :- the delivery of new products and services to market; not to be confused with invention which is the production of new ideas and prototypes.

My stall has always been that the UK is good, really good at invention and innovation, so we need to celebrate success, whinge a little less and build on our strengths.

The first part is to understand the landscape under 12 key themes of funders, networks, government, infrastructure (physical and virtual), technology transfer organisations, business support, discussion fora, standards bodies, finance, research, learned societies, and industry c.f. UKTI Innovation Map

A good place to start is where you can see all of these people in one place and the Innovate 2010 event on Tuesday 12th October was one of the best. Created by the Technology Strategy Board and centred around their support mechanisms of Knowledge Transfer Networks, Innovation platforms, technology calls, Knowledge Transfer Programmes and others together with industry exhibitors and other innovation organisations. All under one roof and pursuing the possibilities inherent in the UK system.

And a last thought - the UK system is flexible, multifaceted, subtle but above all successful.