A golden opportunity to stop selling off the family silver

Member News published by Plextek, under Business Development, Innovation / Incubation, Strategy

By: Alan Cucknell, Head of Ignite Exponential - Plextek's innovation unit. Imagine how different our lives would be today if Michael Faraday had not built the first electrical generator – or if James Watt had not developed the steam engine.

Britain has a proud history of invention – it's often said that more than half of the world's most important inventions have been British. From the first navigable submarine in 1620 and threshing machine in 1786 to the first electromagnet in 1825 and jet engine in 1930, this tiny island has led the way.

However, as anyone in business is only too aware, it's not always the first across the finishing line who has the greatest and longest-lasting impact. The first MP3 player was created in Britain – but who would dispute that it was probably Steve Jobs and Apple that made it ubiquitous? And although television started in the UK, it has been improved over the decades by innovations originating in the US.

Here in the Cambridge tech cluster, we're surrounded by invention and innovation. According to the latest figures from Cambridge Ahead, the cluster is home to over 25,000 companies employing more than 230,000 people and with a total turnover of £46 billion. And, of course, we have the world-renowned University of Cambridge at the heart of our community.

And it's not just Cambridge – the Tech Nation Report 2019 reports that the UK leads Europe in tech scale-up investment and is fourth in the world after the US, China, and India. To date, 35% of Europe and Israel's tech unicorns have been created in the UK, with 16 scaled up in Cambridge alone – including companies such as ARM, CSR, and Autonomy.

But hang on a minute. ARM, CSR, and Autonomy have something else in common – they were all bought by overseas companies:

  • ARM designs the processors that power everything from your iPhone to your fridge. Founded in 1990 as a joint venture between Acorn, Apple, and VLSI Technology, the company was acquired by Japanese company Softbank in 2016 for £24 billion and has recently been in the news again for its sale to Nvidia for £31.2bn.
  • CSR – the former Cambridge Silicon Radio – created custom semiconductors for Bluetooth, Wi-Fi, GPS, and many other applications. The company sold its Bluetooth business and IP to South Korean electronics giant Samsung in 2012 for £198 million – and was eventually acquired by US multinational Qualcomm in 2015 for £2.5 billion.
  • Autonomy was the UK's largest software business, specialising in large-scale data analysis. It was acquired by US-based HP in 2011 for £7.4 billion in a deal that has since attracted a storm of controversy.

So why are we still letting many promising home-grown inventions slip through our fingers and allowing other countries to reap the benefits? A poll by The Engineer magazine last year revealed that 45% of respondents thought a culture of caution on the part of investors was blocking the pathway from academic excellence to commercial success.

In a similar vein, 27.6 percent said entrepreneurs need more support, while 12.1 percent believed the shortcomings lie mostly with universities that struggle to identify and support technology with promise. In contrast, just 5 percent of readers thought the UK has got its house in order and is in a position where innovation is now properly commercialised.

One reader suggested a lack of application of innovations could be to blame – highlighting how South Korea "tied up the patents on most graphene applications before the UK even put pen to paper". The reader went on to say that invention of a method or material in a university is all very well but, all too often, the development into a saleable device is made abroad and the benefit is lost to the UK.

Another survey respondent suggested the UK should change its attitude toward failure if commercialisation of innovation is to flourish. Instead of avoiding failures, we should embrace them as a means to an end, he said. And he raised the possibility that aiming for the perfect solution leads to slower development cycles and loss of competitiveness.

Nevertheless, Cambridge is proving a powerhouse of innovation – with a thriving entrepreneurial ecosystem. Its reputation is such that world-leading companies such as Apple, Amazon, AstraZeneca, Microsoft Research, and Samsun have now set up operations here. It's a golden opportunity to break the cycle of selling off the family silver…

For more information or to discuss anything mentioned in this blog further, please contact Alan at alan.cucknell@igniteexponential.com

For any general enquiries please email hello@igniteexponential.com

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