About this programme by Peter Day
Innovation is easy to praise and hard to do. Britain is very good indeed at having ideas.
We have huge success winning Nobel prizes and writing university research papers, producing far more theoretical stuff per head than almost any other nation.
Then comes the difficulty. The figures show that the UK has inordinate trouble trying to turn ideas into viable businesses. Something fails in the journey from the lab to the corporate HQ.
We have lost the art or craft of being an innovation nation.
For example everyone knows that Cambridge-–city and university—is electric with ideas. Spend an evening with the aspiring entrepreneurs in and around the university and you will reel home relishing the excitement of it all. And, yes, Cambridge is the centre of Silicon Fen, a hotbed of start-ups—13-hundred of them in the past 25 years. It’s wonderful.
But it is also small scale. British start-ups find it fairly easy to grow to £100-million in turnover. But even so they may be employing only 50 or 100 people..these are scalable businesses which don’t need production lines or manufacturing to get to that size with their ideas and their software.
But then comes the exhaustion. Eventually, the great ideas, the intellectual property, are sold off to a predator, often from overseas. The founders and backers get rich, and cycle round Cambridge interfering in things.
But where are the Googles and the Hewlett-Packards and the IBMs of Britain? British entrepreneurs seem to lack the spark of genius to scale up their business to become really big. And British planning regulations make it unlikely that it would ever be allowed anywhere near Cambridge.
British financiers may also be underpowered; they seem to want easy exits, rather than keep on backing a company with the promise of long-term growth within it.
British university entrepreneurs tend to sell out after five or ten years, and then have a nice life trying to spot other start ups they can act as mentors for.
This keeps innovation bubbling along at our universities and other clusters in an eye-catching way. It produces great stories. But it does little to transform the British economy from a post-industrial one into a high technology powerhouse.
This week’s programme hears from people who argue that this can happen here: that innovation is a very important way out of the lengthening shadows of the current nasty recession.
It is a bold and impressive argument; and counterintuitive for many big companies who instinctively lower their risk profile as soon as the gales of recession howl.
But the innovators are out there. The other morning I dropped in on one of the London meetings of something called OpenCoffee Club, founded by a returnee London serial entrepreneur called Saul Klein two years ago. It’s a meeting place for people who love start-ups, and it is now in more than 80 different cities worldwide.
It’s supposed to be less opportunistic than First Tuesday used to be in the era of the dot-com bubble. Coffee Club attenders are there for mutual support and story telling, rather than on the hunt for finance, though of course that may materialise.
The atmosphere of the one I went to is intense and noisy, and the Clubbers are fluent and full of their ideas, enormously plausible. They genuinely do not seem daunted by the idea of starting up a business in the middle of a global recession.
Are they simply foolish? I don’t think so.
Angel investment groups tell me that would-be investors are lining up to join the angel clubs. With the stock market still too risky and interest rates uninteresting, would-be angels feel that they may as well take a punt on an investment they can stare in the eyes, argue with, and maybe even contribute help and advice to, as well as financial backing.
This sort of enthusiasm is heartening, especially when set against the daily tattoo of grim news from other parts of the world of business.
But whether this rush of innovation really means that Britain is finally getting its entrepreneurial act together, I have absolutely no idea.
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