What's wrong with the way the UK government funds startup R&D? This is the question my colleague Sam Dumitriu tackles in his latest substack, and if the experience of a business trying to disrupt clinical trials is anything to go by, the answer is “quite a lot”.
I’ll focus on two problems, but it's worth reading his article in full. First, the business in question, Lindus Health, was marked down because it failed to consider job losses due to automation. And to make matters worse, InnovateUK noted that it failed to “consider the possible negative effect of loss of jobs … when companies choose [them] over their previous contractor to run trials.”
As Sam writes: “This strikes me as exactly the wrong way to think about job creation at a time when many businesses are complaining about worker shortages. Suppose Henry Ford was applying for a grant and having listed all the potential economic opportunities cars could create, was marked down for failing to consider job losses in the horse-drawn carriage sector.”
Strange criteria apart, however, there are deeper problems at play. Co-founder Meri Beckwith told Sam that they hired a professional to prepare their application, “as there seem to be loads of unwritten rules/expectations, and [we] assumed an agency would know what these were.” But “a lot of their feedback was 'more detail needed on x' which seems harsh given we stuck to just within the word limits for each answer. Between the word limits and given that this is inherently speculative, we are not sure how anyone could provide more detail.”
This is a major source of waste. As Sam explains, the money wasted on unsuccessful applications can be staggering. A study published in Nature found that €41 million in salaries goes into writing up applications for a call with a total value of €226 million.
The government and research agencies are well aware of the problem. It’s the logic behind the Advanced Research and Invention Agency (ARIA). But as we discussed in The Way of the Future we can go beyond the DARPA model, adopting a range of funding mechanisms to accelerate the pace of innovation.
What we need is experimentation – whether that’s experimenting with a lottery model that cuts bureaucracy and biases like the Swiss National Science Foundation (SNSF), or longer-term grants in the form of a ‘Horizon Research Fellowship’ along the lines of the Howard Hughes Medical Institute (HHMI) or BP’s Venture Research Unit.
Part of the Progress For those interested in US policy, friends of The Entrepreneurs Network Caleb Watney and Alec Stapp have launched a new think tank: Institute for Progress.
Expect Beta The Government’s Help to Grow Digital scheme launched this week offering funding for SMEs to purchase software to boost their productivity. I appreciate that it’s in beta, but the website is clunky and error prone.
That’s not the only thing we think is wrong. Small businesses with fewer than five employees are ineligible for the scheme, and the software available is limited to a few narrow categories. Even within the narrow categories there are currently very few products to pick between.
Our Next Events Female Founders Forum: North West Regional Roundtable
Thursday, 27 January 2022
12:30pm to 2:00pm Find out more
In 2022 we will be starting a series of regional roundtables to discuss the extra barriers facing female founders. Building on the issues highlighted in our latest Female Founders Forum report Inspiring Innovation, we will be bringing together policy makers and the UK's leading female founders to discuss ways to close the funding gap, increase the number of women in STEM, give women access to better role models and mentors, and close the chore gap between men and women.
APPG for Entrepreneurship: Entrepreneurship Education
Tuesday, 8 February 2022
2pm to 3pm Find out more
Complimentary
There is a major untapped opportunity to equip young people with the skills to start, run, and grow a business. This virtual roundtable will help us form the questions for the APPG’s Call for Evidence, setting the direction for the Briefing Paper and our efforts to influence policy.
More than Money – How to Use Non-Financial Reporting to tell your Company's Story
Thursday, 24 February 2022
10am to 11am Find out more
Complimentary
People want to work for, buy from, and invest in businesses they believe in. In this roundtable we will discuss which non-financial reporting models and the value of external certification.
Profitnet Taster: Free Innovation Workshop for Growing Businesses
Thursday, 3 February, 2022
9:30am to 11:00am
Complimentary Sign up
This taster event is a free interactive event to help you determine if the BRITE Profitnet programme is right for you and we will provide you with a taste of what you will experience on the programme. This event is in-person but may change to virtual depending on COVID guidelines and status.
PROGRAMME
Next Generation
Apply by 31 January, 2022
Complimentary Sign up
18-24 year olds in London can apply to a StartUp Bootcamp to access free business training and grants up to £10,000.
Preparing for Manufacture 3-day workshop
8 to 10 February, 2022
Complimentary Sign up
Calling all electronic and IoT hardware startups preparing for production. This 3-day online workshop will help you to validate your design, find suppliers and get your product made.
The Alpha Accelerator.
15 March to 3 June, 2022 Applications open
This 12-week in-house accelerator is designed for pre-seed businesses for founders from under-represented backgrounds. Themed around Urban Futures, the 2022 programme is open to innovators in: Smart Cities, the Built Environment, Mobility and Transport, and Energy and Emissions.
