By Paola Bassanese
The event started with an animated film on innovation in Britain. The key points were:
- In 2010 there were 4.12 million start ups in the UK
- Securing funding is a challenge and lack of capital is a barrier for new companies. Solutions like crowdfunding are becoming more popular (eg Croudcube.com) and venture capital is another alternative. Israel attracts more venture capital per person and has a high percentage of start ups. Shell Springboard has invested £2.25 million in start ups.
Each speaker in the discussion panel was given a chance to talk about their background and experience.
Matthew Taylor, Chair
Matthew Taylor is CEO of the RSA. Growth is returning to British economy and SMEs play an important role in it.
Trevor Baylis OBE
Inventor Trevor Baylis reminded the audience to protect their ideas as a good idea can make money.
Former Dragon’s Den investor Dough Richard spoke about “failing your way to success”, having sold 6 businesses and lost millions twice. His School for Start ups helped 30,000 businesses to empower people take control of their destiny.
Alex Schey won the Shell Springboard 2013 competition with this innovative concept of retrofitting buses to reduce carbon emissions by 40% (“teaching an old dog a new trick”).
He encouraged young generations to start a business, and wants to inspire children to take up science and technology which are vital skills for the growth of our economy.
Rohan Silva created the Government’s Tech City initiative and was senior policy advisor to the Prime Minister. Technically unemployed as he quit No 10 ten days ago, Rohan has started a technology company in London (and was quick to remark that he did not start a political consultancy or lobby as was expected). He believes in “eating your own dog food”: you are supposed to use your own software.
The debate then started with questions from Matthew to the panel and the audience.
1 What was your biggest success factor and darkest hour?
2 What should the Government do for businesses?
3 What can big businesses do to help?
Trevor: fall in love with yourself! He followed his heart, and wanted to focus on quality of life.
Doug: had small software company in LA, a large corporation offered to buy it, he said yes (but without doing due diligence), the corporate sold shares and Doug could not sell shares when their price fell by 99% losing everything after 10 years of hard work.
Rohan: Whitehall is too comfortable with big business. Consultation process is not inclusive and the Government is not open to small businesses. The Tech City initiative demonstrated that politicians want to be around success but Government tend to deal mostly with large companies that can help achieve Government targets. The truth is that 95% new jobs are created by small companies that are less than 5 years old. Big business and Government talk the same language, 95% of Government contracts went to companies with more than 250 employees.
Alex: if you don’t realise you are at rock bottom you think it’s just another day at the office. There will be difficult times ahead, remember that the good times will return. Patience and perseverance are key.
Audience: patience is under rated virtue, it takes time to grow.
Rohan: the Government should buy from innovators and start ups. Government is the biggest buyer in the UK economy (£150 bil spent in goods and services): the procurement process needs 3 years of accounts which rules out start ups.
Alex: education is key as children will become entrepreneurs in 20 years time, therefore learning about cashflow and business planning at University is too late and should start at school.
Trevor: children have become too dependent on mobiles and computers, they couldn’t make prototypes like he did with their own hands. Every child should be taught two key life skills: to swim and learn about intellectual property.
Doug: the Government should stop imitating Silicon Valley: for example in the creative industry London is the centre of the universe, so there is no need to copy anyone else.
Audience: need for new banking system that recognises micro-companies, because if you don’t have collateral you don’t get the funding.
The Government should encourage a collaborative system to include small businesses.
Rohan: there should be tax breaks for angel investors and peer to peer lending should be encouraged. The Treasury is working on a business bank to lend to SMEs.
Doug: disagrees as bank shouldn’t lend to start ups, because lending should be low risk. The US has entrepreneurial banking and an open banking market. The UK needs entrepreneurial banking and more competition.
Doug: big businesses are not entrepreneurial, they are conservative. They have a distribution network that SMEs can use.
Rohan: culture can change and should be enforced on big business. Large pharmaceutical companies are buddying up with start ups to encourage innovation. Google Campus in East London has created a space for incubators helping start ups.
Alex: there is a lot of focus on software but there’s also the mechanical world, you need machinery and hardware.
Trevor: it all comes down to the way you reward ideas. Companies should encourage bright ideas and showcase them.
Big corporates don’t want innovation as it’s destructive and large businesses don’t want mavericks in their organisation.
Companies are paying lip service to innovation, they make billions in profit and invest only millions in innovation.
Difference between invention and innovation. Countries with a sense of a future and growth like India have a positive vision of the future, we need that in the UK.
And finally: Can the UK be a great country for innovation? The answer from the panel was a resounding: Yes!