True innovation is hard to come by. Here's how governments and entrepreneurs can crack it.
By Dr Mike Lynch, Founder Invoke Capital
London Tech Week is in full swing, offering some rare good news in our current political climate: all signs point to growth. The UK, together with the US and China, leads the way in creating fast-growing global tech companies. Over $5 billion have been poured into UK tech this year, generating a jobs boom in the process. Innovators in Britain have built 13 billion-dollar businesses since last Tech Week – the same number as France, Germany and Israel combined.
London is booming because it has a steady pipeline of science and maths PhDs from the UK's world-leading universities and gives them the capital and business expertise that allow their entrepreneurial instincts to flourish. More and more scientists and engineers are choosing this country over Silicon Valley, and I'm confident that we'll keep seeing more ground-breaking ideas come to the fore.
So it's right to celebrate the entrepreneurs who make this possible. OBEs were awarded to Poppy Gustafson and Jack Stockdale, the founders of cybersecurity unicorn Darktrace, along with Dr Shane Legg, co-founder and Chief Scientist at the AI lab DeepMind. Both companies are incredible British success stories, and could only have been built here, steeped as they are in our rigorous mathematical research.
But as we celebrate the UK's achievements, we must not take that success for granted.
There are storm clouds on the horizon. Anyone who has been in business as long as I have knows that bad times follow good. Today's tech sector hasn't been tested by the pressures of a recession or a major panic on the markets. And the uncertainty of a no-deal Brexit looks likelier by the day.
Whoever the next prime minister is, they need to do three things to keep UK tech successful.
First, the Brexit they choose needs to prioritise real economics over political grandstanding. Instead of arguing over customs arrangements and fishing quotas, politicians should prioritise the growth industries – tech, pharma, advanced manufacturing – that will determine the UK's future. All those industries agree on one thing: that the UK must remain open to money and talent if it is to succeed on the global stage.
We must make it as easy as possible for entrepreneurs to set up businesses here and employ the ultra-skilled workers from around the world who will help built great UK based companies that in turn create jobs for our workforce. If we stifle the opportunities that draw that talent to the UK today, they will simply go elsewhere.
Second, the next PM must prioritise long-term breakthroughs over short-term fads. The most successful startups bring a gun to a knife fight – their technology gives them a clear advantage over the competition so they can dominate their market.
So while I welcome the government's announcement this week that it is investing millions into quantum computing, this money must be invested with care. Those who say the government should invest in new technologies note how the US government's largesse in the 1960s gave birth to Silicon Valley. But this money wasn't pure speculation – it was spent on solving real-world challenges, like NASA's need for a computer chip powerful enough to send an astronaut to the moon. Our tech success has been built on our world class science base. A science basis that functioned in the European based framework, that framework must now be replicated in any future that unfolds.
Finally, we need to make much better use of the commercial potential of our academic institutions. Our universities are world class, but they once had a poor record at commercialising their fundamental research. This has improved but we need to shoot for the world class companies, not selling out too early for the UK to rep the benefits. Growth companies need ready access to the record levels of investment that is being attracted to the UK, and operational expertise to turn their technologies into breakthrough businesses.
Darktrace was the brainchild of mathematicians at the University of Cambridge. But it was a unique recipe of former experts from our intelligence services and experienced entrepreneurs that led to a successful business that has gone from strength to strength. Its founders and backers focused on one simple idea: that their advances in artificial intelligence made it possible to solve long-standing problems in the valuable industry of cybersecurity.
Our science base is second to none, we have an enviable tech ecosystem, creative people, and great entrepreneurs. Let's make sure they have all the ingredients: financing, modern regulation, access to talent, and the culture and ambition to go all the way.
Successful entrepreneurship isn't about top-down planning; it is about tinkering, recognising the business opportunities your new technology gives you and pursuing them relentlessly.
This is not theory, unlike the landscape of my early years, there is now an vibrant ecosystem of scaling top tier UK tech companies, time for the next level.