left to right: Andrew Wilkinson, Simon Hepworth and Karin Immergluck
We have partnered TenU, the collaboration between the tech transfer offices of University of Cambridge, Columbia University, University of Edinburgh, Imperial College London, KU Leuven, University of Manchester, Massachusetts Institute of Technology, University of Oxford, Stanford University and University College London to bring you three panels recorded live in front of a select group of guests in London.
This second panel features Andrew Wilkinson, chief executive of University of Manchester Innovation Factory, Anne Lane, chief executive of UCL Business and GUV Lifetime Achievement awardee, and Simon Hepworth, director of enterprise at Imperial College London.
The panel discusses how universities can build ecosystems and what the challenges are even in cities like London that look like they may have it all figured out. The panel also looks at the importance of local government’s involvement and ponders audience member Jeff Skinner’s purposefully contentious argument that venture funding like Northern Gritstone is the wrong route to pursue.
Thierry Heles: Andrea, can you give us an introduction to the second panel?
Andrea Taylor: The second panel today is talking about building ecosystems and on that we have Andrew Wilkinson from the University of Manchester, Anne Lane from UCL and Simon Hepworth from Imperial College London.
Thierry Heles: Thanks, Andrea. Here we go.
Andrea Taylor: The next topic that we want to move on to that is around building ecosystems in innovation, so that underpins this creativity and success. I think when we talk about building ecosystems, this naturally involves the buildings, the physical spaces that support the coming together of research and ideas so that we have the right meeting and lab space to attract and nurture talent.
This also equally means building ecosystems that involve creating the partnerships, both with local and international stakeholders, such as local government, the investors, industry. We wanted to in this next part of the conversation present some of the successes and highlight the challenges in that ecosystem building and ask, how can we deepen both the connections that we have and expand those for the benefit of the wider sector?
So, joining in this part of the conversation is Andrew Wilkinson from Manchester, Anne Lane from UCL and Simon Hepworth from Imperial College London. So perhaps Andrew, you would like to speak first on how we think about success in partnership development and developing those ecosystems. I know you have had some great successes in Manchester.
Andrew Wilkinson: Thanks. Yes, partnerships are really important, and of course, TenU is an example of a partnership which is working well. In Manchester, we have over many, many years the technology that is come out of the university has been underfunded and that is not only true in Manchester, it is true of other big Northern cities where there was a huge amount of research taking place, very high world leading research, and that was not being reflected and the amount of investment in spinout companies that we were generating.
A horrific statistic is in 2018 the universities of Manchester, Leeds and Sheffield collectively got £23m in investment into their spinout companies, and the golden triangle got a billion. That statistic is shocking because if you combine the research expenditure within those three universities in the north, it is about £800m a year.
So, there was a problem there and one of the partnerships that we can celebrate is a collaboration between ourselves and the universities of Sheffield and Leeds whereby we decided to take our fate into our own hands, and rather than rely on external sources of venture funding, that what we would do is create our own funding vehicle with considerable help from Research England, through their Connecting Capabilities.
So, we decided to create an investment vehicle, which I think many of you will know is called Northern Gritstone, in order to provide early stage funding, well, not just early stage actually, let us say funding into technologies coming out of the universities and not to do it in isolation, but to work alongside other sources of funding to really create impact from the excellent world leading research that was taking place at the universities. I am pleased to say that collaboration has been, and that partnership has been absolutely amazing.
Tomorrow there will be a press release going out, I cannot give you too much detail, but let us say that we will be announcing an initial investment into Northern Gritstone of over £200m, and we will be expecting that number will reach £350m by the end of the year and Northern Gritstone will start deploying funds in June this year. So that is great news. It was done because within our partnerships we had three universities, Leeds, Sheffield and Manchester, that were all faced with a similar problem.
We all had a similar approach to how we were going to solve that problem and therefore, we decided that we needed to do something at scale. We needed to attract investment towards our companies. But also, we recognized that we were just three universities in the north. So, we also designed Northern Gritstone that it would also support other university spinouts, whether it be from Liverpool or Lancaster or Hull or York.
We would also enable Northern Gritstone to invest in those spinouts, and also in other IP-rich businesses coming out of the north because we wanted it to be a game changer, not just for our universities, but for the north of England and to attract further venture funding, both from other parts of the UK and also from overseas into the north. And often if you want to make something happen, you have got to create partnerships.
You have to be able to identify common problems that you have with other organizations and work together to find a solution at scale.
Andrea Taylor: Thanks. Anne, perhaps you want to talk a little bit about the experience of ecosystem building from UCL’s perspective?
Anne Lane: I think London is an unusual place for ecosystems because I think Imperial and UCL probably have their own ecosystems around their universities because they are so big and because you have very different environments in London say compared to Cambridge and Oxford where those ecosystems have built naturally with, I think we were talking this morning, there are about 30 science parks just around Cambridge alone, and the VCs have moved there.
In London, we are surrounded by VCs for instance, but they are not necessarily coming and investing in the university technologies and so I think for a big city like London and similar to New York, you have to make more of an effort to, as Euan was saying, bring those groups together. So, we have had a number of initiatives.
We have had the London Biotechnology Network, we have MedCity, we have the London Bioscience Innovation Centre that was set up as an incubator. Imperial set up Imperial West, UCL has moved out east. So, I think the challenges that then result are really trying to bring in people to service those new technology discoveries, because housing is so expensive and attracting talent I think is very difficult within a big city. So, we have all tried to do our own things within our smaller ecosystems. Those have been quite successful.
Imperial actually, although I hate to say it, Imperial West has got two of our biggest spinout companies based there because there was not space for them where we were. So, I think those separate initiatives have worked well. I think the challenge then is, how do you mesh all of those things together into one cohesive ecosystem?
If that is what you want to do. TenU is sharing best practice I think within those setups because we have all come up against the same problems because of the environments we are in. So, I think really the main thing to take on board there is that each ecosystem is different.
There is not one solution fits all and although New York looks very similar to London, there is a huge number of differences that just would not work here. We are working with Research England on an ecosystem project, but that is one of the big challenges there is actually trying to find similar environments to the ecosystems of London that we are looking at is really difficult. So, there are some successes, but I think there are a lot of challenges too to come.
Andrea Taylor: Just moving on to those challenges, funding that asset development, proof of concept stage is key to underpinning these successful ecosystems, and we have all in our different regions grappled with that and certainly in Edinburgh, no more than others, we know from being away from a hub of a financial ecosystem that the proactiveness that you need to attract that level of funding is important and have had some successes in doing that, not least with the establishment of Epidarex, a VC that we have invested in and a very vibrant angel network that supports that.
But perhaps Simon, you would like to comment from the perspective of Imperial on some of those challenges around proof-of-concept funding and how that can help underpin success, but particularly the challenges as well in developing that.
Simon Hepworth: Thank you. I can do that. I will build on something that Tony talked about earlier as well, in terms of ecosystems going through a journey and taking on filling some gaps at certain periods of time, and then perhaps not doing things that the market is providing. I think Imperial is taking that stance now that we do not have a Northern Gritstone type fund out there and we are relying on London as the source of capital for our startups, but we are forever looking at gaps.
We are looking up to our peers around the world. We are looking at Stanford and MIT. We have copied across the venture mentoring service from MIT. We did that about five years ago, recognizing that particular mode of engagement we felt would work really well in our community. And it has done. We are identifying new gaps, and one of those is at this de-risking level. So, post research but pre-investment some of the really deep technologies that are going to be critical for society in five, 10 years’ time on sustainability, health and security, these require capital after the research grant, but before a VC investor will touch them. So, they are still too risky. It is too early to form a startup around them.
That funding is available in some vehicles. So, we have things like the Impact Accelerator Accounts. Some of the medical research charities provide certain schemes, but the scale of it is nowhere near enough to fund the deep technologies that we have. So, we are launching something called DT Prime at Imperial or Deep Tech Prime.
We are looking actually to learn from what Stanford had done, what Karen was talking about this morning around an innovative medicines initiative, philanthropically funded and the sustainability hub, the same, philanthropically funded. We are looking, can we create philanthropic funding to close this gap, this de-risking gap? We will be meeting with minister George Freeman a bit later as well to encourage him to have government to consider this as an area for funding.
Andrea Taylor: Just before we open it to the floor. One thing I wanted to pick up on, we have talked about funding, but one thing to consider as we come out of the pandemic is the physicality of ecosystems. We have all spent a couple of years in lockdown. We are moving to hybrid working and all of us have been involved in the developing biotechnology parks. We have our own in Edinburgh, the Edinburgh BioQuarter.
As I say, we have been talking about those in each of our regions but with this move to hybrid working, I wonder if I can ask the panel to comment on how you see the physicality of space in playing a significant role in fostering commercialization as we go forwards, will it be important or is that now something we need to pay less regard to, Andy?
Andrew Wilkinson: I think it is incredibly important. I think the pandemic has shown us how important it is because you need to rub shoulders with people, you need to share ideas. Not only that, in Manchester, we are creating a project called ID Manchester, which is going to be a mix of very large companies and small startups and organizations such as mine, and also people coming in, researchers coming in from the university and the idea is to create a fertile environment for ideas, and larger companies to be able to find talent and collaborate with smaller companies.
This notion that all you do is build an anonymous tower and rent out the office space by per metre squared is gone. I think to have a successful innovation district, you need a mix of tenants and I think the more farsighted property developers have understood that and hopefully we are going to see more of those around the country.
Andrea Taylor: Just finally the role of the different stakeholders, so local government, local communities, they are actively playing a role in these ecosystems, but I wonder if maybe Anne and Simon, you want to comment on how these local communities and government are and perhaps should be playing a role in our ecosystem development.
Anne Lane: With UCL it is Camden, that is our biggest local council. In terms of our building, in terms of UCL’s space within Camden, it has a huge effect on the services that are needed and just the local industry. So, even if you just think about students living in the area it has a huge impact on and so we have worked very closely with Camden.
One, to make sure that we are not having a detrimental effect on the area, but also that we are looking at things like social enterprise, which is something I think that universities can really contribute to, where in a big city like London, and particularly in Camden, you have some areas of very significant social deprivation and not necessarily just deprivation, but ways you can enhance local community anyway through social enterprise.
Because I think very often universities like UCL and Imperial are so big they are very often seen as not as part of the local community, and yet they have a huge impact on it. So having that constant dialogue I think with your local authority effectively, and your local business groups I think is as simple as shops and theatres and restaurants is really important.
Andrea Taylor: Any further perspective Simon that you want to add?
Simon Hepworth: For Imperial, our spiritual home is South Kensington, which is in the museum district of London. So, our neighbours there are things like the Science Museum, Natural History Museum, the Royal Albert Hall. It is a very different kind of community to many universities, but moving out west our white city campus, which is focused on innovation and business is about three miles away and it has got a local community around it. It is a community where the life expectancy is something like seven years less than what it is around us in central London.
So, it is an area of deprivation. It is changing us in terms of how we interact. We have a makerspace there where local community can come in and learn how to prototype, learn how something could be manufactured. We have things like coding clubs. We have students that come in and help the older people in the community learn just how to use their tech, just simply how to use their mobile phones, for example. So that is changing us in a very positive way.
Andrea Taylor: Opening it up to the floor. Are there any comments?
Jeff Skinner: Hi, Jeff Skinner, London Business School, until next week anyway. I do not necessarily believe the point I am going to make, but I think it needs explaining nonetheless. Andy, when you said, oh, in comparison to the golden triangle we are so low in venture finding, in some ways that is success.
An economist would say, starting a new venture developer technology is extraordinarily wasteful because you have to set up everything from scratch. Whereas if you have an organization that you could work with by collaboration and work with by licensing, that is actually a much more efficient way of doing it and maybe that is what you were doing.
So, maybe you were far ahead of everybody else because you did not need these flipping funds because you had industry and partners and things and as we all know the amount of money is a poor surrogate perhaps, but it is often all we have got is to say that spinouts provide a 20th of research collaborations. So perhaps all this emphasis that everybody came out with in terms of, oh, we need venture, Google concept fund is different, but all the venture funds, maybe having to have venture funds is actually a source of weakness.
Andrew Wilkinson: First of all, you are right that university spinouts are not the whole answer, but university spinouts are an important component and they of course must work alongside licensing technology to large companies.
They must work alongside student enterprises. They must work alongside other forms of collaboration. But they are also an indicator of, often a large company, I spent most of my life working in commercial companies in industry and what we would do is we would see a piece of technology we thought was really interesting that had been developed by a small startup company and we would go and grab that technology.
So, gone are the days unfortunately, where large companies spend a lot of money on R&D, now what they tend to do is they tend to adopt technologies that have been actually developed by smaller companies.
Therefore, if you want to take technology out of universities and put it into large companies, one mechanism, not the only, but one mechanism to do that is to purchase a smaller company and I think we need to make sure that we support those smaller companies to get them to a stage where that technology can either be adopted by somebody else or they can actually grow themselves. I think that was perhaps our weakness.
Looking at the economies of Manchester, Leeds and Sheffield versus the economies of Cambridge and London, I think you can make your own decisions about where the money is and the wealth of those cities, and to see if there has been benefit to London and Cambridge to having a vibrant source of funding for technology.
Andrea Taylor: Any other questions?
Tatiana Schofield: Thank you. Tatiana Schofield, Royal College of Art. My question to the panel, it would be interesting to hear your view on how you see bringing arts and humanities into building innovation ecosystems.
For example, at the RCA, we work with companies like IBM, Pilkington, BP, British Airways, Samsung, Copa to name a few who value our innovation, our unorthodox thinking, and bringing creativity into technology adoption and developing new use cases. Thank you.
Andrea Taylor: Anne, do you want to take that?
Anne Lane: We had a scheme with the Design Council maybe five or six years ago, which was more applicable to our physical sciences and engineering side than it was really on the bio side, because they would help package very high tech.
So, we had a monitoring system for instance, when you go to see investors and you show investors something that looks nice, but Apple’s a great example of that, then you have almost won the battle already. What really made a difference was actually having that design input and that artistic look at how something looks and feels as well as what it does. We found that made a really big difference with investors.
Then the second thing is Slade School of Fine Art is part of UCL and we had a fantastic collaboration with the coal authority for using their waste products to make a range of paints that was developed at the Slade School of Fine Art.
So, I think bringing those two areas together, arts and humanities really has a strong part to play in even the deep tech side of things. It has made a huge difference to us.
Andrea Taylor: If I can just comment. We have seen that in a lot more of the multidisciplinary partnerships that are emerging, the role of our college of arts, humanities, and social science really increasing. So, particularly even something like digital health.
Yes, it involves medical colleagues looking at the patients, science and engineering colleagues bringing that informatics capability, but the design of digital technologies to be utilized by patients, how they interface that whole design informatics is really important, and to exemplar that in Edinburgh, we have just actually established a new college team for the college of arts, humanities, and social science to embed among the scientists, particularly to surface the sorts of opportunities that are emerging from policy, business, arts, design and how they are complementing, particularly some of these multidisciplinary partnerships that we are now interested to put together.
Simon Hepworth: Just to answer that the London mayor runs an entrepreneurship competition every year. This year a third of the finalists come from Imperial College London and of those finalists four come from our collaboration with the Royal College of Art, which is our Innovation Design Engineering course. So, the power of ideas that come from design are critically important.
Andrea Taylor: So just before we move on, the last thing I want to dwell on is that among the TenU we have a lot of significant relationships with many of our stakeholders, local and international.
I guess one of the questions for us, and perhaps for the audience, is, how can we extend those relationships and make sure that the impact of those is broadly felt not just for the TenU, but broader universities and the wider community. So, I wondered to wrap this section whether they want to reflect on that perspective.
Andrew Wilkinson: I think the TenU is quite a small group and what is important, and obviously a hugely important role for PraxisAuril as well, is to share some of the best practice to as many organizations as possible to demonstrate and to celebrate when we do have successes in terms of innovation that we communicate those as widely as possible.
Then we stress the importance of taking world-leading research and turning into something that has really positive impact in the world. I think we have to all get better at communicating and celebrating success.