No government minister can talk about science and technology these days without a mention of the Covid vaccine taskforce. Usually several. The government’s recently unveiled Innovation Strategy refers to vaccines 34 times.
For once, the cheerleading is not empty boosterism. Ministers are right to claim that the success of the taskforce shows Britain’s strengths in science and innovation. They could hardly have imagined a better demonstration of the potential.
One of the most striking things about the vaccine project was how well Britain managed to compete with the world’s most awesome science machine — the United States. While Boris Johnson likes to talk about the UK punching above its weight in science and technology, it can appear pretty puny compared with the US. Just look at the dominance of companies like Amazon, Apple, Facebook and Google; just marvel at the sheer quantity of money going into research and development.
Yet ministers are not the only ones who believe that the overwhelming dominance of America can be challenged and that Britain is well-placed to do so. Ramana Nanda, professor of entrepreneurial finance at Imperial College London, points out that centres of innovation that appear unassailable often get overtaken by rivals. Silicon Valley, he says, “was a backwater in the 1960s. Maybe its grip now is not that strong.”
Such geographical shifts tend to occur when the focus of innovation moves from one area of technology to another, which is exactly what many experts say is happening now. After years in which most of the action has been in information technology and ecommerce, there is now more excitement about fields such as clean energy, bioscience, artificial intelligence and quantum computing. Luckily, these “deep technologies” are areas where the UK is strong.
One of the challenges of these fields is that the early stage of development tends to be harder to fund in the private sector because it takes longer and costs more to establish whether a particular application will be commercially viable. Nanda argues that the modern venture capital model is not a good fit for start-ups in these areas, which will be more dependent on other sources of financing, including public money.
In its Innovation Strategy, the government accepts that it will need to play a key role in backing deep technology start-ups, both as a funder and a “venture customer” (as it was with the vaccines). Comprehensively ditching the hands-off philosophy of the Thatcher years, it acknowledges that it must try to pick winners in areas of technology and individual companies that it will support.
More remarkably still, it says that it must learn from the vaccine taskforce the importance of placing “a bold portfolio of bets” and not assessing value for money on the basis of individual decisions. Failures are not waste but the “overhead for success”, it says, using the language of venture capitalists that must cause palpitations among more financially orthodox members of the Conservative Party. “Investing in the DeLorean sports car wasn’t an expensive failure, minister, it was the overhead of success,” they could imagine Sir Humphrey purring.
In addition to public money, Nanda sees an important role for universities and philanthropic funds to help to “de-risk” technologies before start-ups can raise more private capital. Britain has some of the world’s top technology universities and research charities, such as the Wellcome Trust, which backed the vaccine taskforce.
The vaccine success was also a reminder that the most dramatic progress tends to be made when there is a big challenge to be met, as with the Manhattan Project and the Apollo programme, where the task is to find a technological solution to a problem rather than find a problem for a technology to solve. This was an obsession of Dominic Cummings, the prime minister’s former chief adviser, which lives on in the idea of a “blue skies” research agency modelled on America’s Darpa defence technology outfit. The plan is still going ahead, though critics say it seems to have lost a bit of focus since Cummings’ dramatic exit from government.
The Innovation Strategy takes this theme further by proposing to identify “a suite of ambitious and inspiring missions” to act as a focus for the innovation effort. But here, too, there is a danger of things being spread too thinly. There is surely one critical and urgent challenge that should be the centrepiece of the strategy: climate change. The government should announce this as the priority mission ahead of the UK’s hosting of the key Cop26 United Nations climate change in Glasgow in November.
While the Innovation Strategy has been generally well-received, there are serious worries about funding. “It’s an excellent strategy, but it will make no difference until resource is applied to deliver the vision,” according to one senior technologist. The government has put some money behind it, but much hangs on the results of Rishi Sunak’s autumn spending review. The innovation world is nervous. Kwasi Kwarteng, the business secretary, has been battling Treasury demands that some of the payment for the UK to stay in a key European Union technology programme must come from the existing science budget, despite Johnson’s pledge that UK science would not lose a penny from Brexit. The outcome of that fight should become clear shortly.
Britain was a pioneer of the mission approach to innovation. In 1714, parliament passed the Longitude Act to reward improvements to navigation at sea and eventually paid more than £100,000, much of it to John Harrison, a clockmaker. But the government will need to dig a lot deeper to fund its new missions. There will be a bit more competition from the Americans this time.
David Wighton, formerly Business Editor of The Times, is a columnist for Financial News
