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.
They’re focusing on biosecurity, emerging technology, immigration and metascience, and already have lots of pithy papers on their website. Many have relevance for the UK. Check out how to reduce recidivism with prison-tech, create an AI testbed for government, or create advance market commitments and prizes in pandemic preparedness.
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.
The Sign for Small campaign is looking to address some of these issues, which is why we’re backing it. If you are of a similar mind, take two minutes to sign it today.
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