Boost UK Economy with Innovation Revolution

Neglected mid-sized businesses missing out on technology says SJIC director

Supporting open innovation between mid-sized businesses and early-stage companies would allow UK plc to derive greater benefit from its thriving technology sector and would make a lasting contribution to the UK’s competitiveness, says David Gill, Director of the St John’s Innovation Centre (SJIC), speaking at the Meerkats and Avatars press and investor event in Cambridge.

David Gill said that the introduction of the Small Business Research Initiative (SBRI), in which early-stage, high-technology SMEs tender for government contracts, has made a tangible difference to many Cambridge companies by introducing them to a ‘real’ client and this concept could be extended.

He says: “An SBRI contract provides a discerning end-user and considerable feedback, which is crucial in helping the SME define its product or service and allow the technology to be ‘de-risked’ for the future investors and clients.

“A key difference to earlier methods of support is that these are competitive R&D contracts, not grants or loans that need repaying.”

Gill argues that a similar scheme aimed at supporting open innovation between mid-sized businesses (MSBs) and early-stage companies would allow UK plc to increase its competitiveness.

He says: “Promoting and facilitating a wider understanding of ‘open innovation’ could help to de-risk innovation for Mid-Sized Businesses (MSBs) and increase market understanding for the SME.

“MSBs are looking to add value to their core business and also to diversify where they are struggling to compete. Early engagement with a technology company can help MSBs diversify without investing in an internal R&D department. But support is required to facilitate this process.”

The Meerkats and Avatars event, at which seventeen early-stage companies are demonstrating their innovative technologies, shows clearly the strength of the UK technology sector.

Gill says: “Every year we support early-stage technology companies across the region with a showcase event to which we invite journalists and potential investors. This year, the Meerkats and Avatars event has been oversubscribed, showing the wealth of innovation across the region.”

John Yeomans, Director of European boutique investment bank FirstCapital, is also speaking at the event and agrees that there is a good level of activity in the technology sector.

He says: “Entrepreneurial companies have become the place to be rather than a risk to avoid. This is particularly so for many graduates and post-graduates today.  Investment is much more focussed now on the good propositions – but there’s scope for more of it. A lot of the companies are still exiting at a good price despite the miserable economic climate. The fact that the sector remains healthy, three years into the credit crunch, underscores the increasing breadth, depth and most importantly growth of this important business sector.”

Gill says: “For the first time this year we have invited some multinationals with a known interest in open innovation to meet the demonstrators at Meerkats and Avatars. These mainly US-based companies have the structures necessary to engage with early-stage companies, something that is often lacking in the UK mid-market companies.

“All too often we see Cambridge technology business reach a certain size and then they are acquired by overseas interests. If stronger links were brokered with MSBs, these technology companies could provide a powerhouse of innovation and strengthen the competitiveness of UK plc.”

For further information on Meerkats and Avatars 2011, please click here.