There’s robust support fostering innovation but little scale-up and commercialisation support to turn those ideas into successful companies. There’s a bold vision for Manchester’s innovation but something is missing, writes Daniel Saunders, Chief Executive at innovation specialist L Marks.
In 2004, researchers at the University of Manchester discovered Graphene, a wonder material with many potential applications. But homegrown companies have struggled to reach profitability, while those in Asia Pacific hold 67.8% of the total market revenue.
Something is missing
Manchester is one of three ‘Innovation Accelerator’ pilot cities that will share £100 million in government funding over a three-year program. The scheme aims to replicate the private-public academic partnerships trailblazed in Silicon Valley.
This is positive news, but the programme seems underfunded, and most of the budget is earmarked for creating physical venues and R&D initiatives. Neither includes scale-up support despite the Innovation GM executive summary acknowledging the need to “mobilise investment into existing and new innovation assets and programmes to bridge gaps in the commercialisation journey…”
Local businesses are already finding it challenging to get scale-up support. There are only 22 scale-up directors for the entire UK under the Innovate UK EDGE Scaleup initiative. While they plan to expand to 130 experts over the next three years, the support offered seems focused on helping startups secure funding rather than commercialising operations. Further compounding the problem is the recent news that Tech Nation is ceasing operations.
While a new vendor sets up from scratch, local start-ups will undoubtedly be impacted by the lack of continuity of services. The provisions to support the commercialisation and scale-up of businesses are severely lacking.
Why is scale-up support needed?
Manchester’s history, culture, and five nearby universities make it a hotbed for scrappy start-ups and industry-defining innovations. But for the region to compete with the likes of Silicon Valley, we need to retain and capitalise on the innovations developed here. Without scale-up and commercialisation support, innovative businesses might never see the light of day, let alone drive economic growth for the region.
To understand the problem, it’s essential to recognise that innovations develop in stages. Different expertise and resources are required at each stage—for example, a different skill set is needed to invent new materials versus conducting user research or producing financial projections.
One of the first steps is to establish whether an innovation is viable. After all, nine out of ten businesses fail, and 35% put that down to a lack of market need for their product.
Commercialisation support aims to:
● Establish product-market fit
● Improve market and customer understanding
● Develop and iterate on the initial idea to ensure it’s commercially viable
Yet I often see entrepreneurs with a brilliant idea asking their friends and family if they would buy their product. The result from this ‘research’ is a resounding yes, so founders push forward to launch their idea. However, the product is often not received as favourably in the real market with competitors, market forces, and discerning customers.
That’s why agile experimentation and iterative development should be used to develop the idea into something with great product-market fit, optimised to have the best chances of success.
It’s unsurprising that researchers found that accelerator programs that guide startups through the validation process lead to a 23% higher survival rate. As a result, ventures that go through accelerator programmes experience significantly faster growth rates and are more likely to receive funding.
Next steps
To compete with the world’s best innovation ecosystems, we must provide more support for commercialising and scaling-up ideas. This support will increase the success rate of innovative ideas in the region, helping them to develop into thriving businesses. Established corporations can also use commercialisation support.
Manchester behemoths wishing to keep their market dominance can set up accelerator programmes to build internal innovations or forge partnerships with external start-ups.
If dedicated support is offered, the broader business ecosystem will also prosper – a region with remarkable innovation stories will attract investors, talent, outside start-ups, multinational enterprises, and additional support programmes. All of which feed into the economic success of Manchester.
