Start up companies can grow at much faster rates than established companies because of their ability to innovate in a way that transforms markets and so any government wanting to improve the economy is well advised to think on how it can accelerate start up companies.
The government has recognised that the UK needs to be a leading player in new advanced technology businesses and believes that we ought to be able to do better because of our strong university base and its IP creation. This will then underpin market capturing innovative product development and new company growth. They recently commissioned Hermann Hauser to look at this issue and he has recommended the creation of TICs to help bridge between universities and industry.
This is undoubtedly an interesting suggestion and has international precedent with for example the Fraunhofer Institutes in Germany. But I was wondering what other barriers there might be and whether other action might be needed as well.
For instance, there already exists in the UK a significant numbers of Research and Technology organisations including a cluster in the Cambridge area of which my company, Cambridge Consultants, is one. These companies specialise in fast track product development and one of their functions can be to accelerate start up companies by providing a virtual R&D resource that can be turned on to reach a particular goal quickly. These companies I believe share some properties (and they are extremely clear for Cambridge Consultants where 75% of our business is for foreign clients and 90% of our business of our start ups is for foreign clients):
- The majority of their product development work is for foreign clients
- The majority of their work for start ups is for foreign companies
I think there are two drivers for this, one is that foreign start up companies are often better funded than start up companies here in the UK and we have fewer technology entrepreneurs who judge well what to develop internally versus what can be outsourced to accelerate value. Indeed if we had TICs, since they are public / private funded would we see the majority of their funding over time migrating to foreign companies?