EIT Digital, a leading organisation driving European digital innovation, held their Innovation Day 2018 in London to discuss future-proofing within digital disruption.
EIT Digital is part of the EIT, which has built a network of Knowledge and Innovation Communities to boost innovation across Europe. Their Innovation Day 2018 was titled “Future-Proofing within Digital Disruption”.
The event explored key aspects of the digital innovation landscape in the UK, such as quantum computing, open banking and 5G. The speakers discussed solutions for ensuring success and navigating digital disruption.
Our Digital Editor Courtney Garner spoke to Morgan Gillis, Director of EIT Digital UK, at the Innovation Day 2018 in London to discuss the challenges of digital disruption in the UK market, the role the government should play in innovation, and how EIT Digital is investing in the future of UK digital economy.
What are the challenges involved in commercialising innovative digital technologies in the UK?
The current challenges remain as they have been for some time – it is very difficult for new start-ups, or spin-outs from universities, to receive funding to begin the initial step of commercialising an innovative technology in the UK marketplace.
There is a network of angel investors interested in commercialising these innovative technologies, but unfortunately there is not enough funding to bring all of the excellent ideas into the marketplace. This is where EIT Digital comes in. We target our budget, which stands at around €100m across Europe, towards both small start-ups and larger companies with the most outstanding new product ideas. The ideas are at the stage where they are past proof-of-concept and are ready to enter the marketplace but require a financial injection to be able to execute a commercial business plan and gain the momentum they need.
The biggest challenge is that there are a lot of great ideas, but a shortage of suitable streams of funding to bring them into the marketplace.
How are EIT Digital ensuring that talented digital entrepreneurs can bring their ideas to the UK market, instead of moving to other economies?
It has been a longstanding problem that some of the best innovation in the UK is noticed in its very early stage and transplanted to a different economy. This means that the value of the innovation is not accrued within the economy that gave birth to the idea initially.
EIT Digital can help with that problem by investing in European businesses and providing support for an extended duration, often between 1-3 years, so that the organisation can build its business within the European economy.
This enables businesses to grow and gain traction without being uprooted at an early stage if a non-European investor finds the product idea or patented technology attractive. We help businesses to put down roots in the European economy, which increases the chance that the company and its value will remain in Europe once after it has been established in the market.
What role should the government play in enabling UK digital innovation, and would you like to see any changes?
The UK is doing a good job of deploying money to address the so-called grand challenges, the technology and digital domains which are important to the UK economy. At the beginning of this year an impressive £1bn fund for Artificial Intelligence was announced by the government.
While the UK government is doing a lot to support the UK digital sector, it is unfortunately not enough to overcome all of the challenges.
EIT digital’s funding is aimed at European level and augments the UK funding. The projects that we focus on usually have an international aspect, meaning that most of the proposals we fund are from international consortiums of organisations. This means that we are supplying a stream of funding which complements the funding from the UK government.
It is extremely challenging for young companies to receive funding in the UK. InnovateUK, for example, is one of the main channels but the success rate is approximately 1 in 10, whereas the success rate for receiving EIT Digital funding is much higher, at 1 in 2. We can offer a faster, more successful track into funding.
While the levels of investment being delivered in the UK through recent changes in policy are impressive, the low success ratio suggests that the need for funding is still far greater than government funding alone can meet.
What are your priorities for the future of EIT digital?
EIT Digital is on a hunt for outstanding innovation, which has been our quest from the beginning of the organisation. Our priority is to find the most outstanding ideas and investment opportunities and to bring those through to the marketplace. The challenge for us is to identify these from the wide range of opportunities presented to us and to provide support at the right level.
The European market is very large and attractive, but even with the various European policy instruments which are being used to stimulate a stronger digital economy, there is still a gap between Europe and the US or Israel, for example.
We aim to identify the most outstanding innovation ideas and invest in these, so that the European digital economy will gain a level of momentum that is comparable to such economies.