Can We Unlock Deep Tech Entrepreneurship To Address The World’s Biggest Problems?

Consider the scenario where Elon Musk is not a multibillion-dollar entrepreneur, but a humble tech enthusiast working out of his garage and looking to secure investment for one of his projects. His radical idea is to launch a network of satellites into the Earth’s orbit to provide stable internet access for even the remotest regions of the world.

His idea might be well intentioned, and the science behind it might be sound, but the costs would surely be staggering. And as for the payoff for investors? Well, it’s safe to say they’d be waiting a while. It’s highly likely Starlink would have remained an aspirational sketch in Mr Musk’s notebook.

Technological solutions such as Starlink that build on fundamental science and engineering – so called ‘deep tech’ – are also a vital tool in helping to tackle some of our world’s biggest problems. Yet, for all the potential deep tech projects offer the world, the vast majority are unlikely to make it beyond the drawing board. This is a big problem as challenges such as climate change become more acute.

By their very nature, big ideas linked to deep tech are often a shot in the dark for entrepreneurs – let alone for the investors needed to back them. New technologies born of scientific advancement can be complex to understand and explain, costly to develop and test, and take time to fine tune for effective deployment. The likelihood of commercial success for those experimental ideas that do secure funding is never guaranteed.

Failure to Launch

So, what does it take to get these life-changing big ideas off the ground? Well, money first and foremost. But there’s also a need for investors to provide the space for innovative thinkers to experiment with their ideas and the patience to realise their potential. While capital markets might be flush with trillions of dollars ready to invest in the next big thing, patience and space are harder to come by.

So where do the biggest challenges lie? The idea-to-innovation process can be broken down into four phases. The first stage is the fundamental research that underlies deep tech; often, this is undertaken by scientists within university laboratories. The second stage builds on this research to create a working prototype, testing and refining it to ensure it works for a commercial environment. The third stage involves deploying the product with early customers and fine tuning the business model to ensure the venture’s cash flows can sustain its operations. The final stage is scaling a fully functional commercial product with a sustainable business model.

Venture capitalists can readily take care of stages three and four, and the depth of talent in our universities continues to develop a pipeline of valuable research with commercial applications. But we are sorely lacking a funding model and support system for the second stage, that can take ideas and turn them into solutions that can be developed into viable businesses. Venture capitalists typically invest in start-ups that have got over this hurdle and universities typically lack the incentives and expertise to focus on this translation stage. The net result is that, as a society, we face a grand challenge around deep tech translation.

Bridging the Valley of Death

Despite the historic challenges faced by universities, several elements of the university environment make it well-placed to help bridge the gulf. The first is the physical infrastructure to support translation. Imperial College London, for example, houses the London Biofoundry, Advanced Hackspace, the Translational & Innovation Hub and Scale Space, that provide infrastructure for deep tech projects as they transition from research ideas to commercial ventures.

Universities are also uniquely poised to implement new models of translational funding related to venture philanthropy, addressing the higher risk and longer timelines required to develop deep tech ventures. Universities are often the hub around which deep tech ecosystems develop, by bringing together investors, policy makers, and entrepreneurial and scientific talent. This is what Imperial’s new Institute for Deep Tech Entrepreneurship is working to establish. We want to help entrepreneurs with funding to enable their experiments to run, as well as provide the weight of the institution and its research expertise to refine ideas and help to secure investment.

While we cannot predict the future, what we do know is the advancements in technology and science will continue to shape our world and capabilities. The biggest question we face is whether we can harness these capabilities for the greater good. By combining research with support for practical application and testing, universities can help deep tech ideas achieve their potential. If we don’t, how can we ever confront climate change and other global challenges?

After all, we can’t all be Elon Musk.

This article was authored by Professor Ramana NandaProfessor of Entrepreneurial Finance at Imperial College Business School.

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