Many of you will already have heard of the many challenges associated with climate change. We need to protect our planet and people to ensure a more sustainable and resilient future for all. A question I keep asking is:
How do we best come together to accelerate innovative solutions and ensure we have the best shot at achieving a brighter future?
We need to explore this balance. How best to invest in this space and how to overcome investment challenges faced by innovators.
We all need to work together
When I say ‘we’ in the above I don’t just mean Innovate UK. We are the UK’s innovation agency, not only do we deliver funding programmes, I also feel that we have a championing role. We need to bring together partners and stakeholders involved in sustainable technologies. We need to work together to ensure the innovation investment chain works faster and more efficiently.
It can’t be done by one organisation alone. It requires collaboration with passion and substance from:
- end users
- local authorities
- government stakeholders.
Together we can accelerate solutions to the market and solve our pressing societal challenges.
Investing in clean growth
We need to think about investing in innovation in a sustainable way. More than ever, there needs to be a clear and strong approach for those investing in clean growth businesses.
A balance of commercial profits, whilst also valuing societal and environmental benefits is needed to be successful. This needs to be right across the investment chain from pension funds to seed funds, and not just at the early stages of investment. To note as I write this blog, there is a latest policy publication from HM Treasury on greening finance, a roadmap to sustainable investing.
I was really pleased to hear recently about outcomes from our COVID-19 response programmes. These are an example of stakeholders working together and considering investment at a local scale. This has resulted in research to look at the potential scalability of community municipal investments from the University of Leeds.
From an innovation perspective, there are several aspects to financing a net zero world, such as:
- adopting current solutions at scale
- considering the next generation of technologies.
These could give rise to disruptive solutions and provide a pathway to ‘the last 20%’.
I’d like to explore these a little further below, appreciating I wouldn’t be able to cover all the activities that are out there. These are all areas that require innovation and investment in different forms for us to have a fighting chance of achieving net zero by 2050.
Adopting current solutions
There are a great many technologies currently available that show a pathway to achieving the transition to a zero-carbon economy. The challenges that remain are:
- reducing cost
- increasing efficiencies
- integrating into systems that work at scale.
One recent example that I feel describes this challenge rather nicely, is the Department for Business, Energy and Industrial Strategy Heat Pump Ready programme. Split into three streams:
- tackling solutions for high-density deployment
- developing tools and technologies
- trial support and learning.
At the same time, the businesses involved, specifically small and medium enterprises, need to think about their own business scale-up challenges. This includes how to secure further investment, which we focus on with our Energy Catalyst innovation programme.
It’s also great to see current case studies of local authorities including Bristol, Nottingham and Leeds where ambition meets action. For example, the UK 100’s recent report into opportunity for the UK Infrastructure Bank to accelerate the pace of net zero investment in our cities.
Scaling developing solutions
This looks at the challenges of ‘it works in a laboratory environment, how do we get this working in a real-life environment’?
Many stakeholders need to be on board for making it work. Critical systems and supply chain challenges must be addressed. Then, the roadmap to achieving scale if you succeed one time, 10 times or 100 times. For me this comes to the point of investable propositions and building relationships with investment communities.
Then a process of delivery and having a deep understanding of what it would take to invest.
What’s the innovation story, track record and business model? Lighthouse projects really need to shine through here. These address the systems complexities of getting projects off the ground, and including the right stakeholders and investors in the right timeframe.
The next generation of innovations
Why have I put this point third in the list of areas I hear you ask? By the way it’s not a priority list, but a proximity to deployment list. I get rather frustrated when I hear conversations that, for some, the word innovation is limited only to invention. We define innovation as the processes through discovery, development, and commercialisation to:
- solve a specific challenge
- realise a new or alternative product, process, or service.
Innovation is required in all three of the areas I’ve introduced above.
A significant amount of focus is put into the next generation of innovation. There is also plenty of start-up support out there, as well as incubation and accelerator programmes to get people going. I do think there is a real challenge in focusing on scale-ups in the clean growth space. They need that patient capital and support to realise their potential.
Of course, we will always need a funnel of ideas, but when it comes to protecting the planet, we need to get the balance right. We need a mix of solutions across the entire five-to-25-year time horizon. 2050 is only 29 years away after all.
Additionally, sometimes as a materials scientist (can I say that still?) you can easily forget that not everything is a hardware solution. Financial technology innovations can pave the way to how investments could be made differently. They also look at risks in a more advanced way when considering future investments.
We have a vibrant fintech sector in the UK and it is always exciting to observe the forefront of thought leadership and innovation in this space. For example, 11 UK-headquartered FinTech companies specialising in environmental, social, governance and sustainability were chosen to join a virtual trade delegation to New York Climate Week in September.
So, what are we doing about all this? At Innovate UK we have the opportunity and responsibility to act as a champion for innovation, this is what really gets me excited.
I believe we have the responsibility for ensuring the golden thread of the innovation process is successful in all the areas we support:
- continuing to innovate ourselves
- delivering inspiring programmes that fund great research, development, and deployment
- connecting and catalysing the businesses themselves to grow and scale.
Connect and accelerate
When it comes to climate change and sustainable technologies, it currently takes too long to get to the market. We need to ensure that all the pieces of the puzzle are connected and accelerated where possible. For example:
- demonstrating new technologies and systems
- getting people to think about their clean growth innovation story
- working with stronger stories
- showcasing innovations to end user and investment communities to create trust, ambition and knowledge exchange.
One example of how we are looking to accelerate investment is our investor partnership with EQUANS. Currently running to align private investment with research and innovation development programmes to maximise outputs and achieve scale. Another is our Innovate UK Edge service, which focusses on business needs for growth and scale.
Connect and start a conversation
So, what’s the call to action here? Well, I was hoping you were wondering that.
I’m keen to build the conversation and network of people who really want to make a difference in investing in the net zero transition. Realising innovative technologies and solutions and accelerating that journey. I certainly want to learn more and input to the investment activities in development and connect-up opportunities for innovators and investors wherever we can.
Please do get in touch on my LinkedIn page with your thoughts. The United Nations Climate Change Conference (COP26) is not just a point in time but a call to action for the next 30 years.
Thanks for taking the time to read this and I look forward to connecting with you.
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