The innovation demand paradox

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Innovate UK introduces a new programme exploring the role of Advance Market Commitments in the development and adoption of net zero solutions.

The climate crisis demands immediate and widespread action. While many promising innovations are emerging from start-ups and researchers around the world, they are not scaling quickly enough to meet the urgent challenge.

There is a disconnect between the supply of new solutions and the demand for them. Advance Market Commitments (AMCs) could help bridge this gap and accelerate the adoption of critical new technologies by getting large organisations to commit to purchasing innovations before they are fully developed.

Recognising the gap: supply vs. demand

To truly comprehend the scale of the problem, it is crucial to acknowledge the disconnect between the availability of innovative solutions and the market demand for these solutions. The pipeline of climate innovations is substantial, covering various critical areas such as food production, transportation, heating and carbon capture.

However, large businesses committed to achieving net zero targets often lack a clear roadmap to translate their intentions into actionable strategies. Fundamental questions about future product offerings and profitability in a decarbonised world remain unanswered.

Paradoxically, innovative start-ups and small-scale initiatives generate ground-breaking solutions, but the resources and industry expertise of large corporations are required to scale up and achieve widespread impact.

Collaborative efforts between start-ups and big businesses are vital if we are to successfully address the climate crisis. The challenge, therefore, is finding ways to integrate these two worlds to drive accelerated innovation and create a sustainable future.

Harnessing the power of AMCs

To address the complex nature of this challenge, a shift in mindset is necessary. This involves moving beyond mere words and into tangible actions.

One potential approach to bridge the supply-demand gap is the utilisation of AMCs. These commitments involve binding contracts to procure innovative solutions that address specific challenges.

AMCs aim to create a market with sufficient scale and certainty to encourage investment in research, development and deployment of climate solutions. By incentivising businesses to commit to purchasing innovations even before they are market-ready, AMCs have the potential to expedite the development and scale-out of climate technologies.

While the idea of using AMCs in the context of climate technology is relatively new and untested, important precedents exist. Notably, early applications of AMCs were seen in the development of vaccines over a decade ago.

Projects like Project X and Frontier have since emerged, aiming to accelerate the development and adoption of innovative solutions through AMC models. Research supports the effectiveness of AMCs in advancing the adoption curve, substantiating the impact they can have on driving innovation.

It is essential to differentiate AMCs from other demand-driven initiatives commonly associated with challenge-led innovation. Three key aspects set AMCs apart:

  • commitments are firm and contractually binding
  • AMCs focus on fostering the adoption of solutions that are innovative but not yet commercially ready
  • the scope of AMCs encompasses entire industries or value chains, rather than isolated business or technical challenges
Engineers on a construction site.

Engineers on a construction site.
Credit: Drazen_, E+ via Getty Images

Concrete actions and building partnerships

Innovate UK, as a public funder of innovation, recognises the potential of AMCs in expediting the scale-out of climate solutions. To explore this further, Innovate UK has initiated a pilot programme focused on the use of AMCs in the concrete industry. Concrete, as a widely utilised material with significant potential for decarbonisation, presents an ideal sector to trial the application of AMC models. The pilot programme, developed and executed in collaboration with Carbon Limiting Technologies, will run from late 2023 until mid-2025.

The programme’s objectives include the development of an AMC framework, engaging potential end customers and manufacturers, and mapping out technical viability and financial requirements. By incorporating a wide range of stakeholders from the concrete industry, Innovate UK aims to shape the development process in line with industry needs.

Additionally, an innovation grant competition has been launched to provide financial support to projects addressing concrete decarbonisation. This competition involves a collaborative approach with a cohort of demand partners committed to exploring the use of AMCs.

Recognising the importance of finance in facilitating the scale-out of innovations, Innovate UK is also working on building an investor cohort focused on overcoming funding barriers. By addressing insurance and investment constraints, the aim is to de-risk investments in climate technologies and ensure a supportive ecosystem for innovators and concrete industry players.

Join the movement!

The urgency of the climate crisis calls for collective action. Innovate UK encourages organisations and individuals to engage with their AMC development process, apply for innovation funding opportunities, and explore investment possibilities. This concerted effort will help create a sustainable future and accelerate the adoption of climate technologies.

To address the global climate crisis effectively, it is crucial to bridge the gap between innovation supply and market demand. By employing Advance Market Commitments (AMCs), Innovate UK aims to drive accelerated development and scale-out of climate technologies.

The pilot programme focused on the concrete industry exemplifies the concrete steps that Innovate UK is taking to align innovation, demand and finance. By actively involving stakeholders and encouraging collaboration between start-ups, large businesses and investors, Innovate UK aims to create a vibrant ecosystem that unlocks the potential of climate solutions.

Now is the time for action. Innovate UK calls on all stakeholders to join the movement, embrace the challenge and collectively propel the scale-out of climate technologies. Together, we can pave the way towards a sustainable and prosperous future for all.

For more information, please contact Christopher Pilgrim at

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