Some of the greatest advancements in technology we have made as a human species have been down to the military industrial complex. Without high levels of western military spending, we would never have created GPS, the jet engine or the internet. However, since the decline in military equipment spending over the last few decades, it has fallen to the private sector to pick up the slack and propel research and development forwards. Sadly though, despite the vibrancy and creativity of the private sector in the UK, we have not been able to propel ourselves forward as a research and development superpower. While the military industrial complex in Israel, has continued to produce ground breaking technologies and built an incredible entrepreneurial scene. Nonetheless we believe the age of military industrial complex driven growth is coming to an end and we are heading slowly into an increasingly demilitarised world, for which we should be very grateful. In this new era, it is vital that we develop a new growth pole to propel our technological advances forward and we propose that this growth pole shall be the university-industrial complex.
The UK has some of the best universities in the world, yet outside of Imperial College London and a couple of other world leading institutions, we lack the focused technical universities to contend with MIT, Caltech and the Indian Institutes of Technology. We need research universities which cater for the needs of the industries of tomorrow, building vast research centres where we begin to develop the technologies which will transform the world we live in. However, most importantly this cannot be the government picking winners and distorting the economic landscape with their own populist preferences.
As such we suggest the new age should be built on university industrial partnerships, where large firms and universities co launch specialised research cells within universities. Already many firms sponsor PhD students to embark on research which will be useful for the private firms, however, the government does little to nothing to support the financing of this research. Instead we should build a model of co-financing research PhDs across the country, where the government pays 50% of the cost of every PhD support program. Overnight this could double the number of PhD students producing research of genuine economic need and attract the brightest and best academics from all over the world. This simple reform could do wonders at propelling investment into ground breaking research and give British firms a leg up in their race for technological supremacy.
However, expanding the PhD research network is only the first step in crafting a new high-tech Britain. The second and much trickier stage is ensuring that these highly educated and specialised researchers deploy their skills in UK R&D rather than disappearing off overseas. The first step is to guarantee every PhD educated individual who has passed through the co-financing program the right to work in the UK for 2 years and secondly to require all PhDs who emigrate straight after graduation to pay back the cost of the PhD to the UK government over 2 years. These 2 simple measures should ensure that the UK trained talent does not leave straight after completing their doctorates.
Next, we need to deepen the research presence of the science parks dotted across the country. These already established research centres built around university cities have incubated some of the most valuable companies created in the UK in the last couple of decades, from Autonomy to ARM. With a new surge of research talent, there initially may be insufficient research projects that corporates will be able and willing to finance to employ all this new research talent. The government could step in at this point by financing "moonshot" research projects for advances which will have massive social benefits, but limited private benefit. This could include pumping money into financing Educational Artificial Intelligence to revolutionise our primary education system, where the brightest and best look into how to implement AI techniques in educational applications to deliver low cost learning for children across the world. The government could also seek to finance research projects into government service delivery, to test alternative methods of public transit or police monitoring. These research projects need not be expensive, and gradually the UK government can pull back its financing role, as Corporates and venture capitalists fill the breach and inject capital into the research industry.
This final wave of private sector driven innovation will only flourish if our financial services industry starts delivering capital to UK high growth companies. We already have the largest venture capital industry in Europe to build on, yet our venture capital sector is a mere minnow in comparison to the structure built up in Silicon Valley. Although it is true that as a country we are far more dependent on growth in London for our prosperity than we should be, the venture capital boom will need to start in London with investors pouring capital into the Golden Triangle between Oxford, Cambridge and London. This area has the highest density of skilled workers of anywhere in the world, as well as access to the world's leading financial centre. In fact, the Golden Triangle lacks only one key thing. An entrepreneurial mindset. However fantastic Oxbridge may be at producing the brightest and most capable workers, it fails to produce entrepreneurs & risk takers. The same issue exists in a lesser form across almost all British universities, in comparison to the entrepreneurial focus of the US university system. Fortunately, there are a couple of lessons we can steal from the Americans to foster this entrepreneurial ecosystem, and it needn't be expensive.
Universities in the US are the incubation engines of entrepreneurship, both financing and nourishing “want to be entrepreneurs” straight out of graduation. Encouraging students to take risks in the first few years of graduating, because if they fail they can always start into regular graduate life a couple of years late. Over in the US, entrepreneurship is not seen as the privilege of the rich, unlike in the UK where 50% of business ideas are financed from personal wealth, family and friends. Incubators could break this link between family wealth and entrepreneurship. These incubators also allow US universities to share in the success of their alumni, as the profits of successful investments are poured back into the universities. This would enable UK universities to gradually build up endowments and invest more into education without the government or students paying a penny more. Investing £680mn a year could enable each university to establish an incubator for themselves, financing start-ups for 13,500 graduating students every year. This cash injection over a 10-year period should be enough to permanently seed these incubator schemes and enable these universities to develop their own entrepreneurial ecosystems. Some will fail after government financing is withdrawn, however those successful incubator schemes, together with the PhD co-financing initiative and the "moonshot" plan, will become the foundations of a new entrepreneurial Britain.