‘TenU Hosts Ecosystems’ in five points

On our second event, TenU Hosts Ecosystems, a panel of experts discussed targeted initiatives and policies for the development of entrepreneurial ecosystems. The event compared New York’s ecosystem development after the 2008 financial collapse and an emerging project approach in London, building on the inaugural TenU Hosts on how technology transfer might contribute to the economic recovery.

New York and London were chosen as examples of conscious ecosystem-building that differs from organically grown ecosystems such as Silicon Valley, and to some extent Cambridge/Silicon Fen in the UK. The two cities also have other key elements in common, such as their large number of students, their financial offer, and strengths in developing new technologies (e.g. AI, fintech and fashion).

The event was chaired by Anne Lane (CEO of UCLB). Orin Herskowitz (Columbia Technology Ventures) and Euan Robertson (Simonds Foundation, formerly New York City Economic Development Corporation) reflected on the approach brought to New York; Andrew Jones (City, University of London) and Alice Hu Wagner (British Business Bank) presented developments on the London project, and Mojdeh Bahar (US National Institute for Standards and Technology, NIST) and Paul Drabwell (UK Department for Business, Energy and Industrial Strategy, BEIS) offered the national policy perspectives.

Five key factors emerged from the rich and varied insights offered by the speakers. These are scale, boundaries, connectivity, talent and critical mass.

1.     Scale

One of the findings of the London Ecosystems Project, chaired by Andrew Jones and developed by a number of London universities in collaboration with Research England, is the difference in scale between London and a number of US cities, including New York. This includes R&D expenditure, as the figure below indicates, as well as IP income and a number of spin-outs. As was pointed out by the speakers, evidence suggests that scale and density matter: higher density fosters higher connectivity, which in turn reduces the consequences of risk-taking, as fallback options are increased.

University R&D Expenditure (£000, total of 2016-2018), Source SQW

2.     Boundaries

One of the questions pervading the London project has been around where to draw the boundaries of ecosystems: should this be around individual ecosystems within the city (e.g. White City, Tech City and the Knowledge Quarter) or around one single, interconnected large London ecosystem? According to Orin Herskowitz, where you draw the boundaries depends on who you ask and what your interests are. In the case of New York, people who work in tech transfer, typically see the New York’s ecosystem as including the city, New Jersey and Connecticut. This, in turn, leads to the question of connectivity between often disconnected boroughs.

3.     Connectivity

Paul Drabwell stressed the importance of providing mechanisms to foster collaboration between universities and between universities and industries, through initiatives already in place such as the Connecting Capabilities Fund and the UK Research Partnership Investment Fund, respectively. Mojdeh Bahar also highlighted similar initiatives by NIST in the US.

In New Yok in particular, Herskowitz described the post-2008 initiatives taken by the Bloomberg and De Blasio administrations to foster collaboration, including inviting university leaders for drinks and meals to get them to know each other and designing programmes to encourage cooperation and friendly competition. Herskowitz also stressed that for these initiatives to take hold, universities needed to be open and well-funded to facilitate collaboration.

Connectivity was also addressed by Euan Robertson and seconded by Bahar, who both emphasised the value of thinking not only in vertical terms across the R&D continuum, from research to product, but also across sectors, to encourage pollination. Alice Hu Wagner, meanwhile, described the British Business Bank’s efforts to create syndicates between angel investors.

4.     Talent

The panellists agreed that universities are attractors and manufacturers of talent. Robertson pointed out that New York had nearly as many students as Boston had inhabitants. London compares well with New York, offering a large, international talent pool. This provides the critical mass necessary to staff a healthy ecosystem.

In terms of particular skills, Hu Wagner talked about an ecosystem development programme to provide executive education in order to improve the venture capital flow through the R&D continuum and attract and nurture talent from around the world. The programme is run jointly between the London Business School and a leading London venture capital firm with support from Research England.

Number of students (2018), Source SQW

5.     Critical mass

The discussion concluded with the acknowledgement that New York and London were lucky in that both cities had the critical mass of talent and finance to succeed. Where talent exists, actors and governments can foster collaboration; where risk capital chains exist, investors and governments can fill the gaps with targeted policies and financial incentives. As historical university towns and financial centres, New Yok and London are starting from a position of strength.

Panellists agreed that it is much more difficult to create ecosystems where this critical mass is still lacking. This will be the challenge faced in US regional development strategies and levelling up agendas, a topic left for the next event, TenU Hosts Regional Opportunities.

In summary, London already has the critical mass of finance, talent, and connectivity and is doing many of the things that have led to success in New York, but may need greater investment as well as more purposive collaboration if it is to reach the scale and effectiveness of US ecosystems. Scale matters, as it fosters connectivity and a more risk-taking culture, which in turn breeds the innovation characteristic of healthy ecosystems. The UK government's commitment to increasing public spending in R&D may help address the scale issue and support growth where it is most needed.

To access the slides presented by Andrew Jones and Mojdeh Bahar, click here and here.

The TenU Hosts event series offers opportunities for US and UK policymakers, thought leaders and leading practitioners in research commercialisation to hold conversations on topical issues. The next event, TenU Hosts Regional Opportunities, is expected to take place at the end of April, so feel free to contact us if you would like to join our mailing list or simply follow us on Twitter.