Phil Budden is a senior lecturer faculty member at MIT’s Management School, and – as a former British diplomat (ex-FCO) – is advisor to MIT’s global REAP programme. In this article, he reveals how MIT has been helping Britain’s ‘innovation ecosystems’, both in London and beyond.
Britain’s economic and industrial success was built historically on a unique blend of innovation and entrepreneurship.
Building on its role in the scientific, financial and ‘Glorious’ revolutions, London gave birth to the world’s industrial revolution in the 1700s and, as such, created the planet’s first ‘innovation ecosystem’.
For centuries, Britain led the way, until it seemed to lose the formula to this success.
While later hubs of innovation—such as Boston, then Silicon Valley and more recently Israel – had captured the popular imagination and global bragging rights by the end of the last millennium, London had become better known for its concentration of high finance, high fashion and corporate headquarters.
To an extent, the rest of Britain suffered from both this intense concentration in particular sectors (and into London away from the rest of the country) and from the western world’s wider ‘de-industrialisation’.
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Revival of British innovation and entrepreneurship
The truth is that innovation and entrepreneurship never truly died in Britain, but had been eclipsed – by these developments, by easier opportunities, and by others learning the lessons of its path-breaking success.
While the 2007-2010 financial crisis, corporate dislocation and prolonged programme of austerity measures were not welcome (especially for those directly effected), they did serve to spark a strong revival of British entrepreneurship.
The ‘Great Depression’ seemed to help ‘kickstart’ and accelerate the combined efforts of our innovators and entrepreneurs.
The case of London – and its nascent ‘silicon roundabout’ tech cluster – is well known, but the capital was not alone.
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London did benefit, however, from its scale, and from enough of the ecosystem’s key stakeholders willing to blow on those entrepreneurial embers.
Key among these was the new coalition Government, which profiled that success with its ‘TechCity’ initiatives.
MIT’s engagement with British innovation
MIT is not only at the heart of one the world’s leading innovation ecosystems: it is also deeply interested in researching the phenomenon (which we refer to as the ‘science of innovation’) and sharing the lessons learned.
To that end, we have created the ‘Regional Entrepreneurship-Acceleration Program’, a global programme designed with MIT Sloan Executive Education to help regions ‘accelerate innovation-driven entrepreneurship’ to achieve economic growth, social progress and job creation.
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Scotland was in the pilot REAP cohort, so MIT already knew something about British innovation.
When London put together a team for the second REAP Cohort, MIT first heard about ‘TechCity’ and what was happening in east London’s Hackney and Shoreditch.
All REAP teams have to have representatives from each of the five Stakeholder groups (see below) which MIT research has shown to be important to the ‘innovation ecosystem’: entrepreneurs and universities, of course, as well as ‘risk capital providers’ (including though not limited to VCs), but also government and corporates.
As such, the London team consists of representatives of each stakeholder category: Universities (UCL and Loughborough-in-London), the UK Government (UKTI, the BIS-FCO agency), executives from Corporations (RBS and BT), Risk Capital providers (the UK Business Angels Association), and serial entrepreneurs (such as Brent Hoberman, Freddie Talberg and Ben Fletcher).
These team members comprise the five key stakeholders necessary to support an innovation ecosystem.
MIT helps London scale-up
REAP’s ‘team London’ – which is completing our two-year programme in June – recently launched its capstone project.
Using MIT frameworks, data analysis and conversations with many entrepreneurs around the region, London determined that it produces many startups but not enough of these ‘scale up’ to their full potential.
Underlying causes for this include challenges of access to funding, to new customers, to export markets and to role models: to meet these needs, team London created the London-based Growth Builder business ‘scale up’ program, which was launched at the BT Tower in February.
As the team prepares to attend the last of its REAP Workshops in early June, it has just reported to MIT that Growth Builder has received applicants to its first cohort of startups from across Britain, all wishing to ‘scale up’.
We look forward to hearing the team’s final report to the REAP programme, and to welcoming the members of team London – as they graduate – to become alums in our growing ‘Global Innovation Network’.
Taking MIT’s lessons beyond London
Though London-based, Growth Builder has the potential to help startups from across Britain to ‘scale up’.
Similarly, REAP team London is committed to sharing its insights with other entrepreneurially-minded regions around the UK, including the Northern Powerhouse.
Several key Stakeholders in that team also have a wider British interest – such as UK Trade & Investment, the UK Business Angels Association, BT and RBS/NatWest – which could help spread application of the REAP approach to innovation and entrepreneurship across the country.
MIT’s REAP interest in Britain started with Scotland in the first cohort, and was deepened by close collaboration with the London team.
Part of the REAP programme (and other teaching at MIT) now involves a detailed ‘case study’ analysis of how London recaptured the spirit of innovation-driven entrepreneurship, which serves as a model for other ecosystems: the study focuses on the impact of the Government’s ‘TechCity’ initiative and subsequent programmes such as the ‘Sirius’ prize competition for graduate entrepreneurs.
As London prepares to join Scotland as an alum of REAP, MIT now welcomes ‘Team Wales’ to its next Workshop, on its own two-year journey through the programme. And with MIT being part of the new consortium to train Britain’s top civil servants, the lessons from our research and practice may soon be reaching Government stakeholders across the British Isles, just as ‘TechCityNews’ takes its reporting across the country.