That Britain is, on average, one day a week less productive than France, Germany and the US is a sobering thought. But it’s also a clear marker in the sand. The Government’s Industrial Strategy paper is right in saying that improving productivity isn’t about making people or businesses work harder; it’s about helping them work smarter.
The choices we make around innovation and investment will determine our ability to deliver a more productive economy, both now and in the future.
Technology has to be the cornerstone of those choices. It is the single greatest enabler to increasing productivity across all businesses and sectors. But whilst Britain is good at discovering new technologies, we fall short in our ability to turn these discoveries into big, sustainable businesses.
We need to address this. Taking a proven technology and developing it for different markets is innovation in its truest sense – and perhaps the most efficient and meaningful way of promoting economic growth.
First Derivatives (FD) is one of the UK’s most prominent financial technology success stories, providing high-speed, big data analytics to global financial institutions. The company has grown because of deep domain knowledge of intelligent analytics processing – based on discoveries around data streaming architecture, in-memory computing and complex event processing. FD’s Kx technology delivers world-leading performance in processing very large volumes of data, including streaming data, on commoditised hardware.
It now commands a market leading position in what is perhaps the most demanding industry in the world when it comes to processing data in large volumes and high speeds: the financial services sector. This growth has resulted in FD being valued at more than £500 million, having returned almost 6,000 percent for investors over the last 15 years and making it one of the most successful companies on AIM since the launch of the exchange. More than 1,700 people, are employed across the firm, with more than 250 graduates recruited last year, providing high quality jobs and training.
There is huge potential to push this technology into new frontiers – in fact, it’s already happening. Last summer, the Earlham Institute in Norwich began using Kx to study crop growth patterns, developing a completely new approach to analytical processing in bioscience.
Indeed, businesses and entrepreneurial teams are exploring ways of commercialising Kx in lots of different areas – from analysing the human genome for personalised medicine, to interpreting satellite data for earth observation, and organising data generated by the Internet of Things. There is an opportunity to create and support a great many more businesses or products from a single technological discovery.
But innovating on a large scale is easier said than done. For each individual innovator and entrepreneur, the process is risky, costly, and it doesn’t happen by accident.
The Government is right; the only basis on which we can produce an enduring programme of action (to arrive at a more innovative economy) is with the full involvement of innovators, investors, job creators, workers and consumers in the UK.
Britain does have an advantage – a natural ecosystem in which, by virtue of our size, innovations can be expanded into different regions and sectors with relative immediacy. But if we are to help more businesses grow from ‘fledging firms to vigorous competitors’ we need to keep partnering, investing and supporting.
Crucially, we need investors providing long-term, patient capital on terms that incentivise and reward growth; big businesses willing to experiment and trail new technologies; a government procurement programme (worth over £250 billion annually) that supports innovative technologies; and a simple and fair tax system. And, we need to attract the very best talent which, in dynamic ecosystems, becomes increasingly self-fulling.
If we get these pieces in place, then we may well create a functioning, commercially sustainable and well capitalised system that can deliver a more innovative and more competitive economy – and that so far elusive, extra productive day.
Stephen Welton is the founding CEO of BGF (Business Growth Fund), and Brian Conlon is the founder and CEO of First Derivatives (FD). The two announced a strategic partnership today to help fund and support businesses using FD’s technology for application in areas such as genetics, the internet of things, 3D imaging and more.