How to spot the next big thing

But only a relatively small number of ideas will ever be truly successful. How do you spot the technology that is really going to 'change the game', make an impact on our lives and be a commercial success? The Royal Academy of Engineering MacRobert Award, the UK's longest running and most prestigious engineering prize, for which I was privileged to be a judge for 4 years, has an exemplary track record in spotting the next big thing. Since 1969 it has recognised advances including the Rolls-Royce Pegasus engine, Johnson Matthey's catalytic converter and EMI's CT scanner (seven years before the technology won the Nobel Prize), which have all gone on to become ubiquitous in modern day life. More recently, winners have included Microsoft's Xbox Kinect, Cobalt Light Systems, which has developed an airport liquid scanner that could remove the need for the 100ml limit, and Touch Bionics, which produces world-leading prosthetics. MacRobert Award entries are judged on innovation, commercial potential, and benefit to society, a system that clearly works. Personally, I believe commercial value is the really telling one. If you have a good idea and it's different from everyone else's, then there will be a demand for it and people will pay a good price. Commercial success is, to a large extent, a gauge of the innovation and its societal value in this sense. And in my experience, commercial value is itself largely based on two things: whether a product or service is unique and whether it is scalable. I'm always surprised that many inventors and entrepreneurs themselves don't know what is unique about their technology: their unique selling point. If someone has done it before, are they doing it better than anyone else, faster than others or more efficiently? It often needs to be a 'break out' technology to succeed in a big way. An example from recent years could be the Microsoft Research team behind the Xbox Kinect who won the MacRobert Award in 2011. They worked intensively over only months to make possible something previously thought impossible. They were the first to market such an advanced natural user interface product using motion capture and, four years after its launch, it remains the market leader. Scalability, too, is vital in securing success. This is clearly easier to achieve when you're a huge multinational like Microsoft, but it's possible for smaller companies too. Previous winners of the MacRobert award hail from some of the smallest start-ups and university spin outs in the UK, proving they have as much potential as industry giants to make their product scalable. The 2013 MacRobert award winner RealVNC started out as a tiny start-up and grew with no external investment. It now provides remote access software for over a billion devices and is used by the likes of Google and NASA and, at the time of the award, I predicted it had the potential to be a $1 billion company within five years. It is the scalability of the technology, as easily mass-produced software, that has allowed this extraordinary growth. From a diametrically opposite starting point, but nevertheless hugely successful, Concrete Canvas, which was a finalist in the same year, is a small business run by two very talented young founders Will Crawford and Peter Brewin, who are successfully selling in over 40 countries across the world. The last few decades have produced some remarkable and life-changing innovations. There will certainly be many more to come but the challenge is to spot those with real potential among the masses in the crowd. There won't be a lot of companies or innovations over the years that can offer both uniqueness and scalability. In my role as an investor, I've spoken with hundreds of companies, but have only ever invested in a handful that I really believe are the 'next big thing'. As for innovations to watch out for, there are two particularly exciting fields in my specialisms of biochemistry and medical technology that I'm keeping my eye on. The first is the convergence of advanced biotechnology and microelectronics. There is an exponential collapse in the cost of genome sequencing and, as already proven, electronics are becoming smaller and cheaper every day. These two trends together could open up a new world of personalised medicine with biological chips and diagnostic circuit boards leading to far more effective life style mapping and precisely specific regimes to both prevent and cure ailments and support well being rather than hit and miss treatment of symptoms, which is often so costly. The second one to watch is the commercialisation of high performance functional materials. Graphene, advanced polymers and other "wonder substances" herald an age of 'smart materials' that can change, learn or repair themselves, allowing cars to fix themselves after minor crashes or clothes that adjust to the weather or security and safety issues. Are you working on something that could be the 'next big thing'? Applications for the Royal Academy of Engineering MacRobert Award are open until 31 January 2015. You can read more and apply by visiting: www.raeng.org.uk/grants-and-prizes/prizes-and-medals/other-awards/the-macrobert-award Ian Shott CBE FREng, is Chair of the Enterprise Committee at the Royal Academy of Engineering.