UK finds its technology footing: Interview with Hermann Hauser

Intent on stimulating British industry, the Labour government in 2010 commissioned technology entrepreneur Hermann Hauser to assess the state of British industry and suggest ways of developing it in the future. His proposals were taken on board enthusiastically by the incoming Coalition government and Hauser's core strategy, the Catapult programme, was born. Hauser was asked to review progress by Innovate UK (formerly the Technology Strategy Board) who administers the scheme. His report, following a six month review process, has just been published – deliberately in advance of the Chancellor's autumn statement. So what does the review reveal? How is the programme progressing? Hauser said: "I have had no continued influence since the initial report, so maybe my expectations were low, but I was really quite surprised by the progress that had been made." Progress is unsurprising in the High Value Manufacturing (HVM) Catapult as it had a head start on the others, having been previously funded by the Regional Development Agencies. "In truth it is not one Catapult but seven covering different aspects of manufacturing," continued Hauser. "HVM is already up and running and doing very well, especially on my criteria of a third, a third and a third. I was keen to see a third of the money coming from industry – it is what keeps these Catapults honest. If the industry is not willing to pay for a third of it, maybe it is not doing something that is interesting to industry. In the case of the HVM they already get 40% of their income from industry, so I knew that industry already had an interest in the problems they were working on." Under the Catapult funding model the remaining two thirds should come equally from Innovate UK's set aside funds and from other funding programmes, which may typically be from other government departments or EU competitions and schemes. Hauser outlined the principle: "The key criterion is that industry is willing to fund a third of it for really innovative research. That is what Catapults are about – innovative projects that industry would not be doing if there wasn't a Catapult. Why should we spend tax payer's money on a project that industry would do themselves anyway? So it is really to encourage industry to be willing to take up on really risky projects. You need that very advanced stuff for industry to stay competitive." Meeting the funding criteria, as HVM does, is a measure of success and Hauser believes it should benefit from further investment: "If the industry third is growing, then the Government ought to grow its third too." The other Catapult that was formed from existing capabilities was Satellite Applications. Hauser commented: "It is going very well. Normally people will build incubators and hope that small companies will come and fill them. With the Satellite Applications Catapult it is the inverse problem, there were so many SMEs camping out there that they had to build an incubator. Since relationships with SMEs was one of our main objectives with the Catapults, this is a very good result." The other five Catapults (Connected Digital Economy, Future Cities, Cell Therapy, Transport Systems and Offshore Renewable Energy) are in an earlier stage of development, mostly having only started on building their infrastructure within the last year. "You would always want them to move faster than they are," admitted Hauser, "but they are all doing pretty well against the business plans that they have been set by Innovate UK in terms of completing the teams, buying the kit that they need and establishing themselves in the premises they have. The next big step, especially for the new ones, is getting the projects in that will prove that they are doing what we want them to." All Catapults were selected through a competitive process and were intended to reflect sectors that the UK could create world-leading industry expertise in. But are seven enough? Hauser hopes his review will demonstrate the need for more. "There are going to very serious budget constraints next year, whether there is going to be any chance of adding growth to the Catapult funding I don't know," he added. "My feeling is that seven Catapults are probably too few for the UK. In comparison, Germany has 67 Fraunhofers but they started just after the Second World War, so they have on average added one a year. My feeling is that one, or maximum two, a year is the right rate of growth." So what does Hauser believe could be the next 'low hanging fruit' that could be worthy Catapult material? "Precision medicine has a good chance of getting funding going forward," he said. "Others I have a lot of sympathy with – and I am not the one who makes selections, I just look at the main areas that I think are deserving – are the Internet of Things and machine learning, because they are making big waves. They have a platform characteristic so they support a large number of companies. Machine learning, in particular, cuts across a large number of sectors." "The job of a Catapult is to be the catalyst," concluded Hauser. "Its output is really the ease of use of university research by companies that can then do the user interface to it. And we have got lots of small clever companies who can design clever user interfaces." CV - Hermann Hauser In his long and successful history as an entrepreneur and venture capitalist, Hauser, who is Austrian by birth, has founded or co-founded companies in a wide range of technology sectors. These include Acorn Computers (where he helped spin out ARM), Active Book Company, Virata, Net Products, NetChannel and Cambridge Network Limited. He was a founder director of IQ (Bio), IXI Limited, Vocalis, SynGenix, Advanced Displays Limited (acquired by Cambridge Display Technology), Electronic Share Information Limited, E*Trade UK and has supported many other start-ups. He co-founded Amadeus Capital Partners in 1997 with Anne Glover and Peter Wynn.