Accelerator Policy: the future after Brexit The UK will need to establish its own policies and its own grant regime to replace the grants currently available from the EU, and crucially and urgently needs a locus to carry this out. EU support for Accelerators and Incubators has been more extensive than elsewhere and more comprehensive and more collaborative than that of the UK, suggests recent research. (My 5-point plan is below.)
With Y Combinator and Techstars as leading lights in the world of Accelerators, the US’s Small Business Administration has run several support programmes:
* 2014, on Accelerator and Incubator models:$2.5 mn;
* 2015, to involve all regions of the US: $4.0 mn;
* 2016, in support of jobs growth, manufacturing, and areas with weak access to VC: $3.4 mn. (1)
By contrast, EU funding (of which of course the UK has been a beneficiary), designed to tackle the ‘EU’s gravest economic crisis in 50 years’ by revolutionising its business culture, has focused on networking – among providers, on the development of specific fields of interest; and has been of various intensities and with different breadths of application.
Policies have been targeted at:
- Cross-border services
- Impact that is industry-led and pan-European
- Startups, especially in ICT
- Eco-system building, and
- Internet public-private programmes
And more specifically on projects about:
* Commercial space applications
- Low carbon energy systems
- Internet content and media
- The Internet of Things
- ‘Smart city’
- Social, and
The EU’s recent Horizon 2020 project commits nearly €9 bn for grants – in phase 1, for innovation feasibility studies, in phase 2, for advice and support services for investment mature concepts, and in phase 3, no doubt for aspects of implementation.
The UK’s interest in Accelerators was founded on a research mission to the US by a public innovation R&D organisation (Nesta) in 2011. Its report, ‘The Startup Factories’, (together with lead Accelerator, Seedcamp) launched interest in Accelerators, and was followed up with funding by Nesta for several very early stage examples. Shortly afterwards, the Cabinet Office offered £11mn in development grants to ten organisations that were focused on stimulating social enterprise. Since then however, policy has relied on the market – mainly through tax incentives to investors (the EIS and SEIS schemes). And grants, mostly for proof of concept, have been available from Innovate UK.
The UK’s approach is strongly marked by the mutual independence of those who deliver Accelerator (and Incubator) programmes; whereas the EU’s approach appears to have been more comprehensive and certainly more collaborative. Meanwhile, London (with its ready access to trade and financial services) has become the leading place in Europe for startups.
It has to be said that evidence of outcomes is no more than the siren calls of the deep: we know little about startup rates or success rates, or about failure rates – either nationally or regionally. And what there is tells us little about ways forward.
However, for Brexit the UK will need to take urgent action to establish policies for the future, together with a grant regime, that will maintain the UK at the forefront of this field. Here is my 5-point plan:
* establish a trade body for this now substantial and important sector, whose primary objective should be collaboration, and include in particular:
* establishing a major UK provider of programmes to rival Techstars and Startupbootcamp; and adapting them for universities, and business and science parks;
* increasing the number and enhancing the practice of mentoring; and of staff of Accelerator and Incubator organisations;
* developing the sector’s venture capital industry;
* and focusing grants on sectors of major interest to the UK; on pe-accelarators; on scaleups; and on local eco-system.
(1) This and the following two paragraphs are based on material in ‘Accelerators’ by Wright and Drori, 2018, most of whose research quoted is dated 2016.
John Whatmore, November 2018