Three Big Ideas #18
Why sharing is caring, a tale of two Cambridges, and privileging innovators
Welcome to our weekly Three Big Ideas roundup, in which we serve up a curated selection of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.
🔁 Eamonn Ives, Research Director
In one of my first Big Ideas, I discussed research that suggested that the arrival of Uber to a city caused the unemployment rate to decline, especially for those at the lower end of the earnings spectrum. In that piece, I said the findings were just “one more datapoint proving the importance of the sharing economy.”
This month, that body of evidence grew a little bit larger. A new paper from Matthew Denes, Spyridon Lagaras and Margarita Tsoutsoura reveals that individuals who have previously worked in the sharing economy are more likely to subsequently become entrepreneurs. They also find that this is especially true for “those who are lower income, younger, and benefit from flexibility. [As defined by those with dependents.]”
Theories advanced for why experience of the sharing economy seems to increase the likelihood of future entrepreneurship include on-the-job learning (backed up by data that shows gig-workers-turned-entrepreneurs generally start firms in the same industry that they gigged in), plus additional liquidity (which can be invested into creating a new business).
In my previous gig worker post, I argued that the growing evidence base on the sharing economy shows the need to proceed carefully when regulating labour markets. Even well intentioned measures could have harmful unintended consequences – with the least affluent in the economy bearing the brunt. At the risk of sounding like a stuck record, that argument remains as important, if not more, today as it did then.
🧮 Anastasia Bektimirova, Head of Science and Technology
While similar in name and research output, funding levels for biotech firms in Cambridge, UK differ greatly from those in Cambridge, MA. The Kendall Square area of the latter Cambridge, stands out in particular – with VCs pouring $14 billion into its 600 biotech startups, earning this single square mile its reputation as one of the world’s most innovative places (more thoughts on this here).
In an article exploring how a biotech startup from Cambridge, UK is trying to bridge the gap between British scientific excellence and US commercial savvy, The Economist explains that “much comes down to the deeper and more educated capital pools and greater appetite for risk in America.”
Science Minister Sir Patrick Vallance illustrated this well in his speech at the launch of the Science and Technology Venture Capital Fellowship at the Royal Academy of Engineering which I attended last week:
“For a decade or so as the Head of R&D at GSK, if I spoke to an investor in the US, the investor would very often know a lot about the science, would know exactly what was going on in different biotech companies, would know what competitors were doing, would know where the scientific problems were. If I had a similar conversation in the UK, nine times out of ten, it would be, ‘is the court diligent safe’? It’s a striking difference, and that’s really what this is all about. Ensuring that the very brightest people who understand finance as well as science and technology can be part of bringing this investment attitude to the UK, making sure that we’re prepared to take the risks, that more money goes into this space in the right and informed way, and in a way that understands the founder profile that needs to be pursued in order to be successful.”
I’m optimistic about the Fellowship, and, as ever, think it’s good when the government launches new initiatives and embraces a test-and-learn mode. At the same time, I wonder what an upside-down approach could deliver. We should be equally interested in people turning their deep understanding of science and technology into market foresight. We need to ensure an enabling environment is in place for scientists to have a more diversified impact portfolio – and reward that diversity. Policy-wise, this could mean better supporting the emergence and growth of small specialist funds led by people who are properly embedded in the research. After all, applying deep domain expertise to make informed investment bets and guide founders could probably count as impact alongside traditional academic metrics. In some cases, perhaps even more so than publishing a journal article.
🎓 Philip Salter, Founder
As part of a swathe of announcements to deliver growth, the Government has brought back to life the idea for an Oxford-Cambridge Arc. During the Johnson Government, plans were made, then scrapped, to build on the millions of jobs and the billions ‘the Arc’ already contributes every year.
As the Financial Times reports, achieving that requires more than just a train line – important though it may be. We also need the two world-leading universities at either end of the Arc to spin out even more incredible companies. Universities, however, are reluctant to cede much of their innovations, with one in four universities beginning negotiations demanding a 50% equity stake. “Investors balk at being accorded just crumbs.”
The article hints at the solution, comparing Cambridge University with Sweden’s Uppsala University, which usually “confers ownership on the originator.” Known as ‘Professor’s Privilege’, this system gives academics ownership of the intellectual property they create, rather than assigning it to universities.
Professor’s Privilege grants them the freedom to decide how best to use it – whether to release it to the world free of charge, or attempt to commercialise it independently, using pre-existing business contacts, or through a university Tech Transfer Office. As our paper Academic to Entrepreneur argues, numerous studies suggest that this system fosters greater innovation. It’s an idea deserving of serious consideration for any government focused on growth.