The formation of the Government’s new Department for Science, Innovation and Technology, provides a much-needed opportunity to correct the UK’s fundamentally flawed innovation funding strategy, and to create a program which drives more commercially-focused Research and Development (R&D), with the potential to deliver billions in growth across our nation’s vital industries.

The UK Government has committed to expand R&D spending to £20bn a year by 2024, reaching 2.4 percent of GDP by 2027. However on its current trajectory – with the current system of financing research and development – we are at critical risk of continuing to waste billions per year on technology with no prospect of making it to industry.

The innovation funding strategy implemented by the recently-abolished Department for Business, Energy & Industrial Strategy (BEIS) was on the road to nowhere. The essential problem is that there is no overarching strategy in place, with R&D funding taking place without a clear vision of what is needed to achieve what will deliver the most growth: commercialization. The drone sector is just one example of this.

A grant-addicted industry

Many of the ‘Innovation funding’ organizations that distribute much of this funding are private companies whose entire business is based on bidding for and spending Government money. This has resulted in the emergence of a self-perpetuating industry focused almost entirely on handing out taxpayers’ money, without a proper strategy for how to bring important emerging technology to market.

The fund-granting process usually omits any analysis of what the market needs. As a result, the UK spends and often wastes huge sums of taxpayers’ money developing R&D solutions leading to dead ends. In the drone sector, the UK Government is spending hundreds of millions of taxpayer pounds on testing and trialing, while meaningful commercialization is moving at a snail’s pace.

There is no doubt that, used correctly, (R&D) funding is extremely important to the development and deployment of emerging technology.

By contrast, recent research has shown that over the last 18 years, almost £300m of taxpayers’ money has been spent by Innovate UK, on companies which have since dissolved.

However, in the absence of a mature commercial drone industry with specific operational needs, there is a danger that technologies or capabilities are researched to satisfy ‘wishful thinking’ rather than realistic long-term advances for the UK economy.

In the drone sector, this wasteful, aimless approach is exemplified by the huge amounts of funding provided to explore the ‘over-hyped’ concept of drone delivery - small packages carried by small unmanned air systems. This is a capability that is clearly not commercially viable, safe, or socially acceptable. In essence, we are spending lots of taxpayers’ money on things which are not, and may never be, required, and – in many cases – have been tried many times before.

Get a clear focus

What’s needed – and what I hope we will see from the newly-created Department for Science, Innovation & Technology – is a ‘commercialization’ program with a clear focus: to help attract investment targeted at delivering commercially-viable services to industry.

This would not only require far less public funding, but it would also help highlight specific research and development requirements. Research and development initiatives could then be funded to optimize benefits to the UK economy, resulting in tangible socio-economic benefits including investment growth and job creation, creating a genuine return on investment both for the taxpayer and the UK economy, to the order of billions.