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Building a way to work smarter

Building a way to work smarter

16 Jun 2017 by hhwdjwbphm.d hhwdjwbphm.d

At its latest Science Insight event, lab building contractor Willmott Dixon invited leading industry figureheads to discuss how research bodies and universities can ‘work smarter’ to attract all-important private investment – we tagged along to bring you the best bits…

A vibrant and sparky conversation touched on the importance of a clear vision, how entrepreneurial spirit is key, the importance of shouting about successes and the next steps people should take to foster important partnerships. Sally-Ann Forsyth kicks things off: “Small start-ups need flexible short-term leases due to the unpredictable nature of their growth and are therefore a riskier place for private investors. On top of this, scientific companies vary in their requirement for office versus wet or dry lab space which can significantly impact on costs and hence returns. However, whilst individual leases may be variable, the constant volume of demand reduces this risk enormously and often lab based organisations find it operationally difficult to relocate creating more stability in occupancy.

“These things need to be carefully considered when attracting investors, as science parks and campuses need to meet the needs of their businesses – which can change quickly. However small businesses can grow really fast. They seed future development on the park and can also act as an attractor for others creating clusters of expertise. This added value proposition makes each science park or campus unique and creates great loyalty with its occupiers, encouraging them to continue their growth on site. A clear vision for the park helps attract and retain more companies, ultimately building the long term future of science parks. This makes them a great place for investment if the investor is willing to support their long-term goals.”

For up-and-coming parks external funding is essential, as without it, many budding biotech businesses would not be able to fund their overheads or research. Currently, funding can be secured from two main sources: the public or private sectors, however Sally-Ann urges her peers to carefully consider both: “Public sector funding is so important to businesses and parks, especially during their early stages of growth and development, when businesses seem more ‘risky’. At this stage public sector funding is crucial, allowing us to incubate small, upcoming businesses and research.” Because of this, it is really important the scientific community to have business acumen, allowing it to understand different types of funding and how they can best be used. Sally continues: “When businesses have grown and have gathered proof of their successes, we at the science park, work with them, helping them to think like entrepreneurs; learning how to market themselves to private investors, and start the next stage of their research and career.”

Science as a business Scientists becoming marketers may seem a novel prospect, however, Angus Horner also believes scientific communities need to learn how to celebrate their successes, in order to attract the right type of private investment. “The UK is home to some incredible research and science, which is having huge national and international impact. However, many of those involved spend too little time shouting about their triumphs. To put it simply, investors will not invest unless they see actual or potential success, so it is down to businesses and individuals to think about how they can better spread awareness of their work. “Harwell is a fantastic example of a thriving scientific community that works with businesses regionally, nationally and globally – but we know that we have much more work to do explaining what is here and broadcasting our news.”

Although Harwell’s community and ethos is part and parcel of its attraction to investors like Angus, he warns that communities like Harwell’s cannot be simply or quickly manufactured: “Strong scientific clusters are hot-beds for investment, but this is largely down to their organic growth of infrastructure, which can take decades to put in place. Harwell has over £2bn of national labs, exceptional people and an amazing ecosystem for innovation, which has formed naturally over many years. Although there have been efforts made to manufacture scientific communities in geographical areas with ample space and resource, they are not generally attractive to up-and-coming businesses and individuals who want to feel part of a wider community and legacy.”

Finding the ‘right fit’ During the discussion, Angus was hailed as ‘the perfect investor’ for a science park – he comments: “There aren’t many private sector investors that take a deep interest in not only real estate and infrastructure investment, but also the technical research and work undertaken – to foster significant growth. In many cases private investors are not very ‘hands-on’ with the science and research, they want to invest and reap rewards too quickly, without appreciating the length of time required to create and really grow companies and innovative product revenue.” Similarly to Sally Ann, Angus notes that private investment money is out there for major knowledge economy assets and places, but different capital sources’ target returns need to be matched to the right opportunities. “There is no easy way to attract the perfect investor; however, having a strong business case is fundamental. Private investment can come at the right time when returns match risk profile, and, although it may not seem that way, there is money out there.

“It is a well-trodden path for parks, businesses and campuses to blend both private and public sector funding, using public sector initially and then, looking to attract private investment once they have matured.” Understanding investment and the needs of state-of-the-art researchers are two of the key areas focused on by parks and campuses. However, what about the building process itself? While Angus urges the community to stay away from ‘hands-off’ investors.

Addressing issues With science and technology facility building specialists and investors like Angus, there is hope for scientific communities to build bigger and better research facilities. However, Chair of the debate, Martino Picardo asks simply: “How do we find an investor like Angus? One thing which was clear during our discussion was that they are few and far between. For many of us, I fear that we do not know how to attract investors, or at least the right kind of investors. “I suppose the real issue for our community is selling our successes to investors, knowing how to meet with them, talk with them and create a dialogue which can support our ongoing work and goals. There is fantastic research happening all across the UK, but the frustration we face is that we don’t know how to talk about it.

“There is an issue when it comes to funding. But it is not an easy one to address; demand is currently exceeding supply and we are well aware that we need more space, more buildings and more scientific clusters. Yet, the conundrum we are facing is that in that we do not know how to speak to private investors or when it is appropriate to make the jump from public sector funding.”

Local enterprise partnerships Although private sector funding is elusive for many businesses, Martino adds that having conversations with local local enterprise partnerships (LEPs) is key, adding: “Gaining momentum is a struggle for smaller businesses, as without initial funding, they will never develop. Because of this, it is really important for parks, campuses and their businesses to engage with LEPs, who can support this process.”

Nigel, of OxLEP, comments that LEPs offer help in the first instance, but also work to support infrastructure for scientific businesses, he said: “All over the country, LEPs like ours, have been working to ‘de-risk’ the sector and pave the way for private investment. However, a lot of our ongoing work is based on infrastructure, where we look at the footprint of a park or campus and invest in other needs such as: housing, employment and facilities. There is no point having outstanding facilities, if people cannot afford to live near them and work within them. Because of this, here in Oxford we are working with local authorities, universities and the business sector to carve out a vision for the future. “This vision is not just applicable to Oxford, it is relevant to the whole of the UK and Europe, even the global market. Yet, while we can work to build a stronger infrastructure, we also need businesses in the community to step outside of their comfort zones and meet with potential investors. We can help them do this, in many ways acting like a ‘dating agency’ for scientific businesses, helping them to have conversations through our Growth Hubs and grow in a sustainable way.”

Delivering funding solutions Fundamentally, with the introduction of the Industrial Strategy earlier this year and Brexit on the horizon, the scientific community is approaching a new era. “We have reached a paradigm shift both technologically and politically and we need to promote ourselves and our research now more than ever,” says Angus. “These changes bring with them a chance for us to streamline our approach, allowing us to better work with the private sector and enable us to align ourselves with the Industrial Strategy too.”

Funding is key to delivering this much-needed hi-tech infrastructure, but the pressure on public sector organisations such as universities to finance schemes such as scientific campuses and parks, is increasing. Funding solutions like Adjuto, a joint venture between Adducere and Willmott Dixon, allows public organisations including local authorities, universities and colleges to benefit from a unique funding solution that could save ten per cent on project spend – allowing them access to private capital to help fund development, principally through the transfer of land and long lease income. Clearly, this exciting period of change brings with it challenges, but also offers the scientific community with a chance to refresh its way of working.

Attendees:

Martino Picardo Debate Chair CEO Stevenage Bioscience Catalyst