Without a doubt, 2016 was a year of turmoil for the UK. A people’s referendum in June saw the majority of Brits vote in favour of Brexit – which in turn saw the pound plunge to a three-decade low. But, counter-intuitively, when economic uncertainty prevails so does the opportunity for change.
In a speech to the CBI at the end of 2016, Theresa May pledged to invest an extra £2bn a year in government resources towards research and development (R&D) through a new fund to back “priority technologies”, a guarantee echoed by Philip Hammond in the autumn statement. May also championed innovators and entrepreneurs, vowing to turn Britain’s “bright startups into successful scaleups by backing them for the long-term”.
This is undoubtedly a wise move. London and the UK in general needs a vibrant tech sector if we want to stay ahead of the innovation curve. However, if we want to start 2017 with a bang then R&D investment should be broadened to include a wider set of entrepreneurial disciplines. After all, having a more diverse portfolio of investments across both tech and non-tech will better bolster the UK’s economy as it exits the EU. True innovation needs to be threaded throughout each and every sector, whether it’s technological or otherwise. We need to help our grassroots companies inside and outside tech to launch, expand and diversify, if we want to boost our economy and stave off competition from abroad.
As things stand, super tech startups are at the heart of a funding feeding frenzy, yet if you’re trying to make it outside of that sector the options may appear more limited. Despite the fact that the UK is making a name for itself in the tech sector, it is not Silicon Valley; its history and heritage is rooted in manufacturing and this is something that mustn’t be sidelined. The UK’s largest manufacturing sector, the food and beverage industry – which is worth a staggering £100bn – didn’t get a single mention in terms of funding in the autumn statement. With over 16,000 new food and drinks products launched last year alone, is investing solely in tech R&D really the right move?
There’s certainly no shortage of innovative and successful UK businesses outside of tech already. For example, Hippeas has pioneered an innovative way of processing chickpeas to create an extruded snack. With a predicted revenue of $35m by the end of 2016 and a launch into 18,500 stores, they are stealing increasing amounts of market share from the classic crisp brands.
Elsewhere, Eve, a mattresses company, is delivering high-quality memory foam mattresses direct to consumers. It’s been so successful that it’s received £10mn in investment so far. And in the health and leisure sector, startups such as 1Rebel are offering on-demand, no membership fitness, which is disrupting the standardised gym membership model.
When it comes to investing it is vital that companies don’t put all their eggs in one basket. If they have a truly vested interest in helping Britain thrive – particularly with Brexit tipping the scales towards uncertainty – then investment must be weaved into the entire fabric of the economy. Let’s start the year as we mean to go on: by making sure funding is accessible to those budding entrepreneurs, both inside and outside the tech sector.