No 1960s vision of the 21st century was complete without an attentive robot-scuttling around doing household chores. At the time, automation went about as far as the Goblin Teasmade — an unwieldy alarm clock programmed to wake its owner with a-gentle hissing and freshly made cup of tea. It seemed logical that the next step would be fully mechanised homes.
Yet, not for the first time, the future failed to arrive on time. Domestic robots turned out to be a disruptive technology that disrupted nothing except the retirement plans of those who had invested in them. We have even gone back to brewing our morning tea — while an original-Goblin Teasmade now sits in a display case at the Science Museum.
Meanwhile, artificial intelligence (AI) has been applied to quite different areas. When Netflix-recommends a film based on what it knows about your tastes, when an internet shopping channel instantly calculates how much it thinks you are worth to it, that is AI.
We are still a long way from machines which can think for themselves in the sense that humans do, but what they can do is crunch through mountains of data on a scale which would have been unimaginable half a century ago. One current application is the software developed by British company Status Today to study employee behaviour and detect unusual patterns — a system which might have detected, for example, the-unusual deals of former Barings trader Nick Leeson long before he took the bank down with him.
How do we know which of today’s emerging-technologies will go the way of Google and which will go the way of domestic robots? We don’t. There lies the problem of encouraging investment in original ideas. Some will turn a dollar into a billion dollars, but many more will never earn anyone a penny.
The use of the word ‘dollar’ was deliberate. Emerging technologies rarely turn a pound into a billion pounds. While Britain is good at coming up with ideas and-taking them to one level, the investment environment in the USA is so much better at attracting the capital required to-create Microsofts and the Googles, which develop ideas on a global scale.
There are British successes. In recent years universities have become much better at turning their ideas into marketable products. One example is Magic Pony, which uses AI to turn poor-quality grainy footage shot on mobile phones into high-quality videos and which was recently bought by Twitter for $150 million. That was shared between its two founders, Rob Bishop and Zehan Wang, who developed the software while they were graduate students at Imperial College.
But where are the British Googles and Twitters? ‘There is a cultural issue with investors in Britain,’ says Derek Hill of Ixico, a UK firm providing-clinical trial-services for pharmaceutical companies. ‘Venture capitalists here don’t want to grow inter-national businesses. They want an exit within three to four years, and by far the best exit is a cash purchase, often from a US company.’
Perhaps the closest Britain has to Microsoft or-Google is ARM, the Cambridge-based FTSE 100 company which designs and builds chips for phones and other devices. ‘It has been a phenomenal success story,’ says Hill. ‘We probably all have multiple chips made by it on our wrists and in our pockets. But you can’t help thinking it could have been ten or 100 times bigger had it had a slightly bolder business model and bigger finances.’
Too often ideas born in Britain don’t get as far as the FTSE — they go on to become American commercial successes. Take biotechnology. Last year, small UK companies raised £178 million in initial public offerings (IPOs), while US companies raised £2.2 billion. UK companies raised £488 million through-venture capital, while Californian companies alone raised £1.8 billion and those in Massachusetts £1.6 billion. Where money is invested in emerging technologies in Britain, it tends to flow into the safer bets rather than the blue-sky ideas which become tomorrow’s disruptive technologies. Of the £178 million raised through the stock market by British biotechnology firms last year, £127-million of it was raised by a single company, Adaptimmune, which is developing T-cell therapy for cancer treatment. It speaks volumes that the company chose to list in the US, on the Nasdaq exchange, rather than in London.
Peer-to-peer lending services are trying to change the culture. One called Funding-Circle has raised £1.3 billion for British start-ups by reaching beyond usual sources of capital such as banks and venture capitalists. It has married entrepreneurs with 50,000 retail investors, 17 local authorities, hedge funds and one university — so far producing returns of around 7 per cent. But it is still early days for this model of raising capital and so far it has proved-better at getting ideas off the coffee table to the first level of commercial development rather than building international companies — the 15,000 companies which have accessed funds through the service have so far borrowed an average of just over £85,000.
There’s another factor in Britain’s underperform-ance when it comes to turning ideas into commercial success. ‘We spend a lot of time talking about failure in a negative way,’ says Martin Whitmarsh, CEO of Land Rover BAR — the tie-up between Land Rover and Ben Ainslie Racing set up to try to wrest the Americas Cup from the US for the first time since an American schooner won the first race around the Isle of Wight in 1851.
By contrast, when Hewlett Packard recognise they have failed in something they are reputed to throw a champagne party, to celebrate the effort that went into it, and the fact that they will not be wasting more money on the project. A British entrepreneur speaks of visiting Israel — rapidly becoming a third technological hub to rival San Francisco and Boston — and listening to people there who accept failure as part of doing business and are prepared to move rapidly onto the next thing.
As for the Goblin Teasmade, it was far from a commercial failure but an all-too-British story of how the man who came up with the idea — George Absolom, a former naval officer of Hayes, Middlesex, who patented it in 1933 – was not the one who made the riches. Having built the first models in his own garage, he sold out an early stage, leaving Goblin to redesign it, file another patent and reap the profits.