Just one suggestion for the Irish Innovation Task Force. Promote funding to disruptive technologies. Let’s start with a definition from wikipedia.
Disruptive technology and disruptive innovation are terms used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect, typically by being lower priced or designed for a different set of consumers.
The important aspect here is that disruptive technologies improve a product or service in an unpredictable way, creating or fundamentally changing a market. An example would be something like Skype. There’s another reason why I’ve chosen this.
I’ve blogged about Nassim Taleb’s “Black Swan” before and his advice for investors about understanding their real risk profiles. Most people get confused between relatively solid investments like treasury bonds versus risk like supposed “blue chip” stock market investments. The ideal Taleb portfolio is about 85% governmental bonds and 10-15% pure risk.
There’s an analogue here with disruptive technologies and the investment strategies of state funding agencies.
Enterprise Ireland is essentially Ireland’s state VC and angel investor. We don’t have much of a VC sector, as such, so we’re reliant on EI to fuel indigenous tech growth. EI is an oft maligned organisation but they are responsible for giving a lot of indigenous tech companies a chance. One of the areas where they fall down, I believe, is in funding disruptive technologies as this is organisationally problematic.
EI’s review process for commercialisation funding for research institutes is based on industrial and academic review. In my experience of grant application submission, which is considerable, they attempt to reach a consensus across the reviewers as to whether a proposal is commercially and technically viable. This is useful at picking ideas where a) there’s already a market b) the technology is mature c) the idea isn’t contentious. However, I’ve seen neat ideas like creating a P2P Telecommunications network dismissed out of hand in 2002 as technically and commercially unrealistic. Perhaps they were right 😉
More annoying are reviews where 2 reviewers love the idea (A marks) and one reviewer hates it (C or D). This has happened and sometimes the nay-saying review reads like an ad-hominem attack. Perhaps it was!
The disruptive idea is inevitably contentious. It will attract naysayers like flies to s&%t. Its market will not be tested and its technologies may be immature or, at best, not industrially tested. Yet Mr. Taleb would probably suggest we should invest 15% of our R&D grants on such technologies. Perhaps more as R&D grants are inevitably risky. This could be accomplished by a two step review process. Step 1 involves establishing what the “consensus” projects are. What projects the majority of people think are likely to yield commercial rewards. Ear-mark 80% of funds for these. Then let’s be ambitious in step 2. Weed out the ideas that a) were highly contentious, b) would revolutionise a market yet c) are being proposed by a credible team. These are your disruptive technologies. Ignore the consensus and fund as many of these as 20% of grant funding will allow.
Another improvement to the process sounds obvious but is the exact opposite of what is practiced currently. Right to reply. Once the applicant submits a proposal, success is in the lap of the gods (not meaning to give reviewers a power complex). Queries regarding applications are rare. Generally you’re presented with an opinion of the review board as a fait accompli without the ability to question reviewer’s comments or clarify misinterpretations. If you consider that, sometimes, the reviewers are in direct competition with the applicant for funding OR the proposed commercial product it’s a process that demands a right to reply.
Modifying the review process as suggested would, in my opinion, lead to a better selection process for grant funding and would improve the chances of funding yielding a massive success. Ultimately, this is what Ireland needs. Much of our techie nous wouldn’t exist but for the early wave of indigenous tech companies such as IONA, Baltimore and Logica, illuminaries of which dominate the tech landscape in Ireland. A massive indigenous success gives a taste for tech enterpreneurship like nothing else and ignites the passions of school leavers towards the ICT sector. It also trains the kind of highly-skilled and adaptable staff we need to build a knowledge economy.