This essay has been written by Dr Raj Iyer, sAlnaptic, and forms part of a publication entitled ‘Perspectives on the role of London’s higher education sector in global AI leadership: A collection of essays’ which is being published on the London Higher website one part at a time.
London is in no doubt the place of choice for entrepreneurs to start-up:
- it’s where the government sits,
- it’s where the money is,
- it’s where the most diverse talent can be found and most importantly,
- it’s also where a good market lies.
Let me elaborate.
London alone is home to over 50 universities and institutions for higher education, and with many more graduating from the likes of Oxbridge willing to work in London due to its cultural diversity and higher salaries, the city offers access to top global talent. London also happens to be the financial capital of not just the country but also the world, which means that start-ups have the opportunity to tap into angel groups (groups of high-net-worth individuals investing in startups) and venture capital (VC) funds in the early stages of their journey.
As a result of the above, there are a number of initiatives that genuinely support bringing innovative ideas to the market. However, they are often stand-alone – either a government backed grant scheme or an accelerator programme offered by the private sector or universities’ incubator services that help their student or staff get their ideas off the ground. This does make starting-up challenging because founders do not get equitable access to all of the ingredients needed in the earliest stages of inception. Not all universities offer incubation services, primarily due to lack of expertise in the area and access to funding remains a barrier for founders, especially those coming from disadvantaged backgrounds or from an ethnic minority group, with less than 2% of venture capital going to female founders!
In my personal journey bringing sAInaptic to the market, the university ecosystem has played a pivotal role. As a PhD from Imperial College London, I had the privilege of working closely with the Imperial Enterprise Lab – the College’s “dedicated support service for students, staff and alumni who want to develop their entrepreneurial mindset, skills, and networks.” With an exceptional 79% survival rate for the startups it launches, the Enterprise Lab was instrumental in laying the foundations of our business – their idea surgery helped us to validate our idea by formalising the market research that was needed to help us understand market needs and dynamics; we then moved on their mentoring scheme where we got to work closely with experts from various business sectors like business, fundraising, sales & marketing, talent and so on in order to come up with a comprehensive business model and plan.
While these initiatives help companies to get a product to market, they often fail at a crucial time of scaling up. And lack of funding is a major factor in this, resulting in a worrying trend of scale-ups moving to the USA, where there is more appetite for risk and funding. After all, startups and scaleups are instrumental in not only bringing innovative technologies out of labs and into the hands of end users, they propel the nation’s prosperity by creating jobs and income from exports and so it’s in the best interest of the new Labour government to prioritise working towards levelling up the playing field for founders to establish and scale their businesses.
It’s my strong opinion that London’s universities and higher education institutions can play a crucial role in this. The government should prioritise funding for universities to facilitate launch of incubation programmes; universities should prioritise partnerships with VC funds and the corporate sector in order to provide targeted mentoring schemes as well as access to funding at all stages of the startup lifecycle; and universities and the government should both work more closely with the corporate sector to create launchpads and testbeds that will help companies to find early adopters and a path to product-market-fit.
The London ecosystem offers a unique and compelling environment for such partnerships and innovation. By leveraging the strengths of higher education, business, and the government, the city can continue to attract and nurture the startup landscape and maintain its position as a global leader in innovation.
