Challenge 3: Innovation – Accelerating Net Zero innovations into practical use
Speakers
Chris Baker, Director at Studio Zao| Chloe Donovan, Managing Director of Natural Building Systems and Material Research LTD | Jasmine Husband, Place of London | Neil Pearce, Head of Commercial Enterprise at LSBU | Shona Campbell, Knowledge Transfer Adviser for Innovate UK
Chris Baker, Studio Zao
Welcome everybody. My name is Chris Baker, I’m the director at Studio Zao, we are an innovation organisation. So we specialise primarily in helping organisations of all sizes, public sector, private sector, small, medium and large, to take their innovation ideas and things they’re working on, and make them happen and do that in a productive way that is as efficient and as less wasteful as possible.
Transition to net zero is getting closer to being within our grasp, however far away that that date does feel. A large part of the conversation for that transition is very much and quite rightfully so focused on energy efficiency and operations in buildings, skills in the green tech space, and how we can actually apply and measure those in order to see the results of some of that work. But sustainability and Net Zero, can’t really be divorced from the innovation that kicks off the whole process.
Whilst there’s a lot going on in terms of investment, and we hear a lot about great technology and great research going on in the Net Zero space, there is a gap when seeing that actually implemented. With this in mind, what are the things we can talk about to help smooth that journey out to actually support businesses, large organisations and the public sector to make that transition happen and take their innovation ideas and put them into practice?
We’ve got a great panel with us today to discuss this topic with me, and to talk a little bit about what they’re seeing in their line of work and in a world asking what’s going on in the Net Zero space when it comes to new business ideas, new innovations, new technologies, new ways of implementing that and taking that into actual action. So I’ll hand over to them to tell you a little about themselves and their businesses.
Chloe Donovan, Managing Director of Natural Building Systems and Material Research LTD
Hi, my name is Chloe, I’m Managing Director of Natural Building Systems and Material Research LTD. Ultimately, what we are trying to do is to systemize the use of natural and bio-based materials in the construction sector. The places and spaces we live in are the single biggest contributor to carbon emissions as a separate entity, but the materials within those buildings are more than 11% of global carbon emissions and if we don’t move away from steel cement, and these high embodied carbon materials, that portion of emissions will use the entire the UK carbon budget in the next two and a half decades. It’s an area that really needs calling out for a solution.
We sit in this interesting middle ground where our goal is to systemize the use of bio-based materials meaning we’re always looking for innovative bio-based materials and our goal is to pull that together and scale it up. We’re both innovating ourselves, while also trying to benefit from and connect with others who are innovating in this space which is a really fascinating area to be in.
We’ve been quite successful in getting research funding, and collaborating with universities, on the raw R&D stuff. But the biggest part of the challenge for all sustainable startups and innovation is how do you actually scale it up? How do you go from having a proof-of-concept product to something that is commercially viable? That’s the stage that we’re at now. We’re in the nice, cosy area they refer to as the ‘valley of death’, if anyone is familiar with startup funding. It’s a really fascinating ecosystem to be in and crossing kind of the built environment and agriculture, I just think it seems like an obvious area where sustainability and innovation could be focusing its efforts instead of making machines to try and suck it all back out of the air.
Chris Baker, Studio Zao
I’m really glad you mentioned, connections with others. And I think that’s going to come up again in a minute, so great stuff.
Jasmine Husband, Place of London
I work in the Innovation team at the Place of London and most of what I do is basically project managing our pilots. It’s quite a large organization and it’s trying to instill on all those different areas of the process. Unlike a lot of property companies we develop, we have Asset Management, we’re landlords, we do all of it, which creates a lot of challenges in my job to try to put it in all those processes. Day to day I meet with a range of stakeholders, internal or external, trying to launch these things and trying to find problems as we work with a problem-based approach. Meaning we try to understand what our tenants are facing, and what the actual issue is and then tackling it like that.
So rather than just trying to put solutions on people trying to understand what we as an organisation, what our tenants are facing, as an actual issue, and then tackling it like that, rather than just coming in and say, Yeah, innovate and not really having any plan, which I think some people, some larger companies can be quite guilty of trying to avoid that as of the last year, we’ve sort of changed our ethos.
Chris Baker, Studio Zao
Thank you, Jasmine.
Neil Pearce, LSBU
Hi, I’m Neil and I’m from London Southbank University and am Head of Commercial Enterprise. I work with a team of people, and we are that interface between academia and the outside world, so not just University Business collaborations but Social Enterprises, communities, councils, etc. Our job is to make sure that those great ideas that we have in-house often originating in academia, find a way to show their real-world impact and get it out there for the benefit of people and planet. We also help people who are looking for solutions and match them with our expertise and help them identify a problem and help get a solution which often involves funding.
We’ve developed a consultancy company where SMEs can come to us asking for help across the construction industry and set up an energy advice clinic for local people in our local Borough, specifically for residents of Southwark giving av on how to save energy. People come to us and find out things like which way you put your blinds depending on which way the light comes in a room as this can make a considerable difference to how you store heat within your home. LSBU try to practice what we preach with the help and funding from Innovate UK. One of the major buildings on campus had 12 gas boilers and we’ve reduced it to three thanks to heat pumps and we’re not too far from attempting to have underwater flows.
Chris Baker, Studio Zao
Brilliant, thanks Neil.
Shona Campbell, Innovate UK
Delighted to be on this panel this afternoon. So Innovate UK is the UK’s innovation agency that supports business-led innovation, both through grant funding and non-cash support through a number of programmes that are too many to go into. Innovate UK has three thematic priorities, one of which is Net Zero and I think it’s fair to say that Net Zero finds its way through the other programmes as well, so Health and well-being and Technologies, they’re all completely interlinked.
The party organisation that I work for is Innovate UK KTN, which stood for Knowledge Transfer Network before becoming fully acronymized, the network bit is important as we’re about connecting people to enable business-led innovation to happen. Most of my work is involved in business-university partnerships, so I work with most of the universities in the BIG London partnership and beyond, including Surrey and West Sussex. The main type of partnership that I support is Knowledge Transfer Partnerships, which is a large, well-established programme and has been going on for almost 50 years.
Chris Baker, Studio Zao
Thank you, Shona. Fantastic. So you all gave a really good overview of some of the work you’re doing. And in many ways, I’ve already kind of touched on a lot of the themes. We’re also very keen to get some questions from the audience. And the second base module was chairs incredibly easy, because that will be the rest of the session. But just earn my keep, if you like, I do have a couple of questions to get it flowing.
First question, Chloe, you mentioned a little bit about that sort of the journey that you’ve gone on. And Jasmine, also, you know, some of the projects you’ve got going on, I suppose just a general level? What does it take to start a Net Zero business or an innovation project today? You know, what are some of those challenges? What does it take? What kind of motivations do you need? What sort of things should you be thinking about? And the challenges to overcome? And how have you overcome a few of them that maybe stick top of your mind and claiming to do want to stop?
Chloe Donovan, Managing Director of Natural Building Systems and Material Research LTD
I think one of the biggest challenges in this space is being able to kind of hold complexity and resist the pull towards silver bullet, binary solutions which is something I see, particularly when getting funding for early stage projects. It’s a nice pithy soundbite, it makes something easy to grasp, but actually the complexity of something like the climate emergency and the Net Zero challenge, it calls for slightly more complex solutions. And with that comes challenges, I think that we made a really key decision to outline our design priorities and what it was we were trying to do. Our guiding values are to avoid petrochemical materials, we try and avoid mechanical fixings and we’ve developed our product to be a circular product. So it’s basically bits of buildings that you can ultimately reuse and trying to do all of that whilst making it cost efficient. That’s another key kind of objective for us. And quite often, some of these things can be intention. And I think I would say that, for me is the kind of single biggest challenge is trying to hold all these things at the same time and recognise the tension sometimes between them and having to make decisions about the direction you want to take your product or your business.
The next biggest challenge is proof of concept. Certainly, for a hardware business, you know, I’ve been on a range of different accelerator programmes. And I’ve listened to a lot of webinars and in the software world, there’s a lot of cheap and easy validation you can do in the beginning, you can do fake websites to see what people click on. And you can do, you know, I guess it’s kind of seen as a simpler financial proposition, higher potential returns, lower complexity, etc. And obviously, what we’re doing is making bits of buildings. So we’ve been very lucky to get support from local authorities from our local enterprise partnerships to be able to tap into some more research funding in the beginning.
But I think there’s absolutely nothing that has done more to help us than having physical demonstrations of our product and what we’re doing and that requires the early adopters, the people that are willing to support something that is new and innovative. Something like buildings, there’s a massive kind of threshold for entry into a market like that, there’s no roadmap telling you which hoops you need to jump through in order to get your product on the market. It’s an absolute minefield, and certain organisations that are kind of heralded as the kind of the knowledge base is in that space.
Personally, I found the more I’ve spoken to them, the less I know. I guess trying to be guided by your principles and the values. I’m very lucky my business partners have similarly joined this because they also see the opportunity to simultaneously decarbonize construction and agriculture and do so in a way that creates better and healthier communities and homes. And that’s my kind of background in youth and community work. And why I’ve kind of randomly ended up in construction. There are a few of the challenges that I think I see certainly from a startup perspective, and right now funding and raising investment is a tricky landscape.
Chris Baker, Studio Zao
I love the cheap and dirty validation comment is certainly something that we work with a lot of small businesses, particularly in South London in getting people to think about actually you don’t have to go and take that whole first step in one. How can you understand validate a little bit better, and go through that as part of innovation, not just in the Net Zero space.
Jasmine when you when we talked about it previously, you often refer to colleagues as pilots, right? And kind of setting these things up, which naturally means you hope that there’s something to follow. So how do you cross that? And we talked about crossing the gap there? What is that process? What isn’t it like? And what are some of the kind of challenges you have in that space?
Jasmine Husband, Place of London
The main challenge is process. We’re a large organisation, and we’re a public sector organisation, which therefore means there’s a lot of process and a lot of red tape, there’s so much you need to go through, which is good, because you know, you have a lot of checks which you need. But equally, it prevents us from being agile, it prevents us from seeing something that we want to solve and solving it then and there.
That brings me to another word that I’m constantly told to be which is ‘resilient’, which I think may be the most needed word for working in the public sector. That’s the main challenge, that process just to get to the pilot, takes a lot. You have to really prove that it works before you’ve even shown that it works, which is quite the challenge that people sometimes don’t understand.
The reason for that pilot is exactly that I have so many conversations that are like, Okay, but what does it do that and I’m saying, Yeah, that’s why I’m trying to do the pilot to show you how it doesn’t, how it works exactly in the field. And then even to go beyond that your the way that we work is once we’ve run that pilot, we hand that over to the relevant sector. So we don’t run the larger scale things, a lot of time we’ve proven the point we hand over to asset management or, or whatever team it’s suitable to be in. So then you really need a high level of buy in from them, because then they need to take the responsibility, which is even more of a process. So the challenges we face can sometimes feel feel endless in that way, because it’s buying off to buy in, and it’s process and a lot of it is can be financially minded.
And I think I spoke to you about this the other day where a lot of the benefits with Net Zero is its sustainability, its net zero measurements, which doesn’t necessarily directly equate to money to the financial gain of an organisation. A lot of what I spend my time doing is creating metrics and frameworks that change that into a number, change that into financial measurements to at least communicate in their language, I find the way to speak to these people a lot of the time it’s I have to change how I’m saying to be in line with them. Even if it’s not, it’s not actually reaching that money gain or nor should it be it should be doing both, as it should always be doing. But if you continue to speak to them that language, I find they shut down a lot of the time and that can be partners as well, quite often the private sector. And that’s a lot of what I do.
In summary the process. It’s the attitude and the mindset and the language you use when you’re speaking to these people. And just the public sector organisation loopholes that there always are, because ultimately, we have to work towards Transport for London, we have to work towards what the Mayor wants us to do, and all these measurements that we’re constrained by, but within that sort of trying to do that, as best we can towards all these goals.
Chris Baker, Studio Zao
Absolutely, it sounds like you’ve got a lot of different things you have to navigate. Someone mentioned resilient, I think you might have done to go through that process where it’s an easy process, but you know, the steps of there, but there are things that can get in the way and make it difficult.
I suppose that brings me on to my next question, one of our audience may be sitting there thinking I’ve got an idea or I want to launch more in this space, but some innovation concepts we want to adopt something that process can be in many ways risky, right?
Neil, earlier you mentioned risk. All these things you have to consider when you’re weighing up taking that journey towards Net Zero, there’s a lot of things to consider, which is innovation relative anyway. How can organisations overcome some of that to justify that risk and ultimately remove uncertainty from that process?
Neil Pearce, LSBU
Well, it’s very difficult. A lot of the great, innovative ideas are from SMEs and individuals and they’re the risk takers. They come to us, Innovate UK or to TFL to look for partners, and we tell them to fill in all these forms and we’ll get back to you next month. Then the next opening for that funding is two months down the line and another month before the panel sits, and then two and a half, three months before they come to a decision.
As an SME, my risk is someone else is going to overtake me if I don’t get this out to market now. But where do I go? So the risk then becomes a balancing act? Do I take the risk of waiting this time period, and securing some hefty funding, all that expertise etc or do I take the risk and say I’m just going to go out on my own and I’ll mortgage the house and the children and see what I can do. Go to friends and family, which is often the alternative as they can get it quicker.
The biggest risk of all is nothing happens which is a risk to everybody, not just to the innovator. How many innovations do we never see come to fruition because of these issues. That’s a risk. There are two ways to look at risk, from the individual perspective and from a global and community perspective, what are we missing out on? If we went back through all our files, whether from academics or externals, and listed all these brilliant ideas that never happened, that’s probably 90% of the stuff we see if not more. So that’s the risk that nothing happens.
Chris Baker, Studio Zao
And I think risk is always often deemed as a bit of a negative thing. Everyone likes to talk about managing and mitigating risks, not necessarily talking about the upside of risk, right? And the other side of risk curve, what are you missing out by not doing it? But also, how do you manage success, and actually kind of see that.
Neil Pearce, LSBU
People are trying to change the risks of big corporatization, we currently have a funding competition running, which is enabling us as a university to work with people that we couldn’t work with before because they went “I want to do a KTP”, which shows a measure and this time scale for a big, long project. They now do the shortened 12-week KTPs which require very light funding from the investor but is mainly funded by Innovate UK and is effectively a proof-of-concept fund. So, if you talk to the right people, there are now programs that weren’t there before.
Chris Baker, Studio Zao
And that helps round us up on this topic. I mean, Neil mentioned a bit about what are we missing out on, and Shona I know that Innovate UK isn’t just about funding, but it is seen as a funding body and represents a lot of different funding groups. What are you doing to mitigate some of that and find these innovations and businesses that have these great ideas to make sure we’re not missing out on some of these potential opportunities?
Shona Campbell, Innovate UK
I suppose the main thing is the non-cash support, which is the Network Building and other support programs that can work with people before they are ready for grant funding on that scale. It links you up with universities and funders but can also link you up in terms of supply chain so that you’ve got people to work with. I guess part of the answer is going back to risk and to de-risk what you are doing you need to work out who the audiences for your innovation are and get them involved really early so that you’re designing something that they actually need and is going to meet that purpose.
That is one of the other benefits of getting involved in networks, we don’t just dream up competitions. The funding competitions are designed, by listening to what’s needed out there in the business community. So if you’re involved, you can influence where funding is going and I don’t know whether that’s widely recognised in the business community, but certainly some of the networks that the UK KTN run, they are listening for what’s going to provide a good return on investment in terms of grant funding
Chris Baker, Studio Zao
Brilliant, thanks Shona. Are there are any questions in the room?
Delegate 1
I’m curious to know about the rationale behind one the features discussed on the short term KTP. Thinking about the fact that the flag of the heavy, short case study around the innovation that you want to do, will improve the chances to get funded either by private or public sector, is that the case?
Shona Campbell, Innovate UK
It’s a bit of a mixed bag. So partly, it’s an opportunity to feel fast. Not every idea is going to work, it might sound great but there is a job to do to actually demonstrate whether it can go forward. So a feel fast is a good outcome in terms of these short term projects.
The other is probably what you’re getting at, and it’s pipeline building. It’s doing early stage work, which de-risks for the business, but also for the funding going into a more intensive and more expensive programme. This was piloted last year, and this year’s programme is open now. We’re learning as we go, what the appetite is. It’s also a bit more accessible for earlier stage businesses, not ‘started up yesterday, want some money today’ type businesses as there needs to be a little bit more infrastructure there to supervise a project. But in terms of having funding available, the grant rate is much higher, it’s a 90% grant rate. So hopefully, that makes it more accessible to innovative businesses who are early in their innovation journey.
Chloe Donovan, Managing Director of Natural Building Systems and Material Research LTD
We looked at KTPs and waiting two years for an answer to a question when you’re trying to design and large scale a product is not compatible. We did a Key Plus Project with a university that had a shorter timeframe and the thing about trying to do innovation is that you kind of accept that you will explore venues that don’t lead anywhere. What you want to be able to do is minimise the kind of investment that you put into those venues and obviously try and learn as quickly as possible. I think having those shorter timeframes and dynamic funding options to collaborate with universities are definitely more appealing to companies like us.
Delegate 1
Does it work also for management KTP or just Knowledge?
Shona Campbell, Innovate UK
Any type of knowledge.
Delegate 1
As a business school it happens that we get companies who may have an idea they want to structure for example, their business model to get that reward from a client perspective. And that is the case where there is real urgency because you’ve got a company who has a product may be developed, what stage it can be like placed and then you can have by creating pieces in order for that to be the order or something like that, and that is where the kind of urgency comes in place.
Shona Campbell, Innovate UK
I think just one point I’d make is that hopefully you weren’t waiting two years for an answer, because you’ll be developing something in evaluating it. So just leave that positively.
Chris Baker, Studio Zao
Thank you very much. Was there another question?
Delegate 2
I think innovation is great when it comes to providing solutions or convenience. Is there a mechanism where innovation, not only just reduces your resources, and brings you business but also benefits the consumer? Everything in the UK, from drugs to real estate is very expensive, how do you use innovation to reduce costs for the final consumer?
Chloe Donovan, Managing Director of Natural Building Systems and Material Research LTD
We’re trying to develop a product that we ultimately want to be cost-competitive with conventional materials or approaches and in the Net Zero and sustainable space, I think it is something that people are very critically aware of. Solving climate change, being a massively cost-prohibitive thing, is not going to lead to the speed and the scale of the uptake that we need. I certainly have seen innovations happening that are very much going to make life easier and cheaper for people, but climate change is going to cost us all and there are ways that we can try and de-risk that in the short term.
Investing in innovations that in the long term will ultimately make life easier and cheaper for everyone is better than sitting back and waiting for things like energy price spirals to happen. I think it’s about where you put the value and I think that obviously, innovation and new products often do cost more in the early stages. It’s about then how you get it from that early pilot scale that we’ve been talking about to being something that is scaled up and therefore can be cost-competitive and I think that is absolutely a massive challenge area. But I do think most sustainable startups are very conscious of the fact that they need to be price competitive as well.
Neil Pearce, LSBU
The pricing of electric cars is a good, real-life example of that. They started prohibitively expensive and are now just expensive due to more people adopting them, but they are on that pricing curve which is just market economics. Similarly, SMEs have to fund themselves even if they get funding to drive their business model until they get scalability, and it can be passed onto the consumer.
Chris Baker, Studio Zao
Final question from the front and then we will wrap this up.
Delegate 3
Talking about speeding things up and getting things done and getting funding to those that have got good ideas. I’ve seen some very good examples, the Royal College of Art does this
‘Pitching to Investors’ and I wondered if LSBU or Innovate UK have a sort of Dragon’s Den type offering that would speed up the process of getting money to people with good ideas more quickly than filling out too many forms.
Neil Pearce, LSBU
Yes we have three, one for students called For Project night program. Another we’re about to launch which will be similar but for startups and academics and that’s come through additional funding we’ve got from the government. It will be a proof of concept and we’re calling it Proof of Concept. Then the third one is through some of our outreach programs. We reach out to businesses, and they come in for networking evenings, and we invite them to explain to us what they want to do and we decide whether or not we can help them.
Chris Baker, Studio Zao
Just to add that, I think there are a lot of accelerators and Business Support Programs that are running across the boroughs, I know that we look after a couple of them. And definitely looking for public and private funding as a ramp off of these kinds of these great initiatives. It’s an excuse to bring people together and share some of those ideas. It doesn’t always have to be in a Dragon’s Den format, I think any way we can bring together people who are potentially in a position to release funding, and it’s not always just enough that you can get all the burden but whether it’s academia, private investors, angel investors, you know, that private investment is also an often unexplored space. Because people always want to keep going back to the public sector pie, which is big, but there are challenges with that.
