An economic downturn is the best time to invest in innovation, London’s economic attachés were told at a meeting hosted by the National Endowment for Science Technology and the Arts (NESTA).
Introducing AERL members to NESTA, chief executive Jonathan Kestenbaum explained that the endowment was established by film producer and politician Lord Puttnam in 1998 with £300m in National Lottery funding. It operates independent of government or shareholders, enabling the organisation to back radical ventures and take a risk profile not always possible in the public and private sectors.
Referring to their recent report entitled Attacking the Recession: Setting the Agenda for the New Economy, NESTA’s head of policy and research Stian Westlake explained how a recession can spur a renewal in the economy through radical ideas. He went on to outline a three-point plan to bridge three critical gaps in a recession. Firstly, the equity gap that finances new ventures needs to be bridged by a venture capital fund, jointly financed by the government and private investors. Secondly, the ideas gap needs to be bridged by identifying future sources of growth, based on consumer and social trends, such as the green economy, the digital revolution and healthcare. Thirdly, the report examined how the right mix of conditions – such as a nexus of research universities, venture capitalists and businesses – can combine to convert ideas into money.
Lastly, Michael Harris, NESTA’s director of innovation policy, told trade and economic attachés that recessions also catalyse innovation in the public sector, because they compel public servants to investigate new and more efficient ways of delivering public services – and that includes foreign ministries and trade missions!