FST JOURNAL

The UK has continually been at the forefront of great scientific and technological breakthroughs, a record of which we should rightly be proud. 

But as we enter a new technological era and AI develops at pace, humans and machine will together determine the next wave of our endeavour. If the UK is to once more shape the future, we need to completely reimagine the state and how it delivers for its citizens. 

This was the starting point of a series of so far three New National Purpose reports from the Institute for Global Change, co-led by Lord William Hague and Sir Tony Blair. In the first¹, we set out a programme for how the machinery of government can reorient to centre around science and tech, by: 

• reorganising the centre of government, with the full weight of the Prime Minister’s authority behind it;
• building foundational AI-era infrastructure, including a national health infrastructure that brings together interoperable data platforms and treats data as a competitive asset;
• creating an Advanced Procurement Agency, incentivising pensions consolidation and encouraging growth equity;
• reforming technology transfer offices to encourage more university spinouts, increasing R&D investment and reforming the way science, research and innovation institutions are funded and regulated;
• investing in new models of organising science and technology research, expanding the Advanced Research and Invention Agency and creating innovative laboratories that seed new industries;
• pursuing broader planning reforms, mainstreaming new technologies in education;
• building stronger global partnerships. 

Agile  

Achieving all of this requires the state to be far more agile in adapting to the technological developments that are going to increase in pace in the coming months and years. 

We argue the Government needs to address the issue of talent and expertise – attracting and incentivising more engineers, scientists and technologists in Government – and refocus on how it develops, procures and adopts technology. The private sector is already moving at pace to utilise AI, inventing new ideas and reinventing business models in the process. The opportunity is going begging for Government. 

Pushing the frontiers of science and technology will drive economic growth across the economy, in manufacturing and materials science, clean technology and cybersecurity to give just a few examples. Our industrial strategy is AI. 

Biotech and healthcare

This is particularly important for biotech². It is an area of science and technology whose historical track record is one of our great successes: penicillin, the discovery of DNA and the invention of molecular biology. 

Done well, biotech can be another building block in a reimagined state that improves and extends lives, hosts the companies of the future and sets the UK up for a century of success. The UK’s speculative MRC Laboratory of Molecular Biology in 1962 drew generations of the world’s most sought-after talent to Cambridge, resulting in 12 Nobel Prizes to date. The Cambridge Biomedical Campus boosted the UK economy by £2.2 billion in gross value added in 2021 alone.

However, the world of frontier research is changing, and as others move at pace, the UK needs to ambitiously embrace opportunities across a host of fields. We need a new laboratory, the Laboratory of Biodesign, focussed on the invention of biotechnology that is currently at too early a stage for commercial investors and companies. This would use experimental and computational methods to design, build and test new biotechnologies, biomolecules and therapeutics under one roof. 

The Cambridge Biomedical Campus

Importantly, it would pioneer a new institutional model³. This model, in the form of interdisciplinary Disruption Innovation Labs for focussed areas of research, would not rely on principal investigators employing teams of graduate students and postdocs. Applying lessons from Bell Labs, Xerox PARC, Google DeepMind and Gerry Rubin’s Janelia Research Campus, which all share common features that differ markedly from conventional research environments, the network of Labs should work at the intersection of AI and 15 different disciplines, be benchmarked to leading international competitors in core funding and bring together a critical concentration of researchers across science and engineering. They would become an essential component of AI-era industrial strategy, training the next generation of talent, spinning out promising startups, and producing output that will accelerate research and growth.

The NHS

The NHS would have a vital role to play. Part of this will be through better procurement, to ensure that our health and care sector is adopting and stimulating innovation in science. But alongside new personal healthcare accounts where each of us own and control our data, we suggest another way to open up research and innovation from biomedical data as a new NHS Data Trust. Majority-owned and controlled by the NHS in collaboration with trusted external partners, the NHSDT would treat NHS data as a competitive asset. Using this national asset imaginatively will save lives, improve care, and realise significant commercial value for the benefit of the public.

This would include establishing a central platform with a single front door for accessing anonymised data, primarily at a national scale, to both commercial and non-profit research entities, which would include large companies. In return, the NHS will benefit from hypothecated investment from the financial profit, and enhanced access and affordability to advanced treatments developed from the data provided. A tiered pricing model will enable equitable data access for UK-based small and medium enterprises, charities, and academic institutions, thereby nurturing homegrown invention capabilities. 

A transparent governance model that puts the public at the centre would ensure that our data remain safe and secure, and that NHSDT’s operations strongly align with public-health objectives. This has the potential to raise significant amounts of capital at a time when funding the NHS is increasingly difficult. It is a radical, but practical new model to invest in our health.

If we are to lead the biotech revolution, research and biomedical data will provide the foundation. And core to this is building companies and products to improve human health.

As it stands, the most vibrant biotechnology cluster in the world is in Boston in the US. Around Kendall Square companies such as Biogen, Eli Lilly and Moderna are some of the 250 plus companies driving developments in the human experience. More broadly, the US is responsible for more than half of the global market cap of $6 trillion.

The UK has had many notable successes, and today is home to companies such as AstraZeneca, Exscientia, Centessa Pharmaceuticals and Immunocore. The opportunity the UK presents has also meant that companies and investors such as Recursion and Flagship have set up here. But the UK is a major exporter of technology, and the US a key beneficiary.

Scaling up

We need to shift the balance and set our sights on emerging lights such as Isomorphic Labs becoming trillion-dollar companies that scale in the UK and list on the London Stock Exchange. This will require a mindset shift, fostering a more vibrant ecosystem and expertise in which emerging managers, solo general partners and operators running funds can increase the competitiveness and depth of capital in the UK, setting spinout terms that incentivise and reward entrepreneurs, as well as reforming pension funds and our capital markets. Specifically, we recommend:

• incentivising pensions consolidation and encouraging growth equity by changing pension capital-gains tax exemption and combining the UK Pension Protection Fund and the National Employment Savings Trust to create a single investment vehicle that participates in market consolidation.
• British Business Bank should set up a programmatic follow-on fund that invests in UK companies that have their Series A or B round led by a Tier 1 firm. Firms would make more money this way and provide a valuable product to small managers in the UK who do not have the capacity for pro-rata follow-up funding. Crucially, this fund should not be used to prop up Series B+ companies that struggle to raise capital – it should be used for supercharging proto-winners that have a chance of returning capital to the taxpayer.
• setting up a real emerging-manager anchor programme, where a large investor commits significant capital to support the growth of new, often smaller investment firms. This should be a quick process, with no more than six months to secure 20% of a fund.
• creating a sandbox that allows small managers to launch and run without the same overheads as the big funds. Areas such as Anti-Money Laundering and Know Your Customer should still be kept but removing other requirements would present a significant opportunity to attract managers across Europe to base themselves in the UK. 

Innovation

Britain has a chance to capitalise on this next wave of innovation. From putting the conditions in place to make Britain home to the companies and inventions that will help people live healthier, longer lives, to opening up economic opportunity and growth, to protecting the world by creating biosecure societies. For those that have become pessimistic about the state of our nation, this might seem unimaginable. But with science and technology at the heart of our Government, we can reimagine what is possible. 

1. www.institute.global/insights/politics-and-governance/new-national-purpose-innovation-can-power-future-britain

2. www.institute.global/insights/politics-and-governance/a-new-national-purpose-leading-the-biotech-revolution

3. www.institute.global/insights/politics-and-governance/new-national-purpose-ai-promises-world-leading-future-of-britain