Unlocking the potential of the UK’s best, fast-growing businesses.

When it comes to science and technology scale-up investment, Britain has reached a crossroads.

Great potential rests in the UK’s high growth businesses – both those that already exist, and those bound to emerge from our best-in-class research and development ecosystem. At present, though, much of this potential lies dormant.

If the private sector moves quickly – with the support of the government, politicians, and the public sector – we can unlock the capital needed to nurture, retain, and develop our most promising startups and spinouts.

Not only will these companies thrive as a result, but Britain’s economy will reap the rewards.

Failing this, the consequences are stark. We risk losing our best businesses to overseas markets. It’s likely we also surrender the chance of significant and imminent economic growth.

And we almost certainly resign ourselves to the role of follower in the fast-accelerating scientific and technological revolution, rather than leader.

It’s a positive sign, then, that there is consensus across much of the financial services industry on the need to improve the funding environment for these high growth companies. So, too, is it encouraging that unlocking pension fund capital is considered key.

Most importantly, though, there is acknowledgement of the need to act now, to make Britain the best and most accessible location for major investment – both domestic and overseas.

At Future Planet Capital, we’re able to say this with confidence, having consulted with leading entrepreneurs, major investors and asset managers in the UK and beyond, and key figures in the insurance and pensions industry.

As a result, we’re able to set out a clear five-step plan of action for realising these shared goals:

1. Managers of insurance and pension assets should work closely with the wider investment industry, to ensure they have the necessary skills, expertise, and partnerships to direct capital towards the UK’s high growth businesses.

2. Insurers and pension funds should look to move quicker than set out in last year’s Mansion House reforms, aiming to outperform the current goal of nine funds allocating 5% of capital into unlisted and early-stage companies by 2030.

3. Investors should look to deploy capital in every region of the UK, with LEPs and local and combined authorities offering investors a single point of contact for investing in their areas.

4. Ministers should make investing in the UK more straightforward by implementing in full the recommendations of the recent Foreign Direct Investment Review by the end of the current year.

5. Politicians should set clear and consistent priority sectors for investment and provide long-term support for these sectors including public sector co-investment.

If Britain is to support its high growth scaleups – and see the results from doing so – we must take these steps. Our industry-wide conversations have provided confidence in the appetite to do so. It’s time to act on these discussions and get much-needed capital moving in the right direction.

Zeroing in on Waste

Globally, 90 billion tonnes of raw materials (i.e. biomass, fossil fuels, metals and minerals) are extracted and used each year. By 2060, this figure is expected to double. Our approach to the use of these materials is linear. Just 19% of waste is recycled or composted. The remaining 81% is incinerated or dumped. 

To reduce the amount of raw materials being extracted and wasted, we must increase the effectiveness of waste management solutions and integrate waste back into supply chains. This can create value, which currently goes untapped. A recent report estimated that each metric ton of uncollected mixed waste represents an average loss of about $375. Thus, it is not surprising that adopting a global circular economy could create some $4.5 trillion value by 2030. 

Fashion, A Case Study:

Fashion is a case in point. Clothing production doubled from 2000 to 2014. Across the same period, the average length of time for which consumers kept each clothing item halved. This rise in demand has placed increasing strain on global raw material supply. Despite this increasing strain, in 2017, less than 1% of material used to make clothing was recycled. 

The least sustainable sector of the fashion industry is fast-fashion. With relatively cheap products, the business model aims to allow customers to keep up with current trends. Production processes have to be low-cost in order to make fast-fashion viable; products are often made from a combination of different cheap materials. Such a blend of fabrics makes recycling these cheaper products difficult. These problems are compounded by the volume of clothes produced by fast-fashion companies. With some fast-fashion companies releasing as many as 20 new clothing lines each year, fashionable apparel quickly becomes outdated. Purchased at relatively low prices, and with  such short product life-cycles, these clothes are perceived of as being disposable. Indeed, in the UK, 336,000 tonnes of clothes are disposed of in landfill each year.

There is, however, a profound circular shift underway in the fashion industry, driven by consumer demand. In a recent survey, two-thirds of textile sourcing executives said that consumer pressures for sustainably sourced materials would likely become a top factor in their supplier ratings by 2025. As a result of these changing patterns of demand, sustainable sourcing at scale will soon become essential for fashion companies who wish to remain competitive. Recycling and upcycling materials will be the main avenue through which sustainability can be achieved in the fashion industry. Reusing materials will allow the fashion industry, responsible for at least 4% of global greenhouse-gas emissions, to cut out carbon-intensive resource extraction processes.

A Circular Approach:

A circular approach which creates value whilst limiting waste and emissions must be adopted not solely by the fashion industry, but by industries across the board. From food to plastic production, we must reduce our linear approach, characterised by over-extraction and unused waste. Future Planet's focus on innovative solutions spinning out from the world’s top universities that intersect both digital and circular shifts ensures that these start-ups can realise their growth potential to make a substantial difference. While assisting with the creation of these new circular systems, they must characterise production and consumption to have a positive impact on our future planet.

by James Derham

The Future Planet Blog: Best minds, brilliant ideas - Douglas Hansen-Luke

Innovation. We have the money. We have the minds. Now we need the Mojo.

Douglas Hansen-Luke, the Executive Chairman of Future Planet Capital, explores how Britain can maximise the effectiveness of it's leading institutions and innovators.

Following the Government's commitment to increasing spending on innovation and technology it's clear that we have the money, and with leading innovation centres including universities, such as Oxford and Cambridge, it's clear we have the minds.

However, do we have the mojo?