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In the Catapult Network’s Supercharging Innovation podcast, knowledge experts and leaders from the Catapult Network talk with some of the UK’s top industrial and academic leaders and parliamentarians to get their views on science, innovation and technology. Together, they are putting UK innovation under the spotlight and exploring the role of Government, businesses, the research community, private investors, and other innovative organisations in strengthening the economy through collaboration. Welcome to the Catapult Network’s Supercharging Innovation Podcast, subscribe now.
The Innovate UK Catapult Network provides a unique combination of cutting-edge R&D facilities and world-class technical expertise to support UK business innovation. Catapults are a critical element of Innovate UK’s portfolio of products and services, where the application of research is accelerated, and where new technologies are further developed, scaled up and realised. The Catapult Network is made up of nine world-leading technology and innovation centres with more than 65 national locations.
Hello and welcome to the second theories of the Catapult Network's Supercharging Innovation podcast. I'm Katherine Bennett, CEO of the High Value Manufacturing Catapult, and this year's chair of the Catapult Network. Our network is made up of world leading technology and innovation centers, established and powered by innovate UK. This supercharging innovation theory explores how the UK must break down barriers to solve national and global challenges, and how this can be realized through the power of science, innovation, and technology. In this very first episode of our series, our expert panel will be discussing how the UK can harness the power of digitalization.
Katherine Bennett:I've seen firsthand how digitalization and manufacturing can coexist. How they, in some cases, work together in harmony, but then in others can be in conflict against one another. But also in the end bring out the best in each other. In the last few years, we've all been privy to the unprecedented rise in AI assistant, like chat gpt, bard, and Claude, and witnessed the impact of these on our everyday lives. Today, you'll hear from some of our most knowledgeable experts across the catapults.
Katherine Bennett:You will hear from Rosa Wilkinson, Phil Young, Amar Abedali, and our very special guest, Lord Clement Jones. They are looking at topics such as what is stopping digitalization from reaching its untold potential? How do we overcome the main challenges towards a successful application in the UK? I'll pass over to Rosa to get the discussion started.
Rosa Wilkinson:Thank you, Katherine. So for those of you tuning in who don't know me, my name is Rosa Wilkinson, and I'm the director of policy at the High Value Manufacturing Catapult. And I'm delighted to be part of this podcast, which will deal with a key question for all of us. How do we harness the opportunity of digital? How do we harness that digital future that we keep hearing about?
Rosa Wilkinson:In the sector I know best, which is manufacturing, it's an important question. Our manufacturers are responsible for around 10% of this country's GDP. They employ about 2 and a half 1000000 people. They're responsible for well over half of our exports and 64% of all of our investment in research and development. You can't imagine our economy without our manufacturers at its core.
Rosa Wilkinson:And we know that new technologies and particularly digital can make that incredibly strong contribution even greater. Now that's true in manufacturing, but I know it's also true in other sectors. Adoption of new technologies here in the UK is actually pretty slow. So what's going on now? Well, I'm delighted to say that I am joined by 3 guys who should be able to bring some light to this very real conundrum.
Rosa Wilkinson:First of all, a couple of colleagues from my fellow catapults. We have Phil Young, director of policy research and engagement at the Digital Catapult, and Amar Abid Ali, who is the chief commercial officer at the compound semiconductor applications catapult. And then our very special guest, I call him Lord Fabulous, the deeply insightful Lord Tim Clement Jones, the Liberal Democrats' Lord Spokesman for Science, Innovation and Technology. Welcome to all of you. So we begin with a problem.
Rosa Wilkinson:We know that digital technologies offer huge benefits, but businesses aren't always seizing them. What's going on, guys? Phil, I'll come to you first if I may. You're absolutely at the heart of the tech sector in the digital catapult. Why aren't firms diving in with more enthusiasm?
Philip Young:That's a really interesting question. And thank you, Rosa. It's fantastic to be here today. I'm very much looking forward to the discussion. Very close to my heart, a lot of the work that we do is very much working with the small startups and scale ups and looking at how we create and then stimulate the products and services that they will build for the future around a range of technologies, including AI, immersive technologies, blockchain and distributed ledger, the Internet of Things, a whole range of different aspects of digitalization.
Philip Young:And the resounding message that we have really, I suppose, as we look across the market and we start to see the dynamics of the market between supply and demand. One of the major challenges, I think, in the UK is that we often have many solutions in specific sectors. So where we have a lot of success and disruption, things like financial services, professional services, or indeed many of the different sectors that reside in the Golden Triangle, so the Oxford, Cambridge, London, Golden Triangle. There's a lot of applications and, startups who grow and build products and services and have successful exits and entrepreneurs who go into those areas. What we don't have as much of is scalable products and services and a number of different companies in perhaps engineering, physical engineering domains, and more traditional sectors of the economy that are distributed across the country.
Philip Young:So outside of those. So largely, that's because of the geographical and cultural proximity of those startups that are based in that Golden Triangle area will work very much with where they see there's lots of data, where there's an easy route to commercialization, quick wins in terms of customer pipelines and investors. Whereas the patient capital of investment and that customer pipeline doesn't necessarily always exist elsewhere at the scalability that they require to meet the goals of their investors in different sectors. So one of the things I think we really need to do is try and stimulate the interest and opportunity recognition within the advanced digital technology startup community about working in some of these more traditional domains such as manufacturing or construction or transport that they perhaps haven't explored, but there is huge potential for us to become leaders in, and there's huge commercial opportunities for them too. So those are the things I think if we can find a synthesis between supply and demand, there'll be a real opportunity there.
Rosa Wilkinson:So can I just follow-up on that point for one moment, Phil? I'm conscious that we have at the moment the Made Smarter initiative, which is about making sure that manufacturers themselves recognize the other side of the wire to stimulate the appetite and interest of some of those folk who could be creating new tools.
Philip Young:Absolutely. So if you look at AI, for example, the recent program called Bridge AI, which has just been stood up, that Digital Catapult were involved in, funded by Innovate UK with a few other partners. This is exactly the type of program that I think is really exciting because it's about how we also stimulate the AI supply side to think about the demand side need. So made smarter, absolutely fantastic initiative, really flying the flag for digitalizing manufacturing. But in order to inspire and generate AI companies, for example, to really think about what the requirements are to work and the opportunity is to work in more traditional sectors, these are fundamental to creating that buzz and scalable growth and investment into those companies and making sure that they realize the opportunity.
Philip Young:So at the moment, I think there's less than 4 or 5% of deep technology or emerging technology companies focused on things like manufacturing and construction and transport. And what we need to do is change that, increase that number, and make them more scalable. And we can only do that with, targeted programs that can help to inspire them at the early stages to looking at new sectors.
Rosa Wilkinson:Amar, can I come to you next? I know you're very much in a community, which usually is at the leading edge of things, which is adopting and which is using tools already. And in fact, we can have no digital sector, it seems to me, without your sector. What are you seeing?
Amar Abid-Ali:Yeah. That's a great question. I think, semiconductor specifically where we play quite a significant role as a catapult, we are looking at all of the commercialization aspects of compound semiconductors. And when you look at the commercialization aspect there from an application point of view, there are 3 major areas where compound semiconductors really play there. It is essentially net 0 and the energy efficiency element.
Amar Abid-Ali:It's the telecoms and the future telecoms capabilities that are in place, and there's intelligent sensing. And the reason for that is really quite simple. It's comes down to physics, the physics of the compact semiconductor devices itself. As they are more efficient and that they can switch faster, they have better capabilities than their traditional semiconductor equivalent like silicon, for example. And so with that in place, where we get involved is really in new manufacturing capabilities that are either in UK, Europe, and elsewhere.
Amar Abid-Ali:And a lot of the new manufacturing capabilities that's required, for example, in electric vehicles currently, if everything is moving from internal combustion engine into electric vehicles, the whole manufacturing line, plus the research and development has to be developed in such a way to enable digitization of that, including for example, connected vehicles and electric vehicles. So the digitization and manufacturing, they are very complimentary in this space and very much one supports the other. The productivity efficiency that's there and the competitiveness of those particular products are quite apparent. And so we are at the space which supports the infrastructure for the data adjacent to get things digitized. And in that space, there are 3 major aspects.
Amar Abid-Ali:Number 1, there are the tools and techniques that allows these technologies to come forward to market. Number 2, it is, the implementation of those and the optimization of them. And that's where the catapult really plays a significant role. And 3 is actually strengthening the supply chain for these particular technologies. So a lot of our projects are actually two dimensional in nature.
Amar Abid-Ali:In one aspect, we're actually trying to improve the technologies and the manufacturing processes of implementing those compact semiconductor applications. And on the other side, we're actually strengthening the supply chain in the UK to enable those to scale up into it. And so copper semiconductor, for example, specifically here, really is used for the development of new electronics devices, for example. And they are massive in terms of improving the efficiency of electric vehicles. And an efficiency of, for example, 10% gives you an additional 80 miles or 90 miles, which actually reduces completely the range anxiety that's out there.
Amar Abid-Ali:Similarly, in manufacturing, sensors are really important in manufacturing. Quite a lot of the sensors use compound semiconductors. Gallium arsenide, for example, is part of the compound semiconductor family. And they are enabling quite a lot of the automation in manufacturing as well. So we do see the application space from the perspective of the renewal, the new technologies, the new trends are actually really using a lot more of the digitization element, but through a different element, through the power electronics, through sensing and through the telecommunication aspect that compact semiconductors bring.
Amar Abid-Ali:So yes, you're absolutely right, Rosa, in terms of, we see it from the end of the research and development part, the 3 years time span and all the way through to actually implementation.
Rosa Wilkinson:Amar, thank you. It's an interesting set of challenges that we're facing. Tim, are your colleagues in the Lords hearing some of those issues, both on the supply and the demand side?
Lord Clement-Jones:It's a delight to be with everybody today because I'm a huge Catapult fan, But I do spend a lot of time kicking the tires on government policy and try to, you know, make sure that for instance, our AI policy is fit for purpose and that we genuinely are on the road to becoming a science superpower and all that, which people have some skepticism about. But I absolutely agree with Phil and Amar that this is a supply and demand issue. On the supply side, we're talking about quite a long pipeline. And, of course, it's very interesting. We've had sir Paul Nurse produce a report earlier this year.
Lord Clement-Jones:We've had, sir Patrick Valance produce a report on the regulation of tech and so on. What they're trying to do is actually get the government to adopt a number of policies precisely in this area. And on the supply side, you know, that it's pretty basic some of this. The r and d side is over bureaucratic. That's why they created ARIA.
Lord Clement-Jones:Well, why haven't they swept away the red tape and number of the other areas as well? You know, we've got a big skills issue right across the board and straightly enough, that's not just supply, it's also on the demand side as well. Businesses feel a lack of confidence that they don't have the internal skills to adopt new technology. In particular, ai, which is increasingly getting a kind of voodoo around it, particularly in the area of sort of multimodal large language models and so on. It's quite a big deal.
Lord Clement-Jones:And then we've got a question about getting the skills from abroad. Well, that's very difficult. We need a more diverse tech workforce, basically. We have problems and Amar alluded to this to scale up is you. It's still very big, and people have talked about harnessing pension schemes and pension funds and heaven knows what else.
Lord Clement-Jones:Well, we're getting there. But, you know, in each of these areas, we've been promised action for quite a long time. The AI report that I was chairing back in 2018 talked about quite a lot of these issues then, and that's already 5 years ago. And, of course, let's face it. We could always do with some more research funding.
Lord Clement-Jones:We're still not competitive, you know and through ukri funding innovate uk And I bet the catapults of all could do with quite a bit more resource to do their Commercialization work. We're still not competitive with many of our actual commercial competitors South Korea US, and so on, in terms of the sheer amount of investment and procurement by government of new tech. On the demand side, it's quite interesting because I think that actually regulation is a demand side issue as well. You have to have confidence that when you adopt new technology, you're not gonna suddenly find you're liable for something which you had no clue that you were. So you need to have a stable regulatory regime.
Lord Clement-Jones:And it's all very well to government talking about pro innovation, regulatory, regimes and so on, which they have done with their AI white paper. What we need is the ability of business to look at this and say, yep, we know exactly what we need to do when we procure something. This is gonna have a kite mark according to, management standard, an AI risk management standard, or a monitoring standard, or a testing standard, whatever it may be, or it could be a kite mark of some kind. So there would be much, much clearer regime when you're actually deploying new technology. And the problem is we're not there yet.
Lord Clement-Jones:The EU is quite a bit further ahead than we are, but all that goes to the confidence of adoption. And then, of course, you know, it always also boils down to, well, can I get a tax credit for this? And frankly, we're going backwards in the r and d and innovation tax Credit side of things at the last budget. So what we've got to do is have a really positive approach. And I remember 5 years ago, we had the same demand side issue.
Lord Clement-Jones:SAP gave us, you know, pretty strong evidence in our Lord's AI report back in 2018 saying not enough businesses had really thought this through, they weren't sure about the context in which they were applying new technology, They didn't have the skills and so on and so forth. Now we are getting better, but we need to do a heck of a lot more to really get both the demand side and the supply side really fit for purpose at the moment.
Rosa Wilkinson:Tim, thank you very much indeed for that. I'm sure lots of our listeners will connect with many of the points that you're making there. But as you were speaking, one of the things that struck me was that actually addressing this challenge means thinking down a number of different current government pillars, finance, skills, you know, supply chains in different areas, our international policies potentially. We saw earlier this year that government was reorganized to support the innovation effort, to support the uptake of new technologies. Have we got that right yet?
Rosa Wilkinson:Do we have the right structures for government?
Lord Clement-Jones:Well, it's really interesting you say that because we have this brand shiny new government department called DCIT. We're all big fans, you know, the formation of a government department may be, quite a good first step, but it's only a first step and we have to, you know, keep moving. There is less reference to the catapults and the need to commercialize, you know, the innovation bit of RDI that really isn't there. And the whole question of startup finance and scale up finance isn't yet being addressed properly and we've got to pull it through. We can't just simply have situations where, Silicon Valley firms just buy up the technology, you know, when it's, gets to a certain point in the UK.
Lord Clement-Jones:We want these businesses to grow and thrive in the UK.
Rosa Wilkinson:And, certainly, I know that there are many businesses with real ambitions for that growth. But very often, it comes down to what I describe as the Ghostbuster question. Who are you going to call? Where are you going to get the help that you need to take the next stage in your growth process. And I know that at times that can be incredibly unclear.
Rosa Wilkinson:I feel this is something that you quite often face within the digital catapult with companies. I know coming to you to ask for support as they try to digitalize. What advice can you give them?
Philip Young:Yeah. It's a really interesting question. Obviously, the journey towards digitalization is full with many pitfalls and challenges. Right? From legacy systems to skills to knowledge bases.
Philip Young:I think a lot of the time, what we tend to find is that the research environment tends to operate in a way that is very siloed in a technology or a discipline. What I would really encourage businesses to look at, but also government to look at, is a more systems based approach to how they approach innovation. So how do we tackle challenges at a level where it's not just one technology or even, a set of technologies, but focus towards a specific mission or goal that you want to achieve as a business or as a collective set of businesses that you drive towards. So sometimes I think we get too hung up on an agenda around a particular topic or a particular area. And in fact, what we need to do is consider these, technologies and digitalization as a set of tools and capabilities that you can leverage to your advantage.
Philip Young:The question is how you leverage it. And that's where skills come in and knowledge base. But but also it's about taking away the fear factor and really just trying something as well. Often what we find is that the first movers if they try and explore what something might mean for their business, and they they recognize that they may fail, they may, you know, even in the smallest sense, take a small amount of investment to try and try and test something. What they don't want to do is then do another test somewhere else and get into what McKinsey calls pilot purgatory of lots of different pilots all over the place.
Philip Young:And this is why working with startups are really important because what we want to do is create a stimulated pipeline of customers for those startups. And they need to be able to gather that evidence of investment and customers that they can then scale their product and service further as well. So I think the partnership with the startups, the taking calculated risks and understanding that sometimes they're not gonna be a very clear use case, and they're sometimes not gonna be a really clear defined value back to you and return on investment. But if you don't do it, then you may miss out and you may lose your competitive advantage or you may not get the ahead of the game and digitalise in the way that you want to. So it's about being bold, I think.
Philip Young:And that's what message we always take to all of the companies that we work with.
Rosa Wilkinson:And it's about asking ourselves how we can inject the confidence that Tim mentioned into, businesses so that they feel able to be bold. I mean, that's a really, really big challenge. And I I know within the compound semiconductor space, it's an area where we need companies to be bold so that they can up their production. I mean, we do talk a lot about producing a new wafer fab in the UK, but actually we need companies within the sector to raise their game from what we've already got. Amar, is what Phil's saying resonating with you?
Amar Abid-Ali:Yeah. Absolutely. I I think the challenges are pretty similar. Although at a different space of time, if you like, generally, you have to go through a process of convincing someone. They have to digitalize.
Amar Abid-Ali:And once you convince them, you're gonna have to apply those processes in place to make that a success. Where we're at is there is almost a preconceived idea that, yes, we do need to do it, the customers we do talk to, And then it's about how do we make that as optimal as possible. And I think we're seeing challenges generally at that chasm between, right, we wanna apply this now. How do we do that best? All the way through to the actual optimization side of things.
Amar Abid-Ali:Where we've spent a lot of energy and time is to make sure that transition is as clear and as concise and as smooth as possible. And if you look at the compact semiconductor market overall, there is the fab element to actually produce the devices themselves. And then, obviously, you need to get from those devices to modules, subsystems, and then systems and and so on. And in the applications catapult, as we are, we tend to look at just after the devices have been produced. So the manufacturing itself has just arrived with a wafer, let's say.
Amar Abid-Ali:And then we tend to get involved, for example, the manufacturing capabilities of doing a novel packaging for this semiconductor wafer. Without it, you won't have a device. So therefore, you can't have an electronic system. And in order to do that and get it into the manufacturing space, what we tend to do is optimize that process for them. So now the process is optimized.
Amar Abid-Ali:The next stage is, how do we scale it up? And that's where we talk to the supply chain and actually transfer over the process that we've made and derisked into the manufacturing, partner. And that aspect is what derisks it generally for the majority of the manufacturing capabilities because, otherwise, it is quite substantially difficult technologies to actually scale up. And so we take that risk away, and that tends to, to bring it forward. So, yeah, I would say that there's definitely an agreement that customers really want to go towards digitalization, but they struggle with the implementation side at scale.
Amar Abid-Ali:And that's the chasm which we're trying to really fill in.
Rosa Wilkinson:And I know that one technology that an awful lot businesses are looking at at the moment is, and Tim, you mentioned it earlier, AI, you know, is it a friend or is it a foe? I hear as I read my papers every day and listen to the radio, I will hear stories in equal measure. I think it's about 15% of all UK firms in all sectors use at least one form of AI technology within manufacturing. It could bring huge, huge benefits in terms of upping the productivity. If we are able to show businesses just as you have described there, Amar, how they can apply it without them getting into pilot purgatory.
Rosa Wilkinson:I love that phrase, Phil, that you used earlier, but really big skills challenges, some significant governance challenges. And Tim, I, I know that you and your colleagues in the Lord have been wrestling with AI issues from time to time. It has been a very, very live topic. Any reflections on on AI and how much we should be embracing it ahead of stronger structures in terms of the governance.
Lord Clement-Jones:Well, we've got to get ahead of the game. Absolutely right, Rosa. But, of course, there is this extraordinary narrative around AI as you allude to. I mean, you know, one minute we're gonna be extinguished. There's massive existential risk.
Lord Clement-Jones:The next minute it's going to do everything for us and everything's going to be wonderful. So you've gotta navigate and the trouble is that if you actually look at the skills of most boards, most business leaders, they don't actually have the skills in order to make the judgments necessary to adopt new technologies, let alone AI and judge whether, you know, it's the right thing to introduce some of these large language models in order to avoid some of the problems and so on. On the other hand, you can't just leave it to somebody who's the chief data officer or the chief technology officer in a business because there are ethical issues involved. So it's a bit of a a catch 22. The board and the audit risk committee of a business needs to be involved very heavily to actually understand the implications of introducing AI applications and so on.
Lord Clement-Jones:I mean, there is obviously an increasing culture of ethics by design and so on, and standards are being set for AI risk management and so on, which are beginning to converge across different jurisdictions and so on. But we're still in the foothills there, and so that militates. And 15% is a miserably low figure and contrast pretty badly with some of our competitors again. So we've gotta do better. I've, written corporate governance chapters about how AI needs to be dealt with in a different ethical issues and so on.
Lord Clement-Jones:But it's still relatively slow progress.
Rosa Wilkinson:Some really interesting points there. And one of the things that strikes me when you think about that 15% figure is what is it that would drive that 15% up? Now, actually, it's not just a problem with AI, as you quite rightly say, Tim, it's something that is common to all technologies. I remember last year, I was, speaking at an event, about the adoption of automation technologies. And what I learned was that although the UK may be the 9th largest manufacturer in the world, in fact, we sit somewhere around, I think it's 24th or 25th on the league table of number of robots and automated processes per capita.
Rosa Wilkinson:It's crazy. We're well down the list, and that was holding us back. And I asked myself the question, well, what's going on here? And, actually, part of it is about confidence, about manufacturers being able to see something working in practice at a factory scale rather than just in a, a microcosm. And that's certainly what the catapults have been there to do.
Rosa Wilkinson:Do we need to build on the sort of catapult approach? Tim, I'm going to come back to you first of all, if I may. But then I'll I'll come to Amar and to Philip on that question.
Lord Clement-Jones:I'm a big fan of catapults as I said earlier, Rosa. They were created by the coalition government actually when Vince Cable was the Bay's secretary of state. And, you know, we wanted to give them real resource and real clout in all of this and we had a House of Lords select committee, our own science and Technology select committee in a report about 3 or 4 years ago, talked about a catapults and what needed to be done to really bring them to maturity. Because in a sense, you are the hyphen that boats an awful lot together. If you boat developers with those who want to adopt, you boat r and d together with innovators, with the businesses, and you can help new businesses grow in terms of your adopters hand as well.
Lord Clement-Jones:So, you know, there aren't many bodies out there that can do that. I'm afraid, I'm, very much in favor of really boosting what the catapults do. I think the network is great. I think the fact that the catapults are so good at collaborating amongst themselves, I think is really important because, you know, no one catapult necessarily has the answer. And so, you know, cross collaboration is absolutely what works.
Lord Clement-Jones:I know I'm sort of preaching to the choir here, inevitably, and I do talk about catapults in the lords quite a bit. So I think we need to get cracking and, hopefully, the message will get through, now that you are, essentially under DCID.
Rosa Wilkinson:Jim, thank you for that very ringing endorsement. But there are some interesting challenges within it because, of course, when the catapults came into being, we were constructed. We were developed to really play that translational role, pulling out the very latest new knowledge from our universities, from our research base, and helping to commercialize it with business. But actually, there is a further step that we need to take, it seems to me, and that is around the adoption of new technologies. Amar, what does it look like from the semiconductor's perspective?
Amar Abid-Ali:Yeah. Adoption with technologies, I think, the name of the game and always been, as a catapult. One of the most difficult things really is to bridge the gap between a technology push versus market pull. And as a catapult, you're always between those two elements and and trying to make sure that those particular technologies actually have a real use in, real applications. We've seen numerous technologies that are there.
Amar Abid-Ali:There are even patents in place, but the application on a commercial basis is not necessarily there. Taking AI as an example here from a compound semiconductor perspective, if you look at what we've done with optimization side of things and looking at how AI would play a role in this, to your previous question, Rosa, We have a mandate, essentially, to make the most optimized products for UK companies so that they become much more competitive than their counterparts elsewhere. And in order to do that, one of the most basic elements for us is that the device level itself is optimized up to the system level. To optimize this, we've created we worked on a project using artificial neural networks to create highly accurate models of, let's say, a power device. Now this may sound like quite a small element in the grand scheme of things, but, actually, what that does is a huge time to market improvement, a huge cost improvement in terms of what you develop for new applications, and a minimal amount of risk.
Amar Abid-Ali:If you combine these as a starting point where the device level, module level, and subsystem level, you're immediately getting huge competitive advantages. Now where we've applied it is a really straightforward thing. And, by the way, we don't see AI by itself replacing any of the, technologies we have been working on, it's actually quite the opposite. It feels that there is a sweet spot in where we work and the projects that we've been involved in by which the engineering expertise and experience is extremely relevant. So an example with the same power device testing there is you have an engineer that takes the devices, tests them fully so that they can characterize it both electrically and thermally.
Amar Abid-Ali:That characterization data is quite accurate because of the experience and expertise of the engineers. That data then goes into an artificial neural network. And so that's the collaboration between the human side and experience and expertise and the artificial neural network, machine learning, if you like, to create a model that then an engineer will make a decision on how to use as well. The chain here is very, very clear on adopting new technologies as well from our perspective. We've always looked at ways of optimizing this, and we've saw AI be the a critical part here and not in a way that it replaces any of the high skilled jobs that we are currently seeing in the marketplace.
Rosa Wilkinson:It's a brilliant explanation and telling of the story, Amar. Thank you. Phil, you're sitting very much at the heart of this, trying to fuel some of that sort of thinking right across the sectoral waterfront. Can I turn to you to pick up the AI Baton and how we can both boost confidence, Help ensure that we are adopting or developing the right tools, and then helping people to have the confidence to really draw them into their business, to boost their performance?
Philip Young:We really are in an AI bubble. Now I think 2 years ago, we might have said we were in AI bubble. I think we're firmly in an AI bubble now. And I think the reason for that is AI is a discipline. It's not a singular technology.
Philip Young:And actually, as AI starts to gather momentum and maturity in certain areas, it inspires the imagination, particularly where it's quite consumer centric. So chat, GPT, bard, those sort of things, emulating human speech are exciting to people on a day to day level because they can see the capabilities that AI offers to their day to day lives. However, AI is also a whole range of other things that we've been grappling with within our various catapults, and within Innovate UK and across the whole portfolio for many, many years already now and, and across the research base as well, where we're thinking about the direct applications of machine learning, for example, to solve specific issues, which are complex automation issues or complex data issues, where we're trying to gather information and insights from that data and try to optimize and create better operational or business efficiency through AI. We do need to detach the two things somewhat. There's the generalist AI approach or general AI approach where we're thinking this is going to replicate a human and it's complete end to end and, and how we achieve that.
Philip Young:And there's the AI where we're looking at these specific applications and what it can mean for businesses. And I think as we detach those things and think of 1 as more sophisticated automation and 1, more human replication, the really interesting thing for businesses is to think about, okay, well, what does sophisticated and complex automation mean for my business? And how do we try to approach that in a way that's sustainable and makes sense for us. Often that's tied to similar discussions and narratives that they've been having probably across their business on a day to day basis. Simple things like what's the data that we have and what access do we have to that data and what's the quality of that data.
Philip Young:We need to move away, for example, from this belief that hoarding data is the right way to go and creating large data lakes of just useless data is not valuable for companies. And thinking about the value and the, usefulness of that data and how do we make it more useful and in in ways that can be in machine readable formats for AI companies. And it's that base level that isn't even necessarily AI yet or machine learning yet will create the opportunity for those types of sophisticated automation to come in through AI techniques and companies to deploy their products and services quickly and effectively for their business to create and yield value for them and decrease their bottom line and increase revenues. And that's ultimately what they're there to do. So I think ultimately AI is a tool, as I mentioned before, in order to make it a successful tool for your business, you really need to get the fundamentals right.
Philip Young:And you need to tackle things which are probably quite rudimentary in your digitalization journey. But do it with the end goal of that AI deployment and with the end goal that you think there's an opportunity to scale some automation across your business in an area that perhaps to start with is not going to completely disrupt your business and then make it fall down on its its knees, but, is an area that, ultimately, you can test it and be confident that it's going to yield some value for you.
Rosa Wilkinson:There's an awful lot of detail in that. And actually, it's a big challenge. So what I'd like to do to round off our discussion is to just think about what your one big wish is, so that the UK can seize every bit of that digital opportunity that we're presented with. The opportunity to massively improve the performance of individual businesses in ways that will allow us to seize new markets, in ways that will allow us to upskill more of our existing workers and, of course, the next generation, in ways that will keep us all safer and help us to lead more fulfilled life. What's your one big wish?
Rosa Wilkinson:Amar, let me come to you first of all, if I may.
Amar Abid-Ali:We punch well above our weight in the UK when it comes to r and d, when it comes to research, when it comes to top class universities across the board. And we have not done too badly as well to have some serious innovative companies that are global. The one wish I have is that we can actually maintain and keep those as they start growing rather than for those to go outside of the UK. A classic example of that, we let go of ARM. ARM became part of SoftBank and now is gonna list in the US rather than in the UK.
Amar Abid-Ali:We have many examples of such. We always come up with great technologies, great innovation, and then somehow at the stage when it can actually benefit at a greater scale, it seems like we lose momentum at those elements there. So I think we've got great infrastructure. I think the cat also play a big role in helping as well getting all the startups to the point of commercialization and SMEs. We just need to close the gap on the massive scale, international scale.
Amar Abid-Ali:And once we've done that, you know, we go through pre seed, seed, series a, series b with startups. And then somehow, we're missing the point after that. It just there is nothing else out there for it. And if you look at the actual investment within that initial stages, you will find the UK actually invests as much as any other country out there. The issue becomes only when that massive scale is required, and at that stage is kind of where we are shy.
Amar Abid-Ali:And I wish we could change that aspect there because that changes everything. It can pull through all the innovation across to the entire chain.
Rosa Wilkinson:Ramar, thank you. A big ask, both anchoring the riches that we have and investing so that they scale up ever better. Tim?
Lord Clement-Jones:Well, I'm absolutely delighted that Amar came before me. So I can say I agree, but because I do think in the pipeline, those are crucial areas. But I'm not gonna talk about that because I think one of the key things is the context in which new technology is adopted, applied, and we've gotta make sure that there is a the right narrative around the adoption of new technology. So you need to build public trust, whether that's in data or in scary AI or whatever it may be, and you need to build business confidence in all of this. And what is the way to do that?
Lord Clement-Jones:Well, in my view, in the data area, it's pretty straightforward, making sure that we have the right context in which data can be used and shared, and we don't start watering down our data protection laws, that the public don't suddenly think that people are trying to take away all their health data or whatever. Good communication is really important that area. So that's one form of regulation, the data side. On the actual machine learning and the ethics by design for AI systems, I think what we need to do is understand that actually regulation is not the enemy of innovation. It's actually sometimes the stimulant because people will have the certainty going forward.
Lord Clement-Jones:I don't wanna regulate in different ways to our neighbors. I want to see a convergence of standards. That is the way that our developers then will be able to spread their wares across the world. It'll be the way that, people will understand that they have the basic ethical protections against some of the more sophisticated forms of AI. And I think that then creates public trust and business confidence.
Lord Clement-Jones:So as a legislator, why wouldn't I want to regulation, legislate, but in a very positive and constructive way.
Rosa Wilkinson:Thank you, Tim. Really, really helpful. Now, Phil, Digital Catapult is playing a huge role in delivering some of that confidence in helping support the trust by showing people the art of the possible, holding their hands, helping them to connect with the right sources so that they can begin their journey with confidence. What's on your wish list?
Philip Young:Look, I mean, digitalization is incredibly complex. I think we try to often in, in government or in communications or in how we operate as businesses, we try to simplify as much as possible. It's in the name human nature to simplify and, and create simple explanations for complex things. And for me, the main complexity that we need to address is that we often, as I mentioned before, consider all of these things in exclusive silos of of of activity. But we're thinking about AI, or we're thinking about regulation of mark digital markets, and we're thinking about metaverse, or we're thinking about how do we stimulate adoption in, manufacturing.
Philip Young:All of those things are very important to do on their individual level. So it's not to say that we shouldn't do that, but what's missing at the moment is this collective joined up systems based approach to how do we tackle these problems. How do we bring together all of the key stakeholders to make sure that there is mutual benefit for everybody? Often, we leave the market to its own forces, and we find that the most well funded and the biggest companies dominate the landscape at the expense of the smaller guys. But at the same time, if we exclude those big guys, then they'll go off and do their own thing in other countries and will be left behind creating a white elephant that nobody wanted and nobody needs.
Philip Young:So everything needs to be collectively brought together. Regulators, the, digital smaller companies who can scale, the big system integrators, the industry experts and knowledge gatherers who can instill this is what will work in my sector and won't work in other areas. And if we're going to achieve big systemic goals like reducing our carbon footprint to yield net zero results by 2030 or 2,040 or 2050, however, the timeline shift. These are the types of things that we need to take a new approach to how we innovate. And we need to take a new approach to how we come together and collaborate.
Philip Young:And the Catapult network is a fantastic example of how collaboration can work effectively. Innovate UK is a fantastic network of lots of different initiatives that are coming together to try and solve these issues. I think what we need from the government and from a policy perspective is a collective funding for towards those goals, much to the kin of of those mission based approaches that we maybe had a few years ago, but more formalized and more structured.
Rosa Wilkinson:Brill, thank you very much indeed. You know, at the end of our conversation today, I think what I'm coming away with is a sense of a number of things. The huge potential that digital offers every one of us, not just businesses, but frankly, every one of us. But at the same time, the huge complexity of digital. You know, we've got some real riches here in the UK.
Rosa Wilkinson:We've got some incredible minds, some incredible companies. One of the things that we've absolutely got to do is to join up our systems, make sure that we're taking that systems based approach that Phil has been talking about, and make sure that we never forget the human factor, the trust, the feeling of confidence, so that we can grow those riches and make them shine. The catapults, as you said, Phil, and as I certainly feel, have got a very strong role to play. We are natural conveners. We don't have a downside as long as we are given both the authority and the liberty and the funding to drive the change that we need to see.
Rosa Wilkinson:Gentlemen, it has been a fascinating discussion. I'm hugely grateful to you for the time that you've spent with us today. Thank you to each of you, to Amar from the Compound Semiconductor Applications Catapult, to Phil from the Digital Catapult, to Lord Fabulous, Tim Clement Jones. Thank you all for contributing to a really ace discussion. Bye now.
Katherine Bennett:Thank you, Rosa. I really value this discussion, which explored so many challenges. Some things which stood out for me were overcoming the scale up problem, the need for proactive and resilient legislation and the importance of strong conveners to draw all parts of the system together for true collaboration. We also heard that the UK has so many digital applications with the power to unlock untapped potential in talent and skills development, sustainability and adoption of new technologies in all sectors.
Katherine Bennett:I hope you enjoyed this episode of the Catapult Networks Supercharging Innovation podcast powered by innovate UK, available wherever you get your podcasts. If after listening to this episode, you have questions, suggestions, or simply want to tell us your thoughts, get in touch with us via our website catapult.org.uk, Our social media channels or via your podcast app. Help us put UK innovation under the spotlight. Subscribe now.