Predicting the future is no stroll in the park.
It is a path down which the most celebrated minds in history have stumbled – even Thomas Edison, inventor of the lightbulb and other household devices, rashly predicted alchemy becoming possible within a century.
Which is why Creative Destruction Lab (CDL) does not deal in crystal balls. Rather the Lab – which was founded in Toronto in 2012 and brought to the School in 2019 – is a non-profit provider of programmes to nurture seed-stage, science- and technology-based companies, enhancing their chances of commercial success through expert-led mentoring initiatives.
‘We don't make predictions about the future,’ says Thomas Hellmann, Professor of Innovation and Entrepreneurship and CDL’s Oxford branch Site Lead, who has in the past advised clients such as the World Economic Forum, Barclays Bank and the Government of British Columbia. ‘We’re not prescriptive. We don’t pretend to have the specific answers – we are really an ecosystem enabler.
‘What we do is, we provide a community of experts that supports entrepreneurs, to promote innovation entrepreneurship, in the UK and beyond, and provide a unique experiential education to our students by exposing them to what “good” looks like in the world of entrepreneurship.
‘There are lots of great companies in Europe that have the potential to achieve some significant innovation and market success, but lack the judgement, the tacit knowledge, that is required to build a massively scalable organisation. A lot of the work that we do is figuring out which of those great ideas actually has traction.’
Innovation and AI
When it comes to AI, for Thomas, the clear line of sight towards the real opportunities is obscured by generalised, science-fiction-derived conjecture. ‘For example, we’re seeing more and more use of AI in manufacturing,’ he says, referring to the facilitation of tasks such as demand forecasting and predictive maintenance. ‘But it doesn't get talked about nearly as much because it's not nearly as exciting or dramatic as some of the other AI areas. AI is also dramatically changing aspects of engineering and planning. We're seeing a lot of optimisation around sometimes fairly mundane things – for example, we’ve had AI companies helping engineers to plan networks and railways.’
One such, forged by many CDL alumni, is Continuum Industries, whose cloud-based algorithms tool helps engineers optimise the design of linear infrastructures, including not only railways but also roads, power cables and water pipelines.
Besides AI’s trickle-down from rarefied realms to the everyday, Thomas foresees edge computing and computer vision systems having a major impact in the coming decades. ‘Artificial intelligence, in tandem with devices monitoring things like traffic, security and agricultural activity, is going to make this kind of edge computing much, much more efficient than it already is,’ he says.
‘And here, AI intersects with the emerging space sector (which you can read about in Space:the new Digital). Earth observation is a big topic – the purpose of going to space right now is not to explore space, but to explore the Earth. We have a lot more data about spatial information, about various things that are happening on Earth, that are hugely important in climate.’
A further trend set to redefine AI’s role in our lives, says Thomas, is the increasing role of natural language processing – from communicating via machines to enhanced language analytics such as sentiment analysis, nuanced language inference and intent detection. ‘The fact that we can now recognise more and more, and interpret language proficiently, is going to have very broad implications,’ he says.
The demand for climate solutions will transform industries once more, but it will also compel us to transform the innovation model itself.
Innovation and climate change
When it comes to climate, one of the two new streams within CDL’s remit, Thomas predicts huge shifts in how innovation itself is funded. ‘The challenge with climate is that some of the most significant innovations involve significant hardware, and therefore significant capital outlays,’ he says. ‘So the demand for climate solutions will again transform industries, but it will also force us to transform the innovation model itself.
It has already forced some changes in the venture capital industry – the typical venture capital fund lasts ten years, but in the last two years, we've seen several recipients saying ten years is not enough.
‘And so we're changing the instruments with which we finance innovation. The climate challenge requires a new innovation model, and the hardest part of that is that the most serious issues will require some kind of public-private partnerships, and innovation led by public-private partnerships is still in its infancy.’
Innovation and health
As for CDL’s health stream – whose alumni include core personnel at Albus Health, which has produced a non-contact, nocturnal symptom monitoring device – Thomas’ conclusion, based on the vast expertise accumulated over the programme’s existence, is that the future could be bright, but the path leading to it is, for now, strewn with obstacles.
‘Health is very much driven by scientific innovation,’ he says, ‘and the pace of scientific progress in the life sciences is enormous.
The emergence of new technologies – like AlphaFold, an AI tool developed by [Alphabet/Google’s] London-based subsidiary DeepMind, that advances the protein-folding problem – will unleash a whole set of new innovations, in this case whereby we understand the biology of molecules, and how proteins are actually composed.’
So where is the problem? ‘All such science is entering a very complex and, frankly, highly dysfunctional medical system where the incentives are completely wrong.
The UK is a leader in medical research innovation, but if the value is all created in the US, we have a problem.
There are various complexities around not just regulation but also economic incentives, and a lot of the scientists don't understand the challenges of commercialising science in the health sector. The biggest challenge we’re facing is that by far the most money spent on healthcare is in the US, and so our European health start-ups have a huge pull to go there, so we risk losing some of the best talent. The UK is a leader in medical research innovation, but if all the value gets created in the US, then we have a problem.’
How the next quarter-century pans out in the health sector, says Thomas, will depend on whether or not these problems can be addressed. ‘It needs addressing urgently,’ he says. ‘Right now Europe is sleeping at the wheel.’
Innovation and fintech
As with climate, CDL’s fintech stream – which will see start-ups work with mentors based in London’s financial centre – is a new addition: and, as Thomas expects those at the proverbial deep end to discover quickly, the upcoming challenge in this burgeoning area of opportunity is all about adoption.
‘The innovations themselves are fairly well defined,’ he says. ‘The main innovation right now, for example, is data science – digitising and creating more efficient digital platforms for the finance world. So where fintech 1.0 is really just about digitisation, 2.0 is now about building AI on top of that digital infrastructure. Fintech 3.0 will be all about quantum computing.
I think we still have a few years to go before that happens. And we at Creative Destruction Lab are preparing ourselves for that because we want to be there early, but we’re not there yet.’
It is unsurprising that CDL is readying itself for an ever-changing commercial landscape. The organisation’s impressive record of success – ‘The collective value of the companies that have come out of all our programmes across all sites is already £8.4 billion ($11bn),’ says Thomas – comes from ascertaining all that can be reasonably surmised about an essentially unknowable future.