Meanwhile, greater demand for life sciences, AI, quantum computing, advanced materials, genomics, cleantech, medtech, and big data should see more patient investors backing IP-rich companies in those sectors, rather than ‘tech-enabled’ business models that deliver short-term returns on investment but limited longer-term economic and social benefits.
I have long argued that R&D-heavy businesses – built on the step-change technology required to meet global ESG requirements – actually deliver the most impactful returns.
In recent years the Enterprise Investment Scheme (EIS) has provided a tax-efficient and risk-mitigating mechanism for retail investors to access cutting-edge but high-risk sectors and technologies.
As we prepare for a fundamental shift towards science and technology, it will be critical to ensure the pipeline of private funding – for both early-stage and growth companies – continues to flow.
This means shoring up EIS – in particular, enhancing the KIC Fund for R&D-led companies – but also ensuring that later-stage investors are motivated to provide the capital needed to sustain R&D-rich companies through their longer-than-average scale-up journeys.
Listen to Bill
Five years ago, Bill Gates gave a TED talk warning of the impact a pandemic would have on global economics and society.
Experiencing that impact, we fully appreciate what he meant.
It is clear that science and technology hold the key not only to getting ourselves out of the present situation, but also to shaping our future and securing it against similar shocks.
This has already pushed deeptech up the government’s agenda, and will do the same for investors as the opportunities for returns become increasingly evident.
Moray Wright is chief executive of Parkwalk Advisors
