From the top · 24 December 2015

Geoff Mulgan: Making innovation accessible and profitable at Nesta

Geoff Mulgan: "Our aim is to turn the creativity and innovation of entrepreneurs into businesses that are both profitable and provide ongoing benefits to people’s lives"
Geoff Mulgan: “Our aim is to turn the creativity and innovation of entrepreneurs into businesses that are both profitable and provide ongoing benefits to people’s lives”

As CEO at UK innovation charity Nesta since 2011, Geoff Mulgan, has become an important and highly influential figure for the small business community in the UK.

Named as one of five leading industry “Supporters” within our list of 30 Small Business Decision Makers for the year ahead, Business Advice sat down with him to find out what makes Nesta stand out in terms of its ability to set the agenda for small business, and how the landscape of the sector may look in 2016.

Having overseen Nesta’s transition from a private firm to a charity, Mulgan is ultimately responsible for Nesta’s range of programmes for startups, investment activities for early-stage ventures and research.

“We are not a trade body or a think tank in the traditional sense,” Mulgan is quick to point out. “Our status as a charity makes us stand out – it makes us more flexible in terms of what we can offer, both to the business community and government.”

With financial backing from governments around the world as well as from the private sector, Nesta helps solve policy problems for small businesses from both sides – often bridging the gap between private and public arenas. Mulgan noted though that Nesta’s mandate is project-specific, and there are general challenges faced by the growing community of small businesses in the UK that should be the government’s focus.

“Generally, there are broad challenges like access to capital and skills, infrastructure issues and the expensive banking system, that the government should continue to address,” Mulgan said. “There’s a structural issue on accessing finance, and public procurement for SMEs could be done a lot better than it is at the moment.”

Rather than positioning itself as an organisation to address such general challenges, Nesta focuses on promoting innovation, providing capital for specific projects and thorough research work. “Our aim is to turn the creativity and innovation of entrepreneurs into businesses that are both profitable and provide ongoing benefits to people’s lives. We are looking to make innovation accessible,” Mulgan said.

For Mulgan, one of Nesta’s principal functions is to try to improve the quality of startups in the UK. By sponsoring programmes such as Seedcamp – an early-stage micro seed investment fund and mentoring programme – it aims to improve the growth dynamics of the small firms that have a disproportionally strong impact on the UK economy relative to the size of the business.

“In terms of our role as an investor, the portfolio of companies our venture capital team look at is constantly changing,” Mulgan added. “We have moved into impact investment, looking for companies that deliver financial return and improve educational outcomes, for instance.”

Education is increasingly on Nesta’s radar as an area in which innovation combined with the right micro-buisiness model can fuel growth. Nesta is overseeing several projects with technology startups in schools to improve learning standards. Mulgan is an advocate of edtech (education technology) and wants to see computer coding introduced to the school curriculum.

“We are turning groups of schools into innovation test beds,” Mulgan explains. “Some of the innovative edtech companies we work with have the potential to change the way schools operate in this country, improving educational standards and children’s lives across the board.”

Mulgan went on to say: “The impact investment scene in the UK is so vague, as an investor we try to be a lot more precise – choosing an area like education where we know we can find startups to nurture that will make precise differences.”

Finally, Mulgan sees his role at Nesta going forward as one of a social advocate, encouraging small firms and financiers to be ethically conscious. “The intention is for Nesta to remain at the forefront of linking finance to ethics,” Mulgan said. “It’s happening all over the world –linking investments to results with an ethical or social bias. We want to be the key body promoting this type on investment here at home.”

In 2016, Mulgan himself will continue to promote Nesta’s activities. As a former senior civil sevant under Tony Blair’s government, he will work closely with the cabinet office and will sit on various small business-related policy committees to promote UK innovation and enterprise under the Nesta mantle.

Sign up to our newsletter to get the latest from Business Advice.


 
TAGS:

ABOUT THE EXPERT

Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.

Finance