Deep tech: The silver bullet to humanity’s problems
Despite the concerted efforts of the government and public in fighting COVID-19, a fourth wave of the pandemic is taking hold in Hong Kong. To successfully curb or even end this global pandemic, all hopes are on the development of a safe and effective vaccine.
Fortunately, there has been a string of good news, with American pharmaceutical companies Moderna and Pfizer, as well as their German counterpart BioNTech, reporting significant progress in their vaccine development. The vaccine produced by Oxford University and AstraZeneca in the UK is of particular interest. Provisionally priced at £3, it is cheaper than the other vaccines and thus expected to benefit more people.
In fact, this is not the first time that Oxford University has been involved in ground-breaking vaccine research that could potentially revolutionise modern science and medicine. Following the discovery of penicillin by Professor Alexander Fleming in the 1930s and 1940s, two Oxford professors led a group of researchers to successfully create the now widely-used antibiotics. Since then, this major advancement in science has saved countless lives, and the three professors were jointly awarded the Nobel Prize in Physiology or Medicine, in recognition of their outstanding scientific achievement. Considering that without antibiotics, a small wound could lead to a deadly bacterial infection, it is no exaggeration to say that penicillin has rewritten the history of medicine.
Vaccination is just one of the many ways biotechnology is changing society. It is also a form of disruptive deep technology, or deep tech for short. Deep tech has three primary attributes: it takes a long time to reach the so-called ‘market-ready’ maturity; it requires substantial capital investment; it produces a powerful and far-reaching impact on the world. Apart from biotechnology, a number of highly innovative technologies are also classified as deep tech, such as artificial intelligence, advanced materials, quantum computing, blockchain, photonics and electronics, drones and robots.
Deep tech refers to cutting-edge research in science and technology, which, if successful, can become silver bullets to tackle humanity’s greatest challenges. However, deep tech is also known for its lengthy development cycles and capital-intensive research, making it a high-risk investment that deters many Hong Kong investors. While the government can provide financial support for basic research, funding often starts to dwindle between the stages of applied research and product prototyping, a gap in capital investment commonly known as the ‘valley of death’. Therefore, steady and abundant ‘patient capital’ is crucial to the development of deep tech.
To spur the development of deep tech in Hong Kong, the Government can borrow from the business model of IP Group in the UK. IP Group engages in long-term collaboration with leading universities in the UK, the US, Australia and New Zealand. Through its exclusive long-term partnerships with these universities, IP Group is given priority to review and invest in new technologies developed there. In turn, it offers patient capital and other professional support to their start-ups and spin-off companies. If the companies are successful in the later stages of development, they will also receive assistance in securing co-investors, to help them deliver more ambitious projects. Back in 2000, IP Group signed a 15-year contract with the Department of Chemistry at Oxford University, agreeing to provide critical support to its spin-off companies in their commercialisation efforts.
Earlier, the Government established the Future Fund and used part of its capital to set up an investment portfolio called the Hong Kong Growth Portfolio to make strategic investment in projects with a Hong Kong nexus. In light of Hong Kong’s situation, the Government can follow IP Group’s example to establish long-term partnerships with local universities and draw from the Fund to invest in their deep tech spin-off companies. This way, the basic research from universities can be transformed into products and services through commercialisation projects, unlocking its vast potential and at the same time boosting local research output. Ultimately, the successful commercialisation of universities’ basic research can be greatly beneficial to the economy and society of Hong Kong.
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