Angie Reynolds, head of Birmingham Research Park, at University of Birmingham Enterprise, explains why lab space is crucial for the support of medical technology innovation.
Amid the economic turbulence of recent years, you could be forgiven for thinking very few sectors are doing well currently – but there is an exception to the rule. Medtech, and life sciences more generally, are flourishing.
However, the risk to this success is not higher inflation or global trade uncertainty, but the national undersupply of available, affordable lab space.
If our start-up ecosystem is to remain strong and continue to develop the innovations of tomorrow, we need to think seriously about space and how we align the needs of early-stage life science businesses with the available resources.
Victim of our own success?
The UK is home both to a vibrant start-up ecosystem and the global headquarters of several multi-billion-pound life science businesses.
The Government has repeatedly highlighted the importance of the sector through the ‘Life Sciences Vision’[1] and most recently through the Autumn Statement, where the chancellor called out life sciences as one of five key growth industries[2].
The West Midlands is emerging as a regional hub for this health innovation and life science success. I think there are three key reasons for this.
Firstly, improved access to the capital that is vital to turning start-ups into SMEs. The West Midlands Recovery Action Plan is overseeing £137 million of public investment into healthcare innovation[3]. Eight research intensive Universities in the Midlands region have been cooperating on the Midlands Investment Vehicle (MIV) project, exploring the potential for a new investment company to support university and regional IP-rich businesses with patient capital (similar to recently established Northern Gritstone in the North of England). These would go some way to addressing the funding gap that has exists between the ‘Golden Triangle’ and the regions that saw the Midlands account for 11% of the UK’s high growth businesses in 2020-21 but only 5% of investment capital[4].
Secondly, universities are playing a larger role in connecting and facilitating innovation. Universities act as hubs that connect the business, NHS and investment spokes together to facilitate the development of highly specialised, efficient ecosystems. At Birmingham, we are using our research capabilities and academic expertise to help develop and commercialise innovative technologies; one route to doing this is by creating a spinout, as has been done with Healome Therapeutics.
Finally, the West Midlands is affordable - with many companies now looking beyond the south-east for well-connected locations where staff can comfortably afford to live.
Just give me some space!
There is a significant shortage of lab space across the country[5]. This is not an issue we will be able to fix easily or immediately.
High demand and limited supply have unsurprisingly led to an increase in prices. This has unfortunately created incentives for lab space providers to prioritise stable, low risk businesses that make for profitable tenants.
This is great news for landlords but bad news for start-ups, which are inherently higher risk. It’s also bad news for patients and the economy. Start-ups are critical to the development of the future technologies and innovations that will improve patient outcomes and create jobs in the regions. The truth is that we all need them to be successful.
However, medtech start-ups are different to other businesses. Their high-risk profile, and reliance on grants during the pre-revenue stage, means cash flow is a real issue. These businesses need to limit expenditure and de-risk decisions on space but also keep options on the table (or bench!) that allow them to scale as they progress. Put simply, they need scalable lab space – affordable now, but flexible in the future.
Space +
Effective incubators are more than just space providers. Success requires peer support, proximity to clinicians and NHS organisations, and connectivity into investors and university research. We are particularly fortunate because the West Midlands has both strong transport links and excellent industry connectivity through events like Med-Tech Innovation Expo, which is based at the NEC and pulls in a national audience.
Providers need to be smarter about how they develop and allocate space. At the University of Birmingham, we have created a new initiative specifically for early stage medtech businesses called Unit 9. Jointly funded by University of Birmingham Enterprise, GBSLEP Growth Hub and West Midlands Combined Authority, it provides space, equipment and facilities for start-ups that do not yet have the funding to acquire long term space.
At Unit 9, we think about facilities and space as a means of unlocking innovation. This pilot project sees temporary, configurable lab space provided at low cost on an escalator model, paired with proactive support for tenants to connect them with collaborators, suppliers and potential customers.
The businesses Unit 9 supports are diverse, and include Clean Bio Tech Limited, a company that have designed and manufactured a revolutionary new 100L continuous production perfusion bioreactor system, and QuestMeat, a cultivated meat ingredients start-up on a mission to improve meat sustainability.
Dr Richard Williams, CEO at Healome Therapeutics, said “Unit 9 is a fantastic solution to the problem many start-ups face: finding suitable lab space within a developed ecosystem at reasonable cost and terms. It has been invaluable in helping us focus on the early business development goals while minimising liability wherever possible.”
This model is working well in the West Midlands but there is a need to replicate this across the country.
It’s time to rethink how we allocate and use lab space to better support the innovations of tomorrow.
[1]https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1013597/life-sciences-vision-2021.pdf
[2] https://www.gov.uk/government/speeches/the-autumn-statement-2022-speech
[3] https://content.knightfrank.com/research/2315/documents/en/west-midlands-2021-8436.pdf
[4] https://www.birmingham.ac.uk/documents/partners/enterprise/uobe-annual-review-2021-22.pdf
[5] https://www.chemistryworld.com/news/uk-firms-face-critical-lab-space-shortage/4016403.article
