Hello Tomorrow and BCG have been building a deep tech approach since 2016, and Hello Tomorrow is listed as the most cited reference on the deep tech page on Wikipedia. Together, Hello Tomorrow and BCG published 5 reports analyzing newly developed technologies, their impacts, and how they can be better financed. Two of the main authors of these reports, Arnaud de la Tour and Massimo Portincaso, came together to share insights and answer questions about their latest report: ‘‘Deep Tech: The Great Wave of Innovation.’’ You can watch the replay of the session here or continue reading for a summary of what was discussed!
Deep tech is an ambiguous field. But what is it really and what is its relationship with the corporate world? Normally when we talk about deep tech, we are referring to startups...
When we talk about deep tech, we are not referring to technologies. We are talking about a different approach to innovation: a wave of innovation in the “post-digital” era where bits and atoms start to work together.
The first thing that companies need to understand about deep tech is that the deep tech approach is about a transition to fundamental innovation rather than the less risky, less frightening incremental innovation they are used to. Essentially, innovation requires you to genuinely expand the realm of options and define a problem you are trying to solve.
Moreover:
The main forces behind this type of innovation are the convergence of different fields.
First, the convergence of approaches
Deep tech brings together science, engineering, and design, making it possible to solve great problems that have previously been unsolvable because they were addressed within separate approaches and with an incremental rather than fundamental approach.
The convergence of technologies
On one side, the realm of options is expanding, while on the other, timelines are shrinking because we are applying the design-build-test-learn cycle. This is not something new in itself, but when we apply areas such as artificial intelligence for designing new drugs or new materials, robotics and IoT (internet of things) for generating, testing, and producing more data, each step gets stronger. You can learn better with more data, this leads to better design, and the entire cycle becomes much faster. What used to take 20 years can now take only 2 years. This is where large companies should focus their efforts: bringing this multidimensional approach to innovation.
It sounds great, but I still cannot grasp the concept of deep tech and how I can benefit from the deep tech approach for my business:
Another way to look at this issue is the convergence of traditional R&D with digital at some point. In other words, it’s not about creating an alternative R&D, but rather about assembling existing pieces together.
If we look at sectors like nuclear, chemicals, food, and agriculture, there is a very high level of R&D capacity in these fields. Deep tech will represent the coming together of this “traditional R&D” with digital technologies (artificial intelligence, big data, etc.), business models (service instead of product), and mindset (agility and customer-centricity).
If we look at the software field, it is more about where the convergence between atoms and bits will occur. Google has managed to significantly increase the efficiency of protein folding modeling with Alpha Fold and revolutionize biotechnology. Microsoft is exploring what it can do with biological data storage and computing. Companies need to start with high-level skills in either traditional R&D or software, but this convergence must occur. It needs to happen to solve a big problem that cannot be resolved with today’s technologies and approaches.
So is this what you mean by ‘adapting to the problem’?
Yes. This is one of the fundamental differences between startups and large companies. Very often, while people focus on optimizing margins, the real problem that needs to be solved gets lost in a broader corporate environment. However, startups begin with a problem, and this approach is at the center of the deep tech approach. Look at the problem and reframe it by taking into account all the different technologies at our disposal, including combinations.
Deep tech investments increased from 15 billion dollars in 2016 to 60 billion dollars in 2020. How do you explain this sudden surge in investments in such a short period?
The ‘digital wave’ that has driven most investments so far is starting to plateau. The GAFA (Google, Apple, Facebook, Amazon) are already established, so this increase is more about scaling technology and spreading it across the economy. On the other hand, we have new, emerging technologies that are just beginning to reach the market and find concrete applications. At the same time, our planet and society are facing challenges of unprecedented magnitude that these technologies can help solve.
In short, there is a pressure to solve the fundamental problems humanity faces, and investing in a deep tech approach is one of the ways to do that. Additionally, people either want to be among those who create the next GAFA of deep tech or at least want to get a share of the pie! Still, while the increase in investments seems significant, we must not forget that the total investment in technology is still less than 10%, meaning the vast majority is still going digital. So yes, investment has significantly increased. However, all of these are still far from reaching their potential, and that is the subject of our latest report published this month! You can access it here 🙂
We know that startups are leading the digital wave and large companies are struggling to catch up. This deep tech wave accompanies physical products a lot as well. What is the role of ventures in this deep tech wave?
It is the combination of large companies’ capital and engineering capabilities with their innovation power. However, what often happens is quite the opposite. The fragility of a venture meets the bureaucracy of a company. This is an area we are trying to develop in the coming years. It is not the technology itself that will self-actualize, but rather the way companies learn to absorb external innovations and leverage the potential they offer.
For example, nuclear fusion summarizes the power and potential of the deep tech approach. We have a domain that used to belong to states rather than companies. It was seen more as a scientific endeavor than a solution to a problem. However, we have recently seen how this has changed. This change began with a problem that needed to be solved: How do we leverage nuclear fusion to deliver energy to the grid? Now, we have multiple ventures with different approaches working on nuclear fusion, which allows us to make great strides as they have materials that enable higher temperature superconductivity, activating different magnets and improving the guidance of the plasma due to physics, and they are applying interactive processes. You can see how different pieces come together.
What do you see in the next few years?
The next big wave to come is Nature Co-Design. In this regard, you can read the report ‘‘Nature Co-Design: A Revolution in the Making’’ published by Hello Tomorrow&BCG and our Turkish summary of the report.
In a few sentences, this is something that businesses everywhere need to understand:
For the first time, we can use nature as a platform for engineering and production. This allows us to work at the atomic level, enabling us to transition from exploitation to productivity. We use organisms to scale up atomic-level things.
This change is comparable to the time when humans transitioned from being hunter-gatherers to farmers. Now, we are becoming atomic-level farmers by using resources to harvest what we need without exploiting them.
If you have any questions, want to continue the discussion, or explore how Hello Tomorrow Turkey can enhance your innovation strategy, you can email us at istanbul@hello-tomorrow.org.
