A guest blog post by Alastair Hamilton, CEO of Invest Northern Ireland, Global Sponsor of the Innotribe Startup Challenge and regional host for the Belfast Startup Challenge.
1. In a few words, describe how Invest NI supports innovation and your role in the big picture.
As Northern Ireland’s main Government economic development agency our job is to increase the size, competitiveness and value of the local private sector. Innovation is of course vital to the success of any economy so supporting and stimulating it is a top priority for us.
We do this in a number of ways. For example we provide a range of programmes to help promising technology businesses start up and expand in Northern Ireland. These include interim management and business focused training programmes designed to help develop essential management, sales and technical skills.
We also offer companies R&D support as well as practical assistance with trade and export development for specific geographical markets. In the case of financial services these tend to be mainly London and New York and we help with activities such as design, marketing, legal and translation services.
At a higher level, an important aspect of our role is helping local universities develop and exploit their intellectual property to maximise their long-term gains. We are also working to stimulate the supply of private equity available to early stage companies. We participate at a number of levels in the funding spectrum including seed funding and co-investment as well as development and loan funding.
2. In the context of financial services, what trends do you see start-ups focused on?
In our experience, the two big drivers are technology convergence and innovation. In particular, we’re seeing interesting developments in areas such as mobile financial services, security and big data. The theme of big data has become especially topical given the enormous flows of data associated with the financial services industry. A major focus – particularly for start-ups – is creating the software needed to extract meaningful intelligence from this data in close to real time.
Interestingly, a growing number of firms are pushing the boundaries of predictive modelling and social media. This is enabling customer demands to be anticipated more effectively, for example, and is helping to reduce fraud and improve automated trading and risk management.
3. How do you see traditional financial institutions positioning themselves towards start-ups and the start-up ecosystem?
Traditional financial institutions know that start-ups are fertile ground for innovation which, in turn, is crucial to the future development of the sector.
For their part, well-established large enterprises have been exploring better ways to harness collaborative innovation and to bring start-ups into their eco-system. Nokia Innovation Mill, Alcatel Lucent’s boot camp, and most significantly Swift Innotribe are all powerful examples of this trend.
Combined with the traditional strategy of acquisition, this approach is creating a more dynamic environment for financial innovation.
In Northern Ireland we’ve seen a number of later stage start-up firms in the financial technology arena acquired and then expanded by larger financial institutions. From our point of view, such acquisitions are especially attractive because they can in turn spur more start-up activity as new entrepreneurs with new skills emerge from the cluster.
One of the best local examples is Wombat Financial Software – an innovative leader in market data management solutions – which set up in Belfast in 2004. In 2008 it was acquired by NYSE Euronext which has since made Belfast the core global engineering centre for its technology arm – NYSE Technologies. The firm specialises in trading systems, specialist R&D, market data solutions and connectivity.
4. Considering that Innotribe focuses on collaborative innovation in financial services, what do you think we should pay attention to?
Innotribe is proving to be an incredibly influential platform for financial innovation. I think the reasons for that are down to the unique eco-system it has created and its continued focus on the commercial opportunities arising from innovation. Innotribe has connected a diverse and globally dispersed community made up of financial technology players, financial institutions, private equity firms, start-ups and others who have a common interest in advancing innovation in the industry.
Most importantly Innotribe’s agenda helps to keep the focus on business delivery rather than pure research. So, I think it’s really about doing more of the same – promoting interaction among members of the community and continuing to offer an environment for commercialising innovation.
We at Invest NI, of course, have a special interest in promoting collaborative innovation. We’re fortunate that our financial community tends to work closely together. Perhaps that’s because we’re a small region with a population of fewer than 1.8 million people. Just last year, for example, five companies involved in capital markets technology joined with our two universities to create a jointly funded collaborative research network of PhDs looking at specific aspects of high performance computing and embedded systems. This venture is already leading to wider collaboration in areas such as R&D and skills development.
5. Finally, are there any other things you think Innotribe readers need to know about Invest NI or your innovation activities?
At Invest NI we’re committed to giving start ups the best possible chances of success by providing the best possible support.
That’s because Northern Ireland is a strongly pro-business region where small enterprise forms the bedrock of the local economy. Many of our most successful firms have grown from very small beginnings under the guidance of dynamic local entrepreneurs.
Examples include Andor Technology, a world leader in low-light scientific cameras and APT, now part of CSR, a specialist in high-quality audio compression systems for professional and consumer products. Within the capital markets sector, we have firms such as Singularity and First Derivatives.
In many cases the promoters of successful innovative companies have reinvested their talent and money in developing new business opportunities. Just one example is Wombat founder Danny Moore whose success inspired him to establish Loughshore, a dedicated Investment house for innovative start-ups.