Face-to-face meeting "Deep-Tech entrepreneurship in Spain".

Oihana Basilio Ruiz de Apodaca, Fiona Murray and Lars Frølund

The Rafael del Pino Foundation is organising 27 March, the meeting presence "Deep-Tech entrepreneurship in Spain". on the occasion of the presentation of the report "Deep-Tech Entrepreneurship in Spain"in which the authors Oihana Basilio Ruiz de Apodaca, Fiona Murray y Lars Frølund The Spanish scenario for the development of these technologies is analysed and a strategy for Spain in this field is outlined.

The event took place according to the following programme:

18.30 Fundación Rafael del Pino, welcome and institutional introduction  

18.35 Online intervention by Fiona MurrayAssociate Dean of Innovation and Inclusion, MIT School of Management, co-author of the Report "Deep-tech entrepreneurship in Spain 

18.43 Intervention by Oihana BasilioFellow Fundación Rafael del Pino-MIT, co-author of the Report "Deep-tech entrepreneurship in Spain 

18.50 Dialogue on institutions supporting Deep-Tech, with the aim of emphasising the importance of shaping an explicit support strategy and the importance of defining clear criteria for the concept.

Lars Frolund, Lecturer at Mit in the field of innovation ecosystems and deep tech ventures and member of the European Innovation Council

Fernando Galindo-RuedaSenior Economist in the Economic Analysis and Stratistics Division, OECD

Óscar SalaEuropean Innovation Council Expert Evaluator and SME Executive Agency (EISMEA)

Asier RufinoFounder and Managing Director of Tecnalia Ventures

Faÿçal Hafiedmoderator

19.40 Round table on Deep-tech startups, with the aim of learning about Spanish success stories.  

Daniel PérezCEO and co-founder Ienai space

Jimena García-RomeuCEO of Alcyon photonics

Meritxel Teixido, CEO/CSO, Gate2Brain

Manuel EspinosaManaging Director, Next-tip

Oihana Basiliomoderator

20.30 Closing


Dialogue on the institutions that support Deep-Tech, with the aim of emphasising the importance of shaping an explicit support strategy and the importance of clearly defining the concept, with Lars Frolund, professor of innovation ecosystems and deep tech companies at MIT and member of the European Innovation Council; Fernando Galindo-Rueda, senior economist in the Economic Analysis and Statistics Division of the OECD; Óscar Sala, evaluator-expert at the European Innovation Council and the SME Executive Agency (EISMEA); and Asier Rufino, founder and CEO of Tecnalia Ventures.

Fernando Galindo-Rueda: We need to differentiate the concepts. That's why we have definitions, which has implications for public support. Other definitions help us to measure things, because if you don't know what you are trying to measure, how are you going to measure it? The definitions also provide a narrative of this idea of Deep Tech, which has a brand value in itself because we are trying to be too shallow. We want to go deeper into things. When we talk about Deep-Tech we think we know what we are talking about.

The definition of Deep-Tech plays a lot with the idea of what Deep-Tech is not. There is an emphasis on the aspect of being on the frontier, as opposed to being on the periphery and not bringing anything new to the table, for example many realisations in the digital realm that don't bring anything new to the table. There is a certain hostility against the lack of authenticity, that they are a bit ethereal and that people can't understand and are not embedded in the economy. There is quite an important reaction against these things.

Maybe we are incorporating too many elements into the definition. We always have a mission to accomplish, but if we try to cram too many things into the definition it ends up being a reflection of what we would like to see in the definition. Sometimes it is better to settle for a definition that is not so precise but that helps us understand why there is so much or so little Deep-Tech. It is a technology that is at the frontier of innovation, that has tangible components. This is important to define the concept.

Asier Rufino: I am a builder of economic ventures, I am quite close to Deep-Tech. My role is to help technologies reach the market. The first thing is that we try to identify the golden nuggets that there are in Tecnalia, which are technologies that are almost always developed with public money that comes from competitive funding from Europe or non-competitive funding from the autonomous community. We want to identify technologies with the ability to identify problems that someone is willing to pay for, because Deep-Tech goes hand in hand with B2B business models. Therefore, we have to be very close to the problems that have a sufficient economic dimension and that are worth investing in order to solve them.

Then you have to protect them in the best possible way. You need to mitigate the risk of scaling up because something that works in the lab may not work on a larger scale. There is also the issue of regulation, because Deep-Tech is at the cutting edge, creating new product categories that still need regulation.

Then there is the issue of equipment. We need to improve them. We need competent teams, with researchers, but also people who are not in the laboratories and connect them when they often do not interact naturally. In Spain we have people with entrepreneurial skills and excellent scientists, but it is very difficult to connect them. Many times, when Deep-Tech companies are created, it is done with profiles that work in the lab, but complementary profiles are also needed. Once we have both types of actors, the money flows. There is also a lot to do in Spain in terms of venture capital.

Lars Frolund: It is too difficult to convince the market. The current venture capital model is rather partner-driven, looking for a good return. If you want to change something, it is better to go to the partners and tell them that they have to do things differently. We need to diversify the way those partners work. We need foundations and family offices to be interested. These are the ones who have the capital. We need to tap into our wealth and our welfare society that has been converted into money. How? Through pension funds. In the UK, it is American pension funds that invest in the development of medical technologies. This can no longer be the case. We need other institutional investors to take responsibility because otherwise we are not going to have a welfare state. One of the easiest ways to say why we want Deep-Tech is to tell people that if you want to have a good life you have to invest in Deep-Tech.

There is a tendency to optimise for more wealth. The way we have seen it done is to invest a lot in digital companies. But we should have a country perspective. If we invest in those companies, it is going to create wealth for very few people and the productive apparatus is going to be located outside the country.

Another reason to invest in Deep-Tech is that it re-educates workers. Countries that don't invest in it will have more poor people and less rich people. Behind every new thing a physicist creates there is a factory, workers who know how to do that work. We need to start appreciating their work, but we haven't done that. We have thought we could outsource production to other countries and the countries we have taken that production to now dominate us. China is the leader in two-thirds of the world's most important technologies. If we don't want this to happen, we have to start investing in Deep-Tech and in our universities, not just to get rich, but to continue to enjoy a good standard of living.

What Deep-Tech companies want is a customer who is very detail-oriented, who can define the solution, who is demanding. Space X was developed because of an innovation in NASA's public tenders. It set very specific milestones and only gave the money if it simultaneously developed a civil market. This is a way of incentivising the construction of companies with a very specific capacity. What needs to happen in Spain is very well-directed incentives in public tender programmes so that governments stop buying on the cheap, so that price is not the most important thing, and start buying from Spanish companies solutions in the prototype phase, because right now they are not doing so. What we have to do when there is no market for that technology is to take advantage of your strengths, your important sectors. That is the signal for companies to create a market for it.

Óscar Sala: Deep-Tech is not a debate about technology, but about the economy; it is about turning knowledge into value for the market. If we want to transform our economy, we have to see what it is made up of, what our strengths are, in which sectors or which technologies we can be more competitive. We have to focus on the sectors where we are strong. Businesses have to change the way they work today. It is time to transform all this into new businesses. Governments have to create the first initiatives. Industry is not ready to embrace technology, it was focused on cutting costs.

We need to work from three different angles. Firstly, we need to make industry more visible. We need to create the conditions for dialogue between industry and researchers. In Finland, 40% of investments are in Deep-Tech, in Spain it is only 15%. Secondly, market-ready research and sectors willing to adopt the technology have to work together. In addition, there is a need to scale. Only 7% of investments are in R&D and almost 50% of start-ups come from Deep-Tech. We have to create the conditions to create the mindset of entrepreneurs and researchers and change the model to measure the impact they are having on the market. In Europe we don't have the same investment market as in the US or Singapore, but we do have good knowledge. In biotechnology we are very good. In digital health, Spain could play a very important role. Agrotechnology is also a very important sector. And also in the energy transition.

The Rafael del Pino Foundation is not responsible for the comments, opinions or statements made by the people who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their sole responsibility. The contents included in the summary of this conference, written for the Rafael del Pino Foundation by Professor Emilio González, are the result of the debates held at the meeting held for this purpose at the Foundation and are the responsibility of the authors.

The Rafael del Pino Foundation is not responsible for any comments, opinions or statements made by third parties. In this respect, the FRP is not obliged to monitor the views expressed by such third parties who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their own responsibility. The contents included in the summary of this conference, written for the Rafael del Pino Foundation by Professor Emilio J. González, are the result of the discussions that took place during the conference organised for this purpose at the Foundation and are the sole responsibility of its authors.