Industrial Strategy Challenge Fund Engagement Workshop ... · o Evidence of a potential global market that could be created or ... forecast to grow to US$11bn by 2018 ... industry

Industrial Strategy Challenge Fund

Engagement Workshop Briefing Pack

v1 12/01/17

Challenge Areas Specific challenges to explore through engagement workshops:

• Bioscience and biotechnology;

• Leading edge healthcare and medicine;

• Manufacturing processes and materials of the future;

• New energy technologies including battery storage and grid technologies;

• Quantum technologies;

• Robotics and artificial intelligence (including driverless cars and drones);

• Satellites and space technologies; and

• Transformative digital technologies including supercomputing, advanced modelling, and 5G.

Additional themes to explore through engagement workshops:

• Integrated and Sustainable Cities

• Technologies for the Creative Industries

Challenge Areas

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Bioscience & Biotechnology

Increase UK self-reliance in food, energy and materials production.

New Energy Technologies

Become the global lead in solving the energy challenge of supplying clean, affordable energy securely to ever more-demanding societies around the world.

Manufacturing & Materials of the Future

Ensure that the UK leads the world in the sustainable manufacturing and delivery of the next generation of products and components.

Integrated & Sustainable Cities

Establish the world’s best smart city demonstrator, introducing 5G technologies and applications, attracting global mobile companies to the UK.

Leading Edge Healthcare & Medicine

Improve patient outcomes through cutting-edge, personalised therapies and new antimicrobials and establish the UK as a world leader in the development and commercialisation of cell and gene therapies.

Robotics and Artificial Intelligence (RAI)

To create UK economic wealth, and an economy that works for everyone, by overcoming challenges using RAI technologies in areas such as hazardous environments, autonomous transport, health & social

care and advanced decision making with AI.

Technologies for the Creative Industries

To create UK economic wealth, and an economy that works for everyone, by overcoming challenges to anchor and grow the UK creative sector and its contribution to wealth generation and society.

Space and Satellite Technologies

To create UK economic wealth, and an economy that works for everyone, by overcoming challenges using satellite-based technologies in areas such communications, navigation and earth observation.

Transformative Digital Technologies

To create UK economic wealth, and an economy that works for everyone, by overcoming challenges using digital technologies such as data, AI/ML, cyber security, immersive, HPC, modelling and 5G.

Quantum Technologies To create UK economic wealth, and an economy that works for everyone, by overcoming challenges

using next generation quantum technologies in areas such a sub-surface imaging, GPS-free navigation, advanced sensing and communications.

Challenge specific information is on the following slides.

For each area there is: 1. A summary of the strawman challenges; 2. An overview of the fit with criteria.

o Evidence of a potential global market that could be created or disrupted by new innovation which is potentially large, or fast growing and sustainable;

o Evidence that the UK has capabilities to meet market needs in terms of research strength and business capacity;

o Evidence that now is the right time to accelerate advances in this field to generate significant social and economic benefits;

o Evidence of a business commitment to work with government to achieve this and that government support will make a difference.

The workshops will explore these in more depth. Your insight, experience and expertise is welcomed to help inform and develop these challenges – especially the business appetite and capacity to address them.

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Bioscience & Biotechnology “Strawman” Challenges

# Description

1

Deliver a sustainable food system resilient to global shocks, able to respond to new market opportunities, and enables health and well-being. Rapid population growth and growing affluence is increasing global demand, with diet-related disease and malnutrition as challenges. The UK’s world leading Bioscience and Biotechnology research and innovation could be used to increase productivity across the sector, open up export opportunities for high-value produce, products and services, and ensure a safe, nutritious and affordable food supply for all. Innovations may come in areas such as precision agriculture, synthetic biology, new business models, or crop plant genome editing leading to new varieties better suited to their environment.

2

Be the world leader in Industrial Biotechnology by 2030. To manufacture bio-based products, materials and energy at the yields necessary for key markets such as chemicals, plastics, biofuels and biopharmaceuticals while reducing reliance on fossil fuels and scarce natural resources. The UK is a world leader in IB research, as well as underpinning biosciences such as genomic and systems biology, synthetic biology and engineering, but these capabilities need to be translated more quickly and sustainably for business benefit. A challenge here is to attract investment and enable small, innovative companies to scale-up their developments quickly to hit the market and allow them to grow.

3

To establish UK biorefinery demonstrator facility by 2020, capable of converting a range of feedstocks from all organic wastes and resources (e.g. solid municipal waste, agricultural waste, forestry and industrial gases) to produce valuable platform chemicals, opening up new revenue streams for UK bio-based businesses in a circular bioeconomy, and cutting waste through bioprocessing to zero by 2030.

4 To apply synthetic biology to accelerate biologics development and safely reduce the time required to bring a new biological therapeutic (e.g. vaccines, immunotherapeutics) to market by 50%.

5 To be the world leader in protein engineering, enabling >50% of proteins with industrial utility to be expressed at an acceptable economic yield by 2030.

6

To harness synthetic biology, advanced technologies and systems biology to exploit biodiversity for industrial challenges and opportunities. A major challenge is for modelling and assembly systems to be developed that can reliably assemble >10 enzyme pathways in useful industrial organisms. Multicellular or colony –based systems are more complex still and the further challenge is to tailor environmental populations, e.g. biofilms and microbiomes, to our healthcare, nutritional and industrial needs. Mapping the “Dark Biome” to access the 90% of undescribed and currently non-cultivable microbial species would lead to novel biomics that could significantly increase the size and scope of of the synthetic biology “toolkit”.

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Bioscience & Biotechnology - Fit with Criteria: Global Market: • Industrial Biotechnology: the global IB sector is

predicted to grow to US$414.5bn by 2017 with a CAGR 2012-17 of 11.6%.

• Synthetic Biology: forecast to grow to US$11bn by 2018 with a CAGR 2013-18 of 34%.

• Food & Agriculture: 30% of global economy is food related with 60% more food needed by 2050. There is a growing need for new sources of protein & ‘healthier’ foods. The addressable market opportunities for UK industry are:

• natural/healthy food & drink £250bn • improving agri-productivity £300bn

UK Capability: • Strong UK business and research base • Industrial Biotechnology: in FY2013/14, there were 225

UK biotechnology and bioenergy companies generating £2.9bn in sales revenues and net exports of £1.5bn, predicted growth of 4% p.a. to 2025.

• The IB Catalyst has invested £79.6M to date through collaboration between BBSRC, Innovate UK and EPSRC

• Skilled UK IB workforce estimated at 8,800. • Synthetic Biology: £300M Synthetic Biology for Growth

programme. • Food & Agriculture: £103bn GVA; £18bn exports; UK’s

largest manufacturing sector; 3.8 million people employed.

Timeliness for Impact: • AgriFood: growing and transforming • Pressing need to close the Yield Gap • Supply Chain shocks (e.g. commodities market, oil

prices, food safety scares and harvest failures) – developing resilience

• Protecting and valuing ecosystems • Reducing environmental impact • Stringent legislation – across supply chain • Consumer pressure, CSR, competitive advantage • Untapped investor take-up

Additionality: • Identifying investible companies • Role in connecting a distributed bio-economy landscape,

and connecting research to industry • Stimulating the rural economy (“Rural Powerhouse”) • Targeting global growth • Need to encourage cross-sector working across, for

example, space, health, HVM, infrastructure, which may not happen naturally

• Can ensure a focus on authenticity and traceability • Can enable companies to work collaboratively to

address large societal challenges

Leading Edge Healthcare & Medicine “Strawman” Challenges

# Description

1 ADVANCED THERAPIES Accelerating patient access to new cell and gene therapies - discovered in the UK and commercialised/manufactured for cost effective adoption in the NHS

2 ANTIMICROBIAL RESISTANCE Utilising new technologies and treatments to reduce AMR by 50% by 2025/30

3 CLINICAL TRIALS Establishing the UK as the go-to country for high-value industry trials, in areas where precision medicine approaches; combination / adaptive / multi-arm designs; and leveraging UK strengths in informatics

4 DRUG DISCOVERY Achieve 50% acceleration in the productivity of the discovery, development (by 2030), manufacture and adoption (by 2040) of new medicines

5 INFORMATICS & DIGITAL HEALTH Create digital technologies to transform the delivery of health care and management of population health, and to make the UK a leading test-bed for new health care systems and self-management

6

INNOVATION IN HEALTH & DISEASE DETECTION USING DIAGNOSTIC, PREVENTATIVE & SENSOR TECHNOLOGIES Developing diagnostics and sensors that enable anticipation and prevention of disease in the healthy, elderly and chronically ill. To precisely diagnose and treat disease in the ill, to improve compliance with medication, and to enable independent living

7 PRECISION MEDICINE Ensuring every person diagnosed with cancer or chronic inflammatory disease has molecular / cell level analysis to enable cost effective precision medicine in the NHS

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Leading Edge Healthcare & Medicine - Fit with Criteria:

Global Market: • Healthcare IT sector 2025; $202 Bn • Medical imaging equipment and in-vitro diagnostics

sectors 2025; $57 Bn • Pharmaceuticals 2025; $1.7 Trn • Biopharmaceuticals 2025; $121.3 Bn • The medical technologies sector, which includes medical

devices and patient monitoring devices – 2025 $583 Bn • Clinical trials current; $60 Bn • Vaccines 2021; $48 Bn • Veterinary diagnostics 2021; $7 Bn • Animal vaccines 2020; $7 Bn • Cell & Gene therapy 2025; $14-21 Bn

UK Capability: • Strong UK business and research base • 107,000 employed in the biopharmaceutical sector and

service and supply chain in 1,948 companies, generating £39.7Bn turnover

• 115,000 employed in the medical technology sector and service and supply chain in 3,685 companies, generating £21Bn turnover

• The digital health sector has an estimated turnover of £886m and approximately 7,400 employees

• Genomics related activities in life science companies generate an estimated turnover of £164m and approximately 1,364 employees

Data from Strength & Opportunity 2015

Timeliness for Impact: • Global healthcare spend 2010 - $6.5 Trn • Healthcare increasing as a proportion of GDP • OECD countries healthcare spend to grow - $10 Trn 2020 • For US alone - economic burden of disease with no, or

inadequate treatment estimated to be $250 Bn • 30% of the UK population suffer from a chronic disease • WHO estimate that the UK loses $3.4 Bn annually in

income as a result of deaths from chronic conditions. • Management of chronic disease has been estimated to

account for 70-75% of all UK healthcare costs • O’Neill report AMR – 10M extra deaths/year and cost

global economy up to $100tn by 2050

Additionality: • More rapid UK Business development and growth • Increased UK productivity • Increased UK competitiveness • Increase in UK jobs • Increase in UK skills base • Development of regional clusters • Improved patient outcomes • Decrease in disease burden and increase in economic

output • Decrease in NHS costs

Manufacturing and Materials of the Future “Strawman” Challenges # Description

1

To make UK manufacturing and materials industries among the most connected, digitalised and flexible in the world in the fourth industrial revolution, enabling their labour productivity to be doubled by 2030. There is an opportunity for firms to harness digital technologies and approaches to accelerate manufacturing processes and materials development, become better connected with the supply chain and decrease variability in quality. There is a need to create a bridge for ideas, know-how and skills from the UK’s world-leading digital and creative sectors, and the research base, to UK manufacturing and materials industries. A challenge here is to make the benefits of digital technologies and approaches relevant and accessible to SMEs across all sectors.

2

To lead the world in resource-efficient manufacturing and materials, whether by mechanical, chemical or biological means, enabling the resource productivity to be doubled by 2030. Business that can manufacture with fewer resources (materials, energy, water) will be more profitable and resilient to sharp changes in resource cost and availability. In addition, CO2 emissions from manufactured products can be reduced across their lifecycles and energy-intensive materials (such as cement) could replaced by novel, sustainable alternatives. The challenge here is to increase research and innovation in areas such as design for manufacture and end-of-life, materials substitution, sustainable business models, remanufacturing, formulation, continuous manufacturing and additive manufacturing. This would generate growth in a circular economy and could lead to manufacturing having a net positive impact on the environment.

3

To enable the UK to ‘make its own future’ by increasing and anchoring domestic manufacturing and materials capacity for high value, next generation products. This can be achieved by driving cutting-edge manufacturing and materials innovation, and its translation into market-ready products, and the development of competitive UK supply chains anchored by non-replicable research strengths and know-how. A challenge here is to de-risk and crowd-in more investment into manufacturing and materials innovation, and scale-up. An example of this is the production of next-generation fibre composites which will be vital for the competitiveness of UK aerospace and automotive.

4

To lead the world in the generating growth through the mass customisation of products and services building on our strengths and know-how in digital, design, servitisation, social sciences and additive manufacturing. The challenge here is to enable UK manufacturers to acquire the capability to meet customer demands for differentiated products and services at scale. An example of this is tuneable materials for additive manufacturing that can be tailored for different products.

5

To lead the world in the industrialisation of affordable, resource-efficient, low carbon buildings and infrastructure construction based on innovation in manufacturing processes, engineering and materials. This would address the national housing shortage at significantly lower cost, construction time, carbon emissions, and health and safety risk, and open up export markets for UK manufacturing and construction industries.

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Manufacturing & Materials of the Future - Fit with Criteria: Global Market: • £30bn boost to UK economy by 2025 by strengthening

domestic manufacturing supply chains (CBI estimate) • Market for value-add materials in 2030 set to be €316bn • Resource efficiency improvements could generate £10bn

additional profits pa for UK manufacturers • Remanufacturing could be worth £5.6-8bn to the UK • 1.7-2.5m new homes needed by 2025 plus >£200bn

investments in UK infrastructure in next decade, market growth at 4.3% pa

• Global market for precision medicine set to grow 10.5% CAGR to 2023 from $39bn in 2015

• Passenger aircraft global market will be $629bn by 2030 • Additive Manufacturing global market $100bn pa by

2020

UK Capability: • Manufacturing accounts for 10% of UK GVA (£162bn),

2.7m direct jobs, 50% of exports, 68% business R&D • UK is ranked 9th globally, 4th in EU in terms of mfg output • EPSRC Hubs and Centres for Innovative Manufacturing

plus Centres for Doctoral Training • Henry Royce Institute led by Uni of Manchester (£235m) • HVM and Digital Catapults provides companies with

access to critical facilities, equipment and expertise • Hartree Centre, Alan Turing Institute, Diamond and ISIS

underpin capability • Of the top 2000 R&D spending firms in the world, 484

are in sectors with high dependence on manufacturing and have manufacturing presence in the UK, and 368 are active in materials research

Timeliness for Impact: • Productivity puzzle in the UK • Growth in emerging markets depends on manufacturing

and materials e.g. electric vehicles, precision medicine • Goals to reduce carbon emissions necessitates greater

resource efficiency • Growth in emerging markets as more people join the

middle-classes and demand more from products • Legacy of R&D ripe for commercialisation • International competitors are investing in major

materials research programmes (US, Germany, Japan)

Additionality: • Together, Innovate UK and the research councils can

connect manufacturing and materials with other industries (e.g. digital) and the research base, across the UK, and stimulate and broaden innovation and provide funding for the best innovation proposals through, for example, a Catalyst to de-risk innovation and scale-up

• Innovate UK can crowd-in private fund investment through investor showcases and Catalysts

• We can enable collaboration between the HVM Catapult and research groups to translate ideas to capacity

New Energy Technologies including battery storage and grid technologies “Strawman” Challenges

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# Description

1

Lead the world in next generation batteries, and secure its production in the UK. Developing high production rates to serve emerging markets in electric vehicles, medical and wearable devices, and the Internet of Things. Scale up of recent research developments in manufacturing, materials and chemistries from the research base and catalysis of a pipeline of future world-leading storage innovation.

2

Reduce energy bills by accelerating game-changing grid technologies which will transform the delivery of clean energy by maximising utility of grid assets and reducing losses. For example, integrating electric vehicle storage, innovative power electronics and controls, improving whole system integration and use of new digital and smart intelligence to balance supply and demand, to reduce grid costs vs business as usual by 30% by 2030.

3 Develop and commercialise new low carbon heating and cooling systems and services that are cheaper than incumbent fossil fuel-based systems, including new approaches to harvesting, distributing and using waste heat.

4 Develop and commercialise production of low or near-zero carbon liquid and gaseous fuels that are cheaper than fossil fuels and can be used in ground, marine and air transportation as well as in industry.

5 Discover, develop and integrate advanced energy materials that will create step-change improvement in performance and/or cost of next generation energy technologies.

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New Energy Technologies including battery storage and grid technologies - Fit with Criteria:

Global Market: • More than 1 million electric vehicles now on the road, with

hundreds of millions expected by 2030 – in many countries plug-in vehicle growth rates are above 40%.

• Clean Energy investment to 2035 is expected to be over $50 trillion.

• Bloomberg New Energy Finance expects energy storage market to be worth US$250 bn by 2040, spurred by cost-competitive renewable electricity which dominates global energy system revolution

• Offshore Wind market expected to be $640bn to 2040 (cumulative)

• Heating and cooling account for more than 50% of global final energy consumption (IEA), and ¾ of this (129 EJ) is met with fossil fuels, leading to annual emissions of more than 10 GtCO2/yr.

UK Capability: • 1% of UK vehicles sold are now electric, and a major OEM is

opening EV battery production in UK. • UK energy sector (2013) contributed £25bn GVA and 131,000

jobs directly to the economy. An additional £71bn and 550,000 jobs indirectly in supply chains(1)

• Research: 13 Energy Centres for Doctoral Training & 7 Supergen activity hubs; 2 Energy Catapults (OREC & ESC). Expertise across electrochemistry, materials, chemical engineering, system analysis and systems integration.

• A strong base of creative start-ups (energy catalyst evidence) and already UK energy intensity and useful energy (“exergy”) efficiency is 15% and rising putting us ahead of the US and China

• Strong UK trajectory towards reducing CO2 emissions.

Timeliness for Impact: • Energy transition is accelerating (20-25% year on year growth of UK

renewable electricity, heat and transport) revolutionising domestic and global energy systems.

• Renewable capacity installed in 2015 exceeded fossil fuel capacity for the first time. This trend likely to accelerate and deliver transformation of global energy systems.

• International agreements have stimulated new cooperation and private investment appetite via breakthrough energy coalition and others.

• Key UK government action upcoming on Emissions reduction plan, joint energy innovation plan, and joint action plan for energy intensive industries makes integration of ICSF for clean energy very timely.

Additionality: • High risk, cost and timescale makes investment high risk / high

reward. Often investors need risk sharing with governments to help involvement.

• Markets for heating, cooling, storage, and zero carbon gases are complex and fragmented, involve numerous interdependencies and network economics and uncertainties.

• Public investment can catalyse disruptive SME-led supply chain development by pulling in radical approaches to conservative industry, and de-risk early stages.

• Regulated industries (e.g. heating) need public coordination to facilitate innovation commercialisation

Quantum Technologies “Strawman” Challenges

# Description

1 Build and integrate a quantum sensor which provides revolutionary capabilities to the construction sector- e.g. build quantum technology based system with the capability to detect and visualise a 0.5m diameter plastic pipe, 5m beneath the ground, at a cost of <£10,000 which fits into a size comparable to a suitcase.

2 Build and integrate a quantum imaging device which provides breakthrough capability to the automotive industry – e.g. design a quantum technology-based vision recognition system, <5cm3 in size and capable of operating in a vehicular environment, that will automatically detect objects which are hidden from direct view (such as a person or car located around a corner).

3 Build and integrate a quantum computer which provides transformational capability to the logistics sector- e.g. developing a quantum based algorithm to optimise logistics and a multinational supply chains.

4 Improve the autonomy and reliability of a quantum technology – e.g. Provide navigation accuracy within 10 nautical miles/month to an underwater self-powered and unmanned drone for 1 month without the need for beacons.

5

Certify the performance of quantum communications system - Using either post-quantum cryptography or QKD, secure the data communications between a drone and a satellite against the threat of a quantum computer without adding any bulk to the outside of the device. Work with the organisations such as the national cyber security centre to verify the security level.

6

Develop a quantum sensor that can be mass produced as a consumer product- Develop any quantum device with real and useful functionality (though the performance may not have to be market leading) into a package which may be suitable for consumer applications- for example, less than the size of a matchbox, with a total a unit cost of <$100.

7 Build and integrate a quantum timing device that provides revolutionary capabilities- Design a quantum clock, with stability of 1 in 10-15, that will fit in the size of a shoebox, and can run unattended for 2 days

8 Design a quantum technology that uses design and human factors principles from the start to create a ‘likeable’ product- e.g. Integrate a quantum technology into a baseball cap which gives the ability to monitor and analyse neurological activity in the brain in real time for an improved brain/human interface.

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Quantum Technologies - Fit with Criteria: Global Market: • The worldwide market for quantum technologies is currently small

(£1Bn) and mostly aimed at the sale of scientific equipment. • However, the industry is growing, and there is a significant opportunity

for the UK to lead a future quantum technologies industry, potentially worth £billions in the short term, and £hundreds of billions in 20 or more years. (source: Government office for science- Blackett review for quantum technologies).

• This significant market is expected because of the highly cross cutting potential of quantum technologies –bringing huge advances in capability to multiple markets and sectors, from telecommunications, transport, health, construction, IT, defence, automotive, manufacturing and many more.

UK Capability: • This proposal will strongly leverage world-leading UK capability

established through the £270 million quantum technologies programme. This programme, established in 2013, set up 4 quantum hubs and supported early innovation activities and skills creation, which is an excellent base on which the UK can build to create an new industry.

• The UK currently sits in joint third position worldwide in terms of spend, number of publications and patents. However, the UK is well known internationally for being highly coordinated. This gives us the leverage to compete against countries spending much more than us. As a result, we can realistically expect to be a significant part of the future global supply chain for Quantum Technologies.

• UK companies are currently dominating the cutting-edge market for the component devices that make up quantum technologies. With the right support these companies give us a vital foundation on which we can build a future industry in the UK.

Timeliness and Impact: • The best timing for this intervention is exactly now. • The technology is ready- Recent advances from mostly UK companies in

electronics, photonics, vacuum systems, cryogenics and nano-fabrication components mean that it is now possible to reduce quantum technologies into a size (and cost) which is commercially attractive.

• Other countries have woken up to the huge potential for quantum technologies and are heavily investing themselves, but are still behind the UK. The UK was the first country to spot the industrial opportunity in quantum technologies. We must continue with our investment, or missing out on the great opportunity which we first spotted!

Additionality: • The uncertainty, risk and long expected time to market makes it difficult

for all but the very largest companies to bring quantum technologies to market on their own. With public sector help, the financial risk can be reduced significantly. Public funding allows UK companies to produce technical demonstrators which allow market opportunities to be identified. These activities significantly reduce the time that it takes to get products to market; they build confidence amongst the industrial community to an extent which is not currently seen anywhere else in the world.

• Public funding also helps to build and connect a complex UK supply chain and ecosystem which anchors quantum technologies in the UK and protects against the threat of quantum technologies companies re-locating oversees.

Robotics & Artificial Intelligence “Strawman” Challenges

# Description

1 Extreme and Challenging (hazardous) Environments. Developing robotic solutions to make a safer working environment in industries such as nuclear, mining, oil & gas, space. Increase productivity and open up new cross disciplinary opportunities which are not currently available.

2 Health and Social care. Enable medical and non-medical interventions that enable shorter recovery times, higher success rates and decrease the long-term costs to the NHS. Includes development of surgical and rehabilitation tools, hospital logistics and personal devices (e.g. companion robots) to support an ageing population.

3 Enabling Technologies. To build UK competitive advantage through an integrated investment programme anchored in cross-sector enabling technologies in RAS to drive forward the new opportunities in Service Robotics for both industrial and consumers use.

4 Artificial Intelligence (AI). The ability to carry out higher level cognitive tasks so a system can apply itself to tasks as diverse as understanding speech, manipulating objects (real or virtual), navigating in unknown spaces etc. by general transfer learning and learning to do a task without vast amounts of data or external support.

5 Intelligent Mobility and Autonomous Vehicles. Development and deployment of autonomous vehicles can lead to safer roads, improved logistics, and a decrease in carbon emissions. In agriculture it could increase yields and productivity into the agricultural sector.

6 Farms of the Future. Performing labour-intensive jobs (e.g. fruit picking or sheep rearing) and managing assets more efficiently (e.g. inspection of crops, soil) to increase yields and improve productivity in the sector.

7 Next Generation Manufacturing. Develop the factory of the future, where supply chains are easily reconfigurable and seamlessly integrate with the digital world to increase efficiency and competiveness across UK. Enhance flexibility for operators to configure and offer new services, and a greater agility for businesses to scale.

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Robotics & Artificial Intelligence - Fit with Criteria:

Global Market: • By 2025 RAAI related technologies will have an impact on global

markets of between $7.1 and $13.1 trillion p.a. • Robotics have the potential to increase the productivity of other

sectors of the UK economy by up to £218 billion (15% of GVA) • Expected growth in robotic sales of 79% between 2014 ($16.7bn)

and 2018 ($30.0bn). Global revenue for enterprise AI applications will increase from $358 million in 2016 to $31.2bn by 2025

• The potential economic impact of autonomous cars and trucks could be $200bn to $1.9 trillion per year by 2025

• The total cost of nuclear decommissioning in the UK alone is currently estimated at £60bn

• By 2020 the total industrial and service robotics market sizes will be in excess of $45bn and $18bn respectively

• Robotic surgery will have an economic impact of over $200bnp.a. by 2025

UK Capability: • Over 300 UK based companies with operations relevant to this

area, and the potential to benefit from a national programme. • Increasing international interest in UK activities and additional

impact arising from leveraged investments. • An active Autonomous/Automated Vehicles programme in the UK

and a growing UAV industry comprising large companies & SMEs • Catapult centres who have identified RAAI programme activities

(e.g. HVM, Transport Systems, Digital, Space) • Extensive community of SMEs active on RAAI technologies &

applications in different market domains • RAAI collaborative academic research portfolio of over £120m

distributed through out the UK in clusters of excellence leveraging over £50m from industry (40% leverage c.f. EPSRC total at 16%).

• Four centres for Doctoral Training with over 100 PhD students alongside 70+ industrial partners providing matched funding.

Timeliness for Impact: • Increasing convergence and interaction between different classes

of technology – especially AI – promise improved productivity, better public services and social benefits

• Modular platforms are emerging for many important functional characteristics of a robot, resulting in a technology ecosystem

• AI is an area now receiving significant funding by large technology companies (e.g. Microsoft, Google, Uber)

• UK public expenditure on long-term care will increase from £11.3 to £31.1bn by 2032, with private expenditure due to rise from £7.3 to £22.4bn there is a pressing need to develop new technologies that allow people to live longer in their own homes.

• Advanced robotic systems will enable SMEs to bring manufacturing back to the UK, increasing competitiveness

Additionality: • Advanced robotics requires substantial capital investments, and

businesses will need clear evidence of positive return on investment – government intervention will de-risk investment and increase business confidence through programmes that increase the pace of robotic product development

• Most industrial and many commercial service robots remain expensive, costing tens or hundreds of thousands of dollars per robot – decreasing the cost of production will enable more industries to use AI enabled robotics to enhance productivity.

• Under-investment or delays in decision-making will leave the UK unable to compete globally and its ability to capitalise on the momentum already in place will be constrained.

Space & satellite technologies strawman challenges

# Description

1 How do we get more business, organisations and citizens using data originated from space in their daily activities? The potential applications of space data have been identified and validated through a number of initiatives to date - what is needed next? How can UK businesses halve the time to market and increase their global market share for satellite services and space technologies?

2 How can businesses prove their products and services for use in space? How can In-Orbit Demonstration and national test facilities be used to greatest effect and are there alternatives or complementary approaches?

3 How can public sector organisations improve their services and save costs by making more effective use of satellite applications and services? What are the barriers to, and solutions for, adoption; including standards, data availability, awareness or cost? How should government act as an anchor customer for new services?

4 How can businesses improve access to the increasing amount of remote sensing imagery generated from space every day? Previous investments have focussed on satellites which are now producing a surfeit of data that is ripe for exploitation. What are the new data access needs, standards and resources needed to exploit this resource?

5 What is the best way of achieving lower cost access to space, and reduce the dependency on non-UK providers? What is needed to develop a UK space launcher capable of launching a 100kg satellite from a UK space port for a user cost of less than £5m?

6 What is the best way to deliver satellite-based broadband communication capability to UK citizens and business? How can business and individuals access superfast broadband (24MBps download) for a cost comparable to existing fixed and mobile terrestrial services? What is needed to ensure compatibility with 5G services?

7 How can the UK be the first to refuel or service an existing in-orbit satellite? What is needed to safely rendezvous, interface and replenish a satellite to extend its life by at least five years? What else might need to be done to prepare the satellite for end of life operations and minimise the risks of space debris?

Official Sensitive

Space & Satellite Technologies - Fit with Criteria Global Market: • Global market worth £260bn (Space foundation 2015) &

Forecast to be worth £400bn by 2030 • UK has 6.5% of global market (2014) • UK has agreed target to secure 10% of global market by

2030, or £40Bn. Evidence to date is achieves this (over past five consecutive years)

• Forecast to create 100,000 new jobs • Includes upstream space infrastructure and downstream

applications/services • Balance of UK Exports(£5bn) :

• to Europe ( mostly ESA and EU projects): 49%, • to US: 19% • Asia Pacific: 16% • Rest of World: 16%

UK Capability: • UK space industry grew to £13.7bn with growth of 6.5%

per annum. This is equivalent to 6.5% of the global space economy (2014/15)

• UK Space industry is concentrated, with 19 organisations accounting for 89% of total industry income but with large and growing SME and services base (Sat Apps Catapult identified over 600 SME engagements to date).

• Contributed £5.1b GVA to economic output (0.27% of total UK GDP), and a total of £10.0b (inc. supply chain) in 2014/15.

• UK space industry direct employment increased at a rate of 6.0% per annum to 38,522 direct jobs in 2014/15, and a total of 113,866 supported jobs.

• Strong academic base (World Class) and Sat Apps Catapult

Timeliness for Impact: • Commercialisation of space (or Space 2.0 / 4.0) is

happening now. • Huge growth in small satellites and low cost access to

space, fuelled by private investment. • Europe need to evolves from heavy reliance of

institutional funding for space development and exploitation; UK can a lead on industrial reform.

• Early Stage private funding becoming available such as the new London Space Tech angle network and the Seraphim fund.

• Decade to 2015 saw highest number of inward investment events at 36, with strong prospects for further growth.

Additionality: • UK engagement upstream ensures applications are user-

driven (c.f. Galileo) • Use of NSS (GPS) and the Internet are examples of Govt-

led creation of new markets (Mazzucato) • Cross sector leadership is needed to help space-aware

companies lead downstream applications as more esoteric than mainstream digital.

• It is estimated that wider UK industrial activities representing over £250 bn of UK non-financial business economy GDP (13.8%) is supported by satellite services

Transformative Digital Technologies “Strawman” Challenges

# Description

1 How do we deliver ubiquitous, reliable connectivity across the UK, that is safe and secure from cyber-attack, in order to bring social and economic benefits for all citizens and sections of society? This includes not only connectivity to the premises but also to the road and rail network.

2 How can UK businesses handle explosive growth in data and develop business models effectively, especially driven by the IoT and various use cases for 5G

3 How can the UK lead in the development and application of Artificial Intelligence to transform businesses across all sectors, augmenting not replacing humans? Challenge areas could include the fields of retail, education, transport and healthcare.

4 How do we integrate large scale machine-to-machine communications, low delay, highly reliable services to deliver the IoT? How do we develop the services and applications that will take advantage these new communications mechanisms

5 Ensuring security is designed into all digital systems, across all network elements and layers, from the ground up. This applies to all digital infrastructure including licensed spectrum(5G) and unlicensed spectrum (LPWAN) as well as fixed line (fibre) and to new digital technology areas

6

Skills creation is critical for future UK competitiveness and security across the entire eco-system. How do we ensure the Research and Development community have the skills and expertise to develop and understand the critical infrastructure and new technology? How to create a new engineering talent pipeline to design future digital and communication technology? How do we ensure end users working in all sectors leverage advanced infrastructure and capability?

7 How can we ensure that the UK leads the world in the using Augmented Reality / Virtual Reality across multiple sectors building on the skills we have in the creation of compelling content?

8 How do we unlock the transformative potential of Distributed Ledger Technology (DLT) as an efficient method of providing trust, transparency and provenance, utilising new business models and ecosystems?

9 How can we leverage the UK’s excellent supercomputing infrastructure to improve productivity and competitiveness in industry (especially SMEs)? How do we target the development of new supercomputing codes at the needs of the UK’s strength sectors SMEs (e.g. Biotechnology, Finance, Creative Industries, AI etc.)?

10 There is a need for the highly energy efficient solutions in wireless digital connectivity to enable cheap solutions that can be installed and left for IoT (e.g.10 year battery life) as well as energy efficient solutions in the Supercomputing and DLT implementations

Transformative Digital Technologies - Fit with Criteria: Global Market: • Digital technologies are by default global • Market Research Store estimates that the total investment in 5G

R&D and trial investment will be $5 Billion between 2015 – 2020, with a 40% CAGR over the subsequent 5 years. This would equate to an R&D/trial market value of ~$8.8 billion (£5.76 billion) in 2025.

• Juniper Research forecasts 5G revenues to exceed $65 billion (£42.9 billion) in 2025.

• IoT $1.1Tn forecast by various including Gartner(2013), IDC (2014) • The total UK M2M/IoT marketplace is worth £13.3Bn in 2016

[Source: Machina Research] and global M2M/IoT revenues will total $47.9Bn in 2016 [Sources, IDATE/Statista] – by 2020 LPWAN services in Western Europe will generate $1.8Bn in revenues, increasing to $5.4Bn in 2022 [Source: Infoholic Research]

• AR/VR global market forecast to be $150bn by 2020 • HPC/Supercomputing hardware software and services expected to

be $14bn by 2019

UK Capability: • 5GIC (University of Surrey), University of Bristol 5G Lab (massive

MIMO, SDN, IoT…) and Kings College London among others significantly active in 5G/IoT plus industry clusters

• Bristol is Open has the first city-wide Software Defined Network (SDN)

• IoT UK programme • UCL, Imperial, Oxford, Cambridge, Edinburgh, world class

universities in Transformative digital and cyber with industry clusters also clusters around Nottingham and Newcastle Universities

• Centres of supercomputing excellence are in Cambridge/London (CORE), Bristol (CFMS), North-east(N8), Northwest (Hartree), Oxford/London/Southampton (SES-5), Wales (HPC-Wales), Edinburgh (EPCC).

• ~42% of applications into E&E round 1 were for transformative digital projects

• UK economists world leading in modelling how to gain value for UK Government (ESRC funded Klemperer and Binmore)

Timeliness for Impact: • Acceleration of deployment of 5G testbeds around the world as a

result of initial research and anticipation of the first set of standards to be available in 2017.

• this means that the opportunity is short to develop the technology both to support this standard and to lead the market in services and application built on it

• Other nations are accelerating their efforts in this area • HPC currently undergoing a major change as the next generation

of computing ‘exa-scale’ systems is being developed for 2020. • DLT/Blockchain beginning to show opportunities beyond Fintech

Additionality: • Current 5G test beds/networks and LPWAN deployments exist in

isolation, both geographically and from the industry sectors they will impact

• Industrial research fragmentation will be reduced(acceleration of innovation)

• Identify/facilitate innovation resulting from5G (help prioritise R&D, support ROI/business case development)

Integrated & Sustainable Cities “Strawman” Challenges

# Description

1

The City as a Lab - Understanding the root causes of urban policy issues to enable the market for innovative solutions and testing of these in an integrated way in UK cities. This requires cross-discipline research bringing the best of UK academic firepower to bear, without siloed funding, to diagnose city challenges. UK expertise in future cities becomes a major export. Strengthen UK regional research links and support local economies to deliver better public services.

2

The Hyperconnected City of the Future - Position the UK as the world’s commercial and regulatory testbed for future city technology. To affect significant change will require demonstrators to prove commercial outcomes at a meaningful scale in the complex environment of a city. A national demonstration capability for commercial testing of integrated future city solutions is needed, that should include interconnectivity, data, standards and regulation. A outcome is global businesses anchoring their R&D in the UK. Informs and linked to the Digital/5G ICSF challenge.

3 The Wellbeing City – Social and health care dominate the spend for local authorities and are forecast to rise with aging and less active populations. New integrated approaches are needed to increase wellbeing, increase uptake of preventative health measures and independent living at a city scale – including understanding the underlying causes.

4

The Digitally Built City - The UK to be world leaders in data/digitally driven infrastructure build and management – includes business models and solutions for increasing capacity, resilience and whole-life performance of urban infrastructure, adaptation to environmental change and future proofing of built ‘smart’ infrastructure for long term economic growth. Data-integration is a particular challenge, including social, environmental (natural capital) and economic as well as technical data.

5 Urban Air Quality – a major global issue that has multiple contributing factors. New solutions and business models that significantly improve urban air quality – including measurement and management in real time, understanding the impacts of poor air quality and step-wise infrastructure/system changes to mitigate sources of air pollution.

6 The Trading City - supporting the UK in becoming the slickest trading nation, integrating transport modes and infrastructure in urban areas for seamless and safer movement of people and goods – includes more productive and sustainable mass transit of goods, services and people, walking and cycling.

Official Sensitive

Integrated & Sustainable Cities - Fit with Criteria:

Global Market: • £200bn pa 2025 (£50bn now) addressable global market

for integrated city solutions • Smart, integrated infrastructure market is £3 billion a

year in the UK, with opportunities for UK firms in a future global market of up to $450 billion a year

• Urban and infrastructure challenges a global market – a constant theme in all our international work (Newton, Prosperity, Missions etc.)

• Over 32,000 enterprises across the UK already providing innovative solutions to the challenges

• Estimated that future cities activity is already worth over £16bn to the UK (Arup/Future Cities Catapult)

UK Capability: • 30 UK cities in demonstrator projects • Leading global city design and contractor businesses -

London a global hub for major city projects & major joint RCUK programme with us

• £16bn architecture and civil engineering firms’ contribution to UK GVA in 2012

• Built environment supply chain ~£200bn to UK economy (~15%) – construction, operation & maintenance

• 10% (~3m) of employment • Catapults: Future Cities, Transport Systems, Digital,

Satellite Applications. • Key national centre on cities and infrastructure research:

UKCRIC

Timeliness and Impact: • Urbanisation trend is driving need for new city solutions • Cuts to local authority budgets driving demand for new

solutions • Disruption is coming from new technology adding data

layers to infrastructure (IoT, AI, Big Data, autonomous systems)

• UK leads the world in Building Information Management (BIM) – improves productivity

• Market delivers superior, cheaper solutions for citizens enabled by smarter infrastructure

• Increasing risk from natural hazards; greater resilience reduces costs and increases productivity

Additionality: • Demonstrator projects provide confidence to invest in

integrated solutions – business ready to co-invest • Drawing together the cross-discipline expertise needed

to deliver innovative solutions • Enabling the establishment of standards and regulation

to provide market confidence • Strong place agenda – strengthen research and city

connections

Technologies for the Creative Industries “Strawman”

# Description

1 Transforming Audio Visual production through next generation technology: How can UK creative businesses innovate and build upon their world-beating status to ensure that the next generation of films, games, and other globally applicable new experiences based on creative content continue to be produced in the UK?

2 Leading the world in the application of Immersive Technology: How can we ensure that the UK leads the world in the creation of compelling experiences across multiple sectors and create new business models based on the application of Augmented Reality / Virtual Reality technologies?

3 Creative Economy: How can we enhance and accelerate the Creative Economy's contribution to UK economic growth through strategic investment in new and emerging creative clusters. Can this provide the bedrock for strong local/regional economic growth through the production of new content, products and global services?

4 AI: How can the UK lead in the development and application of Artificial Intelligence to transform businesses across all creative sectors? Enriching gaming experiences, improving creative workflow management etc.

5

Distributed Ledger Technology: Distributed Ledger technology (DLT) is a transformative and efficient method of providing transparency and provenance of data. How can we use DLT to transform the way we protect and monetise digital creative assets, allowing new content creators to achieve value, and users of content frictionless and affordable access.

6 Product Design: How can creative businesses which are focused on physical design, innovate new consumer goods with the latest technologies in manufacturing and material science? Ensuring that the UK’s design & manufacturing sector continues sit on the cutting edge and creates the products of tomorrow.

Official Sensitive

Technologies for the Creative Industries - Fit with Criteria:

Global Market: • Global media market - $2Trillion • AR/VR global market forecast to be $150bn by 2020 • Advertising - $468bn • Games - $99bn • Film (box office only) $48bn • Design – currently worth £71bn to UK

UK Capability: • The UK’s creative economy provides jobs for 2.9 million people

and accounts for around 10% of the whole economy • Acknowledged world-class service, content and production base

(e.g. ILM, Framestore, BBC, WPP, Heatherwick Stds) • Employment continues to grow faster than the workforce as a

whole growing by 5.1% between 2104-2015 compared to 2% for the rest of the workforce.

• The sector is particularly strong at exporting, with services exported by the UK creative industries in 2014 representing 9% of all UK exports.

• Nearly 50% of Creative Exports are in Digital services underpinned by the UK Digital Economy which represents around 10% of GDP.

Timeliness for Impact: • AR/VR on brink of mass adoption – no dominant platform or

service design, hence opportunities for UK • Synergies with games and film sectors as they race to develop

new technologies for converging media • Significant R&D tax credit and corporation tax incentives to attract

investment in R&D • GDPR (EU personal data regulation) will drive need for innovation

in fields such as (online) advertising • Increasing need for strong regionally-based industries to enhance

value through creative inputs (e.g. VR, UX and content for robotics, Automotive and health sectors)

Additionality: • Make up of creative sector means most innovative forms are small

and need capacity building to undertake R&D • Weak inter-sector supply chain links means need for collaborative

R&D incentives and networks (e.g. Immerse UK) • Disproportionate concentration of creative in London & SE • No current dominant designs in areas such as AR/VR require seed

public investment • Ability to attract talent and large businesses from around the

world on world-beating challenges – e.g. USA, China inward investment opportunity.

[End]