As we witnessed the huge rise of global investments in deep tech start-ups and scale-ups from 15 billion dollars in 2016, to more than 60 billion dollars in 2020, the Boston Consulting Group and Hello Tomorrow are heralding deep tech as the 4th wave of innovation. The report, an exquisite read that we highly recommend to innovators of all professions, explains that the 1st wave consisted of the first and second industrial revolutions, the 2nd wave was mainly driven by corporate labs doing basic research with multi-disciplinary teams, while the 3rd innovation wave saw the emergence of small disruptive firms, backed by venture capital.
Before diving into what we find as essential differentiators and the paramount potential of the 4th great wave of innovation, let us first highlight that “deep tech” is an approach, and there is no such thing as “deep technologies”. The authors legitimately argue that it is the application and the resulting business model that are disruptive. Deep tech ventures are problem-oriented, not technology-driven, and indeed 96% of the companies are operating at the convergence of at least two technologies, with the very aim to find the best solution for the problem they are trying to solve.
During these times of radical transformation for humanity and all life on Earth, it is clear that deep tech companies feel compelled to address major, complex and difficult problems, and they already proved that they are ready to go for the core of the essential matters associated with the Sustainable Development Goals: 50% of deep tech work for good health and wellbeing, 30% for climate action, 19% for affordable and clean energy, and 8% for zero hunger. The challenge is huge: to solve fundamental problems at unprecedented speed.
We strongly believe in what the authors highlight that, even at this stage, ecosystems play a crucial role in effectively and timely supporting deep tech endeavours. It is a paradox that what makes these companies unique and competitive, such as the fact that they mainly develop physical products, rather than software, makes them also very difficult to scale, as more resources are involved for testing facilities. The exceptional news is that currently 1500 universities and laboratories worldwide are engaged in deep tech, governments started to provide targeted grants, while investors and corporates bring increasingly more resources into the game.
What we find to be the “crown’s jewel” of this report is the deep tech principles reflected in “four moments of truth”, which need to be anticipated by the company from the very beginning:
- Which is the problem ? – Copernicus moment
- How can we make this possible ? – Newton moment
- Can we build it today ? – Armstrong moment
- What does it take to become the new normal ? – Asimov moment
The Fourth Great Wave of innovation is shifting reality, and we are all co-creators, not just passengers on an automatic pilot ride, so let us make this wave to be the greatest of all.
We invite you to read the full report on the official website you can access here.