Photographie © École polytechnique – J.Barande
X-Entrepreneurship launches its series of key words related to entrepreneurship and innovation. For the latter, we are interested in Deeptech in which the enterprises are conducting breakthrough innovation. Discover Deeptech, its development in the world and France and its start-ups from the Ecole Polytechnique.
What is Deeptech?
Deeptech consists in organisations or start-ups that propose breakthrough innovation through services or new products. These technologies aim to provide solutions to the challenges of the 21st century, healthcare, societal or even environmental problems. It can be the fight against cancer or global warming. Its R&D is generally long because it brings truly valuable solutions in different sectors.
Sectors of innovation
Deeptech is not limited to just one sector: all domains can be concerned as soon as a need for breakthrough innovation is identified. Generally, we see it in the field of computers, robotics, artificial intelligence, biology, chemistry, electronics, healthcare, new materials and even photonics. France has a strong presence in the last two sectors.
What is the difference between tech and Deeptech?
You might be wondering how to differentiate between tech and deeptech. While tech refers to an already-existing technology, the latter is truly disruptive in terms of technology and science, thanks to innovation.
For tech, we can take the example of Blablacar, which gave rise to the concept of carpooling as a really effective innovation in the shared economy. But the enterprise is based on an already-existing technology: platforms.
Deeptech, on the contrary, refers to advanced technological and scientific solutions for creating new techniques. It is an innovation that is disruptive. An example could be the start-up G-Therapeutics that invented an implant to be positioned in the vertebral column to allow paralysed people to walk: a true revolution in the world of healthcare.
References for Deeptech
BPI France whose objective is to transform France into a "Deeptech nation" takes keen interest in such projects. In January 2019, it launched a Deeptech plan to multiply actions for supporting French start-ups: 1500 start-ups till 2023. BPI France, therefore, created a framework to identify disruptive innovation projects: Deeptech repository. It is based on four criteria:
- Links with research
- Capacity to remove technological barriers
- Creation of a strongly differentiating advantage
- The long and complex go-to-market
Discover X-Up, the Deeptech incubator of the Ecole Polytechnique
Deeptech in the world
In modern times, USA is the leading destination with 4000 deeptech enterprises. This figure could lessen due to a decrease in public investment. China is on the second position with 750 enterprises and a colossal investment which can soon overtake America. Europe is not behind either thanks to its renowned researchers and engineers. Germany accounts for 455 enterprises, UK with 435 and France with 241 firms. Thanks to the support of BPI France, the number of deeptech firms shall increase rapidly.
Deeptech in France
While France has the third position in deeptech in Europe, it still struggles to find investors. BPI France has therefore decided to encourage disruptive innovation to transform the world of tomorrow. French enterprises are largely present in photonics (13% of the start-ups in this sector are from France) and in new material (10%). It lags behind in robotics (7%), artificial intelligence (6%), biotech (5%) and Blockchain (4%). It attracts less investors even though it is placed in Top 5 destinations for investment in Deeptech3. The start-ups of the photonic sector represent only 5% of global investment, for instance.
How is Deeptech financed?
Start-ups and deeptech are often seen as associated but it is not always true. Deeptech projects require a colossal amount of investment for R&D and industrialisation. Until recently, only big corporate houses, research centres and multinationals have been part of the Deeptech. This is the case of IBM, leader in quantum computers. Today, Deeptech is not reserved just to huge corporate giants as start-ups can participate in it through external financing. It can however be difficult to obtain given the market and technological risks. Some financing options exist that are adapted as per the breakthrough innovation and are majorly public in nature. Some are also financed through love money, fundraising and incubators. At the global level, private investors have started to see potential in start-ups and have begun to invest in Deeptech (20% increase between 2015 to 2018). An evolution in France is expected by competent investors in these domains.
EXAMPLES of DEEPTECH START-UPS FROM ECOLE POLYTECHNIQUE