Funding revolutionary innovation: What is 'ARPA' and how can it be successfully implemented?

Yesterday’s 2020 budget statement announced that the UK will invest £800mn in the development of a new blue skies, ‘ARPA’ style innovation organisation. This post reflects on what the ARPA model is and how an ARPA organisation should be designed to maximise its success.

What is ARPA?

The Advanced Research Programme Agency (ARPA) model was pioneered by the US Defence ARPA (DARPA) in 1958. The organisation has since been credited for contributing to the development of the internet, GPs and the world’s fastest aeroplane; and its model replicated for energy (ARPA-E), intelligence (IARPA) and homeland security (HSARPA).

The ARPA approach focuses on developing revolutionary technologies at TRLs 1-4.

It does this by identifying emerging technologies with the potential to transform existing systems. As there are many pathways this technology could take in the earlier stages of development, ARPA accelerates this process by exploring multiple options, eliminating those that perform poorly and advancing progress toward reaching a dominant design. Think skipping Betamax and going straight to VHS, or mini discs and going straight to MP3.

This process is high risk, with failure a recognised part of an ARPA organisation's success.

Adoption of the ARPA model is broadly compatible within the UK’s existing innovation system, with no organisation currently driving revolutionary research toward the country’s Industrial Strategy aims.

How can ARPA be successfully implemented?

The implementation of successful ARPA organisations is well documented. For example the literature on ARPA-E includes how it was positioned, funded and staffed, an independent review of its organisational effectiveness and academic analysis of key performance metrics.

This existing body of work on ARPA highlights the importance of its organisational design in delivering successful technology outcomes, which should now be the key focus of UK policy makers.

To be successful, ARPA should…

• Be positioned at arm’s length of existing publicly funded research, reporting directly to a responsible Minister
• Fund research in ‘white spaces’, where risk is too high for current funders and so avoids duplication
• Formulate sector specific missions that attract the high-quality staff around a transformative, long term goal
• Employ entrepreneurially minded experts under short terms of 3-5 years to create urgency and prevent ideological stagnation
• Select a Director that will cultivate an open, honest and self-reflexive company culture
• Adopt a flat organisational structure that empowers programme directors to select, actively manage and cull projects in a timely way
• Develop a technology-to-market function to provide pull through for technologies entering legacy sectors, like energy
• Examine the role of public procurement in providing market certainty for technology outputs- for example the Department of Defense is a key customer for both DARPA and ARPA-E

The discussion paper accompanying today’s Budget Statement appears to be on the right track to addressing some of these needs. However, the emphasis on stability and a purely academic focus may cause ideas to become dominated by one approach or not sufficiently linked to markets or industry adopters.

It will be interesting to see how the organisation unfolds over the coming months...

Thank you for reading. Please let me know your thoughts.