Comment: Tech start-ups are turning the tide in Aberdeen

For the new generation of oil and gas tech start-ups, Aberdeen boasts a progressive, supportive ecosystem which can set them off on the journey from ground breaking whiteboard concept to international success.

Incredible work is taking place in Aberdeen to nurture a new wave of tech start-ups, says Ewan. Picture: Contributed
Incredible work is taking place in Aberdeen to nurture a new wave of tech start-ups, says Ewan. Picture: Contributed

A 50-year oil and gas heritage with a solid foundation of innovation and flexibility, strong industry exposure to the major operators and throughout the supply chain, proven infrastructure, government backing and a wealth of agencies, including Scottish Enterprise, place Aberdeen as a strategically important hub from which tech start-ups are being given every opportunity to make their mark.

The fall-out from the oil and gas industry downturn has been well documented. Those of us closely involved need little reminder of the thousands of jobs lost and the established businesses which failed to survive, or at best were acquired in the merger and acquisition merry-go-round which is part of any economic slump.

I am glad to say the industry is in recovery mode, but we all accept there will be no return to the days of $140 a barrel. As the North Sea operators and service companies staff-up for an expected increase in offshore activity, I am encouraged by the incredible amount of work that is taking place in Aberdeen in nurturing this new wave of start-ups with the potential to ensure the UK benefits from a sustainable hydrocarbon industry for years to come.

I am fortunate to be involved as an advisor to some of these new companies through Pinsent Masons’ association as legal mentor to the TechX accelerator and incubator, which is run under the auspices of the city’s Oil & Gas Technology Centre (OGTC).

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The first graduates of the TechX programme are now putting in to practice the experience gained from top-level business mentoring and the benefits of accessing rapid prototyping, test facilities, large-sale field trials and industry events. The second cohort starts in earnest in May and each will have access to up to £100,000 funding, with no equity stake or payback and the retention of all intellectual property (IP).

Working alongside OGTC, other equally exciting initiatives by bodies such as Opportunity North East (ONE) and its Digital & Entrepreneurship programme, Scottish Enterprise and Elevator, have added a much-needed vibrancy to the Aberdeen economy and there is now an ecosystem developing locally which is bound to produce lots of opportunities for this new generation of tech companies.

Thousands of skilled hands – and minds – were sadly lost to the oil and gas sector as a result of the downturn. Fortunately, initiatives like Grey Matters, from Elevator and Scottish Enterprise, have brought together senior industry professionals who are experienced in leadership, collaboration, problem-solving and building teams. These skills are being harnessed to create high-growth scaleable energy sector firms.

The single biggest issue that crops up time and again for start-ups is that they fail to properly secure their IP rights, which can lead to insurmountable challenges further down the line. In some circumstances, this can mean the difference between a firm going under or pushing ahead to achieve its full potential.

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Issues can arise when a business commissions a third-party supplier to develop a piece of software or equipment on which the company’s future success will be founded. Such is the drive and excitement of building a young business, that the owners/founders sometimes fail to secure ownership of the IP of the software or equipment. It is only later, when the third party supplier starts to assert their IP rights that things start to unravel.

By seeking the appropriate legal advice at the outset, such a scenario can be avoided but it is not an overstatement to say that failure to do this can undermine the entire viability of an enterprise and likely scare off any potential investors, no mater how brilliant the concept or technology being pioneered.

- Martin Ewan, partner and oil and gas technology law specialist at Pinsent Masons