Revived zeal for tech development a silver lining to downturn

Technology news
The OGTC scheme is looking at the use of automated and reusable technology
Opinion by Martin EwanPartner, Pinsent Masons

The downturn in the oil and gas industry has been well documented but the upside – and there is one – has been the incredible amount of work that is taking place in Aberdeen in supporting and nurturing a new generation of tech start ups who have the potential to ensure the UK has a sustainable hydrocarbon industry for years to come.

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

The first graduates of the 16-week TechX programme are now putting in to practice the experience gained from top-level business mentoring and the benefit of enjoying access to rapid prototyping, test facilities, large-sale field trials and industry events. Meanwhile, the OGTC recently completed a series of UK roadshows as part of a drive to recruit the second cohort of TechX early-stage tech ventures and successful applicants will have access to up to £100,000 funding, with no equity stake or payback and the retention of all intellectual property.

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 eco-system developing locally which is bound to produce lots of opportunities for this new generation of tech companies.

Without doubt, many thousands of experienced hands, and smart minds, were lost to the oil and gas industry as a result of the downturn as they sought employment in other geographic locations or switched careers entirely. Fortunately, however, the youthful vigour of the start-up generation is being matched through initiatives like Grey Matters, which was set up by Elevator and Scottish Enterprise, as a platform for industry veterans who were facing redundancy. Grey Matters has been successful in bringing together senior oil and gas professionals with great experience in leadership, collaboration, problem-solving and building teams, and harnessing those skills to create high-growth scaleable energy sector businesses.

I would hope those a bit longer in the tooth might not fall in to this trap, but the single biggest issue that crops up time and time again for new start-ups is that they fail to properly secure their IP rights. In doing so, they face sometimes insurmountable challenges further down the line and which, in some circumstances, can mean the difference between a company going under or going on to achieve its full potential.

The most common issue is where a company 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 intellectual property 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. Through the appropriate legal advice at the outset, such a scenario can be avoided but it is not overstating things to say 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.

Intellectual property issues aside, for new tech start-ups Aberdeen boasts a progressive and supportive eco-system which can set them off on the journey from ground breaking whiteboard concept to international success. A 50 year oil and gas heritage with a solid foundation on innovation and flexibility, strong industry exposure to the major operators and throughout the supply chain, proven infrastructure, backing from Government and a wealth of agencies, including Scottish Enterprise, are compelling factors which place Aberdeen as a strategically important hub from which the next generation of tech start-ups will be given every opportunity to make their mark.

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