Some global crises, such as climate change, are too big to overcome through individual action or even through government-level policy change. To survive this century, we are also going to need some huge science and engineering breakthroughs—especially in areas such as energy and transportation. Unfortunately, the systems we have built to encourage innovation are in a dismal state.
Federal investment in R&D as a share of the overall economy is lower than at any point in the past 60 years. And venture capital—the industry that is supposed to take risky ideas from government or university laboratories and turn them into valuable businesses—has instead spent the past decade investing in low-stakes tech that helps us order takeout, avoid taxis, swap selfies and overpay for desk space. Many of Silicon Valley's “unicorns” are doing no more to improve the world than their mythical namesakes [see my column “The Big Slowdown,” Scientific American; August 2019].
There is, however, at least one bright spot in the world of tech investing. I got a glimpse of it on a recent visit to The Engine, a for-profit venture firm set up in 2016 by the Massachusetts Institute of Technology. It is designed to fund ambitious ideas in areas it calls “tough tech”: energy, nanotechnology, quantum computing, immunotherapy and other fields where the technical and regulatory challenges are too daunting for most venture capitalists.
A case in point: Commonwealth Fusion Systems. The Engine-backed start-up has turned a former Radio Shack down the street from M.I.T. into a lab where it tests components for future fusion reactors that could produce nearly inexhaustible, economical, carbon-free energy with vastly less radioactive waste than conventional nukes—an elusive goal that scientists have been trying in vain to accomplish for more than half a century. Chief operating officer Steve Renter says Commonwealth's “Kitty Hawk moment”—when it proves its demonstration machine can generate more energy than it consumes—could come as soon as 2025.
“To get technologies at a scale that impacts what's happening in our climate, in the time frame in which we need it, it's going to require some pretty incredible teams,” says Ann DeWitt, a general partner at The Engine. “In areas like energy delivery, it means figuring out how you make that thing a business and how you integrate it into existing infrastructure. Those are areas where I think it's really hard for classical investors to go.”
Part of what sets The Engine apart is the timescale of its $200-million fund. Limited-partner investors know they might not get their money back for 18 years or more, compared with the eight- to 12-year life of a typical venture fund. Plus, the firm provides lab space and equipment in addition to mentorship and networking. And it welcomes companies that hopscotch across disciplines in ways that might puzzle other investors. “We're not afraid to look at a founding team with a physicist, an optical engineer and a stem cell biologist,” DeWitt says.
There are 20 start-ups at The Engine right now, and the firm is renovating an old Polaroid building that will soon hold 100 companies and 800 entrepreneurs. Researchers come to The Engine not because they are trying to make a quick buck but because they have an idea they can't bring alive anywhere else, DeWitt says: “They're compelled into entrepreneurship because of what they're trying to achieve.”