We choose the heart of summer to write about “deep technologies” in order to propose a definition of deeptech, with the help of Bpifrance’s work.
If the word synonym of disruption and contraction of “deep technology” is not yet on everyone’s lips, it is more and more used, up to the point that we forget that its definition is not very clear.
Here is ours: a deeptech technology is a non-digital technology resulting from fundamental research. It has various industrial applications that have the potential to disrupt one or more existing markets or to create a new one, without necessarily disrupting society. These applications are developed by start-ups that are themselves very unique. Here are some explanations.
Without science, there is no deeptech
A deeptech technology is inextricably linked to the idea of “disruption”, which has an obvious corollary in the form of a strong link with research, particularly fundamental research. This research, sometimes carried out for decades and with mostly public funding, is the most likely to allow the production and development of ideas – and consequently, technologies – that are sufficiently unusual to bring about the much hoped-for breakthroughs.
A deeptech cannot be (only) digital
Although it may seem counterintuitive, a corollary of this idea of disruption is that a deeptech technology cannot be digital. Unless an algorithm or a digital system with a fundamentally different functioning and efficiency is created, digital technologies, even advanced ones (high-tech technologies), rely on already existing technologies.
From deeptech comes a world of possibilities driven by start-ups
While each deeptech technology offers numerous development prospects, the choice of destination market rests with the start-up, which is the vehicle for bringing the technology out of the laboratory and onto the market. This choice will depend on the background of the holders and market trends.
In the current context of recovery, reindustrialization, industry 4.0 and the fight against climate change, “industrial” applications seem to us to be by far the most interesting to retain. That said, not all deeptech applications have the potential to affect the whole of society or humanity. Disruption or the creation of one or more markets, even if they are niche markets, is enough.
A deeptech start-up therefore proposes a product based on one or more deeptech technologies combined with more “classic” technological building blocks, including digital ones. It is created with the objective of propelling these combinations onto a market. But is this simple fact enough to qualify this start-up as a deeptech? Probably not as other questions arise: is the founding or management team highly scientific? Does the proposed product present intellectual and technical barriers to entry? What is its state of maturity? What are the proposed costs for its development? And finally, will it disrupt its market?
Without a scientific team, no deeptech start-up
The fact that the technology was developed in a laboratory has two consequences. First, the founding team is composed mostly of high-level scientists who have worked on the technology. The share of scientists may decrease over time, leaving room for more commercial profiles for certain positions, but the majority of employees, from management to the board, will preserve the scientific background of the start-up over time.
An immature product, but well protected…
The second consequence is that when they leave the laboratories, deeptech technologies display very different states of maturity, affecting their time to market, which can be quite short if the technology is well mastered.
In any case, it is clear that the product developed does not escape the need for intellectual protection. In addition to this protection, it presents potential competitors with two other types of barriers to entry: an “intellectual” barrier, which comes from the experience accumulated by the founders during their academic work on the technology, and a “technical” barrier, linked to the resources developed around the technology during this academic phase.
… to costly but not necessarily long development
The development of the product is announced from the creation as capital-intensive and, as we have seen, possibly long. The capital-intensive aspect may come from the low level of maturity of the technology, the need for an industrialization phase, with the installation of non-standard equipment, but also from regulatory obstacles. Indeed, the existing regulations in a given country may not be adapted to the new context created by the technology. International expansion also requires compliance with new regulations, some of which may be put in place to block or pre-empt the development of the technology.
Although very promising, the market for a deeptech start-up is not self-evident. The breakthrough must be desired by its target market and accepted by the company. These two acceptances, which depend on the famous momentum coupled with a pedagogical work around the technology, can be very sudden.
To convince ourselves of this, we can ask ourselves whether, without the global pandemic that has been hitting us since 2020, messenger RNA vaccines would have been developed and marketed so quickly and so strongly on a planetary scale?
— Frédéric Jehl, Deeptech analyst, Economic Studies for Crédit Agricole Group