Deep technology (deep tech) is a classification of organization, or more typically

startup company A startup or start-up is a company or project undertaken by an Entrepreneurship, entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship includes all new businesses including self-employment and businesses tha ...

, with the expressed objective of providing technology solutions based on substantial scientific or engineering challenges. They present challenges requiring lengthy

research and development Research and development (R&D or R+D), known in some countries as OKB, experiment and design, is the set of innovative activities undertaken by corporations or governments in developing new services or products. R&D constitutes the first stage ...

, and large capital investment before successful commercialization. Their primary risk is technical risk, while

market risk Market risk is the risk of losses in positions arising from movements in market variables like prices and volatility. There is no unique classification as each classification may refer to different aspects of market risk. Nevertheless, the m ...

is often significantly lower due to the clear potential value of the solution to society. The underlying scientific or engineering problems being solved by deep tech (and hard tech companies) generate valuable

intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, co ...

and are hard to reproduce.

Definition

The term "deep tech" has been present for decades, representing R&D divisions at major defense and telecommunications corporations such as

Raytheon Technologies RTX Corporation, formerly Raytheon Technologies Corporation, is an American multinational aerospace and defense conglomerate headquartered in Arlington, Virginia. It is one of the largest aerospace and defense manufacturers in the world by reve ...

, Lockheed Martin's

Skunk Works Skunk Works is an official pseudonym for Lockheed Martin's Advanced Development Programs (ADP), formerly called Lockheed Advanced Development Projects. It is responsible for a number of aircraft designs, highly classified research and developme ...

, and

Bell Labs Nokia Bell Labs, commonly referred to as ''Bell Labs'', is an American industrial research and development company owned by Finnish technology company Nokia. With headquarters located in Murray Hill, New Jersey, Murray Hill, New Jersey, the compa ...

, to the more modern definition which increasingly includes companies found in the

venture capital Venture capital (VC) is a form of private equity financing provided by firms or funds to start-up company, startup, early-stage, and emerging companies, that have been deemed to have high growth potential or that have demonstrated high growth in ...

ecosystem or awardees of the Small Business Innovation Research (SBIR) program, a U.S. government program, coordinated by the

Small Business Administration The United States Small Business Administration (SBA) is an independent agency of the United States government that provides support to entrepreneurs and small businesses. The mission of the Small Business Administration is "to maintain and str ...

, that provides $2.5 Billion annually to small, U.S.-owned companies who compete for funding to develop and commercialize disruptive technologies. Deep tech doesn't refer to

innovation Innovation is the practical implementation of ideas that result in the introduction of new goods or service (economics), services or improvement in offering goods or services. ISO TC 279 in the standard ISO 56000:2020 defines innovation as "a n ...

itself, but to a category of

startup companies A startup or start-up is a company or project undertaken by an Entrepreneurship, entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship includes all new businesses including self-employment and businesses tha ...

that develop new products based “on scientific discovery or meaningful engineering innovation”. Hard Tech, which sometimes is used as a similar term to deeptech, refers to deeptech that mainly focuses on tangible products that require sophisticated engineering and manufacturing. According to year 2019 research by the

Boston Consulting Group Boston Consulting Group, Inc. (BCG) is an American global management consulting firm founded in 1963 and headquartered in Boston, Massachusetts. It is one of the "Big Three (management consultancies), Big Three" (or MBB, the world's three large ...

and Hello Tomorrow, a French nonprofit that supports deep technology, the most prominent deep tech fields included

advanced materials ''Advanced Materials'' is a weekly peer-reviewed scientific journal covering materials science. It includes communications, reviews, and feature articles on topics in chemistry, physics, nanotechnology, ceramics, metallurgy, and biomaterials. Accor ...

, advanced manufacturing,

artificial intelligence Artificial intelligence (AI) is the capability of computer, computational systems to perform tasks typically associated with human intelligence, such as learning, reasoning, problem-solving, perception, and decision-making. It is a field of re ...

machine learning Machine learning (ML) is a field of study in artificial intelligence concerned with the development and study of Computational statistics, statistical algorithms that can learn from data and generalise to unseen data, and thus perform Task ( ...

biotechnology Biotechnology is a multidisciplinary field that involves the integration of natural sciences and Engineering Science, engineering sciences in order to achieve the application of organisms and parts thereof for products and services. Specialists ...

blockchain The blockchain is a distributed ledger with growing lists of Record (computer science), records (''blocks'') that are securely linked together via Cryptographic hash function, cryptographic hashes. Each block contains a cryptographic hash of th ...

robotics Robotics is the interdisciplinary study and practice of the design, construction, operation, and use of robots. Within mechanical engineering, robotics is the design and construction of the physical structures of robots, while in computer s ...

photonics Photonics is a branch of optics that involves the application of generation, detection, and manipulation of light in the form of photons through emission, transmission, modulation, signal processing, switching, amplification, and sensing. E ...

aerospace Aerospace is a term used to collectively refer to the atmosphere and outer space. Aerospace activity is very diverse, with a multitude of commercial, industrial, and military applications. Aerospace engineering consists of aeronautics and astron ...

and

space technology Space technology is technology for use in outer space. Space technology includes space vehicles such as spacecraft, satellites, space stations and orbital spaceflight, orbital launch vehicles; :Spacecraft communication, deep-space communication; :S ...

electronics Electronics is a scientific and engineering discipline that studies and applies the principles of physics to design, create, and operate devices that manipulate electrons and other Electric charge, electrically charged particles. It is a subfield ...

(including

semiconductor manufacturing Semiconductor device fabrication is the process used to manufacture semiconductor devices, typically integrated circuits (ICs) such as microprocessors, microcontrollers, and memories (such as Random-access memory, RAM and flash memory). It is a ...

), cyber threat intelligence,

fusion power Fusion power is a proposed form of power generation that would generate electricity by using heat from nuclear fusion reactions. In a fusion process, two lighter atomic nuclei combine to form a heavier nucleus, while releasing energy. Devices d ...

and

quantum computing A quantum computer is a computer that exploits quantum mechanical phenomena. On small scales, physical matter exhibits properties of wave-particle duality, both particles and waves, and quantum computing takes advantage of this behavior using s ...

. Global

private Private or privates may refer to: Music * "In Private", by Dusty Springfield from the 1990 album ''Reputation'' * Private (band), a Denmark-based band * "Private" (Ryōko Hirosue song), from the 1999 album ''Private'', written and also recorded ...

investment in those fields increased more than 20% a year from 2015, and reached almost $18 billion in 2018. Possible fields for deep tech application include

agriculture Agriculture encompasses crop and livestock production, aquaculture, and forestry for food and non-food products. Agriculture was a key factor in the rise of sedentary human civilization, whereby farming of domesticated species created ...

life sciences This list of life sciences comprises the branches of science that involve the scientific study of life – such as microorganisms, plants, and animals including human beings. This science is one of the two major branches of natural science, ...

chemistry Chemistry is the scientific study of the properties and behavior of matter. It is a physical science within the natural sciences that studies the chemical elements that make up matter and chemical compound, compounds made of atoms, molecules a ...

and green energy. In business context, deep tech has three key attributes: potential for impact, a long time to reach market-ready maturity, and substantial requirement for capital. * Deep tech innovations are often radical and may create new markets or

disrupt Disrupt was an American crust punk band from Lynn, Massachusetts, that was active from 1987 to 1993. History The band's initial lineup was Jay Stiles and Pete Kamarinos (vocals), Chris Drake (guitar), Harry Haralabatos (drums), Tony Leone ...

existing ones. Deep tech companies often address big societal and environmental challenges and have potential to impact

everyday life Everyday life, daily life or routine life comprises the ways in which people typically act, think, and feel on a daily basis. Everyday life may be described as mundane, routine, natural, habitual, or Normality (behavior), normal. Human diurna ...

Silicon chips An integrated circuit (IC), also known as a microchip or simply chip, is a set of electronic circuits, consisting of various electronic components (such as transistors, resistors, and capacitors) and their interconnections. These components a ...

are an example of innovation that enabled calculation at previously unimaginable speed and scale. * The time required to move from

basic science Basic research, also called pure research, fundamental research, basic science, or pure science, is a type of scientific research with the aim of improving scientific theories for better understanding and prediction of natural or other phenomen ...

to applicable technology in deep tech exceed the development time of startups based on widely available technology ("shallow tech" such as

mobile apps A mobile application or app is a computer program or software application designed to run on a mobile device such as a phone, tablet, or watch. Mobile applications often stand in contrast to desktop applications which are designed to run on d ...

websites A website (also written as a web site) is any web page whose content is identified by a common domain name and is published on at least one web server. Websites are typically dedicated to a particular topic or purpose, such as news, education ...

, and

e-commerce E-commerce (electronic commerce) refers to commercial activities including the electronic buying or selling products and services which are conducted on online platforms or over the Internet. E-commerce draws on technologies such as mobile co ...

services). For instance, the development of technology behind

took decades, and now AI companies are rapidly developing in many fields. According to Hello Tomorrow, as of 2019 it took an average of four years to reach market in

biotech Biotechnology is a multidisciplinary field that involves the integration of natural sciences and engineering sciences in order to achieve the application of organisms and parts thereof for products and services. Specialists in the field are kn ...

and 2.4 years in

. * The demand for huge early-stage funding for R&D and prototype development and lengthy life cycle of deep tech startups forces them to abandon the established funding progression from friends and family to

angel An angel is a spiritual (without a physical body), heavenly, or supernatural being, usually humanoid with bird-like wings, often depicted as a messenger or intermediary between God (the transcendent) and humanity (the profane) in variou ...

and

seed money Seed money, also known as seed funding or seed capital, is a form of securities offering in which an investor puts capital in a startup company in exchange for an equity stake or convertible note stake in the company. The term ''seed'' suggest ...

series A A series A is the name typically given to a company's first significant round of venture capital financing. It can be followed by the word round, investment or financing. The name refers to the class of preferred stock sold to investors in exchan ...

and subsequent rounds leading to trade sale or

IPO An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...

. Many companies are also funded by government and other types of non-dilutive

grants Grant or Grants may refer to: People * Grant (given name), including a list of people and fictional characters * Grant (surname), including a list of people and fictional characters ** Ulysses S. Grant (1822–1885), the 18th president of the U ...

History

The funding for deep tech companies has increased over the years. According to

, the total investments in deep tech companies increased from $1.7 billion to $7.9 billion from 2011 through 2016. Investment activities are concentrated in the

United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...

and

China China, officially the People's Republic of China (PRC), is a country in East Asia. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...

that totaled for about 81% of global private investments in deep tech from 2015 through 2018 with approximately $32.8 billion and $14.6 billion invested in each country, respectively. China acts as the main driver in deep tech investments with funding increasing 80% each year over that period compared to 10% each year in the US. European countries are also active in deep tech investing. According to the

Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and also published digitally that focuses on business and economic Current affairs (news format), current affairs. Based in London, the paper is owned by a Jap ...

, in 2017 the total funding towards deep tech companies reached around €3 billion across 600 deals. Corporations such as

Google Google LLC (, ) is an American multinational corporation and technology company focusing on online advertising, search engine technology, cloud computing, computer software, quantum computing, e-commerce, consumer electronics, and artificial ...

Facebook Facebook is a social media and social networking service owned by the American technology conglomerate Meta Platforms, Meta. Created in 2004 by Mark Zuckerberg with four other Harvard College students and roommates, Eduardo Saverin, Andre ...

Amazon Amazon most often refers to: * Amazon River, in South America * Amazon rainforest, a rainforest covering most of the Amazon basin * Amazon (company), an American multinational technology company * Amazons, a tribe of female warriors in Greek myth ...

IBM International Business Machines Corporation (using the trademark IBM), nicknamed Big Blue, is an American Multinational corporation, multinational technology company headquartered in Armonk, New York, and present in over 175 countries. It is ...

and

Apple An apple is a round, edible fruit produced by an apple tree (''Malus'' spp.). Fruit trees of the orchard or domestic apple (''Malus domestica''), the most widely grown in the genus, are agriculture, cultivated worldwide. The tree originated ...

show increased interest towards deep tech applications in AI,

virtual reality Virtual reality (VR) is a Simulation, simulated experience that employs 3D near-eye displays and pose tracking to give the user an immersive feel of a virtual world. Applications of virtual reality include entertainment (particularly video gam ...

, drones,

self-driving car A self-driving car, also known as an autonomous car (AC), driverless car, robotic car or robo-car, is a car that is capable of operating with reduced or no human input. They are sometimes called robotaxis, though this term refers specifica ...

s. Business accelerators are also shifting focus from digital startups towards deep tech ventures. In 2016

Y Combinator Y Combinator, LLC (YC) is an American technology startup accelerator and venture capital firm launched in March 2005 which has been used to launch more than 5,000 companies. The accelerator program started in Boston and Mountain View, Californi ...

's batch there were 32 deep tech startups including 9 in biotech, 4 in drones and 3 in advanced hardware. The Eindhoven-based startup accelerator HighTechXL exclusively focuses on deep tech ventures. In Japan, the DTSSA (Deep Tech Startup Supporters Association) has also been actively supporting deep tech, helping to accelerate innovation and growth in the country’s deep tech ecosystem.

Notes

References

{{Reflist, 2 Entrepreneurship Types of business entity

Definition

History

See also

Notes

References