Implicit within this story is that it was the responsibility of Nesta to filter from 1000's of applications the ones where the innovation alone has the potential to drive major shifts in business, and then to back those regardless of any of the other circumstances. The telecom industry, and I suspect the inventor, didn't anticipate the iphone phenomenon, yet we expect a government agency to have that kind of foresight?
I was investing myself during the period concerned and saw 1000's of applications, and yet never saw this inventor approach me for seed funding, and from the sound of the article, if efforts were made to raise commercial money they were not successful. Could it be that the inventor was a key limitation to commercialising his own technology? My experience is that no amount of brilliant innovation is sufficient to mean that you can commercialise a technology if the inventor has either attitude, capability or experience limitations. Perhaps we also expect that our government agencies should step in to fix those problems too?
During the years up to its recent change in status I know that Nesta invested in many truly innovative and brave technology ventures, often to the tune of several £100'000s. Every commercial investor in early stage technology knows you must miss some great opportunities in the 1000's you must reject. Putting pressure on such agencies to account for missed opportunities is likely to breed exactly the kind of defensive investment behaviour that will depress their potential for positive impact. What we should be judging Nesta on is those that it did back vigorously and the returns that those investments made.
My experience of Nesta was that it did have its limitations and constraints. However I did work with people who had a good understanding of what they were doing. If we believe that the state should be intervening in our economy through innovative seed stage investments then maybe the more important issue is that instead of improving provision, we've simply given it up. Nesta no longer does seed stage technology investment and as far as I am aware no alternative has been put in place.