Was Scotland’s state bank blinded by the light? – Daily Business Magazine

The collapse of Pure LiFi is a blow to Scotland’s tech sector, but there had been warnings about the technology, writes TERRY MURDEN

Breakthrough ‘li-fi’ technology, using light rather than radio waves to transmit data, appeared to have established itself alongside other Scottish innovations such as the telephone and television. Developed at Edinburgh University, it was labelled the next big thing that would transform the world of wireless technology.

Pure LiFi, the Leith-based company behind this exciting spin-off, attracted interest from the US army, a US maritime company and Nasdaq-listed Astronics Corporation. Sadly, the ambitions of its small team have come crashing down, leaving another trail of disappointment and unpaid loans.

“Issues” had been foreseen some years ago when there were warnings that the technology had its limitations and that the Scottish National Investment Bank was taking a big gamble with one of its first multi-million pound commitments.

Pure LiFi, having raised more than £35m since it launched in 2012, admitted this week that it has struggled to get find investors willing to put yet more money behind a project which was raising concerns at least four years ago.

Back in 2022 I wrote about a fundamental weaknesses identified in the li-fi concept. While large amounts of data can be transmitted much quicker over li-fi, there are a number of drawbacks that led one tech expert to see it as a “consumer flop”.

Stephanie Howey, who was marketing director at US-based telecoms business Talkroute, said at the time that because there is no improvement to latency, or what is commonly referred to as “lag”, li-fi would not improve the performance of internet media such as video conferencing, playing video games, or talking on the phone via the internet (VoIP).

“You will still be able to download massive files in a blink of an eye,” she said. “Unfortunately, just like your TV remote requires line-of-sight with your television, the connection to your iPad requires line-of-sight with your li-fi transmitter.

“Since a li-fi connection can’t pass through walls, there needs to be a series of transmitters in every room of your home to transmit the signal. Besides the obvious limitations this would impose, it would also be quite cost prohibitive for most people.”

Howey recognised that that there are various applications where li-fi makes a lot of sense. For instance, using wireless transmission via light could help ease spectrum allocation issues. But she said those limitations listed above must be taken on board.

“While li-fi definitely has its place in the world of data transmission, touting it as a wi-fi replacement makes no sense at all,” she said.

We’ve yet to hear a full explanation as to why investors stood back and whether these concerns played their part, though higher than expected costs of manufacture were also a factor. After the announcement that administrators had been appointed, SNIB was quick to issue a statement admitting that Pure LiFi was among its recent list of write-offs, accounting for about £15 million of a growing total.

It’s been said repeatedly that risk carries a cost. Most get that, though no one should be cavalier about mounting tax-payer losses when we pay a state-bank’s executives handsomely in the hope that they get most choices right.

It must also be acknowleged that this is a market that has become more fussy about what to back and what to let go. To that extent, it seems li-fi just dropped down the list of priorities.

Terry Murden held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business

>Latest Daily Business news

Related