Examination of Witnesses (Questions 40 - 59)
WEDNESDAY 18 MARCH 1998
DR ALAN
RUDGE and PROFESSOR
RICHARD BROOK
40. I am very encouraged to hear that last comment because
in our earlier inquiry on Dearing, which is about to report, generally
the feeling was that industry is contributing as much in Britain
as in other countries. Do you really feel that if that bonding
was closer there is much more that could come from industry into
research and higher education?
(Dr Rudge) I do not think we have to look at other
countries and say: "we would like to be as good as them"
I think we have to say: "we want to have the best system
in the world". We have led in many respects, why can we not
lead in terms of this relationship?
Dr Jones
41. You said in your submission that 70 per cent of your
research grant funds are concentrated in 25 institutions. How
has that happened?
(Professor Brook) That happens as a consequence of
peer review. We invite applications from the academic community
to the EPSRC. Those proposals are considered by peer review process,
which I can describe if you wish, but the consequences of that
peer review—
42. You have not had a deliberate policy?
(Professor Brook) No. It has evolved from the use
of our peer review system.
(Dr Rudge) Incidentally, I would argue strongly that
it is a case for not introducing artificial boundaries. In fact,
the thing naturally settles down into a bell-shaped curve, if
you like, with the bulk of it going to the more powerful research
institutions but it still leaves the door open. If you have some
terrific proposal that comes in from a new group in a new university
somewhere it can get funded, and it does get funded, but in proportion
the bulk of it still goes to the bigger research institutions.
43. A few minutes ago, Dr Rudge, you referred to your current
practice now of asking applicants for funding to consider how
their work might be exploited. Is that working well? Has it had
any impact on the nature of the applications that you receive?
(Professor Brook) Maybe I can answer and I hope it
does not seem frivolous. On the application form which we ask
people to send with their projects there is a question: "can
you please advise us of the beneficiaries of this work?"
We are not saying it has to be industry, it could be other academic
colleagues who will be able to advance their own work much faster
because of this. Initially we did get frivolous answers: "The
world. Mankind. Why are you asking this question?" and this
sort of thing. I can only say that after four years of having
this system in place it is now accepted that is a reasonable question
and we get helpful answers that say: "If we are able to make
progress with this work the conclusions will be of interest to
the following sectors", it may be industrial sectors, "or
to the following scientific disciplines" where a problem
which is stopping further progress will then be resolved. People
are happy with the idea.
44. You have this User Panel and presumably you have had
some feedback from them on that. What do they say?
(Professor Brook) The User Panel is one of the two
panels which advises the council of the EPSRC on the deployment
of its finance. It consists of 12 colleagues, predominantly from
industry, and we have one vice-chancellor there because of course
vice-chancellors employ the trained people who come out of the
research system. The User Panel is probably that group within
the EPSRC which thinks longest term. They always come with statements
of the kind: "Do not try to solve what you imagine to be
the industrial problems of today, just make sure that you are
producing people out of this supported research who will be fit
to answer the problems that are going to come up in future decades."
45. So, in deciding which grants to award, you do not necessarily
have regard to commercial exploitability, you just want to start
thinking about what their exploitation might be?
(Dr Rudge) If I can take up your word "exploitation".
If you remember that when you are generating knowledge and building
knowledge in research there may be applications but in some of
the research you do not know what the applications are; it is
pushing our knowledge forward and out of which problems will be
solved, ideas will come, it is not aimed at a specific target.
So that when, for example, a mathematician does a piece of work,
to ask him what applications there will be in terms of products
or services down the road is a silly question but he can say:
"if we crack this problem these are the beneficiaries, these
are the areas that will be stronger because of it". In relation
to our User Panel, which is dominated by industry people, when
we set this system up four years ago we had a lot of criticism
from scientists that this would mean the end of long-term research
and everything would become short-term development, but it is
interesting over the years we have found that the industry people
are those who encourage us to go longer term. They say: "We
do not want you funding development, that is not what we want.
If we want that we can go to the university and do it directly.
We want these people trained. We want knowledge of the longer
term, the bits that we are not working on. That is what we really
need".
46. So you would actually say that this requirement has not
discouraged people from putting in bids for funding if they cannot
see any commercial exploitation?
(Dr Rudge) They do not have to see commercial exploitation,
they have to see who will benefit, who will benefit if you solve
this. If I do a piece of advanced mathematics there would be a
number of people, perhaps in the physics world and in the mathematics
world, who would benefit as a result and maybe in companies if
it is appropriate. I am not going to say that by doing this 20,000
blue widgets will be manufactured in ten years time as a result
of it.
47. I must say, in our other inquiry, what impressed me was
that industry does value basic research. That came across very
clearly.
(Dr Rudge) Absolutely. It is very interesting that
there were two areas that felt most under threat and one of them
was the mathematics people. The first reaction we got back from
our User Panel when they looked at the shape of our programme
was: "We think you should be investing more into basic mathematics".
Mr Beard
48. Many of the advances are at the junction between disciplines.
How does your research council tackle that sort of problem?
(Professor Brook) I think that within the span of
subjects that lie within the EPSRC the system we have is reasonably
friendly towards that. The former system did have committees,
predominantly academic colleagues, who used to set policy and
then judge on which proposals they would take and which not. Then
if I take an example of, say, the chemistry committee, that chemistry
committee would predominantly support work in chemistry, that
is what they were expert in, that is what they liked, and the
heartland was what had to be saved. We now use a system of peer
review colleges. That is we ask all those who have sent research
proposals to the EPSRC in the past to give us three names of people
they consider fit to be peer reviewers. We then find out what
is the range of interest of those peer reviewers and then if a
multi-disciplinary proposal comes to us we find a multi-disciplinary
group of peer reviewers who can tell us what its merits are. I
think we have within EPSRC a system which is by no means perfect
but it is more friendly towards multi-disciplinary work than the
former system was.
49. What if it crosses the boundary between your subjects
and, say, the biological sciences?
(Professor Brook) We do have bilateral meetings between
the EPSRC and the other research councils within the system. I
think in those instances where we are able to state what the landscape
of the boundary is between, say, the Natural Environment Research
Council and ourselves, we know the sort of work that lies there,
we can almost anticipate the work that will be important in the
future and we can therefore look after it reasonably well in these
bilateral arrangements. The plan being that you have overlap rather
than allowing a gap to develop between the two. Nobody should
come into the British system with a great research proposal and
fail because there is not a research council covering that piece
of territory. Where I am more nervous is perhaps in the interface
between the natural sciences covered by the EPSRC and the life
sciences covered by the BBSRC and the MRC because that is an interface
which is extremely exciting. You can think that work of great
novelty and originality will come in this mixture of the life
sciences and the natural sciences and, therefore, your ability
to predict what the landscape will look like is less precise than
it is in the other one. So today I have been at the Wellcome Foundation
and we have been discussing with them a way to look at this interface
between our own territory, if you will, and the life sciences
which they represent. I have talked with colleagues in the BBSRC
as well. We try to do our best with those interfaces but there
is a sensitivity about the natural sciences/life sciences one.
It is perhaps for that reason that the Royal Academy of Engineering
is conducting a survey of research provision at that interface
to make sure that it is being looked after.
50. If you have a collaboration, say, between a research
organisation and the possible beneficiaries, the exploiters of
the research, is it likely that is going to produce more worthwhile
results than if you have a very well- targeted research programme
that leaves out the possible beneficiaries? Is there any balance
of advantage between those two types of collaboration?
(Dr Rudge) I do not think that one could make a statement
saying one is definitely better than the other. If you take any
research project you cannot tell the day it finishes what its
true value is. What you can tell is that it was in the right area,
it was carried out by good quality researchers, properly equipped
researchers, and that the work was well done. Some of those pieces
of work turn immediately into benefit and for some it is many
years before the benefit is realised and it may be in quite obscure
ways. We do not try to measure the value on the day the project
ends. We do try to determine increasingly the quality because
obviously there are quality implications in research as for other
things, and that it is mining the right broad area of knowledge
that we want to direct the effort towards.
51. If you looked back would you say that there is any bias
towards one type of project being more exploited than another?
(Dr Rudge) It is very difficult to give an answer
because many of the benefits downstream, certainly in the physics
based industries, are obscure in the sense that the contributions
do not come from one "Eureka!" leap out of the bath
step; it comes from several different areas coming together formulating
around a new project or service. That is what makes a winner,
it is not a singular thing.
(Professor Brook) I think it is important to distinguish
between the different subject areas we cover. We do support work,
for example, on the engineering of gas turbines. If somebody is
conducting research in that sector you hope that they have talked
to the people who are building gas turbines because it is much
better they know about the context than if they do not. There
are other disciplines like mathematics where again I would say
the more the researcher can think about the context within which
they are working, it is helpful, and the beneficiaries, and we
ask them politely about that. It is quite possible in a subject
like mathematics that an individual inspiration, quite without
contact with the outside world almost, can be significant. We
ask our peer reviewers to be sympathetic to these different dimensions
of problems. To answer, it depends a lot upon the subject area
that you are talking about.
Mrs Spelman
52. You have already mentioned the Faraday Partnership scheme
and I would just like to come back to this briefly. How much potential
do you think there is in the current system for small- and medium-sized
enterprises? How many small- and medium-sized enterprises do you
expect to be involved in the four existing Faraday Partnerships?
Is there any scope to extend this?
(Dr Rudge) First of all, yes, there is certainly scope
to extend it. I did make the point that these are pilots. They
are pilots because we are using a restricted amount of resource.
We only have certain funding that we can spare for this. If it
starts to prove successful, as I hope and believe it will, then
we hope that with the help of the DTI we can expand the scheme
to reach out to more small- and medium-sized companies. If you
look at the different pilot schemes we have adopted, and Richard
made this point a moment ago, we have tried to choose for our
initial pilots four quite different approaches to this extending
the flow principle. Obviously we are going to have to monitor
those four and, if there are one or two which are distinctly more
successful than the others, this will be the model that we will
use in the future. At the moment we are trying some diverse approaches.
The principle behind it all is how do we get this knowledge flow
optimised? How do we get the right knowledge to flow? This is
not a one-way system. What we are looking for is the intermediate
organisation to actually understand some of the problems and opportunities
represented by the small- and medium-sized companies that it does
its business with, that it serves, and to transmit those back
into projects which will drive areas of knowledge that will be
effectively mined in the university and then let the knowledge
flow out to try and get a closed loop so that we get universities
working in the areas that are going to be most beneficial to the
end user. This is not the total programme, it is an element of
the programme. It would be wrong if we said that we drove the
whole national research programme on that basis. I think it is
a key element because it gives us the opportunity to spread out
research knowledge to tens of thousands of small companies rather
than, let us say, the hundreds a university can expect to manage.
If there were thousands of small companies interacting with the
university department they would not be able to do any teaching
or research, they would be permanently swamped with the process
of interacting. We want to transfer that downstream.
53. Twice you have said if you can get help. You have hinted
at the DTI and you have just said if you can get help from the
DTI. Do you think it is appropriate that the Research Cuncil is
currently funding these without help from the DTI?
(Dr Rudge) This is something we debated long and hard
at the council. My own view on this, and I believe that of Richard
too, was that we could postpone it and wait and have the debate
again and wait for the change of Government and a new review,
a new formulation of budget and maybe in a year's time we would
be in a position to fund it jointly. I think there is some urgency
in this. We decided that although we could not go ahead with the
full scale programme we would scale it back to a level we could
afford and get on with it and start to demonstrate its value on
the basis that if we could demonstrate its value we would be in
a stronger position to attract DTI funding on the basis of a successful
model rather than just an experiment.
(Professor Brook) In answer to the question about
the extent to which SMEs were consulted, that was done in the
selection process for the four Faraday Centres which we now have.
I think there were 73 applications, in response to the original
call, for Faraday Centres. We short listed 16 and we then interviewed
the proposed directors of those 16 centres. One of the questions
we invariably asked was: "How legitimate are your contacts
with SMEs? Can you tell us about the SMEs that you represent?"
The quality of answer determined the selection of the final four.
The latter question about the extent to which the EPSRC should
be involved with Faraday Centres without the DTI I would answer
this way: remember the spend within the Faraday Centres is within
the university sector and the role of the AIRTO member is to ensure
that the research which the university colleagues undertake responds
to the known interests and requirements of that SME population.
In so far as it is expenditure to promote relevant research within
the university sector it falls clearly within our mission and
therefore there is no embarrassment about that. Indeed, if the
DTI came in, it was one of my chairman's original submissions
that the function of the DTI money might be to go to the SMEs
so they could actually pick up on the benefits of this research
which had been conducted. It would be a slightly different role.
54. How do intellectual property rights issues affect the
potential for academic/industrial collaborations?
(Dr Rudge) If one looks at the value of IPR to the
universities in terms of the real financial value of going to
some lengths to attract the IPR, and I think Richard has got an
interesting graph, it amounts to about 0.3 per cent of the income,
even excluding government grants and fees income, of the university
sector. It is tiny. My chief concern is with IPR, and arises because
I am a "flow man". I believe our task is to get that
knowledge flowing out into industry broadly and that is what we
work towards doing. In this context, the IPR thing can be a handicap
if it is overdone. There are times when it is appropriate but
if it is overdone by the universities they actually slow down
the flow because industry gets very hesitant about doing business
with departments that are overactive, if you like, regarding IPR.
In general in many sectors of industry there is a huge amount
of expenditure to take place from the time you get even a good
idea to the time it actually becomes a product or service or a
new process or new technique. They have to make big investments
downstream. My own belief is that the academic sector would benefit
more from being less strict, if you like, about trying to gain
benefits from the initial IPR and having a better relationship
with their downstream customer in industry because industry does
have money to spend and it will spend it when it sees the benefit.
That is my own personal view on IPR.
55. Do you think the emphasis on IPR has the effect of bringing,
specifically, inappropriate patenting? Is that one of the outcomes
of this emphasis on exploitation and intellectual property rights?
(Dr Rudge) I do not want to be misunderstood. I am
not saying that there is not a role for universities in holding
IPR or patents, I am just cautioning against going over the top.
I have heard examples from industrial colleagues where some departments
have gone over the top on the IPR issue and as a result of which
the particular sector of industry is saying: "we do not want
to do business with them". There is a balance in this. That
is the point I am trying to make.
Dr Jones
56. Have you taken steps to ensure that your research community
actually understands that balance and when it would be appropriate
to go down the route of patenting and when it might not? Do they
understand the basic principles of IPR?
(Dr Rudge) I think they all understand it in their
own way. I do not pretend that we could influence them totally
in this. We can only express our views about this. Some universities
definitely have policies which are more open with industry and
less IPR dominated and others have very tough IPR positions. They
must follow their own routes. Those that have the better relationship
will actually do better at the end of the day.
57. Could I ask what you think of the venture capital funds
set up in the Budget, the £50 million? Is this going to encourage
more patenting?
(Professor Brook) This was in the Budget yesterday,
as I understand it, and I was out of the country yesterday.
Chairman: That means it has to be you, Dr Rudge, who answers
that. He has got an alibi!
Dr Jones
58. It is a new challenge fund creating £50 million
in venture capital to provide seed funding for the commercial
exploitation of university research.
(Dr Rudge) Of course, it depends how it is applied.
If it is to go into venture capital activities where you are picking
up good ideas and providing some money to help downstream them
then it is fine but it is not going to change the world at £50
million.
Dr Gibson
59. The balance between the money you give to research grants
and post-graduate training, how do you assess that? It is 20 per
cent, is it not, for post-graduate, something like that?
(Professor Brook) It is £230 million currently
to grants and about £80 million to training. Much of the
grant income or expenditure for us is to provide research associates.
It also has a training element within it. How do we decide it?
That is quite specifically discussed in the advisory panels, the
academic advisory panel and the industrial advisory panel, who
then give advice to the council and it is specifically discussed
in the council: what balance should we take this year between
training and between the research grants? In the past the council
has chosen to support studentships. They have enhanced the number
of advanced fellowships. This is for young workers under 36 who
want five years of work to go on. It has introduced the industrial
CASE awards. It has introduced a new scheme which allows someone
who has worked on an industrial project inside a university to
apply for money for one further year provided that person leaves
the university and goes to the company which the research was
associated with. The council has, if anything, emphasised the
training and knowledge creation aspects these last few years.
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