Select Committee on Science and Technology Minutes of Evidence


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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