Examination of Witnesses (Questions 130-139)
ENGINEERING AND
PHYSICAL SCIENCES
RESEARCH COUNCIL
20 JANUARY 2004
Q130 Chairman: Good afternoon, Professor
O'Reilly and Dr Morrell. We have had engineers masquerading as
physicists and physicists doing God knows what but we now have
the fusion of the lot of you, as it were, and we are very pleased
to see you here today. Although we will move on to what people
do with the money they have available, people like yourselves
who in some respects would it be correct to say ladle out the
money—I do not like using the word "dole"—
Professor O'Reilly: We invest
it.
Q131 Chairman: We are off to a good start.
We know that government spending through bodies like yours is
higher in the United Kingdom than in many countries but on the
other hand we know that business R&D is lower than many of
our major competitors. Have you done any work on trying to establish
why the Government is apparently generous and business is not?
Is there anything that could be done to encourage business to
invest more in R&D?
Professor O'Reilly: First, of
course, much has been said about Richard Lambert's study which
focuses very much on this issue, and you will have read that in
as much detail as I have, so we do not need to replay many of
the things he has said. The observation you make is true, the
United Kingdom like most European countries is well below a figure
that has been identified as one made elsewhere that might
be desirable, something like 3%. The imbalance is more on the
company investment side than it is on the public side. We are
still below where we would need to be in terms of government investment
but there is a bigger gap elsewhere. I think that does bring with
it the question of, what are the things that we might be able
to do with the scale of public investment that we have that might
assist, that might bring on the public development, and so on?
This might be quite a good time to give an indication of what
has happened from the research councils. My own view is that there
has been a very remarkable change over the last 10 years. The
research councils were re-formulated following a White Paper in
1993-94, that is when EPSRC dates itself from, although there
were predecessors. There has been quite a change of emphasis,
certainly for the EPSRC and you should recognise that engineering
and the physical sciences are absolutely key to the knowledge
driven economy, other areas of science are as well, but these
are very, very key enablers. When EPSRC was established in 1994
you would have found that 13% of our grants that we awarded regard
to universities had substantial, meaningful engagement of industry
in those project activities. More recently, last year when we
looked at it, you would find that the figure was over 40% meaningful
engagement of industry in EPSRC funded projects in universities.
That is quite a remarkable change and that has not come about
by accident, it has come about as a result of council policy.
That does mean over the last 10 years we see much tighter binding
together, really trying to feed the whole supply chain from basic
research, couple it to industry to foster the culture of knowledge
transfer, and so on. Our observation is that this is not about
industry pulling universities short-term, it is quite the reverse,
they are coming into universities for the long-term and for the
fundamental ideas that they would not easily address within their
own environment.
Q132 Chairman: You have used word "meaningful"
several times; can you perhaps define that? Would I be right in
saying that the involvement is of a two-handed character in the
sense that industry is involved, it is a partner but it also participates
and provides resource as well.
Professor O'Reilly: It is absolutely
two-way, I am 100% with you on that. Technology transfer and knowledge
transfer is often thought of as a one-way process and for me that
is quite wrong. There is a tremendous benefit to both sides for
coming together. First of all the word "meaningful",
when we ask the question "is there engagement?" the
minimum level of indication is a letter of support. We do not
count that, we do not consider letters of support to be significant
meaningful engagement. We are actually looking for substantial
contributions in cash, in kind, in people's engagement in the
activities, and so on. That varies from project to project just
as projects vary. It varies across the EPSRC remit, in some areas
the engagement may be relatively modest and we would not be surprised
about that. In some of the more fundamental areas of mathematics
that may take many, many years before they come through and get
recognised in terms of their exploitation you would not expect
to see great engagement. On the other hand if you look at the
energy portfolio you will find that the figure is not 40% but
it is over 60%. There is a distribution, and I think an appropriate
one. Substantial contribution in cash in kind, industrialist engagement
in the project, engaged in oversight of where it is going, helping
set the agenda, contributing the equipment, access to facilities,
contributing cash, often supporting students that are associated
with the project, all of those facets are the things that
we consider to be meaningful engagement.
Dr Morrell: Also the provision
of a really challenging problem for the researchers to get their
teeth into as well, that is one of the key contributions.
Q133 Linda Perham: You have identified
fifteen industrial sectors as major stakeholders in your remit,
are there others where there has traditionally been low investment
in R&D, fifteen is quite a lot, are there areas that you think
ought to have higher investment but it is not possible to get
that for whatever reason?
Dr Morrell: I think the list of
fifteen pretty much covers all of our remit, that list includes
the high R&D investors and the low R&D investors, so things
like construction and retail. There are examples there of sectors
that have no tradition of working with universities and the reason
we included them in our list was because we felt there was opportunity
to help them work with the universities more. We did not just
pick the sectors which were already successfully working with
universities but we have included the ones that do not do that
traditionally and we are working with them to try and encourage
that.
Q134 Linda Perham: Which ones are not
the traditional ones?
Dr Morrell: It tends to be the
service sector, financial services, retail, media, more on the
services side. There is a lot of innovation in those sectors,
the retail sector is one of the most innovative sectors in the
economy but they have no tradition of working, particularly in
the technology area, with universities for their technical solutions.
I think they provide great opportunities actually for us to increase
the level of their involvement in our research.
Q135 Linda Perham: That is quite a comprehensive
list. There are no areas outside that list that you have not listed
there it is just a difference between the amount of research.
Is there anything that the Government or the DTI can do to encourage
R&D investment in the ones that have a lower level of investment
now?
Dr Morrell: We work very closely
with the DTI sector teams, they are sort of equivalent to our
teams. I think construction is an interesting example, where there
has been a long track record of encouraging the construction industry
to increase its level of R&D through link programmes and various
other DTI initiatives. If I was being cynical I would say, so
what, what effect has it had? I think there is always a danger
of trying to force a solution on to the industry when it may not
match their requirements. My feeling is much more about talking
to the sectors, listening to them and providing them with examples
of success rather than trying to second guess what they actually
need.
Professor O'Reilly: Could I augment
something that Susan has said, I do not take anything away, that
is absolutely right, even in areas of low engagement what you
will find is some superb examples of successful engagement. A
very good example is the construction area where there is not
a very well established pattern of connectivity between the university
basic research and the construction industry important though
it is. If you think of the construction of the Jubilee Line that
went on a while ago, an engineer in soil mechanics at Imperial
College played a very major part in some of the engineering round
that for the construction industry and contributed to much of
the success there and it derived very strongly from the academic
base. Even in areas where there is a low pattern we still look
for excellence and would foster that. That is why I think it is
important that we do not just select the few areas where there
is strong engagement and put all of our efforts into that. The
way we work is that we devise a number of measures, if you like:
How might we measure things to do with the sector? How well does
the sector, the industry know us? What do they think about us,
EPSRC? How well do we know them? How strongly engaged are we?
Along these we draw a map that says here is where we think we
are now and then share that with the industry, with companies
in the sector to get a common view and here is where we reasonably
might try to be in the next three years. In the case of those
where there is low engagement very often it is choose one or two
of those parameters to give the emphasis on rather than try and
push it right across the pack.
Q136 Judy Mallaber: Knowledge transfer
has been identified as a weakness in the innovation process and
the DTI's review acknowledges this, and earlier we had one example
of how the emphasis on getting your papers done at the university
kind of takes away from what academics might do in terms of looking
at possible transfer, so that is one side of the equation. How
do research councils like yours support knowledge transfer between
academia, individuals and industry?
Professor O'Reilly: Can I broaden
that slightly, I will come to it, the business of research councils
such as EPSRC can be thought of in terms of three components:
new knowledge, and that is what we first think of in research;
trained people or knowledgeable people; and knowledge transfer.
We do that but I do not think we should see them as separate,
at least not as distinct. One of the most powerful vehicles for
knowledge transfer is in fact through the flow of trained people
with the knowledge flowing with the people. For EPSRC in the way
which we operate we are a research council where virtually all
of our activity is in universities, we do not have our own research
institutes, we do not own the knowledge ourselves and we have
to try and spin it out from them. It is all in the universities
where there are young people coming through, graduates coming
through, PhD students are quite a strong emphasis for the EPSRC,
this particular research council has been backed. How can we take
that further forward? What we are doing right now is launching
as a pilot scheme something that we call the Collaborative Training
Accounts. Historically we have funded a masters, an MSC course
here or an MSC course there or made a contribution to issues that
are about knowledge transfer. In the new landscape of today we
have come to the view, through a consultation process with universities,
that we should award to them a large grant not a collection of
very small grants for very specific things where having decided
we are going to do it or they are going to do it they have continued
funding for four years. We are putting this together in what we
call a Collaborative Training Account against a business plan
which the universities put forward to us and which is assessed
by people who are used to looking at business plans for what they
will do with the funds that we allocate to them in engineering
and physical sciences. Most importantly while they indicate to
us the things they will also bring into this partnership, and
this is where the Regional Development Agencies are important
in that it gives them some leverage to engage more strongly and
more proactively with the RDAs and then we empower them to respond
to the local needs as perceived by the companies and by their
ideas. What can a research council do? The most powerful thing
we can do is at a broad strategic level provide strong enabling
frameworks that empower those who are close to where the challenges
lie. That is a rather long answer and it is only one facet, I
think it is an interesting illustration of how we, as a grant
awarding research council can get leverage from the RDAs, be responsive
to the local environment and the industry environment and make
it responsive over time.
Q137 Mr Djanogly: One of the collaborative
ventures you have undertaken with partners in industry is to establish
the innovative manufacturing research centres, could you tell
us a little bit more about these?
Professor O'Reilly: Yes. For many
years the research councils have had an emphasis on manufacturing
for the very obvious reasons of its importance but we also know
what has been in there. I could take you back to before the formation
of EPSRC and its predecessor body SERC we had something called
ACME which was joint with the DTI, really get advanced computing
into the manufacturing enterprises. We had a manufacturing initiative
with strong engagement with industry, that has always been a feature
here. That flowed through and resulted in quite a large investment
largely in individual grants and we became concerned having built
the capacity, if you like, that was out there through that investment
that we now needed some mechanism to really make it maximally
effective having done the capacity building. The innovative manufacturing
sectors involved bringing together those academics we had stimulated
with their industrial partners and getting them to look at a slightly
bigger picture now, having got capacity up there, having got used
to working with industry in this way step back a little bit, decide
a focus for the major centre based in one or more universities
with strong industrial engagement, if you like a slightly more
strategic approach that could be activated locally at the university
or through the consortium and choose a focus for where they are
going.
Q138 Mr Djanogly: What is the criterion
for their location?
Professor O'Reilly: There is already
an established strength. The strength already comes through the
normal peer review process and industrial engagement because of
the large collection of individual grants. The first criteria
for EPSRC is always excellence, that is one bit, we have the "e"
word also, but excellence, top quality is an absolute must in
research. Research has to measure up against the best in the world
to be worth doing. That is the process by which we secured that,
that was already there, and then we went through this process
of working with the universities to see how they would bring it
together.
Dr Morrell: What we are doing
now is looking at where the gaps are in our current portfolio
of IMRCs and for the future funding we will be trying to fill
those gaps in term of technology and sector areas that are missing.
We can certainly give you more detailed information on the spread
of sectors that they address.
Q139 Mr Djanogly: Does that show how
effective they have been?
Dr Morrell: They have just undergone
their first review. We can give you more information on the outcomes
of that as well.
Mr Djanogly: Thank you.
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