Examination of Witnesses (Questions 160-179)
SIR JOHN
CHISHOLM, DR
MALCOLM SKINGLE,
TONY MCBRIDE
AND DR
IAN RITCHIE
29 MARCH 2006
Q160 Chairman: I find that strange
really, Sir John, because the panel, apart from Ian, have just
said that giving the budget to the Research Councils to do this
work is the right place. You are now saying they do not have the
expertise in answer to Margaret Moran's question.
Sir John Chisholm: I have tried
to distinguish between money, because that is where the Government
happens to be spending the money—
Q161 Chairman: Does money not need
to be spent on people doing these tasks?
Sir John Chisholm: —and
the expertise in doing that knowledge transfer exercise, which
I said is a rare skill and it exists in certain places in the
economy.
Q162 Margaret Moran: Perhaps some
of the others want to add to that? Could you just point to the
one thing which you wish to change as far as funding of Research
Councils is concerned?
Dr Skingle: I think they vary
slightly. There are various types of knowledge transfer and I
think that the diversity of the Research Councils, the fact that
they are competing for part of the science spend, in a way is
useful but I hope that this Committee will help share the good
bits from each of those Research Councils mainly in respect to
knowledge transfer. The EPSRC have a sector-based approach. A
couple of years ago—I thought it was fairly forward sighted
of them—they had someone shadowing me for a month. Under
confidentiality, they came to every meeting that I went to, it
was great, they wrote up everything I went to, but I think they
really got a better understanding of how our sector works and
then they went out to other industries within EPSRC's remit, which
I thought was sensible. The MRC are professional with their MRCT
group and their licensing activity, although they could do with
picking their socks up in other areas. BBSRC started the bioscience
business competition. I always say when those business plans first
came out my mum could have done a better job. In the early years
of the competition many of the business plans were of poor quality
but through iterations with external advisers within the business
competition the quality has improved and now, at GSK, we interact
with the companies that are coming out of the competition. It
has been successful and other Research Councils are now also sponsoring
it. I see that as a positive thing. There is always this tension
about Research Councils wanting to badge stuff as their own. Frankly,
for people like myself who work across the Research Councils,
I take it upon myself to write to the chief executives of the
other Research Councils when I think we should share best practice.
Q163 Chairman: Just a brief comment
because I do not want to get everybody in to answer every question,
a quick word.
Dr Ritchie: Yes, I think the issue
is the type of activity you do. I was on PPARC and we tried quite
a number of activities. We tried to get British industry to engage
with things like CERN and the European Space Agency, and we tried
to find some bright students and give them Enterprise Fellowships.
We gave them a year of funding and a year of enterprise training.
I think that was reasonably successful. I come back to my major
point which is a thing like PPARC is very strategic science. Cavendish
discovered the electron 100 years ago and it has had a huge effect,
but it did not immediately become economically successful. The
sort of thing that is going on nowadays, finding gravitational
waves or whatever, might solve a problem in 50 years' time. That
is what they should be concentrating on, long-term strategic science.
Spin-out business is quite serendipitous. The World Wide Web came
out of physics research at CERN but there was no connection between
physics research and the World Wide Web. The generation of spin-out
businesses and economic activity is quite serendipitous and quite
often not related to the actual individual science.
Q164 Chairman: A quick word, Tony?
Mr McBride: Just to echo the point
that Malcolm made. I think it is difficult to pinpoint one specific
action which would have a positive impact across all the Research
Councils simply because they operate in different ways out of
necessity with different user communities. Good practice will
be different for each of them. However, I think that overall the
point I would like to make is that closer direct liaison with
industry to enhance responsiveness will be the thing we are looking
for most. EPSRC has a number of good examples of how that is achieved,
particularly with the close direct liaison of project managers
and programme managers with industry, including secondments.
Q165 Dr Iddon: Malcolm, you seem
to have expressed some views on how the Research Councils should
interact with the Regional Development Agencies.
Dr Skingle: Yes.
Q166 Dr Iddon: Would you like to
tell us what those are?
Dr Skingle: Sure. I think the
Research Councils have the continuity and the knowledge to know
the academic science base. You can pick the telephone up to the
Research Councils and if you do not know already you can get to
the science base. The RDAs do not have that knowledge. I am encouraging
EEDA to get a directory together of all the high tech companies
within the region and then to break those down by sector and then
I think that they should formally engage with the Research Councils
and not necessarily encourage a marriage with a university just
because it is 10 miles down the road; it might be the other end
of the country but they might be the best at what they do. I feel
quite passionate about that because the Research Councils do not
have time to hit all of those SMEs. The Research Councils are
going to come to large companies like BAE Systems and GlaxoSmithKline,
but they cannot possibly be expected in all those different areas
to get all those high tech companies. The SMEs are the people
who do not have the time to have people like me to work all the
various systems to get the leverage of science and technology
for the good of their company. I would like to identify two or
three companies as exemplars, SMEs, where people have been deposed
from large companies, so they know what the big game is all about,
and they have accessed the systems. I have a company in my region
which has got 10 people working for them but probably three dozen
people working their projects because they have got grants from
a number of schemes. We should hold those up and other people
will want a slice of that cake because they will see there is
something in it for them.
Q167 Dr Iddon: A bit of marriage
broking?
Dr Skingle: Definitely.
Q168 Dr Iddon: Ian, can you give
us your impression as to how it is easy for small and medium enterprises
to access funds. Is it better to do that regionally or nationally
or does it vary with the SME?
Dr Ritchie: It depends. For a
technology business, which is the kind of thing I get involved
in, usually they have an international perspective and they have
to raise funds, wherever funds might come from. We are quite lucky
in the UK that the venture capital community in London is as big
as anywhere outside Silicon Valley, so it is fine. That is why
God invented EasyJet, so you can go and see these people! Mostly
seed capital comes originally from local sources so when a company
is just beginning it is the local angels or the local start-up
funding which helps with that. In that case the regional agency
can help with that type of thing. In the case of Scottish Enterprise
there is a thing called the Co-Investment fund which funds the
early stage gap so it will double the money up to a million of
early stage money. Basically, if angels put in half a million
they will put in another half a million and that will be a million,
and that helps that process go through.
Q169 Dr Iddon: Do you think all entrepreneurs
running SMEs know where to go for advice or should Government,
through its agencies, be more proactive in supplying that advice
to SMEs?
Dr Ritchie: I can only speak for
Scotland from my own knowledge in Scotland. In Scotland it is
mostly the informal networking agencies like Connect and so forth
that do that. Scottish Enterprise I would not have said was the
place to call, frankly, for that type of advice. There are things
like the Business Forum Club, Enterprise Exchange, Connect, they
all have regular meetings. Going along to these meetings, asking
who is interested in a particular industry and so forth, where
are the angels, that is the way that people network to raise funding.
Q170 Bob Spink: Does anyone feel
that accessing funds at a regional level operates an arbitrary
constraint in that you are not picking the best to give the funds
to? It may be that in one region they have much more demand than
another region and, therefore, in one region people will be turned
away with projects because there are not funds in that region
whereas in another region there are funds going on all sorts of
silly schemes because there are not the schemes coming through.
In other words, is regionalisation appropriate or is this just
part of the Government's regionalisation programme that we have
seen?
Dr Skingle: I think, coming from
a company which sometimes struggles to recognise national boundaries,
let alone regional, carving England up into nine bits does not
make a lot of sense to me, I must say.
Q171 Bob Spink: I am glad to hear
you say that.
Dr Skingle: The other thing is
that for me if it was business you would fuel success, if something
is going well then you nurture it. If you have a look at the RDA
spending then there is an inverse relationship. North West, Scottish
Enterprise and ONE North East would be the ones at the top of
that league but obviously they have got more money and there is
the regeneration issue which is bound into that. To starve SEEDA,
the LDA and EEDA, to have them at the bottom of the pile because
they are doing well, does not seem to make too much sense to me.
Chairman: I think we will leave that.
We note your manner to Bob's.
Bob Spink: And to you.
Q172 Adam Afriyie: Three very short
questions and I will put them to each individual in turn. The
first question is to Ian. I enjoyed your submission, by the way,
I know it came slightly late but it was very direct which is very
pleasant in such inquiries. Should there be so many support schemes
within the Research Councils for knowledge transfers? There are
dozens of them, some of them argue they conflict with each other.
Should there be so many?
Dr Ritchie: No, I do not think
so. I think it is far too complex. My solution is to make this
a lot simpler and concentrate on where the problem lies, which
is with the commercialisation officers employed by the universities.
The Lambert Report was quite clear, it was very cynical about
the quality of these people and the valuation of the ownership
of IPR and so forth which came out of this process. Two and a
half years later we are no further forward, it is getting worse.
One of the problems with these various schemes, the old-fashioned
way it used to happen was post-docs in a lab had a good idea and
they found somebody to give them some money and they started a
company, and that was it. If they were clever enough they raised
venture capital on the way. Nowadays we have got all these schemes
so all these people are now locked to the university, whether
with a knowledge transfer scheme or an Enterprise Fellowship or
whatever, and they have got to deal with the university because
of all these various schemes. The university commercialisation
officer asserts ownership of IPR and demands various terms and
this all goes backward and forward for months, and it is a real
hassle. It has actually stopped several start-ups.
Q173 Adam Afriyie: That is very clear.
A question to Sir John. Do all these different funding schemes
make any difference to industry? Does it improve things? Does
it make things worse? What does it do?
Sir John Chisholm: I do not think
I would go all the way with Ian because in the old days when post-docs
just used to go and do it, not much happened actually, a lot more
has happened since. Just look at the statistics, there is a lot
more activity in creating value from science than there used to
be, which is a good thing. It is a complicated exercise because
we are trying to drive it from the push end and that is a hard
thing to do. Because it is a hard thing to do you get all these
complicated schemes going. As I tried to say earlier on, certainly
in the physics based sciences where our skills are largely focused
the difficult thing is the innovation process which gets you from
the brilliant invention through to something which generates value
or creates interesting knowledge in the economy. How you get attention
on that is where the big issue which needs to be addressed is.
It is not a simple thing to do.
Q174 Adam Afriyie: Do the various
funding issues make any difference to industry? Yes? No?
Sir John Chisholm: They are all
trying to get into space. The reason why there are so many and
it is so complicated is because no-one has found yet the philosopher's
stone here. It is a difficult thing to do. As I said before, part
of that is because there is no one answer to the issue. Different
issues come in different parts of space. Typically in any venture,
in California, for instance, you go through many stages of funding
with different people coming in at different stages each bringing
new expertise. That is because it is a skilful process and it
needs different skills as you go along.
Q175 Adam Afriyie: Very briefly,
do you think the funding formula is about right now or is it wrong?
Which side of that fence do you fall on?
Sir John Chisholm: Certainly I
would not say it is right now, it needs to be improved. The focus
should be on the innovation process. I think we are pretty good
at creating science.
Mr McBride: Can I just make a
very brief point to say that members of both of our ICARG Committee
and Technology and Innovation Committee have for some time voiced
concerns over the nature of the UK's approach to public support
for science, R&D and innovation, particularly the fact that
it is characterised by this high number of small schemes each
distributing a small portion of the pot. That is not to say that
there is no positive effect but it is not having the greatest
effect.
Q176 Adam Afriyie: My final question,
and it is really for Malcolm because I know you are actively involved
in this area, what is your view of the Research Council's new
performance management system, in particular the metrics for assessing
knowledge transfer? I have got something here The Better Exploitation
Output 2. Are these any good to industry?
Dr Skingle: Metrics have a place.
You need to be able to measure something to know whether or not
you have improved and moved on. Obviously they should not be the
sole driver of behaviours but I think the metrics for increasing
knowledge transfer in industry, having spoken with OST and having
been involved at the two London meetings—as several people
in industry were—I think that they are appropriate. Increase
the number of CASE, increase the engagement with SMEs, increase
the number of industrial partnership awards, increase modular
training for industry, I think they are all sensible targets.
Mr McBride: Can I just add a further
point. There are some very good examples and I agree with Malcolm's
point that knowledge transfer should not become metrics driven,
but certainly there is a purpose to metrics and they can enable
improvements in knowledge transfer. There are some very good specific
examples but I think the point I would like to make—and
this was picked up in the previous session—is on the whole
the metrics from the Research Councils are good but they are quantitative.
We would urge them to take every opportunity to supplement these
types of metrics with qualitative assessments from research users
looking at the impact as well. That is difficult, I know, but
it has to be placed alongside the sorts of metrics we are talking
about.
Chairman: That leads us nicely on to
Brian's questions.
Q177 Dr Iddon: A question to Ian
first. How aware do you think the Research Councils are of the
problems faced by SMEs?
Dr Ritchie: I do not think they
are particularly, it is not their job to be, it is not what they
are there for. I think this whole process is developed by people
who don't understand the problems of SMEs. There are not that
many people doing the SME thing and seeing it from the SME's point
of view. In all of these areas, including the Enterprise Agencies
and the Research Councils and the funding councils, they are all
trying to do things but actually very few of them seem to ask
the SMEs what it is they want or even measure the results of it
and feed it back and so forth. I do not think they are very responsive
at all.
Q178 Dr Iddon: Do you think we should
get better at that?
Dr Ritchie: I think so. There
are a few people like myself who live in both worlds but there
are very few of us.
Q179 Dr Iddon: Can any of you give
us an example, or more than one example, of how successful the
Research Councils have been in engaging industrial stakeholders.
What is the best approach you have seen? It is a tough question,
I know.
Dr Skingle: I think we get asked
to consult on their strategy papers and as a large company we
do, perhaps the SMEs cannot. We were engaged, for example, the
week before last with a two day meeting at Exeter with the Systems
Biology vision for the next decade with EPSRC and BBSRC working
together, I think they would certainly attempt to engage us on
various consultations.
Sir John Chisholm: I would agree
with that but certainly larger companies get ample opportunity
to provide individuals to sit on consultative bodies, to sit on
boards, to participate in events because large companies have
resources to do that. As I was saying before, I do not think we
can consider this as a problem that is solved simply by saying
we should communicate better. It is a lot more complicated than
saying we should simply communicate better. Communication should
always be improved but the Research Councils do do a workman-like
job at trying to engage with people who want to engage with them.
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