APPENDIX 1
Memorandum from the Office of Science
and Technology, Department of Trade and Industry
RESEARCH COUNCIL
SUPPORT FOR
KNOWLEDGE TRANSFER
"Following the DTI Innovation Report recommendation,
Research Councils UK (RCUK) is developing an overarching knowledge
transfer strategy and each individual Research Council will agree
with the Director General of the Research Councils (DGRC) plans
and goals for increasing the rate of knowledge transfer and level
of interaction with business. These new targets will become an
integral part of the OST performance management system for the
Research Councils and performance against targets will inform
future spending reviews."
Science and Innovation Investment Framework
2004-14, July 2004
EXECUTIVE SUMMARY
Knowledge transfer is an important component
of the Government's ten year Science and Innovation Investment
Framework: the UK is strong in research but needs to be more effective
at translating the products of research into economic and social
benefits. As part of this framework, each Research Council has
submitted a knowledge transfer plan, the key elements of which
are now incorporated in the Delivery Plans as part of their high
level objective on better exploitation of research results. Knowledge
transfer is a wide term and encompasses a wide range of activities
from commercialisation of research through collaborative research
and people exchange. Certain funds have been specifically earmarked
for knowledge transfer in Research Councils, although these do
not reflect the fact much knowledge transfer takes place as an
integral part of research. Research Council activity needs to
be seen in the wider context of a range of Government support
for innovation including HEIF, R&D tax credits and the Technology
Strategy. The Research Councils' plans for knowledge transfer
are evolvingthey have recently been subject to external
challenge and the Director General of the Research Councils is
currently looking at how Research Councils could deliver a major
increase in the economic impact of their investments.
INTRODUCTION
1. The Government's efforts to increase
knowledge transfer are based on a recognition that science and
innovation are key to ensuring the UK's long-term competitiveness
in an increasingly knowledge driven global economy. In all countries,
economic activity is shifting toward innovation and knowledge
driven industries. We rely more than ever on generation of knowledge
and effective access to knowledge. The UK has a historic strength
in scientific research but needs to build on this to exploit new
technology-driven and high value added areas and secure its long-term
prosperity in the face of global competition.
2. The current Government has placed a major
emphasis on science and research as a driver for economic growth
and have delivered a major increase in funding through the science
budget. In 1997-98, the science budget was £1.3 billion.
As a result of substantial increases in a number of spending reviews,
the science budget will have more than doubled in real terms to
£3.4 billion by 2007-08.
3. In July 2004, the Government published
a ten year Science and Innovation Investment Framework setting
out the Government's ambition for UK science and innovation over
the coming decade, in particular their contribution to economic
growth and public services, and the attributes and funding arrangements
of a research system capable of delivering this. The Framework
put a particular emphasis on increasing knowledge transfer between
the research base and business. There are a number of different
ways in which such knowledge transfer is supportedthe Research
Councils play an important role, but certainly not the only one.
Why is Knowledge Transfer Important?
4. Knowledge transfer is one aspect of the
ten year plan which seeks to increase the responsiveness of the
UK science base to the needs of the economy. This is in line with
the recommendations of the 2003 Lambert review of business-university
collaboration.
5. The Lambert review concluded that the
UK was strong in research, but less effective at translating the
products of research into social and economic benefits, though
he highlighted the rapid change taking place. The ten year science
and innovation investment framework 2004-2014 set out to encourage
greater responsiveness of the public funded research base to the
needs of the economy and public services, focussing especially
on two targets:
continue to improve UK performance
in knowledge transfer and commercialisation for universities and
public laboratories to world leading bench marks; and
Research Council's programmes to
be more strongly influenced by, and delivered in partnership with,
end users of research.
DEVELOPMENT OF
KNOWLEDGE TRANSFER
IN RESEARCH
COUNCILS
6. The DTI Strategy published in September
2003 identified as one of five key priorities the need to strengthen
knowledge transfer from business to business and between business
and academic communities and other knowledge creators and providers.
Following on from this, the DTI Innovation Report, published in
December 2003, set out how the Director General Research Councils
would agree with each of the Research Councils plans and goals
for increasing the rate of knowledge transfer and the level of
interaction with business, and that these plans would be subject
to external challenge.
7. Each Council was invited to submit a
plan including targets in five key areas: interaction with business/public
service, collaborative research, user involvement in education
and training, people and knowledge flow and commercialisation
of R&D. Councils submitted their knowledge transfer plans
at the end of 2004. This marked the first time that the Councils
had explicitly codified their vision and goals for knowledge transfer.
At the same time as these plans were being developed, the Research
Council were moving to a new system of performance management.
As part of this, the key elements of the knowledge transfer plans
were incorporated into the overall Delivery Plans that were published
in May 2005. These Delivery Plans clearly set out that the Councils
are working to two high level objectivesthe first, excellence
of the research base, the second improving the exploitation of
the research. Each Council has also agreed a measurement frameworkand
the Output Two framework sets out indicators of knowledge transfer
and business interaction.
8. Knowledge transfer is very much an evolving
area and the plans are not set in stone. We fully expect Councils
to adapt the plans and raise their sights as they become more
adept at knowledge transfer.
KNOWLEDGE TRANSFERA
WIDE TERM
9. The term knowledge transfer is used to
cover a wide, loosely defined range of activities that aim to
increase the impact of research institutions beyond the academic
research community.
10. It can encompass the classic "technology
transfer" or "commercialisation" role where intellectual
property from research is protected and then developed into a
new business (spinouts) or the rights sold to existing firms (licensing).
But it also goes much wider, including secondments of staff to
business and other users, support for collaborative research,
supporting student placements in business, promoting entrepreneurship
among research communities through business plan competitions,
providing advice on UK research strengths to potentially interested
parties. The whole field of KT is still evolving and excellence
is not well defined and benefits appear in many different ways.
11. The Government's policy is that the
aim of knowledge transfer should be to benefit the UK economy
as a wholeand not necessarily the host institution. Knowledge
transfer is not merely a new or substitute source of funding for
institutionsit is an attempt to ensure the benefits of
the research can be more fully realised by economic factors.
12. Knowledge transfer should not be seen
as simply a one way process. Academic researchers should also
be able to benefit from greater interaction with business and
usersas they learn from business, broaden their knowledge
base and get opportunities to tackle more relevant problems (and
some commentators prefer the term "knowledge exchange"
to more clearly capture this feature). A knowledge transfer mission
and a research excellence mission are not mutually exclusive:
stronger KT and consideration of use can mean a deeper/wider research
excellence.
KNOWLEDGE TRANSFER
FUNDING
13. The form of support for knowledge transfer
reflects the diversity of goals. In the Research Councils there
are earmarked lines of funding available: £2.5 million has
been set aside to increase the management capacity relating to
knowledge transfer in Research Councils and RDAs; £15 million
was set aside to give a special boost to knowledge transfer activities,
and the Public Sector Research Establishment Fund has recently
allocated £25 million to a range of knowledge transfer projects,
many of which were in Research Council Institutes. But simply
adding up earmarked funding would be to downplay the importance
of KT. The science budget allocation shows some 3% of budget has
been earmarked for knowledge transfer, but a much wider range
of knowledge transfer activity takes place as an integral and
seamless part of research. Effective knowledge transfer is woven
into the fabric of research rather than taking place separately.
Knowledge transfer may translate established, rather than new,
research results into economic benefit, for example in companies
that do not operate at the cutting edge of technology.
14. The increasing support for knowledge
transfer in the Research Councils needs to be seen in the wider
context of increasing Government support for knowledge transfer
from the research base. In particular, the Government has already
made major investments in improving university business interaction:
the University Challenge (£60 million over two rounds) programme
provided universities with seed corn funds to improve their ability
to commercialise research; funding for Science Enterprise Centres
(£43 million over two rounds) provided access to entrepreneurial
skills to science and engineering undergraduates and graduates
and the Higher Education Innovation Fund (which is rising to £110
million per year by 2007-08) provides incentives for universities
to transfer knowledge to the economy across a broad range of activities.
In addition, the Government has been supporting commercialisation
from other public sector research establishments (PSREs) through
a dedicated funding stream for those PSREs (£25 million over
2006-07 and 2007-08).
15. This support is already paying dividends.
An evaluation of Government schemes show they are leading to real
culture change within Higher Education. And we are seeing a significant
rise in key metrics of University business interactionas
demonstrated in the table below:
|
1995-06 |
2002-03 |
|
Contract research income from business |
£170 million | £262 million |
New patents granted |
45 |
371 |
Licences granted |
139 |
758 |
Income from licences |
£12 million |
£37 million |
16. Furthermore, it is notable that the combined value
of university spinouts floated on stock markets in the last two
years is over £1 billionlarger than the cumulative
funding for knowledge transfer since 1997.
17. And in addition to the direct support for knowledge
transfer from the research base, the Government is also supporting
a range of measures to promote innovation, consistent with the
ten year framework:
RDAs growing engagement in supporting business
innovation as part of their Regional Economic Strategies, as reflected
in rising total investment in science and technology activities
(some £360 million in total over 2005-06) and in the RDAs
new tasking framework, with specific targets for increasing business
interaction with the UK knowledge base.
DTI Technology Strategy, which is funding an array
of business-relevant collaborative R&D programmes and knowledge
transfer networks, with the potential for universities to become
part of these networks.
R&D tax credits for large and small businesses,
under which R&D contracted out to universities is eligible
for tax credit, thus reducing the net cost to businesses.
Science Research Infrastructure Fund SRIF3, under
which research capital funding is given on condition that HEIs
develop greater access to facilities for business.
A range of Innovation support schemes, such as
Knowledge Transfer Partnerships, Grant for R&D and Global
Watch.
The development of the Science Cities concept
in Manchester, York, Newcastle, Bristol, Birmingham and Nottingham,
involving close partnership between HEIs, city authorities and
RDAs with the aim of enhancing the impact of HEIs on the economic
growth of city-regions.
Government-supported venture capital measures,
in particular the new Enterprise Capital Funds, which received
state aid clearance from European Commission this week.
18. It should be noted that in many cases Research Councils
activity is integrated with this wider support. For example the
Research Councils are represented on the Technology Strategy Board,
to help take account of research base strengths and weaknesses
in deciding on technology strategy priorities, and to ensure that
Councils are able to react to these priorities. Further information
is attached as an Annex.
19. Historically, Research Councils have voluntarily
contributed to the Small Business Research Initiativedesigned
to help small and medium enterprises (SMEs) gain greater access
to publicly funded R&D contracts. Following the announcement
in the Budget by the Chancellor of the Exchequer that the SBRI
scheme will now be mandatory, the Research Councils will promote
a Small Business Research scheme (similar to but distinct from
SBRI). They are committed to spending at least 2.5% of a baseline
of £815 million in 2005-06 on university/SME collaborations
and directly with SMEs.
Looking Ahead
20. As envisaged in the Ten Year Framework, the Research
Councils agreed that their knowledge transfer plans should be
subject to an external challenge from a group of relevant stakeholders,
including business public sector and former Council staff. An
External Challenge panel was appointed by Research Councils UK
on behalf of the Councils, and this panel benefited from presentations
by each of the Councils. At the time of writing this submission,
the panel were finalising their report to the RCUK Joint Strategy
Group.
21. All of the Councils have made progress in putting
in place plans to increase the amount of knowledge transfer and
business interaction. But the Government believes there is a need
for a further improvement.
22. The Director General of the Research Councils has
asked a small ad hoc group of experts to advise him over the coming
months on how Research Councils could deliver and demonstrate
that they are deliveringa major increase in the economic
impact of their investments.
February 2006
Annex A
RESEARCH COUNCIL INVOLVEMENT IN WIDER INNOVATION SUPPORT
SCHEMES
KNOWLEDGE TRANSFER
NETWORKS
1. Knowledge Transfer Networks (KTNs) help to facilitate
business access and investment in science, engineering and technology.
2. Research councils are beginning to engage with KTNs
at a strategic level, for example PPARC, supported by CCLRC, the
UK Atomic Energy Authority and the current network partners (National
Physical Laboratory and Sira) has formulated an Advanced Instrumentation
work package that extends the current remit of the Sensors KTN.
The work package provides specific focus on `high end' scientific
instrumentation for industry and academic research and it's percolation
into the broader markets of analytical, process, test & measurement
and quality assurance / control. The Research focuses on the engagement
of industry with the scientific research infrastructure in terms
of access, knowledge transfer and supply opportunities. KTNs also
have access to EPSRC Industrial Cooperative Awards in Science
and Engineering (CASE) Awards, which are studentships allocated
to companies participating in EPSRC funded research.
Knowledge Transfer Partnerships (KTPsformerly known
as the Teaching Company Scheme)
3. KTPs enable high calibre, recently qualified graduates
or `Associates' to work in a company on a project that is core
to the strategic development of the business.
4. KTPs is truly a cross-Government initiative with six
out of eight of the Research Councils providing around £3.5
million funding per annum. KTPs work alongside AHRC, BBSRC, EPSRC,
ESRC, NERC and PPARC with the aim of offering a holistic package
of business support.
Collaborative Research and Development
5. Collaborative Research & Development (CRD) seeks
to produce successful new products, processes and services to
help drive forward innovation and create prosperity for the UK
economy. The latest round of the Government's £370 million
Technology Programme dedicated £63 million to UK businesses
in six priority areas.
6. Research Councils have made significant efforts to
engage with the Technology Programme and have contributed both
to the development of the Technology Strategy and its implementation,
for example, by providing evidence of strengths in the UK science
base and RCUK technology priorities. Research Councils are important
partners offering support for academic participation in research
projects, increased levels of co-funding and the development of
joint application and assessment procedures for future Technology
Programme Calls.
7. EPSRC has committed funding to date of around £1
million and will continue to commit around £7 million per
annum for the next three years. BBSRC has allocated £2 million
for 2006-07 and MRC is to commit future funding on a case-by-case
basis.
European Framework programme
8. The European Union's Sixth Framework Programme is
the EU's primary funding mechanism for supporting and encouraging
collaborative research and innovation in science, engineering
and technology in the European Community.
9. The Research Councils consider the scale of funding
and the focus of research support within the EU Framework Programmes
to be of significant importance to the UK science and engineering
base. The Research Councils have been involved in negotiations
governing the development of Framework Programmes and their management,
and in raising awareness of EU opportunities in research and education
programmes.
Information on specific activity can be found in the following
publication:
www.ukro.ac.uk/public/pub/uk-research-councils20-years-in-europe.pdf
GLOBAL WATCH
SERVICE
10. DTI's Global Watch Service helps to improve the competitiveness
of UK businesses by identifying and accessing innovative technologies
and practices from overseas.
11. The majority of the Research Councils are involved
in the Global Watch Programme and regularly attend the `Missions'
dissemination events. Research Councils also interact with the
Global Watch International Technology Promoters on a regular basis.
For example, MRC was a member of an Oncology Mission to Scandinavia
and PPARC was part of a group taken to CERN.
Glossary and Web Links
AHRCArts and Humanities Research Council
http://www.ahrc.ac.uk/
BBSRCBiotechnology and Biological Sciences Research Council
http://www.bbsrc.ac.uk/
CRDCollaborative Research and Development
http://www.dti.gov.uk/crd/
CCLRCCouncil for the Central Laboratory of the Research
Councils
http://www.cclrc.ac.uk/
EPSRCEngineering and Physical Science Research Council
http://www.epsrc.ac.uk/
ESRCEconomic and Social Research Council
http://www.esrc.ac.uk/
FP6European Framework Programme
www.ukro.ac.uk
KTNKnowledge Transfer Network
http://www.dti.gov.uk/ktn/
KTPKnowledge Transfer Partnerships
http://www.dti.gov.uk/ktp/
MRCMedical Research Council
http://www.mrc.ac.uk/
NERCNatural and Environment Research Council
http://www.nerc.ac.uk/
PPARCParticle Physics and Astronomy Research Council
http://www.pparc.ac.uk/
RCUKResearch Councils UK
www.rcuk.ac.uk
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