Examination of Witnesses (Questions 220-239)
BIRMINGHAM AND
COVENTRY UNIVERSITIES
12 MAY 2008
Q220 Roger Berry: That would be true
of some other regions as well but that explains the difference
in comparison with the South East and the East and so on. Obviously
research comes up with ideas, those need to be commercialised
if they are going to have an impact on the local economy and so
forth. In your experience, from the university angle, what do
you see as the main barriers to commercialisation of your product,
research, ideas?
Dr Wilkie: I am responsible for
two areas at the university, just so you understand where I am
coming from. I have a group of people that help university be
more competitive and attract research funding, and also I am managing
director of the separate trading company that the university operates
in order to be able to license its intellectual property and receive
payments for that. Historically Birmingham has focused much more
on attracting licence revenues from its intellectual property
portfolio than trying to set up, for example, a spin-out company,
and I know you will hear something later on about spin-out companies
which are successful in their own right, but they are a different
way of a university engaging in the world outside. Interestingly,
on licensing, just to come back to the question on barriers, if
you have a good idea and you have it intellectually protected,
first, you will sell it anywhere in the world, it will not just
be this region that will benefit; those licence revenues, most
of ours, for example, will probably accrue from abroad rather
than just the United Kingdom. Secondly, discussions around that
kind of interaction of the intellectual capital over HEI with
the outside world historically tend to be the province of the
larger organisation. So if I am trying to license something it
is more likely that a large major multinational will be interested
in talking to us about it than a regional SME, for example. Partly
that is because there is an education process that needs to go
on in your small and medium-sized enterprise, and let's not forget
these are very busy people running moderately small turnover businesses
who do not have necessarily the time or the understanding to find
it easy to engage with someone such as ourselves, which is why
part of the remit of not just the University of Birmingham but
Coventry and Warwick and other universities in this region is
to set up some sort of unit that is able to engage with the region
as well as to do the international deals, and a large proportion
of that is education of these businesses in the way in which they
need to work to interact, and the effort it will take them to
interact successfully with an HEI. One possible way of lowering
that barrier would be to provide resource for those commercial
entities to interact with the higher education institution. The
INDEX voucher scheme was mentioned, we have also been offering
another scheme out of the University of Birmingham which does
exactly this, which has also been funded in our case by Advantage
West Midlands. I am also relatively new both to this region and
to this job; I joined the University of Birmingham after a complete
career in industry last year, and my observation is that in the
engagement or the promotion of the assistance of that process
for a university to engage with the regional outside world, I
find Advantage West Midlands very enlightened in that respect
compared to other agencies that I have seen. That is licensing.
Spin-outs are completely different because a spin-out company
by its nature is very small and almost always very local, and
there you are talking about creating lower barriers, and having
the right kind of managerial capacity available on tap to help
the academics or the people with the new good idea to take the
business forward, and I think my experience in this region is
we have a substantial pool of very experienced businessmen and
individuals who could be involved in this—some are—and
one of the things we could do in this region is expand that interaction
in a similar way that, for example, Oxford is very well networked
into its particular region. There is no prima facie reason why
we should not be able to do that here; we just maybe have not
done it historically as well as we could.
Q221 Mr Wright: Moving on to the
SMEs, part of the Lambert Review indicated several areas to be
improved upon, one of which was the question of government support
for business research and development in SMEs. Evidence sessions
we had in Cambridge, for instance, highlighted the fact this does
not appear to be working, whereas alternatively in the States,
for instance, they have an amount of protection for funding of
SMEs. It has also been highlighted by many of the other universities
that we have this particular problem about the lack of money.
What do you think we can do to improve this particular area, as
far as business R&D in SMEs?
Professor Atkins: Is this a question
about research into it, or assisting?
Q222 Mr Wright: Assisting, but also
into the innovation side.
Professor Atkins: Well, I think
there are a number of things that could be brought forward and,
again, it is a question of barriers coming down in large measure.
Michael and Ian have both mentioned the INDEX voucher scheme,
and that does seem to have quite a lot of potential to me. At
the moment it is limited effectively to product consultancy: I
think it could be extended to knowledge transfer consultancy,
high level skills training and so on. That is one area. A second,
I think, is around better ways of enabling SMEs to get access
to very high quality kit, and very high quality skills to run
that kit that they cannot afford themselves. For example, we have
a metrology lab here, which is again part-funded through government
sources and through Advantage West Midlands, and that does enable
SMEs who are in the very high value game to get the consultancy
and to be able to bring their measurement problems to the kit
here on campus, kit they could never conceivably afford.
Q223 Chairman: Metrology is measuring,
is it?
Professor Atkins: Yes. It is not
the weather! It is measuring, and there is a range of SMEs that
use that centre, and the big guys as well.
Professor Popplewell: We have
a constant flow of small true SMEs from the West Midlands and
further afield who come to the centre both for training and for
consultancy and testing out of ideas. The main observation we
would make about them is that most of them do not have a great
deal of understanding of what they should be measuring or how,
and they get a lot of benefit from discussing the possibilities
and the technology and the underlying theory behind that technology.
That is at the SME end. We also run courses on metrology which
are franchised by the National Physical Laboratory through our
centre, and those are delivered again to SMEs and to slightly
larger organisations such as Rolls Royce Aero-engines. We take
the consultancy a little bit wider than that and get into fairly
cutting edge stuff as well. We do not do cutting edge research
but we also work with the International Thermo Nuclear Energy
research project based in Grenoble, which is attempting to build
one might say yet another fusion reactor to produce energy, but
it is a very big major international project with something like
a 30-year time horizon, and we are providing a lot of input to
how they would measure their reactors and ensure they are assembled
as they should be before they start making bangs with them.
Professor Marshall: In terms of
value added, certainly in the manufacturing sector metrology is
an example of a skill where most SMEs probably do not have enough
on-the-ground staff who have that skill, so they need to be able
to get access to it when they need it and to turn it off when
they do not. But again, if you look at development in that area
of just pure measurement, most of the higher value businesses
that exist in and around Coventry have some need for it, and that
ranges from the SME population up to the large manufacturing companies.
The large manufacturing companies can take care of themselves,
as you would expect, but the small to medium-sized need access
to facilities, resources, training and expertise and they need
it today and now, not in three weeks or three months' time.
Q224 Mr Wright: There are also increases
in terms of the start-up and the development stages and beyond
that, in terms of product development or even service.
Professor Atkins: Absolutely,
and the point I made before, which is that the assistance that
we give to SMEs is increasingly around process and service, and
not just around product I think would be a trend that many universities
would echo. We do about six thousand assists to SMEs each year,
that is a pretty high number. Within that it ranges from the kind
of work at the metrology lab through to working with a micro developing
their business plan to go to get funding from a bank. So there
is a whole range out there that we can get involved with. I think
our Institutes are one probable way forward for us in terms of
a model because they combine space for SMEs, and applied research
and the students on placement. The students are pretty much involved
in working with those companies, and then those companies tend
to take on that high level graduate, as an employee, and then
you begin to get a virtuous circle, because often these micros
and SMEs have not had graduates in their labour force until that
point. So that is another quite critical area, and the more we
can get real projects sourced from SMEs into the university and
students working on them and then reporting back to those SMEs
on what they have done, the more I think it is easy to get those
SMEs across that boundary between ourselves and the SME. It seems
one of the major ways to facilitate progress.
Q225 Mr Wright: In terms of the United
States, do you think there is more of a case for ring-fenced funding
for SMEs in this direction, rather than just overall?
Professor Atkins: What we observe
is there are lots of different pots and they come and go. The
point is that we do not have a consistent pot that you can really
plan around. Rather for two years we are going this way and then
oops, we have a bit of money left in the ERDF, and suddenly you
have to rush to get projects in. So it is not steady and coherent
and therefore does not very easily lend itself to the kind of
planning you might want to see in terms of that engagement. We
do get steady funding through HEIF from our Funding Council which
is very important.
Q226 Chairman: I do not know whether
it is just what we have seen in Coventry, but there are quite
a lot of examples of your university providing services of one
kind and another to the SME sector—design, marketing, metrology—where
they are coming here either for free or paying for metrology services.
Professor Popplewell: In some
cases.
Q227 Chairman: Does that mean they
are getting all the R&D they need but it is hidden entirely
from any measurement system, because you are providing it and
it does not show on their books?
Professor Atkins: Yes. That would
be a fair analysis.
Professor Clarke: Anecdotally,
it looks to us as if an SME is more likely to come to a university
for assistance if it is being run by or heavily influenced by
graduates. That does perhaps suggest that universities of all
kinds look a bit inhibiting from the outside, or it may not be
obvious where to go to, or indeed even the question to ask. I
well remember spending a day with a metal-bashing SME in the Black
Country hearing a managing director who was not a graduate saying
that he had been to every university in the West Midlands and
was now working through the East Midlands one by one trying to
get the answer to the question he had and the help he wanted,
and I got him to try and explain and he clearly had a great deal
of difficulty in articulating the question, and because he had
some difficulty articulating the question he had gone to the wrong
people, university after university after university, and he felt
as if he was banging his head against a brick wall.
Q228 Mr Wright: And how did he resolve
that?
Professor Clarke: Well, he was
hoping that his conversation with the University of Birmingham
was going to solve it, but it did not.
Q229 Mr Wright: So what was the solution?
Professor Clarke: I got a group
of people to sit down with him and talk through what the essence
of the real problem was.
Q230 Mr Wright: Whose responsibility
should that be, to make sure that that business or that SME is
aware of where they can go to? RDAs?
Professor Clarke: BusinessLink
on the one hand and I think probably in this region we are quite
good, as universities, about passing the inquiries one to the
other where there is expertise that we know would be helpful.
Professor Atkins: The Manufacturing
Advisory Service is the other excellent service funded by Advantage
West Midlands, and all the BusinessLinks are coming together.
Having said all of that, at the end of the day there is no substitute
probably for more graduates going into those SMEs and being able
to work the boundary from the other side.
Q231 Mr Oaten: On Peter's point,
you said there is this hidden amount of R&D going on. Is it
possible to have some estimate of the value that is put on this
amount of R&D that you are putting in? Also how do you decide
if you are going to charge or not charge?
Professor Atkins: That is usually
governed by whether there is a scheme that can be used to fund
that particular piece of work. So that is all sorts of European-funded
schemes and Advantage West Midlands funded schemes and others
too. I think probably the best way of putting a value on it would
be to look at the university's returns under the Higher Education
Business and Community Index, which we have to make each year,
where we have to put a value on our interaction with SMEs. And
I can tell you, for example, ours from last year, (and Birmingham
no doubt have their own data to add), we assisted 6000 SMEs and
600 bigger organisations last year, and the total income that
that generated one way and another was over £2 million.
Q232 Mr Oaten: But it is the work
you are doing for nothing that I am interested in.
Professor Atkins: The way one
would get at that would be to look at the funding schemes that
these SMEs are coming in on. It would have to be tackled from
that direction.
Q233 Mr Oaten: Is it more than two
million?
Professor Atkins: I would have
thought so. In aggregate across our universities a huge sum.
Mr Oaten: Significant.
Roger Berry: Very.
Q234 Mr Wright: In relation to HEIF,
can you value how successful HEIF has been in assisting knowledge
transfer, and can you give us examples of where that has made
a difference?
Professor Clarke: I am normally
averse to hypothecated funding streams; it does not help us in
our management of our institutions. However, HEIF and its predecessor
HEROBC, struck me as one of the exceptions that in a sense proved
the rule, and I think I would want to articulate it in terms of
the culture change which has been the effect of that funding.
If you turn the clock back 8-10 years, certainly in my kind of
institution and I am sure the same in many respects would be true
of Coventry, academic colleagues were not immediately thinking
about the commercialisation of what they were doing, the commercial
value. What that funding stream has done, I think, has been really
to shift more than its designers would have guessed, I guess,
the culture to make academic support staff and so on aware of
the commercial possibilities of their teaching, their research
and their other activities. I guess it is fair to say that we
have all looked for different ways of finding levers which we
could pull to use HEROBC and HEIF funding to that end, but I doubt
whether there is an institution around which has not shifted significantly.
To be specific, the first thing we did was to allocate some of
our original HEROBC income to pay for a group of people who are
best described as boundary spanners, people who either fought
well and truly in academic community as teachers and researchers,
but who also had a foot in the business community, and their task
was to help their academic colleagues find ways of exploiting
what they were doing in the business community, working with the
business community to help them identify ways in which they could
use the assistance of the first category. Now, I will not say
that every one of those appointments was as completely successful
as it might have been, but taken together they have moved us on
a very great space in a relatively short space of time, and what
has been interesting has then been to see the parts of the university,
because after all we are a very big institution, untouched by
those original appointments—preferably I would want money
from the Funding Council to do the same thing but actually prepared
to spend our own money to make similar appointments to ensure
that activity is going forward.
Professor Atkins: We would echo
that. We have achieved 50% year-on-year growth in the income obtained
through partnering with industry and commerce and to some extent
the public sector through HEIF funding. Like Birmingham we established
a team of business development managers in every faculty. Yes,
they have also been transforming our culture. The other successes
I would point out from the HEIF funding that we have had, and
Birmingham as well, are that as a collective the universities
in this region decided to put some of their money into an investment
pool which could support early stage development of commercialisation,
and that has been very successful for Coventry University. We
have seen a number of disclosures taken through to early stage
development and then on to proper spin-out or licensing as a consequence
of that. We have also used some of our money for what is known
as the Speed programme. This gives undergraduate students who
have good business ideas up to £4,500 to commercialise those
ideas while they are students on course. We have something like
80 students on that Speed programme from Coventry, and that is
beginning to pull through into a very much more entrepreneurial
outlook amongst the students, and many more successes in terms
of potential spin-outs from those student cohorts. So at every
level it has touched the student experience and the academic experience,
it has certainly improved our relationships with businesses large
and small. We would say we only wish it was twice the size.
Q235 Mr Wright: So it is a bid for
more money then?
Professor Atkins: For us the RAE
is not particularly significant; we are not a university that
particularly does discovery research. Cutting edge innovation,
yes; discovery not so much. But with the kind of work we do we
are capped at the top end of HEIF—we are one of those universities
that has reached the maximum, and we could do twice as much.
Q236 Mr Wright: Overall, then, the
programme is a successful programme?
Professor Marshall: Yes. One of
the issues certainly for SMEs is to have access for a translator,
someone who can take you through the corridors to the right person
and then broker a meeting which means the SME comes out knowing
what the problem is, what the issues are, and so does the academic.
One of the bigger investments that we have made is into this translational
capability; we have put into every faculty business development
managers, business development officers, and, indeed, like Birmingham,
some faculties are now putting additional resource in because
they have proved to be so useful. For the SME, coming in through
the gates of the university, if they have no experience of university
at all it is very daunting, and having people who have a foot
in the business camp and in the academic camp who can work as
guides and translators certainly is a great help.
Professor Clarke: And the other
way around, because the most brilliant researcher is not necessarily
the best communicator—and nor should we worry about that,
provided there is somebody to help in that process.
Dr Wilkie: But what you are also
hearing, apart from the translation and the boundary management
issues, is the need for ourselves as HEIs to have the wherewithal
to generate the right internal infrastructure to deal with those
things, and it will be different for different HEIs in different
places on the delivery chain, but nonetheless we need that internally.
It is very easy to sell the services of a university in the general
sense, the sales pitch is not that difficult. The hard part is
making sure you create a project which is properly managed and
which that particular institution is able to deliver in a way.
This is the normal tension in business between marketing and sales
and production people, but in our case it is the tension between
our ability to sell the HEI outside and the academics' ability
within the institution to be culturally aligned so we can deliver
what we promise.
Professor Atkins: That is very
important, and one of the things we have invested our HEIF funding
in is project managers where, when we have got an SME or even
a big company and the academics together, we put in a project
manager to make sure that we deliver on time and so on. Because
a lot of the feedback we were getting, and I think this is quite
common, is that companies like the cleverness and the knowledge
of HEIs, they do not like sloppy delivery.
Q237 Chairman: I am now very sorry
you are not joining us for dinner this evening, Professor Clarke,
because I want to sit you down with QinetiQ and see whether you
are in competition or collaboration. I can see now they are in
the same game as you!
Professor Clarke: Undoubtedly
collaboration. Interestingly enough, as you will hear from QinetiQ
when you visit tomorrow, one of their new projects is about trying
to build links with the research base to do what after all they
used to do but no longer are in a position to do which is fundamental
research.
Q238 Chairman: Is there anything
you want to say about that issue publicly at this stage?
Professor Clarke: Just to say
that I think QinetiQ is a really interesting example of an organisation
which is pitched somewhere on the spectrum between full market
and fundamental research, and they are developing a very interesting
facility to take part in the translation business.
Q239 Chairman: Which has your full
support?
Professor Clarke: Absolutely.
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