Examination of Witnesses (Questions 520-539)
TECHNOLOGY STRATEGY
BOARD
20 NOVEMBER 2008
Q520 Mr Binley: So the EEF is wrong
in its assumption in that respect then. They are talking specifically
about you, not about a wider sector, not about wider operation;
they were talking specifically about your operation. Are they
wrong?
Mr Gray: I do not know the facts.
Q521 Mr Binley: I have just read
it out to you.
Mr Gray: I would be very happy
to provide a written response to the question. Nobody has said
that to me from that organisation. I am very happy to provide
a specific response. We are talking to all the trade bodies; we
are talking to the CBI, we talk to a lot of organisations and
I have never had that feedback before.
Chairman: It does not quite say that.
Mr Binley: I am sorry, I have just read
it out.
Chairman: It actually says, "We
welcome the recommendations"; the question is really about
delivery. They are backing the idea.
Q522 Mr Binley: I will not allow
my question to be taken over and I repeat the words that I used
directly from their evidence to us: "There have been many
changes and fine words on reforming public procurement and departmental
research expenditure to get the most out of innovative business
yet there has been little progress outside the MoD". That
is what they said. Tell me that is wrong or prove to me that it
is wrong.
Mr Gray: In regards to ourselves,
we are a new organisation; it takes a long time to demonstrate
the impact of what we are doing out there. I do think they are
actually very supportive of the concept of what we are about.
I believe that very strongly.
Q523 Mr Binley: You look at it and
come back to me later. You have not answered my question and I
would like an answer.
Mr Gray: I will come back to you
with a very specific written response.
Mr Binley: I am most grateful to you.
Q524 Chairman: We will pass you the
detailed evidence that EEF have submitted and I think it is important
that you do look at that. To be fair, I think that that sentence
that Brian read out may refer to the history in this area as much
as to Technology Strategy Board. Their evidence was given to us
in October, a year ago, when you were only three months old. I
suspect it refers to the history. The EEF are very valuable witnesses
to this Committee and I would not want them to be misrepresented.
They are very concerned about your ability to deliver. Being based
in Swindon was actually one of their major concerns.
Mr Gray: I can understand them
raising concerns from a historical perspective. In terms of the
spirit of the relationship we have with organisations like that,
it seems very strong.
Q525 Chairman: I was asking questions
about the entrepreneurial spirit of the organisation and I think
what they are saying is that there is a history of failure in
this area. This Committee has reported on a number of occasions
in the past and the question is if another group of civil servants
can deliver on this it is really important because public procurement
(which is the specific concern they are expressing) is central
to driving up our technological performance in the UK and we are
very bad at this still.
Mr Gray: The whole agenda of procurement
I see as a very, very significant thing for us to address. I know
your Committee has looked at SBRI—or SBIR as I think it
is referred to in the States—which are very specific examples
of things that our organisation is taking on board.
Q526 Chairman: Do you think you can
act as a catalyst to persuade the OGC to do more work in this
area?
Mr Gray: In the area of SBRI yes,
I think we can do something. It is very much a target objective
for us. In terms of the overall procurement agenda, the fact that
we spend some £150 billion a year or £170 billion (I
am not sure which is the exact number) it is very significant
number. From the Technology Strategy Board point of view I think
there are some roles we can play. We can identify areas where
we can make a very significant influence in terms of how procurement
can simulate innovation. SBRI is a very specific initiative and
I have a very specific objective against the SBRI.
Q527 Chairman: What is your objective?
Mr Gray: The objective I have
is to re-launch SBRI. I have a very specific objective which is
to run two pilots with the MoD and the Department of Health through
to April 2009 and from April 2009 to see a step increase in the
amount of SBRI projects in the UK leading up to something of the
order of £100 million worth of SBRI projects in future years.
Q528 Chairman: Do you think more
generally that procuring more government services and products
from the small business sector would actually do more to encourage
innovation?
Mr Gray: I do, yes. It is one
of the resounding messages I have had in the conversations I have
had with small businesses and some very good examples of where
it has actually worked as well. There is a track record of how
it has worked and where it has worked.
Q529 Chairman: You will be aware
of the fact that there was a joint report from the Federation
of Small Businesses, CBI and the British Private Equity and Venture
Capital Association on procurement from SMEs. It recommended that
government should aim for a 30% target for overall procurement.
Do you think that is a realistic target?
Mr Gray: I cannot comment on the
specific number itself. I think there is a very real opportunity
and 30% is a big number. I cannot comment beyond that. The key
message is that it is a step change and that is what is important.
Q530 Chairman: You talked briefly
about regulation in your introductory remarks as a driver of innovation
which we have seen it can be. The classic example is probably
low carbon vehicles. What opportunities do you think there are
for regulation driving innovation at EU level or UK level?
Mr Gray: Again it is one of the
key messages of the organisation. Let me just choose a specific
example and ask David to provide a specific comment, and that
is the whole issue around low impact buildings and the impact
that regulation is having in that area.
Mr Bott: That is where the Communities
and Local Government code for sustainable homes kicks in because
they have set an escalator for effective building regulations
between now and 2017. People know how to deliver the 2010 target
but it is a price point thing. They do not know really how to
deliver the 2013 target so they will have to deliver new technologies
and then get them into the supply chain. To deliver the full value
of the 2017 recommendations is actually technically quite demanding
and so people are starting on that work now. That rising escalator
of regulations has been well-communicated to the various parts
of the construction supply chain which is probably one of the
most complicated ones in the country, it moves very quickly to
very small companies. The nice thing about that is that the government
effectively procures about a third of the building stock in this
country a year so actually for those houses to be built under
the housing associations that escalator is advanced so by 2010
you have to answer the 2013 requirements and by 2013 the 2017.
That is actually producing a government driven increase in innovation
in the construction industry. So it is about well-considered regulation,
well-communicated to the markets and the companies that supply
those markets.
Q531 Chairman: Would you also be
advising government sometimes to slow down regulatory initiatives
because it might otherwise benefit our competitors and overseas
markets for products that are ready, for example. In the building
sector in particular sometimes there have been some very short
notice changes to regulation which have made life difficult for
domestic producers.
Mr Bott: It is about well-communicated
and predictable regulation. Having spent all that time in industry
I know that the most important thing to know is where your market
is going and what products or services you will be able to sell
because it takes time to deliver them. Precipitous or ill-considered
regulation can be harmful but I would hold up the code for sustainable
homes as a very good example of what can be done well.
Q532 Miss Kirkbride: Listening to
your evidence I do not deny the potential good for a body such
as yours, but I do have very grave reservations as to whether
or not it is achievable just because of the complexity of the
bureaucracies that you are dealing with. You are interfacing with
so many organisations and ones which are particularly opaque,
including government departments which are not normally open to
people's advice other than that which is sitting around the cabinet
minister's table. Can you give me an example where you can demonstrate
to us that actually you were listened to and you made a difference?
Otherwise the feeling may be that this is just another bureaucratic
organisation taking its tuppence worth and deciding how it is
going to spend its own money. Is it making a difference?
Mr Gray: Let me give a couple
of examples, one in the space perhaps of the relationship with
the regions. We have put in place a very formal process which
we have called a strategic advisory group which has pulled together
the science and industry councils. The science and industry councils
are feeding into our user needs, coming back to the question about
deciding what projects we move forward on. The whole issue of
the challenges approach and the engagement of the regions is very
much fed through the strategic advisory group, the kind of formal
relationships and structure we are putting in with bodies like
that. That has clearly influenced where we are investing our money.
It is taking local needs, feeding them up into a national agenda
and then cascading programmes back down.
Q533 Miss Kirkbride: If we can have
all these RDAs then we will not have any need for your body to
feed into all the RDAs, coordinate their effort and the bureaucratic
hydra that gives you a purpose in which you can extol at our Select
Committee. If we did not have all these organisations, if we had
one person for the whole country (including Scotland, Mike) who
actually worried about these important issues, we could do that
on your salaries. Can you give me another example.
Mr Gray: I chose that specific
example because no matter how you are organised you need to deploy
things down right across the country.
Q534 Miss Kirkbride: Do we need you
and the RDAs to do that? Ten years ago we did not have you; do
we really need you to do that? Could it not be done better by
one organisation? It could be you as the organisation, fantastic.
Mr Gray: I believe we are playing
a very strong leadership role in doing that. Maybe if I could
give another example.
Q535 Miss Kirkbride: Yes, give me
another one.
Mr Gray: What I would like to
pick is one of the innovation platforms and again I am going to
look to David to draw in on this. We have just launched a new
innovation platform on the detection and identification of infectious
agents which I believe has a real big opportunity. David, could
you describe how we have linked in with other government departments
on that example?
Mr Bott: It is a bit of a mouthful
as a title but the idea is to take the technology that enables
you to identify the fact that an infectious agent—that could
be a virus or a bacterium or whatever—is there and identify
it very, very accurately so you know what disease vector it is
carrying. At the moment many of the detection technologies take
10 days to two weeks to actually come back with the answer. We
have seen some of the implications of that over recent epidemics
and things. It is technologically or scientifically feasible to
reduce that to a couple of hours or probably even more by applying
nanotechnology and various other sensor technologies. We have
started working with the Department of Health because they realised
that if they can apply that technology and get it developed they
can actually radically change the care model they use for some
of the more infectious diseases. They can intercept the spread
of diseases very much more quickly, particularly HIV Aids, tuberculosis
and sexually transmitted infections. We started talking to Defra
as well. We might think that the disease vectors are unique to
the human being but actually just about all the animals and all
the crop vectors are very similar. We have drawn Defra into that
and they are actually providing us with examples that we can develop
the technologies against as we go out to the industry so that
they can, for example, intercept foot and mouth disease or blue
tongue more accurately and know exactly where it is rather than
having to wait two weeks for the feedback. It is a matter of starting
with the Department of Health, understanding their current business
practice and how it could change with the application of the technologies,
and then moving on to the other examples of how that same technology
can change other people's business.
Q536 Miss Kirkbride: Does it really
take that long to detect foot and mouth and blue-tongue? Two weeks?
Mr Bott: Everybody was talking
about the H5N1 vector of SARS, for example; that is a very specific
genetic type and you have to do a full DNA analysis to be able
to actually say that it is that disease. That is why it took all
that time when people were getting infected.
Mr Gray: What we are trying to
illustrate is where the Technology Strategy Board is working across
government with other government departments. In that specific
example—Department of Health and Defra—you could go
through each and every one of the challenge-led application areas
and you can see where we have worked with the Department of Transport
and influenced their approach on low carbon vehicles, for example,
working with the chief scientific advisors; you can see how we
are working with the Department of Health in our assisted living
challenge. Each of the challenge-led application areas actually
has been a very, very good framework for drawing in other government
departments; there are some really good examples.
Q537 Miss Kirkbride: On your infectious
diseases example, when you have identified the two departments
interested in doing this a bit faster, what then happens? What
do you do as a result of that?
Mr Bott: We have gathered together
some of the obvious candidates in industry, we have gone out to
some of the start-ups that work on nanotechnology and pointed
out that if they apply their microfluidics and nanotechnology
skills to PCR or DNA analysis then they can actually end up with
new business opportunities. We will be launching in the New Year
a competition probably worth about £5 million or £6
million. We write the specification for what the Department of
Health wants in terms of machine or system and ask people to come
up with the way that they would develop those technologies. We
started off looking at the DNA analysis which is the gold standard
at the moment but it turns out that there are other ways by using
biomarkers where you have chemicals which attach to specific parts
of known diseases so that you can then detect them by spectrometry.
You can look at downsizing mass spectrometry to the micro scale.
There is a whole slue of technologies. We are not focussed on
one technology; we are focussed on the problem and explaining
the problem as coherently and as cogently as we can to the communities
so that they can come up with their potential answers to it. Then
we pay them or give them a grant to develop that technology and
then we test it against the Department of Health's success criteria.
Q538 Miss Kirkbride: So you actually
give them a grant to do that then?
Mr Gray: Yes.
Q539 Miss Kirkbride: What kind of
money might there be available?
Mr Gray: Our grants across the
board could go from £30,000 to, in some instances, £100
million type projects. There is a very, very broad range of grant
type offers. Typically on big projects our grant size is somewhere
around about £500,000. In small businesses, SBRIs, small
business type solutions, £50,000 can make a very, very big
difference. On some of the bigger things then you are talking
about much bigger sizes of money. The objective of the organisation
is to be very flexible and offer different types of mechanisms
to suit different types of businesses and different types of business
situations.
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