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The need to support innovation and the translation of scientific advances and ideas into products for the benefit of the UK economy and society has long been recognised. Previous initiatives, including the Faraday Partnerships, have been unsuccessful. Both Government and the Technology Strategy Board (TSB) have assured us that they have learnt from history and the new Technology and Innovation Centres (TICs) will not repeat the mistakes of the past.
Initial signs are encouraging. The TICs initiative has been broadly welcomed by all who contributed to this inquiry and all recognise that it is imperative that TICs build on the existing expertise in research centres working on technology and innovation, many of which have been funded in part by the Regional Development Agencies.
The TSB will identify those existing centres in the UK that will become TICs. The primary criterion must be the quality of the science and the economic benefit to the UK.
We do not expect all TICs to carry out the full range of activities set out in the TSB's TICs prospectus. Each TIC should adapt to the needs of the sector it is supporting—by setting a clear vision, defining its objectives and outlining its method of operation—quickly and responsively. This should be developed in conjunction with business and academia. We are attracted to a hub and spoke model to spread the economic benefit of TICs throughout the UK, providing that a mechanism is put into place which clearly recognises and empowers the hubs to provide leadership to the spokes.
One of the problems with the Faraday Partnerships was the lack of reliable core funding. The promise of £200 million core funding over the next four years from the Government is an acceptable foundation for the TICs initiative in the current economic climate. It is important that the money is not spread too thinly and we consider that an initial target of six to eight centres to be sensible. However, the level of public funding should be reviewed regularly, in order to increase investment in areas where the results justify it. Beyond the medium term the Government should investigate an innovation endowment fund and it should seek a cross-party commitment that gives confidence to the TICs, business and investors.
Funding sources should also remain in balance and TICs should have a clear objective to follow the "one third, one third, one third" funding model, that is one third public funding, one third competitive public-private sector funding and the final third from private sector contracts. There should be a cap on the amount of private sector funding each TIC can access in a given year, as this will promote a more creative approach to innovation. We recognise that it may take some time to achieve, especially where Government funding is required to establish new centres that need to build a reputation with business. However, attaining and maintaining this funding model is a good measure of the performance of individual TICs in the medium to long term.
We are concerned by the possible effects of the TICs initiatives on the wider funding activities of the TSB. TSB grants will form a part of the funding for TICs and other centres through open competitions. While it is inevitable that TSB competitive grants will be in line with the priorities of TICs, it is important that the limited funds for innovation are not monopolised by the TICs. Funding for innovation must be available to those outside TICs, as their work may be the basis of TICs of the future.
One other concern was the lack of knowledge in the business world regarding existing UK capabilities. Businesses will benefit from an online catalogue, maintained by the TSB, of centres that are ready and willing to work with business, in particular SMEs, in specific technology areas.
We recommend that the network of TICs be called "Turing Centres", after the founder of computer science, Alan Turing. We consider that this country owes him a debt of obligation for the way in which he was treated. It is important, however, to remember that it will take time for TICs to build a reputation. The brand and reputation must be well managed by the TSB.
The TSB has made a good start in outlining the concept of TICs in its prospectus. We have made a number of recommendations based on the evidence we have received, which we hope will prove useful to the TSB as it produces a detailed strategy and implementation plan.
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