2 The UK innovation landscape
UK public-private funded research
centres
10. Research and Technology Organisations (RTOs)
is the term given to "specialised knowledge organisations
dedicated to the development and transfer of science and technology
to the benefit of the economy and society".[8]
A number of independent RTOs existing in the UK today can be traced
back to the Research Associations (RAs) of the 1920s-1940s, which
were set up to access Government funding from the then Department
of Scientific and Industrial Research and private funding from
industry. RTOs now "operate on both a commercial and not-for-profit
basis with a focus on more routine and commercially lucrative
laboratory and technical consultancy services, as a result of
gradual withdrawal of public funding from Research Associations".[9]
11. Bodies both inside and outside of Parliament
have been concerned about innovation and the transfer of science
for the benefit of the UK economy and society for a number of
yearsfor example, our predecessor Committee published a
report in 1994, The routes through which the science base is
translated into innovative and competitive technology.[10]
The UK began to explore an equivalent to the German Fraunhofer
model with Faraday Partnerships in the 1990s. This initiative
suffered from poor support from industry,[11]
a "piecemeal approach" and a "variety of governance
models".[12] Professor
Richard Brook, President of the Association of Independent Research
and Technology Organisations (AIRTO), explained to us that Faraday
Partnerships "started up in a very uneven way".[13]
He said that the Engineering and Physical Sciences Research Council
(EPSRC) provided some ring-fenced research money but the then
Department of Trade and Industry "did not find the budget
to provide what would be the core funding", and that when
the ring-fenced money was used up, the Faraday Partnerships had
to apply for peer-reviewed research grant funding "along
with everybody else".[14]
Professor Brook added: "as industry wanted to pull research
towards the applied end, the scores that were being obtained from
the peer review system progressively got less".[15]
This suggests that it became increasingly difficult for Faraday
Partnerships to access public money as they shifted towards carrying
out research that industry was more interested in paying for.
12. Rt Hon David Willetts MP, the Minister of State
for Universities and Science, acknowledged that one of the lessons
learnt from the experience of Faraday Partnerships was "that
you do need reliable core funding".[16]
Iain Gray, Chief Executive of the Technology Strategy Board (TSB),
also recognised that previous initiatives had not been focussed
enough and "money that was invested was perhaps spread too
widely, too thinly".[17]
One other point made by Mr Willetts was that "having a physical
centre with physical kit that is of particular value to SMEs [
]
at the core of the new centres is [also] quite important".[18]
13. We are reassured that both the Government
and the Technology Strategy Board (TSB) appear to have drawn on
history to identify the problems with previous initiatives, such
as the Faraday Partnerships.
Recent Government sponsored interventions
14. The Faraday Partnerships were replaced by the
"more limited knowledge exchange focussed activities of the
Knowledge Transfer Networks (KTNs) from 2004".[19]
KTNs are one of a number of core Government sponsored business
support interventions, managed by the TSB:
i. Collaborative Research and Development
(designed to assist the industrial and research communities to
work together on R&D projects in strategic areas);
ii. Knowledge Transfer Networks (national
networks, in specific fields of technology or business application,
which bring together people from businesses, universities, research,
finance and technology organisations in order to stimulate innovation);
iii. Knowledge Transfer Partnerships (the
placement of a high calibre, recently qualified individuals into
a business to work on innovation projects); and
iv. Small Business Research Initiative
(uses Government procurement to drive innovation by bringing innovative
solutions to specific public sector needs and engaging a broad
range of companies in competitions for ideas that result in short-term
development contracts).[20]
Existing centres in the UK
15. AIRTO explained that the UK network of applied
research centres currently comprised organisations based on a
range of business models:
Public Sector Research Establishments (e.g. National
Physical Laboratory).
University "spin offs" (e.g. Warwick Manufacturing
Group, Advanced Manufacturing Research Centre).
Independent Research and Technology Organisations
configured as companies limited by guarantee or charities, governed
by industry (e.g. Building Research Establishment, Campden BRI,
The Welding Institute).[21]
Privately owned, commercial research and development
organisations (e.g. QinetiQ, Cambridge Consultants, PA Technology).
Corporate research functions and laboratories (e.g.
Arup, Tata, IBM, GSK).[22]
16. In recent years, the Regional Development Agencies
(RDAs) have funded over 60 centres promoting regional economic
growth.[23] The RDAs
funded four types of centres:
i. Technology
push centresfor
example, the Printable Electronics Technology Centre;
ii. Industry demand
centresfor example, the Advanced
Manufacturing Research Centre;
iii. Centres to link
research and businessfor example,
the Knowledge Centre for Materials Chemistry; and
iv. Geographical
centresfor example, the Harwell
Science and Innovation Campus.[24]
17. Dr Tim Bradshaw, Head of Enterprise and Innovation
at the Confederation of British Industry (CBI), told us that many
existing centres in the UK were supported by RDA money. He explained
that "there is a danger, with the RDA money disappearing,
that some of the excellent centres that we've got working at the
moment will find themselves with the best staff wanting to leave".[25]
Dr Bradshaw added:
Their funding is likely to run out in March [...]
once you start to get that climate of uncertainty within those
organisations, you start to have problems. I urge the Government
to look at this and think about how we can make sure that those
centres remain stable in the short term.[26]
18. When we asked the Minister what could be done
to stabilise existing centres in the short-term, he replied: "we
are working flat out on what should happen to the assets and activities
for which RDAs have been responsible. There are some that could
become the core of a Technology Innovation Centre".[27]
19. We expect that some existing research centres
that are part funded by the Regional Development Agencies (RDAs)
may become a part of new Technology and Innovation Centres (TICs),
but many will not. There is a risk of losing much of the expertise
built up with public resources over recent years. The Government
should have, by now, set out further details of what will be done
to support existing centres that are losing RDA money in March
2011. The Government should ensure that in the short-term any
changes do not reduce the overall research and development spend
in the regions. In the long-term it should be the Government's
objective to increase the overall research and development spend
at both the regional and national level.
Coordination of existing UK capabilities
20. The Hauser Report highlighted that the
approach taken to date in the UK "does not currently have
clear prioritisation, long-term strategic vision, or coordination
at a national level".[28]
The Government acknowledged that "the mechanisms for identifying
the sectors or technologies which would benefit from such support
have had no formal role for [the TSB] despite its role to develop
and deliver a national technology strategy".[29]
Dr Bradshaw, from the CBI, considered that nobody "really
knows" what already existed in the UK, that is, "where
the potential centres are and what areas they are in".[30]
Dr Bradshaw highlighted that this was particularly a problem for
small and medium enterprises (SMEs):
SMEs, in particular, often do not know where the
best facilities are that they could go and tap into, where there
is research going on from which they can benefit and where there
is best practice from which they could learn. Part of setting
up the TIC model ought to be to try to work out a better model
of getting that information out to the community that might actually
want to use this.[31]
21. Dr David Bembo, who provided evidence to us on
behalf of the Association of University Research and Industry
Links (AURIL) and Universities UK, explained:
In carrying out a mapping exercise I think it might
be helpful to identify some of the existing centres, the existing
investments, which do and can work with industry from a university
base very successfully, which may not need to be augmented or
have their funding added to through this process, but which could
be catalogued and their presence and willingness to work with
industry could be better advertised to the private sector.[32]
22. Professor Brook, from AIRTO, indicated that it
was his understanding that the TSB intended to "understand
the map of capabilities" of what already exists against the
UK strategic needs. He added that "the TICs should fill in
and provide what is missing. It may well be that the main role
is to connect up a number of existing organisations in a hub-and-spoke
model[33] [
] more
effectively to the supply chain".[34]
23. Iain Gray told us that the TSB had identified
"a long list of nearly 100 centres around the UK" and
that there are probably a couple of dozen that are currently operating
at a "reasonably good regional, maybe even national, level"
but that the aim of the TICs programme was to identify six to
eight "that can operate on a world stage".[35]
24. It is imperative that TICs build on existing
centres and expertise. We found a lack of knowledge in the business
world regarding existing UK capabilities. In assessing potential
TICs, the TSB has already identified a list of nearly 100 centres
operating in the UK. We recommend that the TSB maintain a public
list in the form of an online catalogue of centres that are ready
and willing to work with business, in particular SMEs (small and
medium enterprises), in specific technology areas.
8 "About RTOs: Research and Technology Organisations",
European Association for Research and Technology Organisations
website, www.earto.eu/about-rtos Back
9
Ev 37 (Department for Business, Innovation and Skills), para 15 Back
10
Science and Technology Committee, First Report of Session 1993-94,
The routes through which the science base is translated into
innovative and competitive technology, HC 74-I Back
11
Ev 50 (Advanced Manufacturing Research Centre) Back
12
Ev 40 (Association of Independent Research and Technology Organisations),
para 2.8 Back
13
Q 43 Back
14
As above Back
15
As above Back
16
Q 119 Back
17
Q 82 Back
18
Q 119 Back
19
Ev 40 (Association of Independent Research and Technology Organisations),
para 2.8 Back
20
"Delivering Innovation", Technology Strategy Board
website, www.innovateuk.org Back
21
Others would include EA Technology Back
22
Ev 40 (Association of Independent Research and Technology Organisations) Back
23
Ev 37 (Department for Business, Innovation and Skills) Back
24
Ev 56 (Regional Development Agencies), paras 29-37 Back
25
Q 2 Back
26
Q 3 Back
27
Q 126 Back
28
Hauser Report, p 22 Back
29
Ev 37 (Department for Business, Innovation and Skills), para 18 Back
30
Q 4 Back
31
Q 27 Back
32
Q 4 Back
33
See paragraph 46 for a definition of the hub and spoke model. Back
34
Q 46 Back
35
Q 84 Back
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