Technology and Innovation Centres - Science and Technology Committee Contents

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 years—for 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 centres—for example, the Printable Electronics Technology Centre;

ii.  Industry demand centres—for example, the Advanced Manufacturing Research Centre;

iii.  Centres to link research and business—for example, the Knowledge Centre for Materials Chemistry; and

iv.  Geographical centres—for 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, 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, 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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Prepared 17 February 2011