House of Commons - Technology and Innovation Centres - Science and Technology Committee

Technology and Innovation Centres - Science and Technology Committee Contents

3 The role of a Technology and Innovation Centre

Managing expectations

25. The Government told us that the role of the Technology and Innovation Centres (TICs) would be "to support business activity focused on the development and commercialisation of new technologies that originate in the research base and for which there is business demand".[36] This will be achieved through:

conducting in house R&D [research and development];
providing access to skills and equipment which might not otherwise be within their reach;
helping to scale up manufacturing processes and producing technology demonstrators;
helping to develop value and supply chains;
informing businesses about the potential of new technologies; and
helping early-stage SMEs [small and medium enterprises].[37]

26. Iain Gray, from the Technology Strategy Board (TSB), explained that the TIC was quite a "specific concept". It is a physical centre which may be co-located at more than one location.[38] He explained that "the concept of a Technology Innovation Centre [...] is to provide funding into something that can provide longevity in terms of world-leading skills and world-leading equipment and that provides capability to which smaller companies can't otherwise afford access".[39] Mr Gray added that other centres, which were not TICs, would continue to exist and fulfil their own specific roles. He cited as an example "Innovation Knowledge Centres, which are focused more at the science and research end, working with universities".[40]

27. The TSB described what a TIC would do in more detail in its prospectus. A TIC would:

provide businesses with access to world-leading technology and expertise;
reach into the knowledge base for world-leading science and engineering;
be able to undertake collaborative applied research projects with business;
be able to undertake contract research for business;
be strongly business-focused with a highly professional delivery ethos;
create a critical mass of activity between business and the knowledge base; and
provide skills development at all levels.[41]

28. The TSB's prospectus also states a desire for TICs to "attract work from a wide cross section of businesses ranging from multinationals to small businesses".[42] Iain Gray confirmed that SMEs are "at the very heart of" TSB thinking in terms of how to provide a facility with equipment and skills that SMEs can access.[43] We welcome the assurance from the TSB that SMEs are at the very heart of TSB deliberations on TICs in terms of how to provide facilities with equipment and skills that SMEs can access.

29. Dr Tim Bradshaw, from the Confederation of British Industry (CBI), noted that "the critical thing that [TICs] shouldn't do is to be involved in teaching basic research, policy development and things like that".[44] Professor Ric Parker, Director of Research and Technology at Rolls-Royce, agreed, stating that TICs should not be set up as teaching and skills centres. He explained that "if the centres are working well they will generate the skills by default".[45]

TECHNOLOGY PUSH VERSUS MARKET PULL

30. Technology Readiness Levels (TRLs) are a technology management tool that provide a measurement to assess the maturity of evolving technology.[46] The Government told us that TICs will "primarily operate at TRLs 4 to 7, bridging research and technology commercialisation and de-risking this process for business".[47]

Figure: Technology Readiness Levels[48]

31. Iain Gray told us that, in terms of TSB's overall strategy, "over the last three years, we have worked consistently towards more of a pull [with] the emphasis [on] commercialisation and looking at it from a business pull perspective".[49] However, he noted that approximately 80% of the TSB's existing collaborative R&D programmes had involved universities to some degree.[50]

32. Patrick Reeve, from the British Private Equity and Venture Capital Association (BVCA), suggested that there was an important role for universities to play in relation to TICs. He explained the idea of TICs being "a nexus":

universities [would] use it as a tool for increasing commercialisation of their early-stage proof-of-concept research, and [...] commerce [would use it] as a testing ground and a source ground [...] of new ideas for business areas.[51]

33. The need for a combination of technology push from the research base and market pull from business was also expressed by AIRTO and the Centre for Process Innovation Ltd (CPI).[52]

34. The benefits of a technology push model were highlighted in a written submission by Icon Medical Technology Development, a global consulting company, as the process by which innovation can occur in its "highest impact mode", that is, with the development of "disruptive" new ground-breaking technologies, rather than incremental improvement to existing ones.[53]

35. Others, for example the Advanced Manufacturing Research Centre (AMRC), considered that the emphasis of TICs should be more on market pull. This was a view shared by the CBI; Dr Tim Bradshaw expected the TICs to operate closer to market.[54] He explained that "the focus [of TICs] ought to be on development, demonstration, pull through to commercialisation and all the things that are required around that space".[55] The Judge Business School, University of Cambridge—which has been working on a project to examine how academic research in the physical sciences could be commercialised more effectively—also took the view that TICs should be commercially driven.[56]

36. We found not only when we visited Germany but more widely that the Fraunhofer Institutes were seen as straddling effectively the gap between universities and business. However, the Manchester Institute of Innovation Research (MIoIR), Manchester Business School told us:

the Fraunhofer institutes do not so much transfer knowledge from university to industry [...] Rather, Fraunhofer institutes generate relevant application-oriented knowledge themselves on demand from their clients. While this may often be strongly linked to research in universities (many leading scientists at Fraunhofer institutes are active also in universities), it nevertheless constitutes a knowledge creation sub-system of its own.[57]

MIoIR suggested that the Fraunhofer model only worked in areas with clear industrial demand, a willingness to pay and an ability to absorb advanced technological knowledge. Furthermore, Fraunhofer Institutes tended, in MIoIR's view, to reinforce industrial strengths rather than build up entire new technologies; they transferred knowledge from the university science base only very indirectly.[58] MIoIR implied that they work more on a market pull than technology push model.

ARTICULATING A CLEAR VISION

37. Given the breadth of activities and objectives, set out in paragraph 27, in which a TIC could be involved, there is the potential for the centres to mean very different things to different people. Durham University told us:

The TICs need to determine whether they wish to focus on a bilateral relationship with industry, occasionally using university research groups as partners and using joint university-TIC positions to provide strong collaborative links or to focus on providing the bridge between university research and industry. The two processes and activities are very different and the funding models therefore need to differ. In the former model, a funding structure not hugely dissimilar to that operated by the TSB would work well [...] In the latter, early stage venture funding must play a role as industry is loath to invest significantly in technologies at readiness level [TRL] 4. Most importantly, the TICs must not try and fulfil both functions using a single funding methodology.[59]

We will return to funding issues later in this report. However, it is clear that in order to avoid confusion a clear description of the exact role of TICs must be determined. University College London (UCL), in its written memorandum, summarised the issue succinctly:

If for example the principal role of the TIC is to develop technology that supports external businesses and enhances their competitiveness then that suggests a heavy bias toward a service provision for industry. If however there is a strong desire to commercialise/exploit intellectual property to generate new products then this would suggest a different balance of developmental/translational research vs contract research and service provision.[60]

38. The same approach may not fit every sector. As the Russell Group explained, "different TICs may [...] need to adopt different approaches or mixes of activities, depending on the area of technology [each TIC] covers—a one size fits all approach will not be appropriate".[61] The TSB itself recognises this and told us: "every technology area and market operates in a slightly different way and therefore the best approach for a centre to help address the barriers to adoption of new technologies by business will be different in each area".[62]

39. The AMRC attributed much of its success as a centre to its "clear vision".[63] Professor Nigel Perry, Chief Executive of CPI, agreed, stating that centres need "a constant strategic vision".[64]

40. In his evidence to us, Iain Gray quickly emphasised that the planned network of TICs was merely one tool in TSB's innovation toolbox:

The Technology Innovation Centres initiative is not an initiative that sits over in right field on its own. It's very much part of an integrated landscape. It is one of the tools that has been identified as being a gap in that landscape. It sits alongside tools like collaborative R&D funding, public sector/private sector funding into joint collaborative R&D proposals, Government procurement tools, particularly tools like SBRI, the Small Business Research Initiative, and other tools like Knowledge Transfer Partnerships and Knowledge Transfer Networks.[65]

41. We expect the method of operation of each TIC will adapt to, and therefore vary, to meet the needs of the sector it is supporting. For example, TICs operating in sectors which focus on service provision for a particular industry may operate at higher Technology Readiness Levels than others. The key issue is that each TIC will need to make the best use of existing resources in the sector. It follows that the work carried out in a TIC should reflect both the history of research in the sector it serves as well as an assessment of future demand within that sector.

42. We welcome the list of activities and objectives the TSB has set for TICs in its prospectus. However, it is not reasonable to expect all TICs to carry out the full range of activities. 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. Furthermore, for the purpose of clarity, each TIC should set out the specific activities it will, and indeed will not, engage in.

The regional agenda

43. In the past, the nine Regional Development Agencies (RDAs) and the three Devolved Administrations (DAs) have selected innovation priorities, with the advice of their Science and Industry Councils within each area.[66] The priorities of each are set out in Annex 2.[67]

44. The RDAs told us:

The location of TICs will be critical as TICs will build relationships with organisations at different spatial levels. While all the TICs will need to develop an international reputation, they will also need to work with local organisations, including small and medium enterprises (SMEs) and local authorities, and across the UK with relevant businesses, universities and public bodies. A hub and spoke model is likely to be of most benefit to achieve this.[68]

45. Others took a different view. Imperial College London considered that "a national TIC strategy should not be used as an instrument of social policy. A regionally focused approach will dilute funding and is unlikely to ensure that TIC locations will resonate with industrial need."[69] Others, such as Birmingham City University, advocated regional institutes concentrating on two or three key areas of regional strength.[70]

THE HUB AND SPOKE MODEL

46. The RDAs have used a "hub and spoke" approach to existing centres. This combines a strong hub as the focus for new activity, with relevant research spokes across the UK. These links operate in both directions, with spokes offering an access point to the hub for local businesses, particularly SMEs, across the UK. This helps to include all areas of the country in Government investment.[71] Pam Alexander, Chief Executive of the South-East England Development Agency (SEEDA), explained that "we need to create hubs and spokes [...] that make the best of all of the resources that we have [...] we should focus on the hubs that are the Technology Innovation Centres, but have them very well networked into centres of excellence across the country".[72] She added that this model worked well with renewable energy in the north-east linked to opportunities in the south-west and Daresbury, which was well connected to Harwell.[73]

47. When we asked Rt Hon David Willetts MP, the Minister of State for Universities and Science, whether a TIC could have multiple locations, he replied that he had discussed the hub and spoke model with the TSB and that, while it might not be an appropriate model for every TIC, they seemed to be "strongly attracted" to it.[74] The Minister added that the key criterion for identifying the location of TICs had to be excellence.[75] He told us:

I don't think that we or the TSB can plan this as an arm of regional policy. I very much hope, especially with this hub and spoke model and the Knowledge Transfer Networks that the TSB have, that the benefits of these [centres] reach out across the UK as a whole.[76]

Iain Gray also confirmed "there is not a regional allocation aspect to [TSB's] agenda".[77]

48. Other organisations, such as the National Nuclear Laboratory and the University of Manchester's Dalton Nuclear Institute favoured the hub and spoke model.[78] The National Composites Centre (NCC) supported a hub and spoke model "where a number of current centres work in the same topic area".[79] To us this implies that newly built centres for which there is no current UK capability may be less likely to benefit from the hub and spoke model. The NCC advised that "it needs to be clear which centre is the hub, and it [the hub] should be empowered through funding control and other means, to ensure it can operate this way and provide overall leadership of the cluster".[80]

49. Other organisations were against the hub and spoke model. Durham University, for example, described this "inadequate" model as "suffer[ing] from poor and slow communication [...] unfit for the necessary rate of communication across science and technology areas, and the rapid building and reforming of multidisciplinary teams that the emerging science based technologies demand".[81]

LOCAL ENTERPRISE PARTNERSHIPS

50. The successors to the RDAs will be the Local Enterprise Partnerships (LEPs). In the past, the RDAs played a role in funding research and innovation. We asked the Minister to clarify what role the new LEPs would play in relation to TICs. He told us:

The TICs are national centres, but I hope one thing that LEPs will bear in mind, if it is an activity in which a particular area is strong at, is that they are absolutely candidates for having a peripheral operation or getting plugged into the Technology Innovation Centre in some way. We think the initiative for that will lie with the Local Economic Partnerships.[82]

51. We wished to establish whether, as a consequence of RDAs being replaced with LEPs, the DAs would have an advantage in determining regional innovation priorities and the location of the TICs. Iain Gray told us that the TSB has "put in place a process that we believe engages business across the UK. It engages trade organisations across the UK that have different regional aspects. I believe that we are getting the right regional input into our decision-making process".[83]

52. We appreciate that in locating the TICs the TSB and the Government must be careful not to compromise economic objectives. In an ideal world, there would be a good regional spread of centres, but this may not happen. The primary objective—when the TSB identifies which existing centres in the UK will become TICs—must be the quality of the science and the economic benefit to the UK. We consider that a hub and spoke model is useful in connecting existing centres working on similar areas, across the country. This model will be a good way to spread the economic benefit of TICs throughout the UK. Where the hub and spoke model is used, we would like the TSB to put into place a mechanism by which the hubs are clearly recognised and empowered so that they can provide leadership to the spokes. Where existing capabilities do not exist and new centres are required, it may be more appropriate for the TSB to consider regional strengths as set out in the regional innovation priorities table (see Annex 2).

Identifying candidate areas

53. The TSB's TICs prospectus draws on the Hauser and Dyson reports in identifying the criteria that potential centres will need to meet, in order to become a TIC and secure funding. These criteria are that:

the potential global markets which could be accessed through the centre are predicted to be worth billions of pounds per annum;
the UK has world-leading research capability;
UK business has the ability to exploit the technology and make use of increased investment to capture a significant share of the value chain and embed the activity in the UK;
technology and innovation centres can enable the UK to attract and anchor the knowledge intensive activities of globally mobile companies and secure sustainable wealth creation for the UK; and
technology and innovation centres should be closely aligned with, and essential to achieve, national strategic priorities.[84]

54. Based on these criteria, the TSB expects to assess proposals for potential centres. In the first phase for centres coming into existence in 2011-12 (a second phase of centres is planned for 2012-13) the TSB proposes to select up to three or four centres from an initial list of six candidate areas:

i. High value manufacturing;

ii. Energy and resource efficiency;

iii. Transport systems;

iv. Healthcare;

v. ICT; and

vi. Electronics, photonics and electrical systems.[85]

55. The TSB has acknowledged that the list represents six very broad areas and it would expect the majority of centres to have a tighter technical focus and definition within, or across, these broad areas. It is also possible that some areas may warrant more than one centre.[86] Iain Gray explained that this list of six candidate areas was not definitive. Whilst the areas aligned with the TSB's priorities, Mr Gray told us that the TSB was seeking views from the business world on these areas.[87] The TSB was, however, seeking to fast track a centre in the area of high value manufacturing.[88]

56. There was broad agreement amongst the witnesses that appeared before us on the criteria used to assess potential centres and identify candidate areas. Professor Ridgway, from the AMRC, considered that it was important to concentrate on "industries that can actually produce results";[89] Pam Alexander, from the RDAs, added that we should look to areas where "we have the industry that is ready and willing to take those opportunities and exploit them";[90] Professor Brook, from AIRTO, was of the view that it would be useful to "follow the model that you are investing in a company […] the process of defining markets, the route to market, strengths, weaknesses and competitive edge";[91] and Professor Perry, from the CPI, summarised that:

The critical importance here is the potential impact on the UK […] That will be in one of three areas: an area where there is existing economic activity, but innovation is required and needs to be supported by industry to get to an inward investment position or to support existing companies; a technology area that promises great potential, which has started to be exploited, but needs to be kicked that little bit further to get it there; or the difficult area of technologies that are still coming, but do not have any economic activity around them.[92]

57. When we asked Mr Gray whether the Government was imposing a view on which candidate areas to invest in, he told us:

Government has had a view in terms of its work with business on things like the innovation growth teams, and the Chief Scientific Advisers have a view in terms of future priorities. Our business works with Government to try and understand what the future priorities are. So Government is involved in an interactive way right through this process […] Our strategy […] will be […] signed off, by the appropriate Minister in BIS.[93]

58. The University of Lancaster highlighted, in its written memorandum to us, that the Government Chief Scientific Adviser had recently taken a view on future priorities in the Foresight report, Technology and Innovation Futures: UK Growth Opportunities for the 2020s.[94] This report identifies no less than 53 individual technologies which can be readily grouped into 28 clusters.

59. The Minister explained to us that, much in line with the criteria drawn from the Hauser and Dyson reports, the candidate areas "should be areas where there are big global markets, where we already have a strong research capability in Britain and where we believe that British business has the capacity to exploit the technology [but] it will be for the experts in the TSB to listen to the business and research communities that put forward proposals for specific Technology Innovation Centres in specific sectors".[95]

60. We do not comment on the candidate areas identified by the TSB, nor has the Government. We simply encourage the TSB to consult widely and transparently with industry and academia to ensure that the chosen candidate areas are the correct priorities.

36 Ev 37, para 5 Back

37 As above Back

38 Q 87 Back

39 Q 88 Back

40 Q 87 Back

41 Technology Strategy Board, Technology and Innovation Centres: a prospectus, January 2011, p 5 Back

42 Technology Strategy Board, Technology and Innovation Centres: a prospectus, January 2011, p 4 Back

43 Q 98 Back

44 Q 10 Back

45 As above Back

46 A full definition of TRLs is given in Annex 1 to this Report. Back

47 Ev 37, para 4 Back