6 Assessing success
124. With £200 million being invested in Technology
and Innovation Centres (TICs), there will eventually be a need
to assess whether the centres have provided a good return on public
investment. The Technology Strategy Board (TSB) stated that:
Effectiveness must be when a centre enables economic
activity that far outweighs the public investment. Effectiveness
must be helping to stimulate a vibrant industry around the centres.
This is long-term and difficult to measure. The only near-term
measure can be the eagerness of industrial partners and customers
to invest time and money in the centres.[198]
In contrast, Pam Alexander, from the Regional Development
Agencies (RDAs), told us that the TSB and Government "need
to be very clearly setting the parameters within which they [TICs]
operate and what the success criteria are".[199]
Progress towards the three thirds
funding model
125. During our visit to Germany, we heard from the
Federal Ministry of Education and Research that Fraunhofer Institutes
were assessed, in part, by how much money they drew in from the
private sector. Dr Bradshaw, from the Confederation of British
Industry (CBI), agreed that "the amount of commercial income
they are bringing in" would be a good measure of success
for TICs. He added that another key criterion of success was whether
TICs were bringing in repeat business; which he saw as "a
mark of quality".[200]
126. In addition to using commercial income as a
marker for success, Professor Brook, from the Association of Independent
Research and Technology Organisations (AIRTO), added that it was
about broader progress towards the one third, one third, one third
model, including "how much the TICs are enabling industry
to recover from European programmes".[201]
Rt Hon David Willetts MP, the Minister of State for Universities
and Science, shared his view:
A good measure is the one that they use in Germany
of, "Is there a service that businesses are willing to pay
for?" The fact is that this third, third, third funding model
is a very good way in itself of monitoring performance and ensuring
that it's worthwhile, because if they are not getting specific
grants by research councils or others, and if they are not getting
businesses wanting to use the facilities and pay to use the facilities,
then there is a problem. But if they are getting those two flows
of funding in alongside the core funding, that, to me, is a pretty
encouraging sign that they are meeting a need.[202]
The Minister recognised, however, that TICs would
need to build a good reputation with business. As we noted earlier,
he said: "We have to be realistic. You could not expect [TICs]
to get to a third, third, third split in year one or year two".[203]
In contrast, Iain Gray felt that in the relatively short term
(12 months) businesses should be queuing up at the doors.[204]
127. Progress towards the "one third, one
third, one third" funding model may be slow, especially where
new centres are established 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. The "one third" of funding that
is drawn in from the private sector, in particular from repeat
business, will be key.
Additional measures of success
128. Professor Parker, from Rolls-Royce, emphasised
that "output focused metrics, not just activity metrics"
should be used to measure success.[205]
Dr Bradshaw, from the CBI, told us that patenting outputs could
be included, as well as "how much of their work has gone
through into commercialisation".[206]
He added that he "wouldn't look at things like academic publications
[…] so that the people involved are not feeling they need
to produce something for an [Research Assessment Exercise] equivalent.
It is focused on that commercial side."[207]
Pam Alexander, from the RDAs, and Professor Richard Brook, from
AIRTO agreed that interim measures of success could include output
in terms of patents and spin-out companies.[208]
Professor Brook explained:
I would probably also look at skills and what happens
to the people, because the TICs are potentially routes for people
to do a great apprenticeship in this intermediate commercial exploitation
business, and then to move out either to set up their own businesses
or to move into the industrial supply chain […] Secondments—the
ability to have mobility between the industrial partners, the
TIC and the academic sector—and the flow of people are some
of the things that I might look at to see whether they are being
done effectively.[209]
129. Professor Parker explained the four basic metrics
Rolls-Royce used to assess the success of its 28 University Technology
Centres:
- First, what did you deliver to the company
in the last year? We ask our own people on the staff, recognising
that there is a time frame in all of this, of the ideas and technology
that that centre has delivered in the past.
- [Second] What have we actually put into a product
this year? That might be a four or five-year lapse in itself.
- [Third] We ask them how many patents we've
got between us on the work done, and
- [Fourth] we ask how many people have actually
been recruited from those centres into the company.[210]
130. Iain Gray told us that "the success [of
TICs] is around the commercial exploitation [...] It is the number
of spin-out ideas that move forward into the marketplace that
will be the key litmus test to this".[211]
He added that there is a much broader question about how the benefit
of investment in innovation is measured:
A considerable piece of work has been done by NESTA
on the Innovation Index. We are looking in a much broader context
at how we measure the success when we might not see the success
for five, 10 or 15 years. The ultimate success is jobs, economic
benefit, inward investment, large corporations choosing to invest
in the UK that might not otherwise have done so, corporations
that currently exist in the UK continuing to keep their R&D
base here in the UK, and small companies that are here in the
UK growing into the next big FTSE 250, FTSE 100 businesses. Those
types of longer-term success criteria will be as associated with
TICs as they are with anything else.[212]
131. The Minister accepted that "we have to
be a bit patient on performance. A year or two down the track,
if we have not had some brilliant commercial success immediately
[…] it would be a pity if we were getting terribly impatient
with [the TICs]".[213]
132. There are a number of potential short to
medium term measures that can be used to show whether TICs are
working satisfactorily. The framework used by Rolls-Royce to assess
its own centres is typical of how a business will judge TICs.
Businesses will want TICs to prove that they are meeting their
needs. The best judge of this will be demand from businesses for
TICs' services, in particular, if they offer repeat business to
TICs. In the longer-term, innovation is notoriously difficult
to measure. As the Minister suggested, the Government and the
TSB must be patient in attempting to assess the success of TICs.
In the light of the long-term importance of this initiative and
of the need to make a convincing case to the Treasury for increasing
investment, we recommend that the Minister regularly report progress
to the House.
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