House of Commons - Science and Technology Committee

Technology and Innovation Centres - Science and Technology Committee Contents

Written evidence submitted by the Royal Society of Chemistry (TIC 47)

The Royal Society of Chemistry (RSC) welcomes the opportunity to respond to the Science and Technology Committee's consultation on Technology Innovation Centres.

The RSC is the largest organisation in Europe for advancing the chemical sciences. Supported by a network of 46,000 members worldwide and an internationally acclaimed publishing business, its activities span education and training, conferences and science policy, and the promotion of the chemical sciences to the public.

This document represents the views of the RSC. The RSC has a duty under its Royal Charter "to serve the public interest" by acting in an independent advisory capacity, and it is in this spirit that this submission is made.

1. What is the Fraunhofer model and would it be applicable to the UK?

1. The Fraunhofer Institutes are a network of independent, not-for-profit Technology Innovation Centres (TICs) in Germany. They operate with the aim of carrying out applied research for use by both public and private sector, developing technologies from the research stage until they are ready for market. This area is sometimes referred to as the intermediate sector due to the space that it occupies between basic research and commercialisation. This focus aims to drive areas of economic growth, as well as benefit wider society.[46] They are funded mainly through contract research; in 2009, approximately a third of their funding came in the form of base funding from the government. The remaining two-thirds is equally split between public contract research (Federal, regional government and EC) and private contract research (industry).[47]

2. This model has evolved to generate a network of institutions, which serve both industry and government by providing technological solutions and facilitating knowledge transfer. The Institutes are grouped into a series of Networks and Alliances under broad themes. The central seven areas are Information and Communication Technology, Life Sciences, Materials and Components, Microelectronics, Production, Lights and Surfaces and Defence and Security.[48] This system allows for collaboration on the basis of shared technological outputs, as opposed to the narrow confines of subject-driven research. The extensive internal reviewing of the Networks ensures that this structure is constantly revised, as the research landscape progresses. It also allows for the identification of gaps for the foundation of new institutions, in response to market growth areas.

3. This method of organisation is advantageous to industry, particularly in comparison to traditional industry-academia collaborations, as it ensures that customers have access to an entire network of researchers in their area of interest, rather than a single institution. The Institutes actively co-operate to provide solutions to large-scale projects. The contract research carried out for industry is of particular value to small and medium enterprises (SMEs) who form half of their industrial customer base.[49] The availability of this service is often critical for the growth of small companies who have limited internal research capability.

4. The Fraunhofer governance system involves a complex series of boards.[50] Ordinary membership is open to individuals and organisations that make up the Assembly of Members. The senior governance bodies contain representatives elected by the assembly, as well as representatives from the management boards of the institutes, federal and regional government. These bodies set the overall scientific and business agenda of the organisation autonomously, but they do take account of the role of the network in the national innovation framework.

5. The Fraunhofer Institutes follow a technology-focused model. Their approach of carrying out research "directly aimed at promoting industrial performance" enables businesses across a range of sectors to bring new technologies to market. This system could be applicable in the UK. The UK has a strong research base, yet falls short in terms of translating this into outputs of economic benefit.[51]

6. The Hauser report on "The Current and Future Role of Technology Innovation Centres" in the UK recommended that a network of TICs could be created to bridge this gap by carrying out research with the specific aim of generating economic benefit.[52] The role of SMEs has been recognised as essential in the growth of the UK economy.[53] A network of TICs would support the growth of SMEs by providing the expertise, research infrastructure and specialist knowledge that many small businesses may not have in-house. These types of specialist research centre will also play a pivotal role in meeting future skills challenges such as the low-carbon economy.[54]

2. Are there existing Fraunhofer-type research centres within the UK, and if so, are they effective?

7. The UK has a large number of Research and Technology Organisations (RTOs). Some of these were originally government-funded Research Associations, which evolved, as funding mechanisms changed. A number of these are now part of the Association of Independent Research and Technology Organisations (AIRTO). These organisations aim to provide the knowledge and skills to enable the development of new technologies. Like the Fraunhofer Institutes, RTOs serve both industry and government. A recent Oxford Economics report commissioned by AIRTO highlighted the economic benefits of RTOs within the intermediate sector.[55] The report highlighted the sector's ability to take research and transfer this to commercial applications, directly contributing £1.2 billion to UK GDP in 2006.

8. Some existing Technology Innovation Centres (TICs) in the UK follow a model similar to the Fraunhofer Institutes, focussing on specific sectors. For instance, the Centre for Process Innovation (CPI) is an organisation split into two main business units. One is the Sustainable Processing and Advance Manufacturing Centre (SUSPROC), which provides process solutions for industry. The second is the Printable Electronics Technology Centre (PETEC) which focuses on developing early stage research in this area into products for market.

9. Both units of the CPI, like the Fraunhofer Institutes, predominantly carry out contract-based research for industry. It has also benefited from significant government investment at both national and regional level to sustain growth. In 2009, PETEC was awarded £20 million from the Advanced Manufacturing Strategy and One North East Regional Development Agency. The CPI has been effective in delivering its vision to help "companies and universities who aim to develop and commercialise new products and processes".[56] Since, it's inception in 2004, it has established linkages with over 400 SMEs and attracted £473 million in private sector leveraged investment.[57]

10. In adapting the Fraunhofer model to the needs of the UK, the following issues regarding selection of technology areas need to be addressed:

Who will identify the technology areas?
How will the technology areas be identified?
How transparent will the process be by which the decisions are made and areas identified?

11. Identifying and concentrating on key national strengths to improve capabilities in these sectors is one option. The Hauser report has already identified a number of candidate areas of national strength for new TIC networks to focus on, such as regenerative medicine, plastic electronics and advanced manufacturing.

12. Innovative Manufacturing has also been highlighted as a priority area by the Chemistry Innovation Knowledge Transfer Network (CIKTN).[58] Knowledge Transfer Networks (KTNs) are a crucial tool in the delivery of the Technology Strategy Board's (TSB) innovation platforms.[59]

13. SUSPROC's focus on manufacturing is important in developing the UK's existing strength in this highly competitive market. Despite the recent financial downturn, the manufacturing sector is still one of the UK's key strengths.[60] A sector-by-sector analysis showed that the chemicals manufacturing sector is the second largest manufacturing exporter.[61] In 2007, this sector directly contributed £17 billion to the UK's GDP.[62] Of the six other manufacturing sub-sectors identified, four have been specifically identified as downstream industries where chemistry is necessary for their operation.

3. What other models are there for research centres oriented toward applications and results?

14. Other European TICs in Denmark, the Netherlands, Sweden and Norway have models which are similar to the German model of technology-focussed capability. However, unlike the Fraunhofer Institutes which host a range of organisations across different subject areas, these networks all place greater focus on areas of national strength and strategic economic importance.⁴

15. An alternative model is the challenge-driven model. This approach involves taking an overall challenge area and using a network of TICs to provide input at different stages. This methodology is particularly pertinent in addressing global challenges which will face society in the future. These overarching challenges will require an interdisciplinary approach and require an infrastructure to bring together researchers in different areas.

16. The RSC roadmap for the chemical sciences, Chemistry for Tomorrow's World, has identified seven key priority areas and the challenges in these areas which face society.[63] Chemistry has a vital role to play in solving these and is a key underpinning science in the interdisciplinary approach required to tackle these challenges.

17. The Telemedicine and Advanced Technology Research Centre in the US (funded by the Department of Defence) is an example of a group of research organisations set up with a challenge-driven focus. Their broad aims lie in the area of medical research and this is sub-divided into a range of portfolios. These portfolios include large share of research for the Department of Defence, as well as innovative basic research. The centre uses a network of other organisations to feed into their overall research programme.[64] The range of areas covered by the research centre and its partner institutions is extensive and whilst its primary function is to carry out research for the Department of Defence, much of their research has potential application in health research.

18. Challenge-driven TICs in the UK could be used to deliver the TSB's innovation platforms. As these are based upon specific societal challenges, TICs in these areas could offer a mechanism by which stakeholders in these areas could come together. They would also offer the infrastructure needed to implement technological advances to deal with these challenges. KTNs are vital in constructing networks of TICs to address the challenges identified in the innovation platforms.

19. A common factor between all of the TICs discussed is the strong branding that identifies these networks as leading research collaborators to both public and private sector. A strong brand across a network can stimulate cross-institute collaboration, further reinforcing the overall brand. The Hauser report recommended that any future UK network of TICs should carry a brand recognising a noteworthy UK contribution to the sciences.

4. Whose role should it be to coordinate research in a UK-wide network of innovation centres?

20. Coordination of research in an innovation network is important in ensuring that TICs are effectively integrated into the national innovation system. The Hauser report found that a weakness of the current UK system is the lack of formal coordination between organisations. It recommended that the TSB should be charged with setting up a management board to oversee the activities of all TICs across the UK and devise future strategies for the network. Following the recent announcement of a £200 million investment in a future UK network of TICs, the TSB is in the process of formulating a strategy for this network.

21. In creating a strategy, the scale, purpose and evaluation of the system needs to be examined:

Is the £200 million over four years proposed by the government sufficient for the number of centres proposed?
What criteria will be used to evaluate the network?
Is the four year framework proposed by the government a suitable timescale?
If TICs are to be effective, should the framework not be significantly longer than 4 years?

22. The question of funding is dependent on a number of other factors, such as whether these networks will incorporate existing centres or involve the creation of new centres, thus requiring greater capital expenditure. In determining whether a four-year timescale is appropriate, the evaluation of these networks needs to be explored. Four years may be sufficient to foster initial links between centres and commence research programmes. However, as outlined the Hauser report, a time scale of 3-5 years to achieve commercial viability is too short.

23. The structure for coordinating these networks needs to incorporate a mechanism whereby the input of all stakeholders, including government, academia, research councils and industry can be included. The RSC agrees that the TSB is well-placed to coordinate a UK-wide innovation network. Their Knowledge Transfer Networks (KTNs) can bring together the stakeholders in different technology areas. They are an ideal tool for extending current collaborative networks, as well as ensuring that new networks incorporate the correct means to deliver innovative solutions. In creating new networks, consideration needs to be given to the location of any new centres:

Will there be a regional strategy to locate TICs?
In the absence of Regional Development Agencies (RDAs), will the networks focus on geographic areas of existing excellence?
Will the networks create new geographic areas of excellence?

24. CIKTN currently supports a range of collaborative projects; it is a partner in the Knowledge Centre for Materials Chemistry.[65] The KCMC is a "virtual centre of expertise" and brings together a number of establishments in the North-West "to drive product innovation in the chemistry-using industries by the application of materials chemistry". To date, the centre has worked on a range of projects to help deliver solutions for industry, including fuel cells and semiconductors. The success of this existing system can be used to realize a national network of innovation centres that feed into an overall framework.

5. What effect would the introduction of Fraunhofer-type institutes have on the work of Public Sector Research Establishments and other existing research centres that undertake Government sponsored research?

25. Creation of new institutes will provide current Public Sector Research Establishments (PSREs) with new bodies to collaborate with. The core objectives of PSREs and TICs vary slightly. PSREs are concerned with government research in the interests of informing government policy and exploring key areas of research in relation to national strategy.[66] Whilst some outcomes from research in these environments do reach the commercialisation stage, this is not the core aim of these institutions. In the case of TICs, their main aim is to take research and translate this into technology for the market.

26. In creating a new elite network of research centres, the role of existing centres needs to be taken into consideration.

Should existing research centres remain separate from the new networks?
If not, how will their work be coordinated with the new networks?

27. It is essential that the knowledge base in existing PSREs is taken into account when formulating new innovation networks. An integrated system that incorporates all stakeholders, including PSREs, industry and academia will be key to advancing innovation. The KTNs are ideally placed to facilitate this. Their role in bringing together industry, academia and government is important in ensuring a cohesive innovation strategy.

The Royal Society of Chemistry

2 December 2010

46 Profile of the Fraunhofer-Gesellschaft Back

47 Fraunhofer-Gesellsaft Annual Report, 2009 Back

48 Structure and Organization - Fraunhofer-Gesellschaft Back

49 International Comparison of Five Institute Systems - T. Astrom, M. Eriksson, L. Niklasson, E. Arnold, December 2008 Back

50 Statute of the Fraunher-Gesellschaft, Revised 2003 Back

51 A Vision for UK Research - Council for Science and Technology, March 2010 Back

52 The Current and Future Role of Technology and Innovation Centres in the UK, H. Hauser, March 2010 Back

53 Backing Small Business, BIS, November 2010 Back

54 RSC Response to Meeting the Low Carbon Skills Challenge, June 2010 Back

55 Study of the Impact of the Intermediate Research and Technology Sector on the UK Economy, Oxford Economics, May 2008 Back