Written evidence submitted by Sciovis
Ltd (TIC 75)
The Government has a desire to invest in key technology
areas that are relevant to future UK societal objectives in areas
such as sustainable healthcare, a low-carbon economy and a secure
society, supported by new strategies in information processing.
To meet such goals, it is essential that the UK makes the best
use of its innovative skills, especially in areas which will lead
to wealth creation through processes of product and market growth.
Traditionally, the UK has relied on its Universities
as a source of new science and technologies (S&T), although
it is recognised that small medium enterprises (SMEs) also play
a key role in the invention and innovation process. But there
has always been a challenge in translating that S&T base into
new products, which provide the seed-corn of economic growth.
Whilst the Universities have moved forward considerably in recent
years in their efforts to exploit their research activities, the
exploitation of the underlying intellectual capital has been less
successful than in other nations. In the USA, for example, the
exploitation process is enabled to a considerable extent by the
US Government's Small Business Innovation Research (SBIR) and
Small Business Technology Transfer (STTR) programme, which provides
an annual funding pool of about $2.5B under the terms of the Small
Business Research and Development Enhancement Act. The process
is supported by the network of National Laboratories which provide
small businesses with access to technical facilities, well beyond
the capabilities of any emerging enterprise in its initial growth
phase. The US Department of Defense also supports an advanced
Manufacturing Technology (ManTech) program, to ensure that technologies
and processes are exploited on an affordable, timely and sustainable
basis.
Other nations have different approaches, but very
often rely on Research Institutes to bridge the gap between academic
research and its exploitation in new products. In Germany, for
example, the Fraunhofer model for enabling applied research provides
some key features that would be of benefit if pursued in the UK.
The 59 Fraunhofer Institutes provide the basis for
the coordination of activity across a diverse set of activities,
ranging from Molecular Biology to Transport and Infrastructure
Systems. They do not replace the role of Universities, but focus
on the application of technology towards meeting society's priorities.
The Fraunhofer Institutes receive about one-third of their income
from Federal and State grants, which is used to refresh capital
facilities, maintain infrastructure and fund preparatory research.
The remainder of their income is won through contracts with industry
and government in selected areas of activity. To date about 150
companies have been spun-off from Fraunhofer Institutes, whilst
a number of others have benefited from being able to access their
facilities and the expertise of their scientists and technologists.
There are other examples in Europe. In Belgium, IMEC
has grown into one of the world's leading microelectronics research
centres with major companies such as Intel and Samsung among its
core technology partners. TNO was set up in Holland to provide
companies and governments with objective, scientifically-based
advice across a wide area of activity, including defence. Indeed,
on an International basis, there are many other examples of such
independent research institutes addressing applied research, including
Battelle, SRI and SAIC in the USA. Of these SRI is particularly
relevant because it has created about 40 new commercial ventures,
capitalising on technology originally developed within its not-for-profit
core business.
Virtually all of these Institutes operate on the
basis of a not-for-profit business model and return operating
surpluses back into their capital asset and human resource base.
Where their activities result in commercially exploitable work
outside their existing customer base, they will generally form
a new company to support that exploitation, to avoid any penalty
arising from charges relating to the higher overhead costs of
the parent Institute. The research process per se is not
capable of generating a high profit margin and even for large
industries the associated costs are borne as a charge on product
divisions.
The UK has in the past explored different approaches
towards wealth creation. A notable failure has been in the case
of AEA Technology, which is now a shadow of its former self and
no longer able to compete on the international scene in the important
area of atomic energy. Arguably another failure has been QinetiQ,
which has pursued a business model for growth and wealth creation
based on acquisition rather than growth and exploitation of its
underlying intellectual capital. Currently the company is choosing
to divest itself of its Emerging Technologies Group, which contains
the few remaining components of the extensive facilities and knowledge
base built up at Malvern over several decades by MoD to develop
advanced electronic and photonic technologies.
In my role as Research Director of MoD's Electro-Magnetic
Remote Sensing Defence Technology Centre (EMRS DTC), I have directed
the funding of research activities across academia, SMEs, Research
Centres and manufacturing industry. There have been some cases
where University research groups have failed to meet their research
objectives, let alone generated exploitable concepts. This is
partly because the Universities have success criteria based on
publishing new work rather than spinning-off new products. In
general their research teams are not always well-suited to address
product development, which is the critical gap that needs to be
addressed if the UK is to be able to exploit its intellectual
capital.
On the basis of my experience in interacting with
a number of different organisations over many years, including
DARPA in the USA, I can see considerable benefit in the UK forming
a well-coordinated network of Technology Innovation Centres addressing
applied research. This would provide a focus for the incubation
and development of new ideas and innovation in a stimulating environment
by bringing together frontier researchers, technologists, industrialists
and entrepreneurs.
The arguments for such a network have already been
presented in the recent Hauser Report. There are already some
centres in the UK that could be considered for the basis of such
a network. Indeed QinetiQ's Emerging Technologies Group at Malvern
could potentially provide the basis of a centre focussing on electronic
and photonic technologies underpinning advanced information processing
techniques, a low-carbon economy and a secure society. It already
has established links with key Universities, notably Warwick,
Lancaster, Birmingham, Oxford, Imperial College and Bristol, as
well as industrial partners such as Intel, Hewlett Packard, Oclara
and Sharp.
I would suggest that the Technology Strategy Board
would be best placed to coordinate activity at such Technology
Innovation Centres, supported by existing Knowledge Transfer
Networks in key areas of market requirement.
Professor Keith Lewis
Director
Sciovis Ltd
6 December 2010
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