Written evidence submitted by the Institution
of Chemical Engineers (IChemE) (TIC 81)
ENQUIRY REMIT
1. What is the Fraunhofer model and would it be
applicable to the UK?
2. Are there existing Fraunhofer-type research
centres within the UK, and if so, are they effective?
3. What other models are there for research centres
oriented toward applications and results?
4. Whose role should it be to coordinate research
in a UK-wide network of innovation centres?
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?
INTRODUCTION
"Intermediate institutes", of which the
Fraunhofer institutes are perhaps the best-known but not the only
example, operate in many countries as a vital "bridge"
between the academic research and technology base and the commercial
world of industry and commerce. While varying in ownership, structure
and modes of operation, they perform an effective and highly regarded
role in many countries as part of the overall innovation system.
Within Europe, organisations such as TNO in the Netherlands and
VTT in Finland, along with Fraunhofer, have been widely studied
as models that could be of value elsewhere.
There are a number of aspects of the Fraunhofer Institutes
that make them successful, however, this does not necessarily
mean that the model can be easily replicated in the UK, The research
they carry out is generally demand led by specific market needs
whereas in the UK research tends to be led more by fundamental
research. They have had a significant length of time in which
to grow and cement their position and reputation within the academic
and business communities. Potential centres in the UK would need
to establish themselves much more quickly in an already crowded
research landscape both at home and abroad. But perhaps the most
important aspect is that of funding. The Fraunhofer Institutes
are heavily funded by both government and industry to the tune
of €1.6 billion per year, mostly through contract work, which
is considerably more that the £200 million over four years
being proposed in the UK. The funding of Fraunhofer Institutes
also tends to be over a much longer-term than in the UK where
grants only cover periods of around 3-5 years. This is critical
as it enables the institutes to recruit high calibre staff and
give them time to build their reputation.
Institutions of this type are poorly represented
in the UK, where traditionally a great deal of reliance is placed
on universities as drivers for the innovation process. Whilst
the UK's high quality university base makes an important contribution
to this end, over reliance can raise significant problems. Universities
are well placed to work with industry on genuine research and
development through to the application stage. However, the "cultural
gap" between academia and industry sometimes widens as the
work progresses through to an exploitation stage and this inhibits
effective collaboration at the pre-commercial phase. The incentives
applicable to university staff and research teams are seen by
many outside academic circles as being not conducive to the intermediate
role, since they focus primarily on research performance and publication
output as the basis of appointment, career progression and funding.
The environment within universities is seldom as "businesslike"
as industry would wish for pre-commercial research and development,
with practical concerns about confidentiality and intellectual
property management sometimes being raised. In addition, university
staff enjoy a good deal of latitude to pursue their personal research
interests (which often lies at the heart of innovation of course)
and this can detract from a focus on the needs of industrial partners,
who may have very specific views of how they wish to develop an
opportunity.
That said, there are many good examples of university-associated
institutes playing an important intermediate role. These include:
- Warwick Manufacturing Group.
- Rolls-Royce Defence Technology Centres.
- Surrey Space Centre.
- Advanced Manufacturing Research Centre at the
University of Sheffield.
- Cambridge Institute for Manufacturing.
In addition to the university based organisations
there are also Government facilities such as the National Physical
Laboratory, the STFC sponsored science and innovation campuses
at Daresbury and Harwell and industry based facilities with companies
such as QinetQ (although these are in serious decline).
However, such institutions necessarily adopt a different
ethos and employment terms to those which are the norm within
the university sector and this can lead in some circumstances
to tensions between the unit in question and the host university.
This suggests that there is a strong case to be made for intermediate
institutes that are complementary to, but separate from, universities.
Moreover, this need has been heightened following the decline
and closure of many corporate R&D centres. These centres often
involved staff who were comfortable dealing with academics engaged
in fundamental research and their disappearance has widened the
gap between academia and industry - as such, the need for a bridging
body is more pressing than before.
The working relationships between industry, business
and universities have improved significantly in recent years,
with many examples of successful exploitation through spin-outs,
licensing and collaborative R&D. However, the absence of a
significant network of "bridging institutes" between
academia and industry is seen by some as one of the factors at
the heart of the UK's well-known and long-lamented failure to
achieve a commercialisation and innovation performance commensurate
with the superb quality of our fundamental research base. If this
shortfall is to be redressed, intermediate institutes will play
a vital role.
These considerations were apparent at the beginning
of the millennium when the newly-formed Regional Development Agencies
sought to more fully exploit their regions' R&D and knowledge
assets in the interests of economic development. A further examination
of this process is useful in identifying common concerns and potential
solutions for innovation centres.
CENTRES OF
EXCELLENCE
The RDAs secured private sector consultancy support
in order to address this challenge. Typically the process included
a detailed and realistic analysis of each region's R&D assets,
a systematic strategy for innovation, and the creation of regional
Science & Industry Councils designed to achieve a coherent
view of needs and opportunities across industry and other partners
on a regional basis. In the particular case of North-East England,
a pressing need was identified to exploit some very specific knowledge
assets to help transform the economy of what at the time was a
severely disadvantaged region and one strongly dependent on the
petrochemical and process industries.
The measures proposed[133]
included the creation of a number intermediate institutes, termed
Centres of Excellence (CoEs). They were designed to "pioneer
an innovative new model for industry-science links in the UK"
and to "...address some of the difficulties encountered in
relation to industry-science links, partly reflecting the very
different cultures and reward systems that apply in industry and
in the science base - especially in universities." The concept
was described as follows:
In essence, a Centre of Excellence (CoE) is an association
of university, company and other R&D groups and associated
teams that derive benefit from working together. If one makes
a simple, albeit inadequate distinction between basic research,
strategic research, applied research and development, the focus
of the Centres will be primarily - but not exclusively - on the
strategic and applied areas rather than on basic research, which
might be best conducted in the universities, or on development
of specific products and processes in a way best handled within
a company. The Centres will provide a mechanism for 'proof-of-concept'
projects, i.e. further downstream than a university laboratory
project but not yet developed sufficiently to form the basis of
a full commercial investment proposition.
Projects within the Centres' programmes will typically
be conducted under a common project leadership and to an agreed
plan by directly-employed staff and by partners (such as universities
and companies), working in collaboration. The balance between
them will vary from Centre to Centre and from project to project.
An important aspect of the Centre's work will be to facilitate,
and where appropriate to manage, effective interfaces between
the R&D base and businesses within the relevant clusters and
beyond.
The Centres took account of a detailed analysis of
stakeholder expectations: a sample analysis is presented in modified
form in Appendix 1.
Several key success factors were identified that
are relevant to any potential UK initiative:
- The active involvement and support of companies
within the relevant clusters, based on recognition that the Centres
will benefit their business interests;
- The active involvement and support of the relevant
universities, based on conviction that the universities' own interests
are served by the successful development of the Centres;
- Effective support by the public sector, while
allowing autonomy of operation and fast decision-making;
- Access to a range of funding streams;
- Ability to accommodate a diversity of participants
and relationships, with some organisations highly dedicated to
a Centre while others have a more selective relationship with
it;
- Recognition externally for research excellence
and industry relevance; and
- Creation, through the Centres, of an efficient
and effective professional interface between the science base
and industry.
Preventing potential conflicts was also a key consideration:
- The CoE must not be perceived as competing for
profit with its own members/stakeholders - this points to each
CoE as a company limited by guarantee;
- Focus on right to use IP not on IP ownership;
- Distinguish use for research and use for
commercial gain, and avoid restricting universities' or
CoE's right to use IP in future research;
- IP ownership should normally rest with the lead
party responsible for its generation: CoE ownership may be appropriate
in some instances as a better alternative to messy joint ownership;
- Universities must be able to accrue credit for
CoE work (including if possible work done outside "university"
groups - eg via academic status for senior industry scientists,
where the latter have the required track record in terms of external
recognition, publications, etc); and
- Companies must have easy access to academic expertise
via a professionally managed interface, with guaranteed speedy
response - a gatekeeper, but one who opens the gate and helps
you through it, not one who gets in the way.
The Centre model was deliberately designed to accommodate
both directly-employed staff and groups from companies and universities
which could be hosted, physically or virtually, within the Centre.
The role of the Centre Chief Executive and his/her team would
be to marshal all of these groups around a common set of strategic
aims. The model is described in more detail in Appendix 2.
The model offered flexibility within an overall "family
likeness" taking into account
- Who is involved in a specific project, and who
leads;
- The extent to which participants draw on CoE
activities as distinct from just being located there;
- The mechanisms by which R&D is translated
into products, processes and wealth creation;
- The academic/industry balance;
- The balance between long term and short term
R&D; and
- The degree to which the CEO/core team manage
activity directly
The proposals were implemented by One NorthEast and
as intended, the Centres evolved in different ways appropriate
to their sector. Particular note should be taken of the New &
Renewable Energy Centre at Blyth (Narec), Northumberland, and
to the Centre for Process Innovation (CPI) on Teesside - recently
merged with the Centre of Excellence for Nano, Micro and Photonic
Systems (Cenamps). Both have proved extremely successful in building
up strong reputations, excellent links with industry, and in particular
attracting and retaining major national and international companies
within the UK, aided by access to both the physical facilities
and the expertise available through the Centres
CONCLUSIONS
This experience suggests that institutes of this
nature could play a central role in any future innovation system
in the UK. It is not the only model available but the features
listed above highlight issues that should be taken into account
when designing innovation centres for the UK. It is also helpful
to gain experience of working within the UK where the culture
within both industry and academia may be a barrier to adopting
other models from around the world.
Funding and governance arrangements are unlikely
to follow the Fraunhofer model exactly given that it is better
suited to an environment where substantial national and regional
public funding are available - pressures on public expenditure
dictate that this is unlikely to be the case in the UK for some
time to come. It is important that such centres are able to achieve
critical mass, both in business and academic activities, which
means that they should be few and large, not many and small, and
that they are given time to develop rather than being rushed into
too rapid a move to financial sustainability, as the latter would
drive an undesirable short-termism. They should focus on areas
where the UK has a distinctive and sustainable strength in a particular
sector, or at least a realistic opportunity of achieving and maintaining
one. Both assembly and process manufacturing falls squarely into
this category and the UK should build on existing centres, using
further funding to consolidate and further strengthen that position
and notwithstanding the loss of other sources of public support.
They should have access to research funding from
sources such as Research Councils, typically in collaboration
with universities. The relationship with universities and with
industry should be underpinned by the availability of joint appointments
both with universities (there is for example a precedent in this
with a CPI-sponsored chair at Newcastle University), and joint
appointments with major companies. It is extremely important that
these Centres are be able to collaborate well with industry and
universities. It is equally important that they do not duplicate/displace
existing centres or relationships, or be seen to be in competition
with universities (or other research organisations). There must
be a net gain in capability rather than any potential substitution
of a TIC, for, say existing established university-industry relations
or we may find that the innovation base is eroded.
Coordination should be led by the Technology Strategy
Board (TSB) as they are already well placed to carry out the function
of networking the centres. However, care should be taken to ensure
their role is to provide a strategic overview and enable innovation
through collaborations and not to add an unnecessary layer of
bureaucracy. IChemE believes that in this manner the strength
of the UK's fundamental research base can be more effectively
translated into innovation and commercial success.
ABOUT ICHEME
IChemE (Institution of Chemical Engineers) is the
hub for chemical, biochemical and process engineering professionals
worldwide. With a growing global membership of over 30,000, the
Institution is at the heart of the process community, promoting
competence and a commitment to best practice, advancing the discipline
for the benefit of society, encouraging young people in science
and engineering and supporting the professional development of
its members. For more information, visit www.icheme.org
Institution of Chemical Engineers (IChemE)
8 December 2010
APPENDIX 1
CENTRES OF EXCELLENCE - STAKEHOLDER EXPECTATIONS
INDUSTRY
- Access to resources (money)
- Access to facilities and expertise (people) eg
via:
- Cost effective access to facilities/expertise/knowledge
that would not be justified on a company stand-alone basis.
- No operational management (ie cost effective
outsourcing).
- Provision of a user friendly interface (Industry/Research).
- Enhance ability to attract "high calibre"
resource to the region.
- Enhanced competitive advantage, eg via improved
foresight, ability to spot and exploit business opportunities.
- In some cases, fulfilment of personal commitment
/ drive of company leaders.
- Raised company profile; ability to make a visible
contribution to the region/industry.
- Ability to influence/shape research activities
to respond to market needs/industry priorities.
- Graduate retention.
- For SMEs: reduced risk, access to services/facilities
that they could not afford themselves, access to good advice,
and increased chances of survival and growth.
ACADEMIA
- Finance - research funding and investment in
facilities.
- "Kudos" - ie for research-led universities,
REF credit. The CoE must enhance and not undermine success in
terms of REF ratings.
- Peer group recognition.
- CoE to have commercial/operating structure to
facilitate the above.
- Maintain access to IPR for future research, eg
via ownership. Implications of CoE must not "constrain"
ability to develop future research.
- Retain access to world-class facilities.
- Maintain ability to profit from IPR, eg via ownership.
- Improved commercial exploitation (CoE may offer
opportunity to follow higher risk strategy).
- Income from contract and consultancy activities
- Enhancement of, not a "drain" upon,
existing academic resources (people, funding, opportunities for
commercialisation, etc).
- Attract and retain talented staff.
- Opportunities for placements and secondments.
PUBLIC SECTOR
- Creation of high quality, sustainable, knowledge
based jobs.
- Deliver radical change to sector productivity
and competitiveness.
- Exploitation of science base via 3 routes.
- Technology transfer to existing companies.
- Provision of effective "route" for
new start-ups.
- Attract inward investment/establish new companies.
- Ability to attract and retain "high calibre"
people
- Effective utilisation/exploitation of UK science
& research base.
- Development of a new and effective model for
science/industry collaboration.
- Limited period of high public sector investment,
and limited or no long term continued core funding requirement.
- Avoid a public sector body assuming day to day
operational/financial responsibility.
- Improved innovation/R&D investment.
- Long term sustainable co-operation across public/private
sector interface.
APPENDIX 2
CENTRE FOR EXCELLENCE (COE) MODEL
The component groups of the CoE can include the following,
each gaining specific advantages from participation in the Centre
which are listed on the right:
| 1, 2, 3 are academic research teams
| — | Access to facilities
|
| — | Able to work side by side with company R&D teams
|
| — | Potential for enhanced funding
|
| — | Research capacity building
|
| — | Professional interface with industry and investors (not just those on-site)
|
| — | Shared services
|
| | |
|
| 4 and 5 are corporate R&D groups | —
| Access, formally and informally, to academic and other expert knowledge
|
| — | Access to shared facilities
|
| — | Potential for enhanced leverage from R&D funding, by using it to gain access to wider R&D programmes and expertise
|
| — | Research capacity building
|
| — | Professional interface with academia
|
| — | Staff can gain academically accredited qualifications
|
| — | Shared services
|
| | |
|
| 6 and 7 are standalone companies | —
| Co-located with key customers |
| These could be corporate or academic | —
| Expert scientific, technological and business advice/support readily on tap
|
| spin-offs; or service companies for | —
| Access to facilities beyond the means of an SME
|
| other participants on or off site | —
| Full incubation support if appropriate, or shared services
|
Components 8 and 9 are groups managed directly by the core
team. These could include:
- Analytical/measurement services (complementary to those in
universities and elsewhere).
- Common scientific or pilot plant facilities.
- Joint project teams with secondees from companies, universities
and others.
- Conference/seminar services.
- Training services.
- Technology transfer teams.
- Investment/exploitation services.
At the heart of the CoE are the CEO and core team, who:
- develop and implement a strategy for the centre as a whole,
involving all participants and based around technology platforms
of common relevance;
- promote and expand its role;
- initiate and co-ordinate collaborative proposals eg EU Framework,
national facilities, inward investment propositions;
- guide and facilitate "roof-of-concept" work;
- secure funding;
- manage joint projects;
- manage shared facilities;
- provide a professional academic-industry interface, through
understanding both "sides" in depth;
- understand and access financial and other resources for commercialisation;
- provide a "window on the future" for participants,
eg by undertaking or facilitating forecasting/foresight of technology
and related trends for companies; or by identifying and interpreting
emerging research themes and industry priorities for academic
and other researchers; and
- provide feedback to research providers on current and anticipated
market requirements.
133 "Realising the Potential of the North East's
Research Base", Arthur D Little Ltd, Report to OneNorthEast,
7 August 2001 Back
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