Technology Innovation Centres

Written evidence submitted by the National Composites Centre (NCC) (TIC 49)

Technology Innovation Centres

Introduction

1. The National Composites Centre (NCC) welcomes the opportunity to submit evidence to the select committee enquiry on the use of the Fraunhofer model for the creation of Technology and Innovation Centres in the UK. Launched as a result of the UK Composites Strategy, published by the Department of Business Innovation and Skills (BIS) in November 2009, the NCC is presently under construction. The NCC supports the key messages of the Hauser and Dyson reports on technology and innovation centres. The NCC believes that it is critical for UK industry, that TICs are created to facilitate the commercialisation of University research outputs for maximum economic impact.

2. As defined today, the NCC’s remit is to provide industrial customers with access to expert resources and state of the art composite manufacturing fa cilities at an industrial scale. The NCC will develop new technology based design solutions and rapid manufacturing processes, and be capable of building prototypes and validating concepts. It will be the hub of the UK ’s effort to develop and implement rapid composite manufacturing technologies and systems. The NCC will lead the co-ordination of a strengthened network of pre-existing regional centres of comp osites excellence, and partner with other related technology centres in cognate fields. It will provide direction and focus for engaging industry with fundamental research and building collaborative links with UK universities. The Centre is tasked to contribute to the develop ment and co-ordination of training to support the skills base necessary for applying advanced and specialist composite technologies. As such the NCC’s stated objectives are broadly aligned with the Fraunhofer model of engaging the research base with industrial needs.

3. The NCC is owned by the University of Bristol and operated on behalf of UK industry in delivery of the strategy. Its activities are overseen by an industry-led Steering Board. The present contribution has been prepared by the NCC Steering Board with input from AgustaWestland, Airbus, GE, GKN, Rolls Royce, Vestas and the SWRDA and the University of Bristol.

4. As it is already well aligned with the general principles expressed by Hauser and is in a formative stage, the NCC has to declare an interest in the output of the select committee as it believes it has the potential to be a Technology and Innovation Centre.

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

5. The Fraunhofer-Gesellschaft (F-G) is Europe’s largest application-oriented research organization. It operates as a "community" (Gesellschaft) of more than 80 research units, including 59 Fraunhofer Institutes, at different locations in Germany, with other facilities in Europe, USA, Asia and the Middle-East. It is a not for profit organisation with a largely devolved organisational structure, with each research unit managing its own operations, overseen by central organisation that ensures strategic orientation on the basis of centralized control mechanisms.

6. The stated key objective of the F-G is to transform scientific expertise into applications of practical utility The F-G develops technology products and processes from basic research up to commercial maturity. Individual solutions are sought in direct contact with the customer.

7. The F-G has an annual research budget of circa € 1.6 billion. Two thirds of this is derived from contracts with industry and publicly financed research projects. One third is directly contributed by the German government as institutional funding. The majority of the 17,000 staff are qualified scientists and engineers.

8. The Fraunhofer Institutes undertake two key types of research:

a. Contract research in the service of industry and government. Each Fraunhofer Institute develops solutions of direct practical value to technical and organizational problems and contributes to the wide-scale implementation of new technologies.

b. Application-oriented basic research funded by the German federal ministry of education and research enables the F-G to conduct non-contract advanced research into technological fields which hold high promise for the future. This paves the way for entry into new markets. Expertise acquired through this research by the Fraunhofer Institutes is of course made available to industry through collaborative projects.

9. Companies of all sizes in the manufacturing and service sectors benefit from contract research. The F-G represents an important source of innovative know-how for small and medium-sized companies that do not maintain their own R&D departments.

10. Although research is at the heart of their operation, each Fraunhofer's mission is to ensure successful commercialisation of new technology, and to this end they provide a wide variety of services to assist businesses in the successful deployment of new technology. If necessary, several Fraunhofer Institutes will work together to produce more complex system solutions. The following services can be provided:

a. Product development and optimization through to prototype manufacturing

b. Development and optimization of technologies and production processes

c. Support with the introduction of new technologies, by
– conducting trials in demonstration centres equipped with state-of-the-art test facilities
– training the customer’s staff on site or at the Fraunhofer Academy
– providing support services that extend beyond the initial phases of a new process or product

d. Technology assessment support, in the form of
– feasibility studies
– market surveys
– trend analysis reports
– environmental audits
– pre-investment analysis reports

e. Supplementary services, e.g.
– advice on sources of funding, especially for small and medium-sized enterprises
– accredited test services, including issue of test certificates

11. The NCC believes that the basic principles of the Fraunhofer centres would be applicable in the UK. For fast moving, high value, growth technologies it is highly beneficial to entrust and empower a knowledgeable organisation, together with relevant industrial partners, with the responsibility for delivering the future technology vision for commercial and economic benefits. Such organisations would need to be able to nurture technologies that show high promise for the future, and also provide direct assistance to industrial customers in successfully maturing technology and providing all the support necessary in deploying it into their products and processes. With appropriate adaptations to UK needs and cultural landscape, the NCC believes that the key principles of the Fraunhofer model are applicable to the UK, TIC’s:

a. Providing the opportunity for UK industry to gain access to state-of-the-art equipment and skills which are beyond the means of any one company.

b. Providing an environment in which companies and their supply chains can develop ideas, products and IP together and accelerate getting products and services to market.

c. R educ ing duplication of public and private investment across the UK by aligning PV funds, and public funding through sources such as TSB, RCUK and FP7 and provide centres and programmes of international significance. This could contribute to the UK meeting its stated intention of investing 2.5% of GDP in R&D, registering more patents and attracting more FDI.

d. Becoming the focus of effective ‘clusters’ of centres focussed on technologies with natural synergy.

12. A TIC model where users can contribute to a generic programme and share IP (as with the the NCC) provides excellent leverage for the users and encourages collaboration

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

13. The NCC is limiting its response in this section to centres in the fields of high value manufacturing, composites and advanced materials applications as these are where it feels it is competent to comment. The NCC is aware that there are organisations in other technological fields, but is not able to comment on them.

14. The NCC is aware of a number of other research centres in the high value manufacturing, composites and advanced materials applications fields which capture some of the principles defined by Hauser. These include Advanced Forming Research Centre (AFRC) in Strathclyde, the Manufacturing Technology Centre (MTC) at Anstey, the Nuclear Advanced Manufacturing Research Centre (NAMRC) and Advanced Manufacturing Research Centre (AMRC) in Sheffield.

15. Each of these centres focuses on developing new technologies & processes in specific advanced metallic manufacturing fields. AMRC in particular has a successful research record in supporting a number of businesses, notably Rolls-Royce and Boeing, to improve their capability and efficiency in machining of hard metals. In recent years AMRC has branched out into a small number of new fields, including some aspects of composites. MTC is still in formation, with three industrial partners signed up so far. Its focus is on a number of general manufacturing fields, including assembly, net shape manufacture, advanced tooling and intelligent automation. AFRC is a recently opened centre focussing on metallic forming and forging. The NAMRC is a recent announcement (Q1 2010).. NAMRC/AMRC will also have a technology transfer & training centre built alongside to allow a wider service offering to its customers. None of the existing centres provide the breadth of service offering included in the F-G portfolio

16. Each of the above centres is owned by Universities, by means of a variety of not-for-profit constructs. This is differs from the F-G model and brings a number of real and perceived advantages and disadvantages. The close connection with the providers of fundamental research is clearly beneficial as the centres can provide the means to mature University research through to commercial application, whilst at the same time exerting a "pull" on future research to deliver solutions to known industrial challenges and also the connection with the wider HE sector

17. The above centres are considered to be successful within the scope of their offering – each has a strong membership base, with a number of common members across all centres. Each is typically very focussed on technology expertise and offers little of the wider offering provided for within the Fraunhofer model. Although most of the centres can identify SME users, there is rarely a strong engagement with the wider SME community. As a result existing centres are considered by some to be somewhat insular, but this is certainly solvable. They have a largely common approach and philosophy as Rolls-Royce has influenced each of them, building upon the initial model of the AMRC.

18. There are a number of organisations that provide the broader service and business assist elements of technology transfer and commercialisation support, but without providing the core technology development aspect. One example of this is NAMTEC, the National Metals Technology Centre which operates as an independent organisation & provides technical consultancy, strategic analyses, design and simulation services, education and training and assorted business support functions, as well as organising technical conferences and events.

19. The NCC considers its own intended mission to be broadly aligned with the Fraunhofer model, although it is currently only funded for technology development activities. The NCC believes it could offer even greater value if it was supported to offer an extended remit of services addressing the wider issues of skills improvement and technology/knowledge transfer. F ocussed on developing a key high-growth technology, the NCC is positioned between University research and Industry . Interest is intense and ranges from materials suppliers, tooling companies, design consultancies, and manufacturers in the automotive, renewable energy, aerospace, marine and construction sectors as well as organisations intere sted in recycling and disposal. The NCC will be equipped with state-of-the-art equipment and manned by world class expertise, offering access to resources beyond the means of any one company. The strong interest from multiple sectors, the full supply chain and engagement with Universities offers opportunities for collaborative development programmes that will improve UK capability both within, and across sectors. In the UK there are already a number of other small composite centres, each somewhat localised, either in the companies it supports and/or the technology it provides. These centres are now becoming spokes within the NCC Hub and spoke model. This ensures a coordinated whole UK approach, removing overlaps, filling gaps and providing a more complete and harmonised offering to UK industry

Question 3: What other models are there for research centres oriented toward applications and results

20. The NCC is aware of a number of other UK research organisations oriented to application and results, which at least in part, undertake work in the fields of advanced manufacturing, composites and advanced materials application. There does not seem to be a standard model for these as some are commercial enterprises, others are state owned and run. These include, but are not limited to QinetiQ, National Physical Laboratories, DSTL, Energy Technology Institute (ETI), Motor Industries research Organisation (MIRA), Buildings Research Establishment (BRE), TWI.

21. Globally there are certainly other models, many of which are fully state-owned and controlled. The NCC is aware that a different model exists in the United States, where there is an extensive network of national laboratories such as those of the Department of Energy, Department of Agriculture, and National Institute of Standards and Technology (NIST) of the Department of Commerce, National Aeronautical and Space Administration (NASA) laboratories, Air Force Research Laboratories (AFRL) and many more.

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

22. As the mission of the TICs is to deliver and assist in the commercialisation of technology and innovation to meet industry needs, the NCC believes that the TSB should provide high-level leadership and sponsorship of the complete network of centres; setting the overall technology strategy and objectives, defining the governance and supporting the technology visions of each centre both with funding and other mechanisms as appropriate.

23. In some fields of critical strategic and economic national importance, such as composites, a national leadership group should exist. This group should be chaired by a senior minister, be attended by contributors from industry, academia and Government and non-government organisations, and:

a. Develop an industry sector strategy and identify key actions to enable it to grasp the commercial opportunities created through global shift s (e.g. environmental improvements created via composites enabled light- weighting )

b. Encourage the development of new industrial collaborations and the development of supply chains and networks

c. Encourage and provide direction to the national development of new manufacturing processes and materials (and hence guide priorities for the TIC)

d. Monitor delivery of the commitments in the composites strategy.

24. Connection to all relevant UK Universities is critical to ensure

a. University-developed technology can be "pushed" through the TIC’s to help ensure a route to market.

b. The TICs have a mechanism to create a "pull" that will shape future fundamental research to meet industry needs.

25. If the current concept of University ownership of individual centres is continued, Universities will need different incentives to ensure TICs output meets Hauser objectives, and to be able to clearly identify quantifiable benefits to balance the risks taken in their ownership. Universities are not naturally entrepreneurial or commercial in their culture or operation, whereas these TICs will need an approach which is very focused on new opportunities, growth and commercial risk taking. Understanding the customer, agility, and a focus on delivery of results to industry will be critical and this may produce some tensions with a University ownership based system.

26. Where a number of current centres work in the same topic area, they should be clustered as one TIC, in a "Hub and Spoke model". It needs to be clear which centre is the hub, and it should be empowered through funding control and other means, to ensure it can operate this way and provide overall leadership of the cluster.

27. It would seem sensible, as for the Fraunhofer model, for centres to manage themselves within a centralised framework which sets high level strategy, overall objectives, defines processes, provides shared services, and undertakes funding/lobbying.

Question 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?

28. The effects might be various and hard to predict but in a world of growing focus on value contribution and industrial customers it should be expected that the existing centres would come under some challenge.  If existing centres are doing their job effectively and efficiently there is little obvious benefit in establishing and subsidising new competitors; however it is important to bear in mind that the prime merit of the Fraunhofer model is that it is designed to help reinforce the competitive strength of the economy through the work they do for industry.  It might be expected therefore that existing public sector research establishments, which are working on close-to-application research, will have to increase and better align their work and output with industry – and in effect start to align themselves with the Fraunhofer model.

29. During the NCC proposal phase, strong support was provided by a number of public sector research establishments, notably DSTL. This suggests that such organisations would recognise a beneficial relationship with TIC type organisations.

Conclusion and Final remarks

30. The successful Fraunhofer model and the two reports from Hauser and Dyson provide strong cases for creating Technology and Innovation Centres in the UK, as a means to enhance the UK economy through strengthening our industrial competitiveness.

31. If centres such as the NCC were to become TICs and align with the Fraunhofer model it may be necessary to extend the tech nology scope from the current Technology Readiness Level (TRL) 3-6/7 to at least 7/8 to ensure greater involvement in solving more issues around commercialisation & in production support. Clearly caution would have to be exercised not to contravene state aid issues for work at higher TRL’s

32. It would be important to su pport, enable and fund the TIC to provide the variety of b usiness assist/supplementary services as defined within the F-G list above in the answers to Question 1. The skills delivery part of this would need to be coordinated with other providers, for example with the HE sector in creating Doctoral Training Centres.

33. In line with the Fraunhofer model it would be essential to put in place the mechanisms for providing the public funds for the nurturing of technologies with high promise but lacking a n immediately visible application . These would later be made available (through IP licensing) to a wide range of UK industry.

National Composites Centre

02 December 2010