Technology Innovation Centres

Written evidence submitted by Loughborough University (TIC 68)

Technology Innovation Centres

Declaration of Interests:

Loughborough University is a strong academic institution with particular track record of research that is collaborative with industry and other research users. Such research forms>70% of our research portfolio. Loughborough has arguably the largest engineering academic activity in the UK. It has held significant funding from the Engineering and Physical Sciences Research Council in the form of Innovative Manufacturing Research Centres. It has a keen focus on research that makes a difference, and has pioneered a range of mechanisms for undertaking industrially focused research and knowledge transfer. These include a number of individual company technology or innovation centres, for example with Rolls Royce and Caterpillar. The University houses one of the largest centres of co-located academic and industrial staff in our Systems Engineering Innovation Centre, where around 30 industrial researchers work alongside our own academic staff. We have also had significant discussions with Fraunhofer (IPA) regarding a UK Fraunhofer centre in a manufacturing arena, potentially to be based within our Science and Enterprise Park on campus. A number of our current activities may form the focus of potential TICs.

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

1.1 The Fraunhofer centres are not-for-profit organisations with permanent staff, offering applied research and development services. The model integrates academic and industry research with a funding model based on income through three, notionally equally sized, categories (contract research for industry, competitively won research contracts (e.g. from EU), and "institutional" core funding).  The latter is provided by central government and the amount is proportional to funds secured in the first two categories.  The central funding has occurred for over 50 years and was initially a much larger percentage of the total. Thus government funding complements success in gaining contracts from industry. There is a large network of Fraunhofer centres, mostly in Germany, each with its own area(s) of expertise.  The Fraunhofers are usually directly linked with a university department and an academic is often the Director. This enables useful collaboration and exploitation to take place. 

1.2 Despite the unification of branding, there is a strong diversity of Fraunhofer institutes. They serve different technology communities, and different geographies. Within the German innovation system, Fraunhofer Institutes sit alongside a broad range of other highly differentiated institutes, each with very specific remits (eg Max Planck), as well as the German University system. This landscape is very different to that of the UK, where Universities occupy a much broader role spanning teaching, fundamental and applied research, and knowledge transfer. Implementation of the Fraunhofer model directly is unlikely to be successful without recognition of the existing strong applied research and innovation support landscape already in existence in the UK.

1.3 There are other differences between the UK and German systems that make a direct transplant of the Fraunhofer concept challenging. One is a different of IP regimes in the Universities, where the German academics would typically own their IP. A further difference is in the doctoral training system. Fraunhofer Institutes use significant numbers of doctoral students to provide a significant fraction of the labour force. The difference in the PhD model (length, and portfolio vs single project) between Germany and UK may require some adjustments to a Fraunhofer model.

1.4 The UK system, with significant applied research within Universities, also allows for a rapid feedback to ensure that undergraduate programmes remain relevant.

1.5 The Fraunhofer Institute system has benefited from consistent support over a number of decades, with significant benefit for its international profile.

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

2.1 There are many research centres in the UK aiming at exchanging knowledge between industry and academia. Historically we had the membership based Research associations, now typically referred to as RTOs which moved towards a more consultancy-based model as public funding was withdrawn.

2.2 Effectiveness is not easy to ascertain, having no formal methodology to establish. Effectiveness could be based on the value which major industrial partners gain from the centres, or value for money for the public purse, where emphasis might be on benefits for a broader range of companies.

2.3 The UK has a history of comparatively short-lived initiatives in this area, compared with the Fraunhofer model.

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

3.1 The UK has a wealth of models for research centres oriented toward applications and results. The University system itself has built up extensive capability in knowledge exchange with external users. HEFCE has funded capacity building in this area via the Higher Education Innovation Fund. The success of this capability building has recently been evaluated very positively. [1] A hugely diverse range of centres serve a diverse range of industrial innovation needs.

3.2 Loughborough is a University strongly oriented towards applied research, and is involved with a number of models for research and knowledge transfer activities appropriate to individual sectors.

3.2.1 Loughborough University is a partner in the Manufacturing Technology Centre, based at Ansty. This has a small number of research partner members, with industrial subscribers, and is formally constituted as a not for profit company. This will be a physical facility for the scale up and test of innovative ideas on an industrial scale.

3.2.2 Loughborough University hosts the Systems Engineering Innovation Centre on our campus. This is not formally constituted as a legal entity, but has governance based on collaboration agreements between parties dealing with IP, facilities and allocation of resources. A key element of this is the collocation of industrial researchers with academic researchers. The centre has core funding from industry and the University, but also successfully bids for research council, TSB, European and other sources of funding. Many of these bids will involve further external academic and industrial partners, adding to the richness of the collaborative relationships of the centre.

3.2.3 Energy Innovation Cluster within the Science and Enterprise Park. This is not a formally constituted centre, but is instead a naturally emerging cluster of activities including industrial and academic research groups, spin-out companies and public/private partnerships (including the Energy Technologies Institute, and Cenex (Centre of excellence in low carbon and fuel cell technology), plus regional innovation networks reaching out to smaller companies. Participants group together in a variety of combinations to bid for further external funding for research, knowledge exchange and postgraduate training. This innovation community has strong interactions between industrialists, academics. There is space available for likeminded organisations to cluster together. There is a rich pattern of collaborative interconnections both between those physically located on the Science and Enterprise Park and those beyond. This model has strengths that a monolithic "centre" would struggle to replicate. Academic linkages are to a broader range of academic expertise than available in our own University, via our collaboration with Birmingham and Nottingham Universities as the Midlands Energy Consortium.

3.3 These examples all have common characteristics. Multiple academic and industrial partners are involved. Diverse organisations are able to participate and benefit from the public funding investment. Central challenges are multidisciplinary and often involve platform technology areas that cross industrial sectors, yielding economies of scale. They have rich connectivity and interaction with other key players in the UK and internationally. Often this is formally driven by funded networks eg TSB Knowledge Transfer Networks nationally, or the regional iNETS or innovation networks. The governance arrangements are completely different in each case.

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

4.1 The Technology Strategy Board and the Research Councils are existing bodies with key roles in this domain and should both be involved. The governance of the individual TICs should involve a balance of industrial and public sector interests, and ensure accountability for the use of public funds. The Knowledge Transfer Networks could have a useful role in ensuring the coordination of TICs with other centres of excellence across the UK and ensuring that TICs tap into the full range of national expertise.

4.2 Successful innovation often occurs in the context of complex supply chains. In some mature technology markets, these may be well established, with obvious structures. In emerging technology markets, the nature of the supply chain may be as yet unclear. It is critical that all key innovation stakeholder viewpoints are incorporated into the activities of a TIC.

4.3 Supply chain opportunities and the associated need for capability development may have sub national spatial geography, and interfaces with other mechanisms such as regional growth hubs and other potential support for high growth businesses should be carefully planned. Care must be taken to ensure that smaller companies have a voice in shaping the activities of TICs.

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?

5.1 Universities have developed a wide range of applied research activities and knowledge exchange mechanisms, often in close partnership with research users. Development of TICS to support industry/academic linkages needs to acknowledge the ownership that many Universities now have of this agenda. Whilst recognising that investment in TICs may create or enhance necessary infrastructure that is not currently available within the University system, structures devised for a TIC should find ways to be inclusive of existing activities and industrial partnerships within Universities via exploration of hub and spokes models.

5.2 Care must be taken with metrics that capture Universities’ industrial interactions, especially HEFCE HEBCI metrics, to reward Universities who interact with industry via TICs rather than directly.

Loughborough University

December 2010