Science and TechnologyWritten evidence submitted by Frank J Morris

It seems to me that much of the funding for science and technology in UK is based on a “strategy of hope” as we used to call it in Arthur D Little. A certain amount, often not much, of resource is applied in the hope that something useful will come out of it. There are much better ways as even a cursory study of works like “Third Generation R&D” will show.

I am an Engineer and Management Consultant with many years experience in technology-intensive businesses both hands-on and in advisory and management roles. I have no direct interest in research or research-based enterprise just a frustration that UK taxpayer resources are wasted at such a scale when there are much better strategies that could be applied.

I have answered your specific questions below and would be happy to follow up if there is interest.

1. What are the difficulties of funding the commercialisation of research, and how can they be overcome?

A fundamental logical flaw exists because commercialisation will only occur if there is an adequately large pool of users prepared to pay to exploit the research. In other words, starting with the research is not the answer. You must start by identifying difficult problems that, if solved, would have commercial value. Then researchers can focus at least some of their effort on understanding aspects of the problem so that the problem eventually becomes solvable by engineers, designers, manufacturers etc.

A key issue, often overlook by TSB etc, is to match research with the UK’s industry absorption capacity. So, for example, medical research fits the UK’s “big pharma” marketing machines well but EPSRC-related stuff does not get absorbed so well as we have such a weak semiconductor industry.

A clear and positive UK example was research into the human genome which required some articulation of possible benefits before adequate energy was deployed in the necessary science and development and refinement of sequencing technology.

2. Are there specific science and engineering sectors where it is particularly difficult to commercialise research? Are there common difficulties and common solutions across sectors?

Supply chains have become complex and global. A better science or technology widget has to find a buyer/licensor within this mesh. These buyers are often middle-size companies whose technical management, especially in UK, rarely have the time to understand what is in the research pipeline. Knowledge Transfer Partnerships fail because they are more “science/technology push” rather than “industry pull”.

A better answer would be to fund short sabbaticals to enable technical managers in SMEs to visit study tours to explore options—the scheme might operate in a similar way to UKTI’s Overseas Market Introduction Service but with better funding. Technology Advisors (challenge to find adequately qualified experts) could undertake a briefing at the company to identify strands of investigation, then develop a short study international, national or regional programme in which the technical manager is updated on possibilities with follow-through help with licensing, process improvement funding etc. A web-based anonymous “cry for information” system might be deployed usefully here.

3. What, if any, examples are there of UK-based research having to be transferred outside the UK for commercialisation? Why did this occur?

A primary example is that of organic semiconductors where UK, especially Sir Richard Friend and his team at the Cavendish Lab, led the world but, despite forming and funding two moderately successful start-up companies, commercialization is now in US and Asia, as a result of the much higher concentration of technology adopters in California and supply chain companies in Asia.

Almost all out semiconductor and software research is similarly exploited in America and Asia.

4. What evidence is there that Government and Technology Strategy Board initiatives to date have improved the commercialisation of research?

Very little. The intervention scale is much too small to be significant and it is more grant-aided “science/technology push” than venture-backed “market/industry pull”.

5. What impact will the Government’s innovation, research and growth strategies have on bridging the valley of death?

Minimal and possibly negative. The intervention scale is much too small to be significant and grant-aided “science/technology push” is more likely to encourage small lifestyle initiatives than the commercial entities nurtured under venture-backed “market/industry pull”.

6. Should the UK seek to encourage more private equity investment (including venture capital and angel investment) into science and engineering sectors and if so, how can this be achieved?

In principle yes, but angels and VCs will not invest in science or engineering; they will invest both financially and intellectually when there is a clear problem with a clear market being addressed by a credible team so there is a profit possibility.

7. What other types of investment or support should the Government develop?

These are risky investments and greater incentives are required to increase the pool, including more tax-breaks, co-investment funds and convertible loans.

February 2012

Prepared 11th March 2013