Science and TechnologyWritten evidence submitted by Ian Phillips

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

The simple model of transfer of technology to commercial exploitation is broken. Research Outcomes are (very) seldom products in their own right. Mostly the “technology” they produce is useful to enable options in products which may or may not offer a commercial advantage. Other options may well come from known science, methods etc in other domains. Innovation, is creation of market forming or mould breaking products, using technologies which are “known”. Business should be risk averse so introduction of new technologies should be discouraged in the route to profit.

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?

It is always difficult to commercialise research outcomes where the application (commercialisation) domain is not obvious (See Laser and text-messaging). However some of the best outcomes are applicable in a wide area of domains (eg: RF, LCD, Integrated Circuits, CPUs), so tend not to be seen as advantageous to any specific one. These spend unavoidable time in the ‘hinterland’ waiting for the market to call for the technology that they provide. The wait can sometimes be unaffordable.

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

The Computer, but there are other examples: Yet it can be argued (justifiably) that it is only some parts of this that have transferred out of the UK, and also that other parts of it in the UK have benefited from advancements which were made elsewhere. No technology is ever truly invented in one country or exported to another for exploitation ... its just not that easy. The transfer of ‘parts’ of technology to other areas of the world (within and beyond the UK) is for the same reasons under all circumstances is that to do so makes better business sense. That can be financial, it can be employment costs, or regulatory, or availability of appropriate skills, or availability of appropriate infrastructure. The ultimate decision will also be dependent on the nature of the product which is to be made (including that ‘part’ that left the UK), and the predispositions of the business itself. In other words it is impossible to identify a single item. However if competition in Commoditised products is your aim, then the availability of large amounts of finance is a requisite; By comparison if exploitation of high-valued skills/capabilities (such as ARM) then the education and mindset of the workforce is a requisite. Bear in mind that most bigger businesses/Institutions and a lot of smaller ones are international, themselves and work freely with international customers ... then the idea of (UK) nationality is almost nonexistent within their culture.

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

There is little evidence of this, but that doesn’t mean it is not a good thing. You have to have appropriate expectations. (See also my answer to Q1). UK Research outcomes may well have become significantly better in quality and availability (which I believe!) and they may have been adopted in the UK and beyond (and don’t forget that 99% of the world is outside the UK!). Even so, new products take typically three years to go from concept to production, and new technologies must be product-ready before they can be used in product development ... that makes min of ~six years for something to move out of Research and appear in a Product. But research itself is not a case of picking up the answer ... it takes time. So from the first EPSRC grant to being used in a Product is at least 10 years, for good performance in this criteria. Typically it will be significantly longer ... and the worse cases much much longer. THIS IS NOT A FAILURE, complex things take a time. ARM IPO’d in 1991, our product came out of the BBC Computers in Schools program in the 1980s, and was based on research work done 10 years before that.

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

The valley of death is a misguided model created by the semiconductor FAB guys to help them get funding for transfer of process development into FABs. At that stage it is not research at all, but the process of setting up production ... The outcomes of academic research will never be as complete as the “development process” which is being transferred into production. Research outcomes will relate to components (eg photolithography) which is used within such.

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?

No. Private investors know what they are doing with their money. They do not invest in bad opportunities and it is inappropriate to strongly influence this (See the Banking crisis). Government has a role to assure that the ‘primeval swamp’ is stocked with a set of well educated world-class researchers and educators, who provide our share of knowledge into this commercialisation pool, and maintain our independence from others who without our world-position may be in position to exploit our lack, because our contribution would not threaten them in return.

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

The Government should be prepared to pick winners, and should not “chase the ball”. Support and develop what we are good at in the UK, don’t try to change us to be ‘somebody else’. Replication of other countries model of success can only ever be successful if you are prepared to make huge financial investments to change culture, education and industries ... And you can only displace the incumbents if you exceed theirs. Much better cheaper and sustainable to develop what you are good at !!!

February 2012

Prepared 11th March 2013