Science and TechnologyWritten evidence submitted by Plymouth Marine Laboratory Applications Ltd

This document has been prepared by PML Applications Ltd, a wholly owned trading subsidiary of Plymouth Marine Laboratory.1 Plymouth Marine Laboratory (PML) is an independent marine research laboratory and undertakes leading international research to respond to societal needs and to promote stewardship of the world ocean. PML provides capability for observing, modelling, understanding and forecasting marine ecosystems. Operating in an interdisciplinary way PML is uniquely placed to undertake research, provide advice and deliver outcomes on the key challenges facing society in relation to global change and sustainability of marine ecosystems. PML is also designated as a National Capability delivery partner for the Natural Environment Research Council, providing a strategic research capability in marine science and Earth observation for the UK.

PML Applications was established in 2002 to broaden the application of PML’s research products and to drive the process of knowledge transfer, identifying and bringing to market the next generation of innovation and products.2

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

The commercialisation of research takes place, fundamentally, in one of two forms:

Through a form of targeted research or provision of specialist consultancy services that are focused and often guided by an industrial partner with a particular challenge to overcome.

Through the development of some form of “product”that can then be further developed and released onto the open market. The definition or product can range from new chemical or extract, a new process or procedure, through new equipment, instrumentation, software to the provision of new services.

In very general terms, scientists tend not to be entrepreneurial in nature. They are great discoverers and having made an initial discovery tend to quickly move on in search of the next. They are driven largely by academic prowess and their currency is a publications record. Rather than consider the potential for commercial application of their discoveries and manage their intellectual property accordingly, their first reaction is to seek to publish their discovery. Entrepreneurs have a very different culture. They tend to see commercial opportunities through combining different discoveries in unique ways to create novel solutions.

Lack of understanding of the “route to product development” in scientists and pressures to publish are key barriers to more entrepreneurial behaviour. Development of simple business models, licence agreements and exploitation advice are fundamental in facilitating the commercialisation. Model agreements for management of IP, providing equitable returns to the inventors would help greatly. It is important to make it easier for scientists to commercialise discoveries and to be incentivised by appropriate rewards that should counter the inability to earn scientific currency (ie publish) whilst managing intellectual property. On making a discovery scientists should ask themselves first—“is there an application for this, because I have an easy route-map to help me exploit it, if not then I will publish?”

Secondly there are difficulties in understanding what industry needs. Research institutes need better guidance from industry to identify problems and opportunities that can be developed in partnership—ie the provision of industry-pull. The opposite is true; academia needs to improve links with industry to demonstrate emerging skills. Closer links are required together with a mechanism for actively engaging and exposing industry and academia to solutions and skills outside of the usual industry sectors—eg the food industry engaging with marine science where novel products and reagents may be harvested from an underutilised marine resource.

Having identified a potential commercial application for a discovery the challenge is how to develop this into a product. This requires a feasibility study. Most state funded feasibility studies require industry partners and cap funding to a proportion of the cost of assessment and development. Whilst this is fine for the more mature opportunities—ie those closest to market that are likely to be attractive to private equity—it does not work for those early concepts that require some focussed research to get to the next stage. Partial funding, coupled with difficulties in finding partners willing to sign-up to this type of higher risk funding, create a barrier as research organisations rarely have the additional funds to develop proof of concept to such a stage that it becomes attractive to partners. Proof of concept funding should therefore be a target area, with associated conditions (eg tax incentives) that attract industry partners.

Are there specific science and engineering sectors where it is particularly difficult to commercialise research?

It is particularly difficult to commercialise marine ecological research. The marine environment provides an untapped wealth of resources—particularly with respect to its microbial and algal communities. In general, markets for potential use of these resources are not clearly defined and in many cases there is direct competition with hydrocarbon derived products, creating both an opportunity and a very established incumbent technology. There is a limited track record of commercialisation of this science. A few niche markets have been developed—usually by very entrepreneurial inventors/scientists themselves—but in general, the potential of these resources is poorly understood by industry and often perceived as having high entry costs.

Comments of forums for industry engagement and “Godfathering partnerships” refer.

What if any examples of UK based research being transferred abroad

PML has excellent knowledge of marine bacteria, benthic ecology, ecological succession and water quality. It is a world leader in some of these areas. These skills when combined provide the relevant tools to develop novel technologies to manage ballast water. New legislation is being developed and more stringent ballast water management standards are required. In turn these require new technologies.

A significant privately funded research opportunity into the development of these new technologies has been transferred to a European institution on account of better state funding conditions at the proof of concept stage and the presence of stronger links with academia and industry partners that are likely to take up the new technology.

What evidence is there that Government and TSB initiatives have improved commercialisation

This is a question of timing. For those opportunities relatively closer to market, requiring feasibility studies and market development, it is clear that initiatives have worked.

We have also been very successful with earl stage funding. PSRE funding has also allowed us to screen some of our marine bacteria and micro algae resources and identify biotechnology opportunities. This has been essentially a “new raw material” search. New compounds and natural bioactivities (eg antibiotic properties, natural biosurfactants, natural sunscreens) have been identified. Additional funding is required for proof of concept and further development.

Similarly PSRE funding has allowed us to combine core scientific skills in unique ways to develop services in ballast water management and anti-fouling technologies relevant to the shipping and marine renewables industries. These services range from consultancy and expert witness advice, through to testing and development of new coatings and equipment.

PSRE funding has been successful in early stage commercialisation in our organisation. It has pump-primed the development of a successful business stream that in turn feeds income to our more fundamental research. In addition to providing the funding for targeted research, it has been used to develop commercial skills in our scientists, as well as developing strong links with industry. A number of new services and potential products have been developed and more industry partners are being sought. However, the challenge remains to source funds and partners to take these new opportunities past proof of concept and into early feasibility.

It is important to understand that the commercialisation of science has a long life cycle. Ten years of development from concept though to product is not uncommon. Funding strategies therefore need to be long term.

What impact will the Government’s initiative bring

The ability to undertake proof of concept early research that can be used to attract industry partners for joint targeted research and commercialisation. For example, France’s marine research is largely state funded and this provides the ability to offer industry a range of development opportunities, generally at more advanced stages than available in the UK.

Should UK encourage more private equity investment

Yes—but this needs to be targeted at early commercialisation, not the close to market opportunities that are usually funded by private equity.

What other types of investment should the Government develop

1. Equivalent PSRE funding to encourage early and proof of concept targeted research. This should be linked with industry partnerships that support out-sourcing of early development. As the IP develops, the partnership will naturally strengthen and will cascade ownership and employment towards industry as these opportunities become closer to being exploited. This funding should be seen as Government support for industry and not a mechanism to prop-up academia.

2. Funding to develop industry/academia partnerships. This should include a mechanism to actively scan developing research and IP, and then to actively promote these emerging skills to industry. These introductions can then foster the development of stronger links and potential partnerships. Conversely the mechanism should improve communication of industry requirements to academia.

3. The development of a set of tools or provision of business and commercial advice that makes it easy for scientists to exploit IP. Examples could include template licence agreements and business models that give confidence to the scientists that they will be fairly rewarded for their invention. These would set out best practice and illustrate the “going-rate”, thereby avoiding suspicion of having ideas “ripped-off” or exported by industry.

February 2012

1 www.pml.ac.uk

2 www.pml-applications.co.uk/

Prepared 11th March 2013