Science and TechnologyWritten evidence submitted by Research Councils UK

Key Points

Research is a vital component in the UK innovation landscape, as highlighted within the Innovation and Research Strategy for Growth economics paper.1 Research Councils are instrumental in shaping the research landscape to play a leading role in the innovation ecosystem—through the research we fund; the infrastructure, both nationally and globally, we support; the talents we develop and help prosper; as well as the partnerships with business and government that we forge on behalf of UK research; the Research Councils nurture innovation and the broad contributions of research to the growth and wellbeing of the UK.

Research Councils UK consider that there is no single point of failure—or “Valley of Death”—that affects the whole innovation system, but sector by sector there are a number of different aspects where there can be insufficient progress towards impact. Commercialisation problems are often sector specific and therefore there is no single solution. In order to ensure that the innovation ecosystem is highly effective it is important to address the full range of factors including funding, regulation and cohesion of different sectors working across actual or perceived boundaries.

One of the key challenges identified by the Research Councils for commercialising research ideas is the time required to take research forward to the point of commercial output. This can vary widely and is often over a long timescale, with significant consequences for securing commercial funding and interest. Commercialisation of a research idea or innovation also carries considerable scientific and technical risk and the less developed the idea, the greater the risk. At a time when the economic climate is challenging, the risk appetite across all sectors of business may be expected to be reduced, with the consequence that engagement with, and investment in, early stage ideas will be more challenging. In various sectors, the challenges of time, investment and risk can combine to create serious “valleys”. We believe public intervention from the Research Councils—in coordination with others—to support the timely de-risking of scientific2 and technical breakthroughs, and to aid commercialisation of research outcomes, can result in substantially greater impact. In addition, our support can enable the leverage and deployment of further funding from both the public and private sector.

1. Research Councils UK (RCUK) is the strategic partnership set up to champion the research supported by the seven UK Research Councils. RCUK was established in 2002 to enable the Councils to work together more effectively to enhance the overall impact and effectiveness of their research, training and innovation activities, contributing to the delivery of the Government’s objectives for science and innovation.3

2. This evidence is submitted by RCUK on behalf of all the Research Councils and represents their independent views. It does not include, or necessarily reflect the views of the Knowledge and Innovation Group in the Department for Business, Innovation and Skills (BIS).

The Research Councils’ Role in the Innovation System

3. The commercialisation and exploitation of the UK’s world leading research is critical for enabling innovation, contributing to the growth of the economy and tackling societal challenges.

4. The Research Councils believe the inquiry is considering commercialisation as the process by which the outcomes of research activity are brought to the market place through the development of new or improved products, processes, services or technologies. The innovation process is non-linear and complex, as explained for example in the BIS Innovation and Research Strategy December 2011. The term “valley of death” can be a useful way of looking at issues of commercialisation in some sectors, for example, we consider the Catalyst fund4 to be an effective solution in the biomedical area. However, this approach is not necessarily appropriate for all sectors, and in some sectors the concept of a “valley of death” can be misleading through its implication of a linear journey. Other sectors have different complexities and challenges which require appropriately tailored solutions.

5. Whilst the commercialisation of outcomes is an important mechanism through which research delivers benefit and impact, there are a wide variety of other ways through which research can deliver benefit to society and the economy. A broad range of knowledge and support models are necessary. A critical aspect of this is the role of highly skilled people as carriers of knowledge and tacit information, and as the potential recipients and interpreters of new knowledge, providing critical absorptive capacity in business.

6. The Research Councils have several different roles in supporting the UK’s innovation landscape. First of all we provide leadership in funding world-leading research that has the potential to lead to innovative products, processes, services or technologies. We also provide a number of interventions to develop research outcomes into economic and societal impact. Some of these interventions are outlined below (see Appendix 1 for further information on the Research Councils interventions). The Research Councils:

6.1Fund collaborative research and knowledge exchange which provides opportunities for the co-production, application, exploitation and commercialisation of research between business and academia. To achieve this we usually fund the higher education sector directly to support collaborative research projects.

6.2Provide flexible finance to allow the outcomes of research to be developed towards wider benefits within the higher education sector including supporting the very early stage of turning research outputs into a commercial proposition. This funding helps take an idea to the stage at which the potential for commercialization is more clearly defined, enabling the possibility of securing further funding to progress.

6.3Support initiatives and opportunities for early commercial development of research produced by research staff working in their institutes, for example through the Rainbow Seed Fund,5 MRC-T,6 and STFC Innovations Ltd.7

6.4Train the next generation of researchers and innovative people through investment in doctoral training. This is an extremely important route for the provision of highly skilled people into business. Indeed, 56% of doctoral graduates, three years after graduating, are employed outside of higher education.8 The Research Councils training portfolio also includes major collaboration with business for example through CASE studentships9 and Industrial Doctorate Centres.10

6.5Maintain a broad, deep and direct relationship with the business sector and work in partnership with major UK and global companies to support relevant pre-competitive research. We work in partnership with business at all levels from business members on our Councils, strategic partnerships with sectors or individual companies, to facilitating relationships with business at the individual project level. The Research Councils portfolio includes collaboration with over 2,500 companies including many small and medium sized enterprises (SMEs).

6.6Build connectivity in the innovation ecosystem by working with innovation and knowledge infrastructure partners including the Technology Strategy Board,11 Funding Councils, and the Design Council, and key Government departments including the Department of Business Innovation and Skills (BIS), Ministry of Defence (MOD), Defra and the Department of Health (DH).

6.7Promote a culture within the research base where commercialisation can thrive and commercial research outcomes are recognised and rewarded appropriately. The Research Councils are working closely with other key stakeholders such as the Higher Education Funding Council for England (HEFCE)12 and the other Higher Education funding bodies to achieve culture change within the research base; key drivers include Pathways to Impact, the Research Excellence Framework (REF) and Higher Education and Innovation Funding (HEIF). For example, Pathways to Impact was implemented in 2009 within the application and assessment process for Research Council funding. This policy encourages researchers to explore pathways for realising the impact of their research, including where appropriate, pathways towards commercial application early in the research process.

6.8Operate or fund innovation-led campuse,s13 centres, institutes and facilities, which create a critical mass of facilities, equipment, skills, and innovation-led research and provide a platform for businesses, universities and the research base to undertake collaborative projects. These investments make a key contribution to the UK innovation system in a global context, ensuring that our research contributes to UK economic growth, national security and societal well-being. Research Council operated campuses, centres, institutes and facilities are complementary to the Catapult Centres that are being established by the Technology Strategy Board.

6.9Include within our portfolio research into innovation and commercialisation. Our research centres in these areas have been encouraged to input independent and expert advice into this inquiry.

7. Further information is available on the knowledge exchange and impact section of the RCUK website.14 This includes the RCUK impact strategy, Pathways to Impact, and the Knowledge Transfer Portal which is a gateway to further information on Research Councils support for knowledge exchange.

Commercialisation of Research: Key Challenges

Q1. What are the key difficulties of funding the commercialisation of research and how can they be overcome?

8. RCUK note that the “valley of death” is helpful in understanding and responding to the challenges of commercialisation within some sectors, but consider that there is no single “valley of death” within the overall innovation system. In addition there are also a number of areas where there is insufficient connectivity15 which hinders the commercialisation of research.

9. RCUK recognise that there are a number of challenges associated with the commercialisation of research across the entire innovation spectrum which relate to funding. These include:

9.1Duration to market: the time needed to take forward a research idea to the point of commercial output can vary widely and can take decades to be realised. This can have significant consequences for securing commercial funding and interest. This represents challenges for the commercialisation of research which require solutions from all parts of the innovation system. The long time to market from initial research ideas can problematic for companies funded by short term VC investment. Pelamis Wave Power Ltd, now 14 years old, is one of the world’s leading wave energy developers. The company, a start-up from the University of Edinburgh, has been funded by venture capital. However, short term VC funding was not well suited to this complex engineering challenge. For example, the need to demonstrate progress and achievable revenue to secure continued VC funding led to a move to an array of machines sooner than was optimal for the overall wave energy device development16. In a different sector, Beneforté super broccoli, which has potential health benefits for people with cardiovascular disease and cancer, was introduced in a UK supermarket in October 2011—27 years after the first research was undertaken.17 The development of the product involved fundamental research, specialist commercial and legal expertise, product development and extensive marketing, every step of which required funding and commitment.

9.2Risk: commercialisation of a research idea carries considerable risk and the less developed the idea, the greater the risk. This will reduce the take up of early stage ideas by the commercial sector and at a time when the economic climate is challenging, the risk appetite across all sectors of business could be expected to be further reduced. To mitigate this element Research Councils, working with partners like the Technology Strategy Board, provide direct support to bridge this gap in terms of follow-on funding for proof of technical and market concepts, and also specialist support for emerging technologies through Innovation and Knowledge Centres. The current MRC translational funds, and the future Catalyst fund also tackle this gap in the biomedical area. The Rainbow Seed Fund (RSF), which is collaboratively managed by three Research Councils and other research partners, also acts as a catalyst by investing directly in early stage companies. Commercial sector investment can also be facilitated through seed cord VC funding, and specialist sector bodies like MRCT. The Rainbow fund has encouraged over £100 million worth of private equity investment and the development of a number of different spin-out companies; new companies facilitated by MRCT have won similar amounts of private investment.

9.3Management of intellectual assets: For the research that we support, we make it a condition of funding that the research organisation will make every reasonable effort to ensure that the intellectual assets obtained in the course of the research, whether protected by intellectual property rights or not, are used to the benefit of society and the economy. Identifying and managing intellectual property can be central to delivering commercial benefit from research outcomes in certain sectors such as pharmaceuticals, chemicals, personal care products, aerospace and defence and energy technologies. We welcome the novel approaches some research organisations are adopting; for example Easy Access IP.18 We encourage other organisations to consider innovative and appropriate ways of managing intellectual assets including recognising circumstances where free access might be the most effective approach to ensure that potential economic and societal benefits can be realised by beneficiaries. There are still considerable challenges in managing IP in a European and global context. We welcome the Hargreaves review as making a key contribution to this.

10. RCUK also recognises the issues outlined below in addition to funding are important:

10.1Culture: The Research Councils are working with other key stakeholders to achieve culture change within the research base and ensure that the academic community has the time, interest and expertise to ensure that the outputs from their research are taken forward and commercialised if appropriate. A 2010 study for ESRC and EPSRC found that industrial engagement is common and increasing among UK academics working in engineering and physical sciences.19 We expect this culture change to be reflected within institutions’ recognition and reward policies to ensure that this culture change is supported.

10.2Absorptive Capacity. Many commercial innovations will involve researchers working with existing businesses. Therefore, business will need absorptive capacity to work with researchers. Research Councils help to contribute to the solution through the training of PhD and post-doctoral researchers and by facilitating movement of highly skilled people at all career stages between the research base and business and other users.

10.3Research Environment. Key to increasing the speed and likelihood of research commercialisation is to create an environment which brings researchers and business together to meet informally and to work alongside each other in multidisciplinary teams. This creates a suite of effective knowledge transfer activities that deliver impact and could include: longer term collaborative research, shorter term problem solving projects and expert staff available to aid commercialisation. An example of this in action is through the Innovation and Knowledge Centres20 which are supported by the Research Councils and the Technology Strategy Board to accelerate business exploitation of emerging research.21

Q2. Are there specific science and engineering sectors where it is particularly difficult to commercialise research? Are there common difficulties and common solutions across sectors?

11. The Research Councils fund research into policy, regulation and new business models all of which are essential for a successful innovation system. As noted above there are various challenges associated with the commercialisation of research, and the impact on sectors varies considerably from sector to sector; therefore a common solution is not to be expected and different mechanisms are needed in different circumstances. Any interventions for improving the commercialisation of research must be sensitive to both the context of research and business sectors.

Q3. What, if any, examples are there of UK-based research having to be transferred outside the UK for commercialisation? Why did this occur?

12. Research and business both operate in a global innovation system. The UK has a particularly high level of R&D funding from overseas22 and many of our largest active R&D businesses are global companies. We should expect UK research to sometimes be transferred outside of the UK for commercialisation and for UK business to draw on research from overseas.

Q4. What evidence is there that Government and Technology Strategy Board initiatives to date have improved the commercialisation of research?

13. Public intervention from the Research Councils and others to support the commercialisation of research outcomes contributes to reducing the risk and enable the leverage and deployment of further funding, including from the private sector. Appendix 1 provides examples of RCUK interventions and Appendix 2 provides RCUK examples to illustrate the breadth and diversity of potential commercial applications of Research Council funded research. There is evidence that follow-on funding helps researchers to bridge the funding gap between traditional research grants and commercial funding by supporting the very early stage of turning research outputs into commercial proposition. This is achieved by support to develop the commercial potential of a concept and establish both commercial feasibility and scientific/technical merit through a mix of technical and business development activities.

14. A 2009 external evaluation of the EPSRC follow-on fund reports that 78% of projects led to further commercialisation activity. An investigation of the economic impact of 32 case studies arising from EPSRC Innovative Manufacturing Research Centres (about 10 % of the total IMRC investment) showed that this work had generated £70 million of additional sales for industrial partners, £43 million of licensing fees, cost-savings of at least £17 million to the public sector and £10 million to the private sector, and 20 new technologies and products were brought to market.23 From MRC’s translational schemes, there is good evidence that early stage, shorter term (<two year) investments have helped commercialisation; assessments of outcomes from the portfolios of longer-term projects (three years) will be made later.

15. The Research Councils work together with the Technology Strategy Board to ensure that there are initiatives and opportunities to improve the commercialisation of research, for example through Knowledge Transfer Networks, Knowledge Transfer Partnerships, Innovation and Knowledge Centres, Innovation Platforms and Collaborative R&D funding. By working strategically with the Technology Strategy Board we are improving the journey towards commercialisation in key areas, for example, the development of the Catapult Centres24 and co-funding the Biomedical Catalyst Fund. The RCUK Economic Impact Report 201125 outlines the close working relationship between RCUK and the Technology Strategy Board, and the various impacts we have achieved together.

16. Research Councils and the Technology Strategy Board have complimentary but distinct roles within the innovation system. The Technology Strategy Board has key strategic areas of focus26 where there are well evidenced technology and innovation opportunities for UK wealth creation. Research Councils fund a much broader research base, and aim to provide flexible support to help commercialise developments from research as they emerge, working with the Technology Strategy Board and other partners when appropriate.

Q5. What impact will the Government’s innovation, research and growth strategies have on bridging the valley of death?

17. RCUK welcomes the Government’s innovation, research and growth strategies. The Innovation and Research Strategy27 clearly sets out the Government’s approach to boosting investment in innovation and enabling UK success in the global economy. We welcome the clear intent of the strategy to achieve closer working in the innovation system, for example, through support for Innovation Vouchers, Venture Capital investment finance, emerging technology areas with the Technology Strategy Board. The critical role of research and the ecosystem approach highlighted within the Innovation and Research Strategy for growth economics paper is also particularly important.

18. To stimulate long-term growth, further investment is important but tailored solutions for specific sectors will be required. For example, RCUK welcomes the £180 million Catalyst fund to help the next generation of British medical breakthroughs.28

Q6. 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?

19. Both venture capital funding and investment by existing companies played an important role in commercialisation of our portfolio. Venture capital funding appears to be relatively healthy and strong in sheer volume in the UK compared with many other countries; the UK saw large venture capital investments in 200829 (0.2% of GDP) although this market is directed towards European as well as UK businesses. It is important to look at the potential for further investment from large global business as well as venture capital and angel investment.

20. The Government has a role to play in promoting greater awareness of UK investment opportunities in the international capital markets by marketing UK innovation capabilities. However, as mentioned in paragraph 9.1 the long time to market from initial research ideas can problematic for companies funded by short term VC investment.

Q7. What other types of investment or support should the Government develop?

RCUK makes the following recommendations to help improve the commercialisation of research:

21. The Government and the research community need to build on the progress already made in developing the environment and culture within the research base that encourages the exploration of impact from research and in which commercial research outcomes are recognised and rewarded.

22. The Government should continue to invest in and promote the UK’s research base. The UK’s research base is a vital component of the UK’s innovation landscape and makes an important contribution to economic growth through our research outputs.

23. The Government should continue to encourage innovative and appropriate ways of managing intellectual assets—to ensure that potential economic and societal benefits can be realised by beneficiaries. RCUK support the Hargreaves Review in making a contribution to this.

24. The government should maintain its current focus on the innovation system and on addressing issues of connectivity, funding, timescales and scientific risk within sectors. Sectors vary considerably, therefore a common solution is not to be expected; different mechanisms are needed in different circumstances and any interventions for improving the commercialisation of research must be sensitive and tailored to both the context of research and business sectors.

February 2012



BBSRC National Research and Innovation Campuses provide strategic funding for 8 institutes based at 6 separate and distinctive campuses across the UK.

The Science and Innovation Campuses at Daresbury, Cheshire and Harwell, Oxfordshire are creating a critical mass of facilities, skills and business, in synergy with the universities and research base.

STFC operates several world-class research facilities in the UK; industry makes use of these facilities to develop their products and processes, often working collaboratively with university researchers and STFC facilities staff.

STFC Innovations Ltd (SIL), a wholly owned technology transfer company, SIL was set up in 2002 and its role is to support STFC in identifying and brokering deals to exploit and manage our IP rights, including gathering revenue through spinouts and licensing agreements.

The Innovation Technology Access Centres (ITAC) are unique, fully equipped space for innovation, research and development providing flexible access to offices, laboratory space, clean rooms, workshops, “hot-labs” and high specification scientific equipment. The facilities are designed to suit start-up companies, SMEs and also research & development teams from established companies. I-TACs are based on the Daresbury Science and Innovation Campus and Harwell Oxford.

The Rainbow Seed Fund (RSF) was launched in May 2002 and comprises a partnership of publicly funded research laboratories with funding of £10 million provided by the Department of Business, Innovation and Skills. The Rainbow Seed Fund provides investment to support the early stages of commercialisation of technology and services from its partners.

Biomedical Catalyst Fund will deliver growth to the UK life sciences sector through supporting and driving the development of innovation life sciences products and services. Support will be available to both academically and commercially-led research and development. This is a joint programme between MRC and TSB and builds on MRC Translational Funding.

MRC Translational Funding—following the Cooksey Review, MRC provides extensive grant support for developing medical discoveries into new treatments, diagnostics and devices, on a larger scale than general Follow-on Funding (see below). Grants to HEIs or HEI/business collaborations can help take important medical discoveries into early-phase clinical trials if needed, as well as providing smaller awards that add enough knowledge to ensure commercial investment follows.

MRC Technology—was formed in January 2000 and is the technology transfer agent for the Medical Research Council’s intramural researchers employed in MRC Units and Institutes and has a string track record in translating cutting edge scientific discoveries into commercial products.

Follow-on Funding provides financial support at the very early stage of turning research outputs into a commercial proposition. This funding helps take the idea to the stage at which the route to commercialisation is clearand it is possible to secure further funding to progress, , for example, through a spin-out (seed or venture finance) or licensing opportunity.

Collaborative Training Schemes—enables researchers to develop the relevant skills to undertake excellent research, work effectively in business (and/or the government or other important sectors), and exploit the outcomes of their research. Training opportunities include vocational courses, collaborative studentship projects between academia and industry, and training in entrepreneurship.

Support for Enterprise includes a range of activities and opportunities to allow researchers to develop their entrepreneurial skills and to access business advice while commercialising their existing research, initiatives include enterprise fellowships, Young Entrepreneurs Scheme (YES).

People and Information Exchange—All Research Councils encourage increased levels of university-business interaction; support the exchange of researchers between academia and industry, and stimulate partnerships between business and researchers. This includes support for brokering and networking activities, fellowship/secondment schemes that enable researchers to work in a commercial environment, and support for Knowledge Transfer Partnerships.

Collaborative Research: The Research Councils fund collaborative research which is academic research undertaken in partnership with other research organisations, with business, with government and/or with the third sector (eg charities). Collaborative research can take a number of forms, from a basic grant between two partners, through to a complex multi-partner research programme.

Knowledge Transfer Accounts (KTA) provide flexible funding for institutions to make sure the research we fund is fully exploited. KTAs utilise a wide variety of approaches, including workshops, seed funding, training and development in KE skills, and people exchange, including funding Knowledge Transfer Partnerships (KTPs).

Knowledge Transfer Secondments (KTS) are focussed on ensuring the research we support is fully exploited, but are focussed on the secondment and exchange of people between academe and users. KTS also utilise KTPs as a way of delivering people exchange.

Innovation and Knowledge Centres (IKCs) (now in partnership with the Technology Strategy Board) are centres of excellence to accelerate and promote business exploitation of emerging research and technology. Their key feature is a shared space and entrepreneurial environment.

Centres for Innovative Manufacturing aim to maximise the impact of innovative research for the UK, supporting existing industries, and opening up new industries and markets in growth areas.



Conformetrix: Dr Almond’s unique technology, to determine the dynamic 3D shapes of drug molecules, is the culmination of a large body of work produced during a BBSRC David Phillips Fellowship. Within the space of three years, Dr Almond’s research has gone from laboratory concept to the edge of commercial reality, which promises to have a substantial contribution to drug discovery and, ultimately, patient health. His research group’s discovery of the flexible 3D molecular shape of hyaluronan quickly led to a UK patent and the all-important “proof of concept” that their new methodology could be generalised to any small flexible molecules, such as antibiotics and hormones With the support of two Follow on Fund awards and a BBSRC/RSE Enterprise Fellowship, Dr Almond has made rapid progress towards commercialisation and, with his colleague Dr Charles Blundell, formed the spin out company Conformetrix to exploit the technology. They went on to raise seed funding from Aquarius Equity Partners.

Beneforte Broccoli “super broccoli” was launched onto selected UK supermarket shelves in October 2011, and represented more than two decades of work by a collaboration between two BBSRC-supported research world-class institutes and a specialist technology transfer company, part-owned by BBSRC.

Eight19 Ltd is a solar energy company, spun out of the Cambridge Integrated Knowledge Centre (one of the EPSRC IKCs) that builds on the development of clean technology to enable a new generation of low-cost, flexible plastic solar cells that have the potential to dramatically reduce the manufacturing cost and increase the throughput of solar technology. The IKC funding enabled fundamental science to be transformed into a sustainable manufacturing process and a strong team to be built. This de-risked the investment in a commodity market (unattractive to VC funding) which, together with support from the Carbon Trust catalysed further significant inward-investment from the specialty chemicals company Rhodia. Eight19’s current product, IndiGo, is an affordable pay-as-you-go source of solar electricity to provide electrical lighting and phone charging for communities that are not connected to power grids. It’s much cheaper than kerosene, the most common source of lighting, and far cleaner and safer. IndiGo has already changed the lives of several hundred Kenyan families and over the next two months 4,000 solar units will be distributed in Kenya, Malawi and Zambia. Eight19’s work won the Rushlight Solar award30 in February 2012 and is also endorsed by Solar Aid.31

NERC has recently spun out an international geological consultancy from the British Geological Survey, BGS International, which is based on the skills and experience of a small team from BGS identifying new opportunities for surveying, especially in African countries funded by those countries or the World Bank. As a result, the company can access multimillion dollar contracts from the World Bank and African countries. This is a knowledge-based consultancy bringing funding from overseas sources into the UK. It requires a different approach to commercialisation than that which is based on IP. Whilst the data available from the BGS is free to access, significant value can be achieved for house builders, mining companies, oil and gas and other industries through providing specific added-value products eg high value data and information products from geological data and knowledge. This brings significant income to the UK and BGS and is a more straightforward route to market than is possible with IP-based commercialisation.

Next generation solar energy harvesting projects will improve quality of life and generate economic benefit: EPSRC and the Technology Strategy Board launched a joint £7 million investment through a staged approach in 2010 to transfer world class knowledge from universities into business led early stage projects to research the use of nanoscale technologies. The technology focus was to develop and scale up the next generation of solar energy harvesting. The purpose of the investment was to connect UK based supply chains and position industry as a dominant force in next generation solar energy harvesting for worldwide markets and as a cost effective course to the UK renewables energy mix for 2020/50. Building on the success of this competition, EPSRC and the Technology Strategy Board have teamed up to deliver a joint £9 million investment in nano-enabled healthcare diagnostics and targeted delivery of therapeutics in November 2011.

BAS has recently licensed some innovative tracking technology to a UK SME This licence deal was facilitated by the TSB’s Electronics, Sensors, and Photonics KTN, who helped run a wide-ranging and transparent bidding process for the right to manufacture and sell the technology. This collaboration allowed BAS to fairly licence a technology which had been developed using public money, retain accountability to the taxpayer and bring in money from a private company to continue to support UK science.

Through STFC Innovations Limited, the STFC’s wholly owned technology transfer office, the STFC has launched 15 spin-out companies since creation in 2002. These companies last year employed 88 people in the high-technology jobs in the UK. Examples of STFC Innovation’s success include:

Cobalt Light Systems, which develops equipment for non-invasive analysis of materials. They offer unique and proprietary analysis systems with applications in many market areas. Cobalt’s technology can rapidly and accurately measure chemical composition without touching or changing the sample. This ability allows the content of bottles, pills, containers to be determined without damaging the products which makes them especially well suited to pharmaceutical assay, pharmaceutical lot release and QC and fine chemicals analysis and identification.

CellaEnergy was the winner of the 2011 Shell Sprinboard Award and makes safe, low-cost hydrogen storage materials which could produce a viable and practical alternative to fossil fuels. Cella’s materials use nano-structuring to safely encapsulate hydrogen at ambient temperatures and pressures. This sidesteps the requirement for an expensive hydrogen infrastructure. Cella has A round funding from an established UK chemical company.

Heptares Therapeutics (formed in 2007). Heptares Therapeutics is a drug discovery company focused on novel small-molecule drugs targeting G-protein-coupled receptors (GPCRs), the largest family of druggable targets. The Company has developed a unique, transformational and proprietary technology for making purified, stabilised and functional GPCRs (known as StaRs™, Stabilised Receptors), overcoming a major limiting factor to the development of new drugs targeting this group. It is an MRC Technology spin out based on MRC intellectual property from MRC LMB and NIMR. The company received seed funding from the venture capital firm MVM Life Sciences Partners LLP of some £2.2 million. In 2009, it raised a further £21 million ($30 million) of equity finance in a successful Series A private round from three blue-chip international venture capital firms. Clarus Ventures led the syndicate, which includes the founding investor, MVM Life Science Partners, and the Novartis Option Fund. It has reached substantial commercial deals with Novartis, Takeda Pharmaceuticals, Shire, and AstraZeneca.

Bicycle Therapeutics: Formed in 2009 Combes the most desirable features of small molecules and biologics, to create highly specific and highly stable peptide drugs. It is an MRC Technology spin out, based on the research of Sir Greg Winter, at MRC LMB. The company announced a collaboration with Pepscan Therapuetics (Netherlands) in November 2009 to use its constrained peptide technology for the development of new therapeutics. In 2010 Bicycle Therapeutics signed a License agreement with the Ecole Polytechnique Federale de Lausanne (EPFL) in Lausanne, Switzerland and secured additional seed funding from SR One, the independent corporate venture fund of GlaxoSmithKline, and SV Life Sciences.

Activiomics Ltd: Formed in 2010 provides a mass spectrometry based phosphoproteomics service to industry and has in house programs for biomarker discovery and validation. The company’s scientific founders are Dr Pedro Cutillas and Professor Bart Vanhaesebroeck from QMUL. Professor Vanhaesebroeck is a world leading expert in PI3K signalling (a major disease target in oncology and inflammatory diseases) and has MRC funding. Dr Cutillas is an expert in quantitative mass spectrometry and conceived the technology that is the basis of Activiomics. In 2010 Activiomics secured agreements with UCB and GSK to apply its technology to identify new drug targets. In 2011 Activiomics secured investment from the IP group Plc.

Oxford Nanopore Technologies: Formed in 2005 to develop a disruptive, proprietary technology platform for the label-free analysis of single molecules. The company was founded by Professor Hagan Bayley, who is currently Professor of Chemical Biology at the University of Oxford, in partnership with IP Group Plc. Professor Bayley is MRC funded and the company supports a number of postdoctoral workers in Professor Bayley’s laboratory. Until May 2008, the company was named Oxford NanoLabs Ltd. In 2011 the Company announced it had raised a further £25 million from issuing shares to existing investors, the latest in six rounds of funding that has raised a total of £75 million. The funding will be used to develop the company’s technology for nanopore DNA sequencing, protein analysis and solid-state nanopore research.

Novacem, company developing a new carbon-negative cement, spun out of Imperial College London. EPSRC funding has played a key role in developing both the cement itself and the manufacturing process via a PhD studentship, Follow-On Fund award (with the London Development Agency) and latterly two industrial research grants jointly with the TSB. The cement absorbs CO2 from the atmosphere during manufacture.32 Novacem is still in the development stage but has partnerships with the biggest cement companies in the world (including Laing O’Rourke, Lafarge and Rio Tinto)33 and believes that within 20 years, 25% of the world’s cement needs could be based on Novacem technology. It currently employs over a dozen people, has a prototype plant that can produce five tonnes per annum and is developing a facility that can produce 200 tonnes per annum. Likely demand means that, in time, Novacem will have to licence its technology for manufacture all over the world. In 2012 Novacem is on the Global Cleantech 100 for the second year running. It was a World Economic Forum Technology Pioneer for 2011 and featured on MIT Technology Review’s list of the 10 most important emerging technologies for 2010. It was also a Wall Street Journal Technology Innovation winner and a Bloomberg New Energy Pioneer for 2010.

Energy efficient lighting—with long-term EPSRC sponsorship, the teams of Professor Sir Colin Humphreys (Cambridge University) and Professor Philip Dawson (Manchester University) have been developing gallium nitride (GaN) for use in light emitting diodes (LEDs) suitable for solid-state lighting (savings of $20 billion for US/£3 billion for UK p.a. predicted)34 and other applications. The groups have collaborated with businesses across the lighting industry and its supply chain.35 For example, SMEs like Forge Europa have grown by over 100% in a three year period and PhotonStarLED, founded in 2007, is enjoying phenomenal growth,36 from 5 employees three years ago to around 90 now. Professor Humphreys’ research group has helped AIXTRON to achieve sales of over £800 million in 2010 alone via collaboration on systems for growing GaN-based LEDs and a new division of Plymouth based Plessey will utilise the Cambridge Group’s technology to grow GaN on silicon, rather than costly sapphire, in a bid to drastically reduce the cost of making LEDs for lighting in offices and homes.

1 Innovation and Research Strategy for Growth Economics Paper (No. 15)

2 Adhering to the BIS definition of science “encompassing research and practice in the physical, biological, engineering, mathematical, health and medical, natural and social disciplines, and research in the arts and humanities”.








10 Industrial Doctorate Centres:

11 In the 2007 Comprehensive Spending Review RCUK set a target of committing a minimum of £120 million in collaborative and complementary activities with the Technology Strategy Board, between April 2008 and March 2011. The target was exceeded by 27%, collectively reaching over £165 million.

12 Joint RCUK/HEFCE statement on impact:

13 Examples include: Babraham, Cambridge; Daresbury, Cheshire; Harwell, Oxfordshire and NRP, Norwich.

14 RCUK Knowledge Exchange and Impact

15 Connectivity relates to the richness of the network of connections, via formal or informal relationships, partnerships, agreements, etc that exist between the different agents (individuals, companies, universities, etc) in the innovation landscape.

16 (Energy Research Partnership, October 2011).



19 The Republic of Engagement. Exploring UK Academic Attitudes to Collaborating with Industry and Entrepreneurship. AIM Research and UK-IRC for ESRC and EPSRC 2010.



22 The UK R&D Landscape: Enhancing Value Task Force (February 2011, CIHE, UK-IRC).

23 Economic Impact of the Innovative Manufacturing Research Centres, DTZ report for EPSRC 2011.






29 Innovation and Research Strategy for Growth Economics Paper (No 15)



32 −0.11 tonnes of CO2 is produced manufacturing one tonne of Novacem cement—compared with 0.8 tonnes for one tonne of Portland cement.


34 US DoE Report 2010 “Energy Savings Potential of Solid-State Lighting in General Illumination. Applications 2010–30”.

35 UK Parliamentary Office of Science and Technology, POST Note 351, Lighting Technology, January 2010.

36 Its award winning colour tuneable LED product ChromaWhite has recently been nominated as part of Vince Cable’s Made by Britain project.

Prepared 12th March 2013