Summary
The translation of university research into commercial success—technology transfer—is a well-researched, and well-reviewed, area. Indeed, the development of an evidence base on technology transfer has benefitted from a succession of high-profile, often Government-sponsored, reviews on how to improve collaboration between universities and business, and increase the commercialisation of academic research. Such efforts are to be commended, but successes in identifying the challenges associated with technology transfer have yet to be matched by progress in tackling the underlying problems. Instead, technology transfer has been dominated by an ongoing ‘review culture’ and an ‘implementation deficit’.
Our inquiry appears, however, to have helped refocus the Government’s attention on technology transfer and the need for action. The Industrial Strategy Green Paper describes the Government’s aim to “do more to commercialise our world leading science base”. This is supported by additional funding, announced during the course of our inquiry, including £120 million, over the next four years, to “incentivise university collaboration in tech transfer” as well as the establishment of a separate ‘Industrial Strategy Challenge Fund’ to address “Britain’s historic weakness on commercialisation”.
We welcome the Government’s renewed emphasis on technology transfer but remain concerned that its previous efforts have disproportionately focused on the ‘supply’ of research by universities, rather than on the level of ‘demand’ from businesses. Without a healthy commercial demand for R&D, the scope for universities to engage more in technology transfer is limited. Progress on this, however, is disappointing—the overall R&D intensity of the UK business sector continues to be low compared to other OECD countries. The Industrial Strategy, combined with the Government’s forthcoming reviews of R&D tax credits, the Small Business Research Initiative, and the VAT system, all present valuable opportunities for the Government to refocus its efforts on raising demand for university research, and creating the conditions that are conducive to businesses investing more in R&D.
The Government has also announced that it intends to commission research to examine “different institutions’ principles and practices on commercialisation of intellectual property (IP)”. The valuation of IP, and the amount of equity taken in spin out companies, are contentious issues. Some evidence indicates that technology transfer offices are prioritising short-term revenue generation and overvaluing IP, whereas others maintain that this is not common practice. Technology transfer offices are often in the middle of complex IP negotiations and are tasked with balancing competing priorities, with varying degrees of support. The Government’s forthcoming research should therefore examine what skills are needed to successfully value IP, and broker negotiations, as well as how these skills may vary by sector.
We were surprised to find that engagement between Local Enterprise Partnerships (LEPs) and universities is patchy. Despite having a mandate, and funding, to promote local innovation, LEPs are currently lacking any firm obligation, or support, to connect local businesses and higher education institutions. In contrast, the four pilot ‘University Enterprise Zones’, established with the explicit aim of increasing interaction between universities and business, are notably missing from the Industrial Strategy Green Paper and face uncertain future funding. The Government should use the opportunity presented by the Industrial Strategy to oblige all LEPs to work with their local universities, or else reassign a proportion of their funding sufficient to roll-out a national university enterprise zones programme.
Finally, the Government must be careful not to damage the UK’s pre-eminent position in academic research in pursuit of ever-greater commercialisation. The vast majority of innovations do not begin as discoveries in academic research and the Government must be alert to, and address the needs of, the UK’s broader innovation landscape.
10 March 2017