EVIDENCE TO THE COMMITTEE
Threats to the science base
3.7 Many witnesses
stressed the importance of maintaining the science base, as well
as supporting the innovation process. Witnesses from the Association
of the British Pharmaceutical Industry (ABPI) told us that "We
rely very heavily now on our colleagues in academia to do a lot
of the really fundamental and underpinning research for us"
(Q 228). The DTI restated its total commitment to maintaining
the science base. Dr David Evans, Director of Technology
and Standards at the DTI, assured us that the Government and the
Research Councils are still trying to maintain the balance between
"bedrock" science and applied research set out in Realising
our Potential (Q 10). However, the ABPI argued that
British companies are increasingly looking abroad for new research
partners because they consider the UK science base is declining
through under-investment (Q 237). The pharmaceutical industry
also looks to universities to produce skilled scientists to staff
the industry's laboratories. Here, too, the ABPI says that it
finds the UK science base increasingly wanting.
3.8 But although it
is very significant, the pharmaceutical industry is hardly typical
of United Kingdom industry. The big firms are global in operation;
the market is large and highly regulated; development takes a
very long time, but a new patented medicine can command large
returns; and academic and commercial researchers communicate with
relative ease because they work in substantially the same ways
(Mr Langston and Dr Garnsey, QQ 93-97). At the same time,
moreover, the industry's specialist research relies on a level
of capital equipment in its laboratories that can rarely be duplicated
in universities; and it must expect to carry some of the burden
of training its own scientific staff. More disturbing were the
comments of Professor Gareth Roberts, Chairman of the Committee
of Vice-Chancellors and Principals (CVCP), that "if the UK
economy is to remain internationally competitive, it is essential
that our universities are adequately funded to maintain the international
excellence and standing of their research. However we believe
that there is growing evidence that some multi-national companies
based in this country are re-siting collaborative research overseas
in the light of concern about the research infrastructure in the
United Kingdom". "It is clear that the money allocated
by our Higher Education Funding Councils is now grossly inadequate
to meet all the objectives". "Greater attention must
be given to the replacement costs of research facilities and equipment".
"Infrastructure funding is falling between the cracks in
the system and none of the stake-holders is taking full responsibility
for it" (Q 337).
3.9 Professor Roberts
drew our attention to the importance of recognising that employers
are not a homogeneous group and that large multi-national companies
have very different needs from small businesses. He reminded
us that it is the small companies which are critical to the innovation
process. Similarly the organisation of research in the more than
100 universities in the United Kingdom varies considerably from
the large strongly research-focused institutions to those that
are small and teaching-focused. Within this research environment
activities range from "blue sky" basic research to near-market
applied research. There is a balance between the need to carry
out work at the very leading edge of technology and the need to
form links at local and regional level with SMEs and local business
advisory services. Even more important is the need to maintain
the very delicate balance between investigator-driven basic research
and the more focused applied research where commercially successful
exploitation is more readily apparent.
3.10 Professor Roberts
pointed out that although it was not explicit Government policy
to divert more public sector funding into applied research, the
attractiveness of schemes designed to bring university and industry
together tended to push research programmes in that direction.
"I suspect that the overall balance is now about right",
he told us (Q 358). "But with all the momentum it could
soon be out of bounds" (Q 359).
Interaction with the science base
3.11 Dr John Forrest,
Chairman of the Brewton Group of small and medium-sized IT companies,
voiced two familiar criticisms concerning interaction with the
United Kingdom science base: too many of its best brains are business-illiterate;
and inventors did not wish to relinquish equity in their inventions
(Q 166). We found much truth in this generalisation, but
a lot of evidence suggests things are changing.
3.12 Dr David Evans
(DTI) told us his assessment of the present United Kingdom position
was positive: "there has been a steady growth in the interaction
between industry and the universities" (Q 2). This
bodes well for competitiveness, since DTI surveys show that firms
which grow fastest tend to exhibit good connections with the science
base (Q 7).
3.13 Dr Garnsey described
the interface between the science base and industry by emphasising
that innovation is not always a linear process, proceeding from
the university to the company and out to the market. It is an
interactive process where innovations in, for example, software
or scientific instruments may feed back into the science base
and trigger new research (Q 86). The significance of partnerships
between industry and the science base was mentioned by many of
our witnesses.
3.14 William Castell,
the Chief Executive of Amersham International plc, told us the
key to innovation is partnerships involving the best scientists
around the world (Q 143). Although in the global market,
he regards Amersham as a relatively small company, he believes
that big firms will also be forced increasingly to make research
partnerships, partly because in many situations innovation requires
more disciplines than any one firm could have in-house. Amongst
Amersham's strategies for finding the right partners were university
"listening posts", an international high-level advisory
board, and interfaces as informal as dinner in college halls (QQ 154-6).
3.15 The ABPI spoke
of partnerships with university science that are close: "The
barriers between us are now largely removed, or at least minimised"
(Q 228). Mr Harvey emphasised that it was important for
universities to forge links with industry (Q 278); however,
this should be done on a one to one basis. "When universities
go it alone", he argued, rather than forming university consortia
to manage the university/industry interface, "they do better
because they are motivated to work in their own self-interest"
(Q 280).
3.16 Representatives
from the Association of University Research and Industry Liaison
Officers reinforced the view that a significant change in culture
is under way. "Academics are interested in commercialisation
of their ideas" (Mr Thomson, Q 303). Our witnesses emphasised
the importance of integrating the technology transfer function
within the universities' affairs: "licensing is part of the
business" (Q 303). They emphasised both the timescale
of the process, given that it might be 20 years before an initial
breakthrough led to an exploitable product, and the need to look
at the "portfolio" of ideas within an establishment,
not one or two isolated examples. Professor Roberts emphasised
the top-level strategic role of the technology transfer function.
These were issues that needed to handled by the top management
within academic institutions. Licences also gave rise to one
of the few sources of funds that were not earmarked, and could
be spent how the university chose.
Innovation
3.17 Innovation is
widely recognised as the key to industrial success. The White
Paper "Realising our Potential" points out that
"firms which are skilful at innovation will secure competitive
advantage in a rapidly changing world; those which are not will
be overtaken". Madame Edith Cresson, the European Commissioner
responsible for research and education, has spoken of an "innovation
deficit" in Europe and the need to foster a genuine innovation
culture. Dr David Evans explained that the DTI has moved away
from support for industrial R&D itself in favour of actions
to improve the "infrastructure" for innovation (Q 9).
He mentioned some of the many schemes including the Teaching
Company Scheme (Q 7), Postgraduate Training Partnerships
to support both postgraduates to work for their degrees in industrial
research organisations (Q 9) and LINK (see Box 1).
3.18 Dr Elizabeth Garnsey
(a lecturer in Management Studies) told us of the work at Cambridge
University that has created "a culture that is open to enterprising
activities" (Q 98). "There is an opening up of
awareness that it is not necessary to go into the large company
with large laboratories, but there are now opportunities for starting
up your own business" (Q 92).
3.19 The Chief Executive
of BTG plc[5],
Ian Harvey, was in general optimistic about innovation in the
UK. He produced figures to show that the United Kingdom is five
times more successful at generating royalties from patents and
licences than the USA. In his experience, United Kingdom universities
have become much more "creative" in innovation over
the last ten years, and more keen to spin-out new companies.
A lack of receptivity to new ideas in United Kingdom industry
was at the root of any failure to innovate (Q 271). Evidence
from the industrial liaison officers tended to confirm the view
that there was no lack of ideas inhibiting the innovation process:
"the problem is to identify the opportunities" (Mr Thomson
Q 303).
Intellectual property rights
3.20 University research
may lead to patentable ideas. If a patent is taken out it may
be licensed to an existing firm, perhaps a large multi-national
company, or it may form the basis of a local start-up enterprise.
Whichever route is followed, IPR are key to both the generation
of income to the university from licensing and the spin-out of
new business enterprises. One of our early witnesses, Dr Elizabeth
Garnsey, told us that Cambridge, unlike other universities, does
not claim IPR in inventions of its staff. This is an unusual
policy. Strathclyde was more typical, taking the IPR and sharing
royalties 50:50 with the principal investigator. Most witnesses
felt the expertise, both technical and legal, required to take
out and uphold a patent meant this could not be left to individuals.
DTI suggested that some universities might be keen, "sometimes
too keen", to protect their IPR with patents which are expensive
to acquire and much more expensive to defend (Q 8). Although
there was little support for the idea that IPR should be ceded
to industry, it was acknowledged that it was a chronic problem:
universities had limited funds with which to support a technology
transfer office and apply for patents; even deciding what to patent
was "extraordinarily difficult" (Mr Quysner, Q 205).
| Box 5: Intellectual Property Rights
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| The Research Councils have adopted a consistent approach on intellectual property rights (IPR) and the commercial exploitation of research arising from their grants. It is expected that valuable results obtained in the course of research will be exploited to the benefit of the institution (usually a university) and its researchers. Initially the ownership of IPR rests with the institution and IPR may be retained or assigned to individuals or industrial partners under exploitation arrangements. Where more than one institution is involved, the IPR rests with the institution employing the inventor. Agreements on IPR and revenue sharing are supposed to be made prior to starting to draw down research grants on projects that involve collaboration with industry.
|
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| The Office of Science and Technology (OST) has similar rules for IPR resulting from research that it funds directly (e.g. through the Foresight Challenge fund): it is up to research consortia to negotiate the ownership of IPR themselves; and exploitation is expected in a manner that brings maximum benefit back to the United Kingdom.
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| The OST and most of the Research Councils do not expect to receive royalties as a result of the exploitation of external research that they have funded. However, the ESRC retains the right to 50 per cent of the income from IPR royalties and copyright. The Medical Research Council (MRC) funds a large amount of internal research by its own staff, and in its own institutions, and in this case the IPR, and any revenues, are retained by the MRC.
|
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| In general for the United Kingdom, if an invention (in the widest sense of the term) is developed in the normal course of work then the rights to it belong to the employer. If it is made outside the bounds of work then it belongs to the individual. If the invention is made within work and it is of profound importance to the employer (e.g. transforming a small company into a high value world leader), then it is possible for the individual to get compensation. However, the Patent Office has said that no one in the UK has yet been awarded compensation under this clause.
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| In some European countries the law on IPR is rather different. In Germany, for example, an individual is automatically entitled to remuneration from inventions made during the normal course of work. Individuals can also claim compensation if the company does not do enough to exploit the invention.
|
3.21 The significance
of IPR to universities with large research programmes and its
importance as one of the few unconstrained sources of income raised
the question whether IPR work was adequately funded. Numbers
provided by David Thomas, Chief Executive, Imperial Exploitation
Ltd (Q 303) for his organisation showed that five technology
transfer specialists were examining the IPR opportunities that
arise from the work of around 2,000 academics. This, he argued,
indicated that even the more enlightened organisations could do
more to fund and protect their IPR. But, as Professor Gareth
Roberts explained, any Vice-Chancellor acting in the role of a
chief executive who had seen the funding of his organisation from
Government drop from over 80 per cent to under half recognised
what had to be done-and had the powers to do it. The remedy was
in the hands of the universities.
The balance between spin-off and
licensing
3.22 The complexity
of the relationship between innovation and exploitation is indicated
by the discussion in the Bank of England report. This notes (paragraph
3.60) that United Kingdom universities with IPR to exploit usually
license it, for immediate gain, rather than set up a spin-out
company. If the licence goes overseas there may be a loss of
United Kingdom competitiveness which a spin-out would have prevented.
Douglas Robertson, Secretary of the Association of University
Research and Industry Liaison Officers, confirmed that he "approaches
IPR licences globally and it is often easier to get a licence
overseas than in the United Kingdom" (Q 304). But whereas
the larger research universities might find it easier to seek
markets for their IPR overseas, Jay Mitra, Head of Economic Development
at the University of North London, explained that IPR was less
of a concern for the ex-polytechnic sector. They looked at what
their universities could do to meet the needs of small, mainly
local, companies. Only a less specialised multi-disciplinary
approach could bridge the gap between what small companies needed
and what universities can provide. He outlined collaborative
work where the University of North London drew on the expertise
of the University of Bologna in its linkages with local business.
This collaboration, where the university acted as the intermediary
between local industry and the research worker, contrasted with
collaborative work described by Professor Gareth Roberts between
the universities in York, Leeds and Sheffield where different
research centres at the forefront of science worked together.
5 BTG exists on the academic-industrial interface;
it acquires IPR from universities and licenses it on. Formerly
the British Technology Group, BTG was privatised in July 1995
and now operates internationally; but it still files about a third
of all patents generated by United Kingdom universities. Back
