When money is tight, the returns from science matter

UK Science Minister David Willetts MP

“Emolument matters. Public spending on science, just like everything else, has to stand up to rigorous economic scrutiny,” Willetts said to an audience anxious for clues to where the axe will fall in the UK spending review (for which read announcement of cuts to public sector budgets), that will happen in October.

One of the most frequently used arguments to support research relates to the benefits – often unanticipated – which accrue from blue skies research. “The surprising paths which serendipity takes us down is a major reason why we need to think harder about impact,” Willetts said, adding, “There is no perfect way to assess impact, even looking backwards at what has happened.”

With this in mind, Willetts told his audience he was postponing the introduction of changes to the way in which the impact of UK university research is assessed for one year. This will allow time for the findings of a pilot impact assessment exercise, due to be completed in the autumn, to be taken into account.

And he also wants to consider work going on elsewhere to establish sound impact assessment methodologies “For instance, there are some interesting developments underway in the US, where the Star Metrics initiative is seeking to track the science dollars pumped into universities through the recovery programme and will then trace their impact on the broader economy,” Willetts said.

Innovation sausage

According to Willetts, the previous UK government viewed innovation as a sausage machine, in which money was pumped into university-based scientific research, leading to patents and spinout companies with venture capital backing. As they mature, these businesses provides tax revenues, jobs, and a profit for the university.

“It sounds very attractive and it does happen,” Willetts said, noting that Imperial Innovations, the technology transfer arm of Imperial College London, has been a great success.

But, he said, this is too neat and tidy an account of scientific and commercial progress. “The world does not work like this as often as you might think. And that is not our failure, it is a gap in that whole picture of innovation,” said Willetts.

The sausage machine model may actually have had the perverse effect of putting an exaggerated focus on IP and spin-outs. On average the amount that UK universities generate from commercialising their IP is less than 3 per cent of the total income they make from working with business and charities.

For Willetts, there are other ways of harvesting benefits from research. “For example, I’m a firm believer in clusters - best defined as a low-risk environment for high-risk activity.” Dundee is an example here, with some 350 computer game and creative industries companies based around Abertay University. “The area around Dundee is now home to about three quarters of all British jobs in computer game development,” the minister noted.

And while it may be a matter of national pride, there is no economic argument for being the first to make a scientific discovery. “What exactly is the economic problem if the next scientific discoveries originate overseas, rather than here?” Willetts asked.

Instead, it is important to have enough good science to tackle a new problem, to react effectively to scientific breakthroughs, however or wherever they may arise, and to capitalise on those breakthroughs via research programmes and business initiatives.

Building absorptive capacity

“Some 95 per cent of scientific research is conducted outside the UK. We need to be able to apply it here,” Willetts said. In advanced scientific fields, it is often necessary to conduct leading-edge research in order to understand, assimilate and exploit the leading-edge research of others. “It is this absorptive capacity which is crucial,” said Willetts.

There are powerful feedback mechanisms resting on this, with foreign companies citing the quality of the public research base as one of the main reasons for locating their own internationally mobile R&D in the UK.

His views on clusters, absorptive capacity and the role of basic research have led Willetts to a number of conclusions about the role of government in supporting science and innovation. First, he said, it makes sense for government to back shared facilities such as synchrotrons which private companies could not develop on their own.

Smart public procurement

Willetts also pointed to the power of public procurement in driving innovation, citing the example of Skynet, the provider of secure satellite telecommunications for Britain’s armed forces. With Skynet, the Ministry of Defence purchased a service, and requests further capability as necessary, but does not own the hardware. The operator, Astrium is free to sell spare bandwidth to other government departments and friendly states. “Skynet is an example of smart public sector procurement. Instead of buying a satellite, the MoD bought a service and created a commercial opportunity at the same time,” said Willetts

The UK public sector spends £200 billion per annum on goods and services. It’s vital this purchasing power is used effectively, Willetts believes, “A purchasing contract can be as effective a way to get money to an innovative small business as a grant or a capital investment,”

The challenge, Willetts concluded, is to make the most of the science base and maximise its contribution to economic growth. “I strongly believe that contribution may come best if we encourage openness and innovation, not if we try to micromanage our universities, direct researchers, or count patents.”