The UK can play a global role in R&D and whilst remaining involved in EU programmes said George Freeman, setting out plans to attract foreign capital into the research ecosystem
UK science minister George Freeman announced new measures to boost private investment that will commercialise the country’s research, using schemes set up to compensate for exclusion from Horizon Europe to help drum up financing from overseas.
It’s long been a concern that the UK, like the EU, lacks the private financial firepower of the US to turn its start-ups in success stories, and Brexit has sharpened concerns about the UK’s attractiveness to investors.
“If we're going to be a powerhouse in this global economy, we have to attract much more international money; there is a wall of money out there,” said Freeman in a speech in London yesterday at Onward, a centre right think tank. “The number of people who say to me, ‘I'd love to invest in this ecosystem, how can I?’”.
The UK government has committed to increase research spending to £20 billion by 2024-5, an increase of around 30%. A new unit has been set up in the Department for Business, Energy & Industrial Strategy (BEIS) to work out how to parlay that boost into two to three times as much private investment over the next 5 - 10 years.
Last December in Japan, Freeman unveiled a £119 million fund for overseas research collaborations, as part of the UK’s response to being shut out, for now, of Horizon Europe.
The hope is that new funding streams will stimulate global science collaboration, which then leads to foreign investment in UK R&D, a BEIS spokesman said.
In addition, Freeman announced BEIS will soon unveil a tool that allows potential investors and local leaders to track research and innovation clusters across the UK.
By being more “scientific” about what is holding clusters back – be it skills, public funding or infrastructure – the UK can “get much more bang for our buck” and “attract that private funding that I talked about,” Freeman said.
The UK has long had a strong innovation cluster between London, Oxford and Cambridge, which Freeman said is on a par with Silicon Valley or Boston.
But it is government policy to promote development of clusters elsewhere in the UK to help diminish regional wealth inequalities, and the hope is that this new tool will help.
In 2021, foreign direct investment (FDI) into university R&D fell 6%, the first drop since 1999. The problem, according to the Higher Education Policy Institute, is that universities are not well enough integrated into innovation ecosystems, and no one in government has taken charge of attracting investment.
That said, in the past few weeks the vaccine manufacturers Moderna and BioNTech have announced investments in the UK. FDI into UK life sciences has fluctuated wildly in recent years, but at £1.9 billion in 2021 outstripped every other country except the US.
In a further bid to boost investment, UK chancellor Jeremy Hunt last month announced a relaxation of financial services rules that Freeman hopes will allow UK pension funds to invest in domestic R&D.
“The pension reforms in the City are designed to make sure that we can harness finally the great power of the City of London to support our science and technology base,” Freeman said.
The European Commission is still blocking UK association to Horizon Europe because of threats by London to tear up the Northern Ireland Protocol, a key part of the post-Brexit settlement.
“We're still pushing for that association to be formalised,” said Freeman. But meanwhile, the UK has been dispensing money that would otherwise have been spent on the framework programme, including £480 million for R&D that included funding for basic university research budgets.
There have been signs of a thawing of relations between Brussels and London this week, with the UK agreeing to allow the EU access to its trading IT systems, which would help monitor flows across the Irish Sea between Great Britain and Northern Ireland. The question of the Northern Ireland Protocol remains unresolved, but this is a first step.
“The Prime Minister is investing in hugely improved relations across Europe,” said Freeman. “I've yet to find a member state that doesn't say we really want the UK in Horizon.”
Martin Smith, head of the policy lab at the medical research charity Wellcome Trust, said, “There seems to be positive noises when it comes to EU-UK negotiations over the NI Protocol - maybe a cause for optimism, even if there's a way to go on that,” “Now would not be the time to close the door on Horizon - but I don't think that's on the cards yet.”
Pick up the phone
But with association still blocked, the UK is drawing up its own Plan B alternative to Horizon. “I meet research leaders pretty much every week, and we are working in the coming weeks to define this package. It's now with the Prime Minister, the chancellor, the cabinet, the National Science and Technology Council,” said Freeman. More details will be announced at the next budget on March 15, he said.
Freeman issued another warning in his speech that the UK could not wait forever before deciding to give up on association, and launch this Plan B instead. “I think increasingly, people have said the worst of all worlds is just to be benched and to be neither in nor active outside,” he said.
However, he has made similar ultimatums before that have come and gone. Last June, Freeman said in a speech in Brussels that “if the phone doesn’t ring in autumn, we’ll have to go.”
In the speech yesterday, he acknowledged that working up an alternative to Horizon was at least in part a negotiating tactic with the EU.
“If we move with bold vision, as the Prime Minister is minded to do,” he said, “I think it's more likely [the EU] will pick up the phone and say, look, come back in, and let's do the European Research Council together and learn from some of the things we're doing.”