PRAXISUNICO RESPONSE TO THE INNOVATION AND RESEARCH STRATEGY
PraxisUnico welcomes the new Innovation and Research Strategy for Growth. We welcome the continuing commitment of the government to both basic and translational science. PraxisUnico also welcomes the further investments being made in the innovation ecosystem. We are pleased that the contributions made by UK universities, research institutes and Public Sector Research Establishments (PSREs) are recognised as being the most productive in the G8. PraxisUnico will play its part in capturing greater economic and social gain for the UK from research and related emerging technologies. PraxisUnico will support the government in ensuring that the mechanisms for implementation are effective and as simple as possible.
On some of the specifics:
SMART
The re-launch of SMART is welcome. The importance of small companies to the health of the UK economy is critical. PraxisUnico hopes that when the scheme is re-launched that speed of decision-making and support for applicants, key ingredients of the success of the old scheme, will be a focus. It is also essential that there is recognition that some of the best projects will be the riskiest and the terms and conditions and methods of assessment need to be appropriate. The report recognises the critical role played by a small percentage of SMEs in wealth and job creation. It is essential that these high growth companies or ‘gazelles’ are involved in the consultation on schemes which are targeted to this group. There is a rising trend for such companies to act internationally despite their size, the micro multi-national (see recent report from the Lisbon Council) and they need to be supported by UKTI. It is also essential that young companies are not excluded through lack of an established track record, but are assessed on their prospects.
University spin-outs
PraxisUnico believes that new industries will emerge from new companies which create the future and generate demand and not simply from the re-shaping of existing major companies. Open innovation models by many larger companies also recognise their critical role.
In 2009 over 1300 University spin-outs were actively trading taking new technologies to market, often in entirely new domains. Since 2003 over 50 of these have gone to trade sale or independent public offering with a capital value in excess of £13bn. The early years of these companies can be challenging. PraxisUnico therefore welcomes schemes targeting small companies and would wish to see the rules for such schemes implemented in a manner where young companies including university spin-outs and graduate start-ups can take full advantage of the system.
PraxisUnico's only disappointment with the Strategy is that there are no funds specifically targeted at University companies or PSREs. The University Challenge Fund Scheme was highly successful delivering seven times the original public funding in private sector leverage and bringing many new technologies through the spin-out route.
PraxisUnico welcomes the Biomedical Catalyst Fund and hopes that it will be open to early stage university companies. The 'valley of death' as it has been called, exists across all technologies, not just biomedical, and the UK strength in engineering, physical science and social sciences which address areas of some of the greatest societal challenges also need access to high risk investment funds which when aligned with risk-averse venture funds will bridge this valley of death. The holding of the Anglo-US Financing Innovation Summit is therefore welcome. True technology investment funding in the UK needs to increase if we wish to capture the economic gain from our research base. It is interesting that recent reports from some US bio-investors is that they are turning their attention to Europe (including the UK).
The UK is making a reputation in starting technology businesses but we need to become starter-finishers with investors seeking longer term returns, the days of quick exits are over, and incentivised to stay with a business for longer by the tax regime.
Universities as hubs - actions under delegated authority
The Strategy recognises “universities as hubs of networks that link businesses with the research base”. Following the demise of the RDAs, in England the universities' role as hubs is increasing. In all of the schemes outlined in the document we believe that now is the time to reinforce that dynamic. Many of our members welcome the opportunity to ensure the delivery of many of the Government’s objectives and ensure direct engagement between the research and business communities. For example, building on the experience of Knowledge Transfer Accounts, Knowledge Transfer Secondments and through running their own innovation voucher schemes universities are well placed to deliver innovation vouchers and other schemes with delegated authority.
Capital
PraxisUnico welcomes the extra funding but is concerned that the pressures on capital funding previously introduced will have a detrimental health on the responsive mode grant system. Capital funding, whilst welcome, needs to ensure that it dovetails effectively with recurrent funding in order to produce an economic gain.
E-infrastructure
The investment in this area is critical if the UK is to stay at the forefront, not just of computer and information sciences but, in all disciplines.
Innovation Vouchers
This scheme is particularly welcome. Many universities have developed and delivered their own schemes very effectively. However, in some parts of the public business support systems under the previous government there have been examples of very cumbersome administration being introduced into schemes with very low grant values. PraxisUnico is sure that many universities would welcome the opportunity, possibly in collaboration to deliver this scheme on behalf of the public sector. Our members' experience has demonstrated the efficacy of this approach.
European funding
Universities have played a critical role in securing UK investment both from the Framework programmes and European Regional Development Funds. PraxisUnico is pleased to see the commitments made in the Strategy. We are presently very concerned that the European Commission’s ability to deliver simplification of the administration of both these programmes will not be effective. The new ERDF regulation, for example, runs to 160 pages. The terms and conditions imposed through such schemes are wholly out of line with the innovations they are expected to support. The IP terms for European research are in need of further revision if the ambitions of Horizon 2020 are to be achieved, as was noted at the first European Innovation Summit in Brussels on the 5th and 6th of December. PraxisUnico members have a great deal of experience in these areas and will be happy to support BIS.
Prizes
PraxisUnico shares the government’s view that prizes can be very effective. We would wish to see the prize based approach expanded, possibly as an instrument to aid government procurement on innovative solutions.
Open data
PraxisUnico welcomes the opening up of government data sources, subject to protection for the individual’s rights. We believe that many new businesses can be built around such data sets and that this will further enhance the research community. PraxisUnico also believes in open access to research data, but this must be balanced to ensure that early disclosure does not undermine academic output, collaboration with industry or the securing of patent protection in the absence of a European Patent Grace Period, such as that available to inventors in the USA or Japan.
The geography of clusters and Catapult activities
PraxisUnico welcomes the commitment to clusters and Catapult. But there needs to be recognition that the UK is not a large country. PraxisUnico believes that in the internet age we need to build an e-infrastructure that delivers UK economic benefit for all regions. Companies should not be disadvantaged through their location. Technology-based businesses may be best located close to a particular university in order to access facilities or research but this should not disadvantage them in respect of clusters and Catapult activities. Such activities need to be inclusive, bringing their benefits to the widest possible UK community of businesses and researchers. There are six Fraunhoffers in the area of photonics alone! The level of funding provided for Catapult is insufficient for six centres on its own – the centres need to recognise their role in acting as hubs and stimulants for others on a networked basis. Only through such a scale of collaboration will the UK punch its economic potential.
Notes:
The Innovation and Research Strategy for Growth can be found at www.bis.gov.uk/assets/biscore/innovation/docs/i/11-1387-innovation-and-research-strategy-for-growth.pdf