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October 10, 2007

Another small step in the right direction

During David Sainsbury’s long tenure as the minister responsible for science and innovation a number of landmark reports were published reviewing the state of science, technology and innovation policy, notably the Innovation Report, the Lambert Report and the Ten-year Investment Framework for Science and Technology. However, there was always a sense that these exercises were carried out in isolation from one another despite the multi-ministry endorsements that they carried.

In this post-ministerial review, Sainsbury has aimed to achieve a synthesis of policy, particularly in the areas where its predecessors overlapped and sometimes muddied the waters. The result contains no surprises, but subtly shifts the emphasis still further towards innovation and knowledge transfer as the justification and driving force behind government support for science. Nonetheless, all stakeholders will be relieved at the headline recommendation that the increase for basic science funding, foreseen in the Ten Year Framework, should continue, along with (regrettably, in diminishing order of probability) more money for the Technology Strategy Board and a call for other government departments to increase their performance and improve the quality of policymaking by investing more in R&D.

This is a report that aims to be well grounded in the latest thinking on innovation policy—a chapter is devoted to describing the UK’s innovation ecosystem and there is extensive analysis of the reasons for apparent lack of R&D intensity, including the high service component in the economy. The issue of innovation in services is much discussed, though no new ideas are offered beyond an endorsement of the current approach in the Department for Innovation, Universities and Skills that was stimulated by NESTA’s Hidden Innovation report [RF 20/06/07 p16].

Sainsbury has been keen to avoid the accusations of ‘linear model’ thinking that were attached to the early part of his ministerial tenure when innovation policy seemed synonymous with the promotion of spin-off companies. That is not to say that this issue has gone away, but it is a mature treatment focused on hi-tech clusters around universities, complex funding arrangements and identifying insufficient proof of concept funds as the main deficiency in the supply of venture capital, with recommendations for regional development agencies to establish these.

Knowledge transfer is another focus, with research councils set to come under still more pressure to improve performance in this area and extend substantially KT partnerships. Sainsbury has struggled to find a way of recognising that different types of universities have different roles to play in KT and, in particular, to find a role for those that are less research-intensive. However, the result is obscured by an unfortunate attempt at a new nomenclature. This assumes that if a university is not “research intensive”, then it is “business-facing” and, presumably, vice versa—an assumption contradicted by the evidence on links with business.

The first group are defined as focusing on “curiosity-driven research, teaching and KT”, and the second on “the equally important economic mission of professional teaching, user-driven research, and problem solving with local and regional companies”. Reference to “regional universities” would have given a clearer signal and perhaps opened the way to more innovative funding models for this kind of work than the adjustments to HEIF funding that are proposed.

A clear winner in this report is the Technology Strategy Board, which, apart from a ringing endorsement of its present activities such as Innovation Platforms, is put forward for a broader leadership role in defragmenting innovation support. This fragmentation is the cumulative result of the large number of micro-initiatives in this domain over the past decade—one must say with ministers as key culprits in their search for positive announcements to make.

The targets for the new joined-up approach are research councils, RDAs and government departments. One area of fragmentation needing early attention will be the effect of the recent division of the late Department of Trade and Industry! An interesting new role is as the repository for information about the competitive strategy of industries—which would be the closest government has come to coordination of a business sector in three decades.

This report brings demand-side innovation policy fully into the mainstream, using public procurement and regulation to stimulate innovation rather than stifle it. As well as rolling these into the Innovation Platforms—already underway—government departments are urged to adopt innovative procurement practices. The challenge is not one of knowing what should be done but rather of doing it.

A more focused proposal is a fundamental restructuring of the UK’s Small Business Research Initiative, which requires government departments to spend 2.5 per cent of their R&D budgets on small businesses. This has tended to disappear in consultancy rather than promoting innovative S&T solutions to policy problems. The TSB once again is proposed as the agent to effect a transformation. A negative suggestion is the exclusion of the social sciences and humanities from qualifying, at a time when other parts of the review clearly recognise the need for interdisciplinary approaches to innovation in a knowledge and service-based economy.

In sum, this a thoughtful and comprehensive document but, not surprisingly from the man responsible for the present set of policies and institutions, the movement forward is incremental rather than radical. The steady rise of innovation and KT as drivers was already there, but the research community has yet to absorb its full implications.

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