1. business and industrial

CBI submission: Nurse review of Research Councils
Introduction
1. The CBI welcomes the opportunity to contribute to the Nurse review of Research
Councils. The CBI is the UK’s leading business organisation, speaking for some 190,000
businesses that together employ around a third of the private sector workforce. With
offices across the UK as well as representation in Brussels, Washington, Beijing and Delhi
the CBI communicates the British business voice around the world. CBI members span
sectors including pharmaceuticals, telecommunications, software, aerospace, chemicals
and other materials, defence, oil & gas, and food. Many CBI members which are not
headquartered in the UK invest heavily in R&D in this country.
2. As a business federation the CBI is not itself a major research user, and in responding to
the call for evidence we do not propose to address each of the specific questions in order
but to highlight the major issues raised which are of greatest relevance to our members
and to business generally.
Summary
3. The Research Councils play a pivotal role in the UK’s innovation ecosystem, and adequate
and balanced funding is essential for them to fulfil this function. Their engagement with
business must take account of the diversity of business requirements and competences,
including the varying needs of businesses of different sizes. Pathways to the
commercialisation of research outputs need to be continuous and connected, including the
transition from excellence-based research support by the Research Councils to exploitation
based on commercial criteria.
The Research Councils play a pivotal role in the UK’s innovation ecosystem, for which
adequate and balanced funding is essential
4. The Research Councils are required by their Royal Charters to promote and support
research and related training, and to contribute to the economic competitiveness of the UK
and the effectiveness of public services and policy, and to enhance the quality of life and
creative output of the nation. From a business perspective the Research Councils’
contribution to economic competitiveness is the primary consideration, though this
contribution takes a number of different forms, including commercial exploitation of the
results of research projects, recruitment of trained researchers and access to specialised
equipment and facilities.
5. The wider business benefits of engagement with academic research are diverse and often
hard to measure. A number of them are described in the recently published CBI guide to
business-university collaboration for research, innovation and skills Best of Both Worlds,
including access to new ideas and horizon-scanning and opportunities to influence the
supply of relevant skills, to extend capability by working with experts in disciplines where
the business lacks expertise, and to access expertise through global academic networks.
6. The Research Councils account for the majority of public funding for research in UK
universities, so their role in promoting economic as well as other forms of research impact
is extremely important. Recent measures taken by the Research Councils to prompt
researchers to consider the potential impact of their work have helped to promote an
academic culture which is supportive of business-university research collaboration, and
although the growth of collaborative research with businesses is hard to measure, the
effect is implied by the steady growth in recent years in the volume of university contract
research income from businesses of all sizes. This exceeded £460m in 2013/14, an
increase of over 5 per cent on the previous year. Consultancy income grew even more
strongly, at over 12 per cent, to nearly £185m, while income from businesses’ use of
university facilities and equipment grew by more than 10 per cent, to nearly £100m.
7. The quality of the UK’s research base is an important source of national competitive
advantage, underpinning the attractiveness of the UK as a place to invest in knowledgeintensive industries, and providing businesses in the UK with an exceptional
resource. Funds disbursed by the Research Councils account for well over half the
‘science budget’ which funds most university research in the UK. The science budget, at
nearly £5bn, was ring-fenced in the last two spending reviews, reflecting in large part the
importance of its contribution to growth, and it is an order of magnitude greater than the
funding of Innovate UK, the national innovation agency. However inflation has significantly
eroded the science budget in real terms, and a reversal of this decline is increasingly
necessary if the quality and impact of UK research are to be maintained.
8. Businesses value access to facilities and equipment as well as the ability of universities
and Research Council facilities such as the Diamond Light Source to provide an
environment for excellent research and for training early-career researchers. Following the
major cuts to capital spending in 2010, and partial reversal of this measure in succeeding
years, the government decided in 2013 to guarantee science capital investment in real
terms at £1.1 billion from 2015-16 to 2020-21. This was a welcome move, but it will be
important over that period for capital and resource funding for research to be
aligned. There is a strong business interest in sustaining an effective national science
base, particularly in universities, supported by adequate levels of both capital and resource
funding.
Research Councils’ engagement with business must take account of the diversity of
business needs
9. Individual Research Councils have different degrees of engagement with research users,
and in particular with business users of research. The most developed apparatus for
business engagement is that of EPSRC, which has developed strategic partnerships with a
number of major R&D-active companies and funds a range of Centres for Doctoral Training
(CDTs), many of them with significant business involvement. This reflects the extent of
business relevance of the research it funds and the range of businesses and sectors
concerned. However, all of the Research Councils are rightly committed to ensuring that
the maximum impact, including economic impact, is delivered from their portfolios. The
Gateway to Research website has the potential to support this by alerting users to relevant
research which is funded by Research Councils with which they have not previously been
engaged. For this to happen, however, it is of course first necessary for a business to have
some acquaintance with the work of at least one of the seven Research Councils.
10. Large companies which are strongly engaged with Research Councils, such as EPSRC
strategic partners, generally find the relationship satisfactory and beneficial. Some models
of engagement are particularly appreciated by business, including EPSRC’s Industrial
Doctorate Centres which award Engineering Doctorates, based on a four-year programme
combining PhD-level research projects with taught courses, in which students spend about
75 per cent of their time working directly with a company. BBSRC’s Industrial Partnership
Award scheme is also highly valued by participating companies and deserves to be better
known.
11. However for many businesses, including medium-sized businesses and medium-sized UK
subsidiaries of companies headquartered elsewhere, the Research Councils’ potential to
be of assistance lacks visibility. Maximisation of research impact would be favoured by
promoting more and wider business awareness of the work of the Research Councils and
of how to access them and exchange understanding of business needs and the possible
value of research. A possibility worth exploring would be the designation of cross-Council
business sector contacts who could both give specialised support and advice regarding
specific research portfolios and also provide a signposting service to expertise elsewhere in
the Research Councils and beyond, including Innovate UK. Lack of knowledge and
difficulties in access to appropriate expertise are significant barriers to engagement for a
number of businesses, and should be addressed.
12. It is striking that for small and medium-sized enterprises the two most valued forms of
engagement with universities, as measured by the amount they choose to pay, are
consultancy and services related to facilities and equipment. This is marked contrast to
large companies, which collectively pay far more for contract research than for all other
services combined. The difference broadly reflects the tendency of smaller businesses to
have less internal technical and administrative resource and absorptive capacity, and this
should be a consideration in promoting the Research Councils’ potential to many smaller
businesses.
13. One form of engagement which enjoys a well-established and longstanding reputation for
effectiveness, but still does not enjoy as high a profile as it deserves, is the Knowledge
Transfer Partnership (KTP) scheme. All Research Councils are involved as sponsors of
KTPs, and there is scope for them to coordinate their efforts to raise business awareness
of the nature and potential benefits of the scheme, particular among mid-sized and smaller
businesses and sectors which are less engaged with the Research Councils and with
university research generally such as the creative industries. KTPs also need to be made
more widely known to PhD students, since they potentially offer a useful post-PhD step
which does not involve premature commitment to or against an academic career.
14. A number of ‘innovation voucher’ schemes to promote initial engagement with universities
by smaller businesses were developed by some of the Regional Development Agencies
before they were disbanded. The first and perhaps most successful of these, in the West
Midlands, was initially part-funded by EPSRC. Some similar schemes have been
subsequently developed by individual universities, and Innovate UK offers a limited scheme
for SMEs in certain sectors, but there is no single UK-wide overall scheme which caters for
all sectors. The Research Councils should consider whether there would be merit in
supporting such a scheme, both to promote engagement between business and
universities and other knowledge providers, and as a pathway to impact.
15. A number of Research Councils support schemes for business-academic researcher
exchange. This is another area where there may be scope for a more joined-up crossCouncil effort to promote awareness within businesses of what is on offer. Researcher
exchange is widely recognised as an invaluable means of promoting effective knowledge
transfer and catalysing further engagement.
Pathways to commercialisation must be continuous and connected
16. The fundamental criterion for Research Councils’ awards of funding is excellence, which is
appropriate. The system of peer review generally works well, though there may be
potential for increasing to some extent the inclusion of suitably qualified reviewers from
research user organisations. However there is also scope for improving the
connectedness of paths to commercialisation of research results. Decisions on
commercialisation do not depend on academic merit but on market potential and return on
investment. These criteria are used by Innovate UK as the national innovation agency, and
although Innovate UK and the Research Councils have made progress in improving the
coordination of their operations there is still room for more clarity and coherence over the
transition from academic to commercial modes of appraisal and the associated support
mechanisms.
17. There is also a need for more connectedness between the individual Research
Councils. An increasing amount of research with potential for major impact is
interdisciplinary, and although this has been recognised by the designation of crossCouncil themes and priority areas, the Councils themselves do not always seem to be well
equipped to take a holistic view. Greater transparency in this area, reflected on the
respective websites and including details of lead contacts, would be useful.
18. In view of the relevance of the UK’s research base as a factor in investment decisions by
global businesses, the Research Councils should develop their collective and individual
links with UKTI, both within the UK and through RCUK’s overseas offices.
19. Problems over intellectual property continue to bedevil many negotiations between
businesses and universities over research partnerships, and to mitigate the effect of this
issue the Research Councils should contribute to promoting awareness of the Lambert
toolkit as a resource of potential value to both sides. Although the toolkit is fairly widely
known in universities, many businesses are not acquainted with it.
17 April 2015