Select Committee on Science and Technology Fifth Report


CHAPTER 6: RESETTING THE REGIONAL/NATIONAL BALANCE

Introduction

6.1  As discussed in previous Chapters, the establishment of the RDAs has significantly altered the framework for the national drive to improve the exploitation of SET for economic growth.

6.2  This Chapter explores the new dynamics within the national and wider policy frameworks set by the Government and the European Union (EU). Against that background, we then discuss the ways in which those frameworks need to be adjusted to accommodate the growing regional stake in technological innovation.

Policy balances

National science investment

6.3  The national policy on science is focused on the development of an excellent SET base, based on peer review. This is overseen by OST and HEFCE, and delivered mainly through the universities. There is further national investment in science through the Public Sector Research Establishments and various Government Departments (e.g. Health, Defence and Environment, Food and Rural Affairs).

6.4  These investments in SET research are made from a national perspective. They concentrate on developing and maintaining the excellence of the science base. They take no obvious account of regional SET concerns or needs.

Investment in regional development

6.5  The national policy on regional economic development, overseen by the DTI on behalf of a number of Whitehall Departments, is delivered through the RDAs. As the primary purpose is economic development, no explicit priority is given to regional involvement in the SET base.

Exploitation of SET — the integrating agenda

6.6  Both National SET investment and regional development have an interest in the exploitation of SET for economic growth. While the interest is common, our Inquiry has shown that the different perspectives could be brought together more effectively.

6.7  SET exploitation falls within the broad general area of "Innovation". National policy on innovation is championed by DTI, which recently restructured itself to form an Innovation Group. At the time of writing, the Department was part way through a joint review with HM Treasury on Innovation[51] (underpinned by the Lambert Review of the Business-University interface[52]).

Coherence

6.8  There is an obvious imperative to optimise public investment in SET. Although that optimisation is complicated by the wide variety of national and other bodies channelling funds into the SET base, we are clear that it is possible to do better.

The developing role for RDAS

6.9  RDAs recognise their developing role in the national picture of SET. They interpret and deliver national policies in the context of their regions. Different regional demands mean that similar national strategies are expressed through different tactics in the regions, based on history, culture and ambition.

6.10  The RDAs' collective submission to the Inquiry (p 20) noted their increasing knowledge of regional and local SET strengths and the importance of their continuous involvement in both national SET policy development and in the development of regional research strengths. They also noted their emerging role in stimulating knowledge transfer, business development and wealth creation.

6.11  All RDAs wanted: to grow new industries in their regions; access to the SET base to underpin their strategies for economic growth; and to understand and draw on the key emerging technologies. They recognised SET investment as a powerful magnet for SET companies, and that a high-quality SET base underpinned SET exploitation and application in all its manifestations. Ideally, each RDA wants a strong basic science base, relevant to its Regional Economic Strategy, located in its region.

6.12  RDAs also acknowledged their role in coordinating and advising on Third Leg core funding and their role in skills development in relation to SET. Furthermore, they emphasised the importance of performance measurement that accommodates the longer term view needed to assess the impact of SET exploitation on economic performance.

6.13  However, as shown by our recommendations in previous Chapters, the framework for RDAs' delivery of their remit can be much improved.

Regional/National coherence in SET

6.14  A general point emerging from our Inquiry is the need for national organisations and funding agencies (such as the Research Councils, HEFCE and DTI) — while maintaining their specific focus and mission to secure excellence — to make their SET investments with an awareness of the regional dimension. In return, there is an equal need for RDAs to relate what they are doing to national developments.

6.15  This is true for both investment in the SET base and in mechanisms for its exploitation. Each area of responsibility and each funding agency should maintain its distinctiveness. But they should be aware of potential synergies at national and regional level, and then follow those through to ensure the different regions benefit. This should overcome concerns about different initiatives overlapping — or even acting against each other.

6.16  Some of our witnesses felt there was a natural presumption on the part of funding bodies that SET facilities serving national needs should be in the South East. For example, NWDA suggested that Whitehall tended to see provision as "national" if made in London or the South East but "regional" if made elsewhere (Q 299). While noting that perception, we received no hard evidence that this was the case. Moreover, we observe that the South East has a relatively high proportion of the national population and, for historical reasons, is also home to a number of distinguished research institutions.

6.17  The key criterion in allocating funding in pursuit of SET excellence must clearly be merit. Even so, we believe that it is possible to take regional considerations into account in national resource allocation without compromising quality. Given the relatively small size of the country and the nature of modern communications, we would go further and say that regional considerations should never be dismissed out of hand, hence our recommendation in paragraph 5.26: as Sir Ian Gibson noted, even globally significant provision has to be located somewhere (Q 269). Any perceived gap between national and regional levels will also be reduced by making user-friendly information about the location of SET expertise widely available, as recommended in paragraph 4.51.

Coherent SET across Government Departments

6.18  The topic of our Inquiry, "Science and the RDAs", crosses a number of Whitehall Departmental boundaries. That spread of involvement has led to some lack of coherence, confusion and even contradictions. For example, as SURF noted, the proposal in the January 2003 HE White Paper[53] to create 6* research departments with compensation for non-research intensive institutions by allocating a regional role "not only contradicts the principles of regional polices, but is inherently dangerous for the future of the science base itself" (p 270). We acknowledge the Government's attempts to minimise the impact of Whitehall boundaries but, as noted in previous Chapters, there remains significant room for improvement.

6.19  A consistent thread in our evidence is that the major priority of science policy (manifest in, for example, the work of the Research Councils and HEFCE) must be to build and maintain excellence of the SET base in the UK. There is also general acknowledgement that maintaining the excellence of that SET base should be primarily the responsibility of the SET research community. Their knowledge, experience and understanding gives them the credibility to judge quality. The role of the RDAs is to work with that quality-assured SET base to help ensure its effective exploitation.

6.20  As SURF noted, consideration of regional needs within national science policy does not have to subvert the principle of scientific excellence (p 270). The question is not the dilution of SET quality but of its effective connection with the processes of exploitation.

RDA perspectives

6.21  With their brief to generate regional economic prosperity, RDAs have to make sense of SET-related policies from different Whitehall departments and from Europe, and manage them to ensure that they work coherently in a regional context. They are, indeed, uniquely placed to see where such policies and approaches positively reinforce, overlap and even act against each another.

6.22  It has become clear to us that the various policy strands are not always working in a positively reinforcing way. Given the importance of SET in economic development, RDAs must be given a coherent framework in which to operate, acting as real partners in the development of effective exploitation policies.

Focus for coherence

6.23  For coherence to be achieved, there must be the right balance between regional and national perspectives, and between the strategic and the operational. The present lack of coherence is underlined by various questions which arose from our Inquiry, such as the following.

(a)  How does national investment in SET and Centres of Excellence link in with Regional Development?

(b)  How can RDAs best build the role of such Centres into their incubation activities, their cluster developments or their Innovation Strategies?

(c)  Where and how do investments in fundamental science (such as by NWDA and DTI at Daresbury[54]) have relevance for other regions? And how is that expertise accessed across the country?

(d)  Where and how are SET-related interests of the different Government Departments brought together?

(e)  How are European funds maximised?

(f)  What are the implications of RDAs investing in SET?

6.24  Coherence is, of course, greatly helped by having a limited number of performance measures — relating to outcomes rather than processes — that are common to the various stakeholders. Coherence is also served by reducing bureaucracy, examining overlap, addressing State Aid rules, and exploring where and how national and regional and EU investments can operate synergistically to give greater impact and gearing.

Better integration of national and regional SET

6.25  A clear message from our witnesses was the need for a stronger integration of regional and national activities in relation to SET and its exploitation.

6.26  From the RDA perspective, ONE strongly supported a regional dimension to national SET policy, but saw national co-ordination as necessary to ensure that national objectives were met and duplication avoided. They believed this could be achieved by the RDAs working with national funding bodies (p 139). NWDA wanted to become participants in national science policy formation and less processors of Government funds. They also wanted to see regional capacity building in SET as part of the criteria in determining the disposition of Government spend on SET (p 154). CURDS reinforced the point, citing Foresight as:

"a good example of a policy which lacks a strong regional dimension, by focusing on national priorities. Although there have been Regional Foresight exercises, their impact has been limited because they either seek to persuade firms to pursue particular technological avenues identified as national priorities, or they lack the resources and purchase on policy to address regional industrial priorities." (p 275)

6.27  From industry, Rolls Royce plc said it was not clear whether RDA strategies were adequately influenced by and integrated with the national picture. The links between the developing strategies of DTI, the Engineering and Physical Science Research Council (EPSRC) and MoD and the role of RDAs should be made clearer (p 330[55]). The Royal Academy of Engineering argued that each region should, in close conjunction with regional industry, be allowed to develop its own SET strategy and fund it appropriately, albeit with some level of national coordination (p 309).

6.28  From the academic community, SURF noted the increasingly key role for RDAs in implementing national policy on SET exploitation for wealth creation "but Government thinking on RDAs and science policy remains muddled and disjointed" (p 270).

6.29  In the development of EU science policy, recent policy statements have stressed the importance of regions in the mobilisation of R&D, to encourage the growth of innovative firms and their integration into a European research area. To support innovation there is a need for meshing policies at local, national and European levels.

6.30  The development of Science (and Industry) Councils in the regions is beginning to address the gap between national and regional perspectives. Although those Councils have significant potential, there still remains the question of integrating their work with national imperatives.

National innovation framework

6.31  The establishment of RDAs and the importance of SET in their Regional Economic Strategies has changed the national dynamics. That change needs to be accommodated by a more coherent framework for the development and delivery of innovation.

6.32  The lack of coherence in all this is underlined by the number of reviews[56] under way to address this area. The Society of British Aerospace Companies commented that "the proliferation of such reviews, and the perceived absence of significant change on the ground is a reflection of the lack of a national innovation strategy". The Society further noted the danger of policy fragmentation if the coherence was not directly addressed, and that the application and exploitation of SET was too important to leave the necessary coherence to chance (p 327).

A National Framework for exploiting SET

6.33  We are clear that there must be a coherent framework for addressing the application and exploitation of SET at both national and regional levels. This would help to ensure that sensible and appropriate alignments are in place between the different policy areas of science, innovation, HE and RDAs — all with the common aim of improving economic performance.

Current approaches

6.34  The Government's 2002 policy statement Investing in Innovation[57] is a useful starting point in the development of a national framework for SET exploitation, but it could do more to address the longer term direction of SET exploitation, and the regional/national balance.

6.35  Whitehall Departments are aware of the need to secure coherence in this broad area. For example, references to RDAs' roles were made in Investing in Innovation and in the January 2003 White Paper on The Future of Higher Education[58]; RDAs meet the Research Councils annually; and the Innovation Network, run through the DTI, involves the RDAs and representatives of the Development Agencies in Scotland, Wales and Northern Ireland.

6.36  The RDAs also meet each other and work collaboratively in areas of common SET interest such as establishing a Nanotechnology Centre. OST indicated that the Research Councils have to address the exploitation of their research (Q 45) and that the Public Sector Research Establishment Fund was set up (with £10m in 2001 and a further £15m in 2002 for 2004-6) to encourage such exploitation (p 17). The HE sector has a number of organisations — such as the Universities Companies Association (UNICO) and the Association for University Research and Industry Links (AURIL) — that address knowledge transfer and company spin-out.

Future directions

6.37  National leadership is required on the exploitation of SET to provide the right drivers and processes for the exploitation of SET for economic gain. That leadership should not only provide a structure but also deliver a focused policy and strategy that successfully integrates the different perspectives — the national science base, the business community, the RDAs and the emerging Science Councils — into a coherent and powerful SET exploitation strategy.

6.38  Accordingly, we recommend that, as a priority, the Government should involve relevant national and regional players in devising and implementing — by the end of 2004 — a national policy and strategy for SET exploitation that, with a carefully tailored set of common outcome measures, truly integrates national and regional perspectives. The emphasis should be on outcomes rather than process and, as discussed in the lead up to our recommendations on paragraph 3.28, the overriding need is for monitoring the impact on economic performance through a few relevant measures over appropriate timescales.

6.39  This new approach would give coherence to SET exploitation for economic impact by addressing, for example:

(a)  national and regional perspectives on SET research and its exploitation;

(b)  formal linkages between the SET Research base and Science Councils in the Regions, and relevant Whitehall departments;

(c)  SET investments and its exploitation in relation to clusters;

(d)  metrics for impact and accountability;

(e)  communication flows;

(f)  clarification of the different players' roles, responsibilities and interconnections;

(g)  private and public sector interests;

(h)  capacity for SET exploitation in universities and in business; and

(i)  strategic vision for national SET exploitation.

6.40  The strategy should be overseen by an appropriate national body, to include significant business representation. Given the interrelationship with the regular assessment of national and regional SET synergies recommended in paragraph 5.26, the new forum proposed for those purposes (with adjustments in the suggested membership) might usefully take on this task.

Conclusion

6.41  RDAs are relatively new organisations. In paying increasing attention to the role of SET in their economic strategies, weaknesses and opportunities have become apparent within the structures intended to encourage and support economic development.

6.42  Some of those weaknesses are relatively minor matters of process. Others are more deep-seated. That is not because policy levers are missing — indeed, there are too many policies. It is because the present arrangements lack the coherence necessary to enable those levers (rationalised as necessary) to operate in harmony. We have made recommendations throughout out Report to address these matters[59]. For ease of reference, they are gathered together in Chapter 1.

6.43  As a nation, we must capitalise on the momentum engendered by the RDAs in their early years. As indicated by the title of our Report, SET needs to be an explicit and integral part of the regional agenda. Putting in place now the required new structures and appropriate common outcome measures will help ensure our national prosperity in the increasingly challenging years to come[60].


51   Details in the DTI Press Notice P/2002/752 of 27 November 2002 - see www.dti.gov.uk/innovation-group/pressrel-271102.htm Back

52   See www.hm-treasury.gov.uk/consultations_and_legislation/lambert/ Back

53   The Future of Higher Education, Cm 5735, January 2003. Back

54   See paragraph 4.33. Back

55   Part of the evidence submitted by the Society of British Aerospace Companies (p 327). Back

56   Such as those noted in paragraph 6.7. Back

57   Investing in Innovation: a strategy for science, engineering and technology, July 2002 - text available on www.hm-treasury.gov.uk Back

58   Cm 5735, January 2003. Back

59   As noted in paragraph 1.17, we hope the extensive evidence base published in Volume II of this Report will provide a valuable resource for the Government and others as they pursue our various recommendations. Back

60   As noted in paragraph 1.4, we are minded to make a further study of this area in about five year's time to see what progress has been made in these important matters. Back


 
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