Oral evidence: Business-University collaborationHC 249-ivTuesday 1 July 2014
Oral evidence, 1 July 2014.
Witnesses
Will Searle, Managing Director, Axillium Research, Dr Richard Hutchins, Board Member, Coventry and Warwickshire Local Enterprise Partnership, Dr Carl Perrin, Director, Institute for Advanced Manufacturing and Engineering, and Antony Harper, Head of Research, Jaguar Land Rover, gave evidence.
Chair
May I thank you for agreeing to help the Committee with its inquiry? First of all, if you were not here at the beginning, to activate your mics just press the bottom button, and then to de‑activate them press it again on conclusion of your remarks. Could I also emphasise: please do not feel that you all have to answer every question, only if you feel that there is something that you wish to add or subtract to anything else that has been said. Could I just ask you to introduce yourselves for voice transcription purposes, starting with you, Will?
Will Searle
Will Searle, Axillium Research.
Dr Hutchins
Richard Hutchins; I am a Director of the Coventry and Warwickshire Local Enterprise Partnership.
Dr Perrin
Carl Perrin; I am Director of the Institute for Advanced Manufacturing and Engineering.
Antony Harper
Tony Harper; I am Head of Research for Jaguar Land Rover.
Chair
Thanks very much. The first question is really about ease of access to universities from industry, because we have heard conflicting evidence on this. Nigel Foster of Leeds University and Professor Richard Jones of Sheffield University said that Andrew Witty’s recommendation for a single point of contact at each university for SMEs is “a difficult area”, and that intermediaries, such as Catapults and individual academics, are preferable alternatives. From a business perspective, why do you think it is important to have a single point of contact?
Dr Hutchins
One of the things that businesses crave, and we heard it from the last set of witnesses, is continuity and a set of brands and trusted relationships that businesses can work with. The landscape over the last five to 10 years has changed considerably. Some of the intermediaries have disappeared from the scene, Business Link being one example; some have remained. The Manufacturing Advisory Service is a good example of that. Where they have remained and have, by and large, done a good job and are a brand that is recognised, there are effective relationships with those brokerages and they can then broker into the likes of universities to provide services, such as those that are provided by the two universities that you have visited today. One thing that is beginning to emerge and could be very helpful through the Local Enterprise Partnerships is the emergence of new growth hubs. These effectively are new brokerage services. De facto, with 39 LEPs, there are likely to be a large number of growth hubs operating at a very, very local level. In that regard, they could be problematic in that businesses do not really recognise local areas. Businesses operate where businesses need to operate—locally, regionally, nationally and internationally. They may need to work with a multitude of growth hubs to access the services that they require from universities and the like, so it is a complicated landscape, but at least there is some form of brokerage service around for businesses where they so desire it.
Chair
Could I just go on and look at it from the point of view of delivery from the universities’ angle? GlaxoSmithKline said in their evidence to the Committee that universities’ technology transfer offices tend “to treat all sectors the same when negotiating, despite development times and the size of potential returns being hugely different”. In your experience, just how well equipped do you think university staff are in their understanding of industry to understand exactly the sort of business drivers and mindsets that lie behind the relationship?
Dr Perrin
I have only been in my role now for a couple of months and, prior to that, I have worked for 20 years in manufacturing and just come from Rolls‑Royce. There is a great deal of work that Rolls‑Royce does with universities in terms of developing new technologies and with its supply chain. One of the gaps is not just in terms of the university technology transfer of the technology and the product knowledge itself, but it is actually in terms of turning it into a manufacturable product. We have talked a lot about TRL and levels of TRL, but MCRL, the manufacturing capability readiness, in terms of taking that product and being able to manufacture it to the intended design, at scale, at the right quality and the right cost, is very important. It is important to understand what the expectations of the university actually are in terms of what it is transferring into industry and then what industry picks up, and how we avoid that valley of throwing the technology over the wall and some gaps in between the two. One of the things that I think can work well is transfer of people between the two, and those organisations getting closer together, understanding each other and each other’s organisations a lot better to try to bridge that gap.
Chair
What you have said seems to be consistent with some of the remarks made by the previous panel about the inter‑exchange between the university and business. What would you analyse as being the key qualities that a university employee has trying to promote that in supporting collaboration?
Dr Perrin
Where I have seen it work well is where the university researchers who I have worked with understand the industry’s needs. There is as much push from the university into the business in terms of answering technology needs, rather than trying to pull through from industry from the university. The skills they need are an understanding of what makes a sellable product, in terms of cost and capability, if it is in manufacturing. That is just one example.
Ann McKechin
Axillium’s written evidence described the cultural conflict between industry on the one hand, and academia on the other, relating to industry having a terms‑of‑business approach and academic institutions being focused on research grant terms. I just wonder what the key aspects are to you of each side’s position that tend to be unacceptable to the other. What are the practical solutions—I am sure you are all practical people—about how we could actually alleviate these problems?
Antony Harper
First of all, there is a cultural difference, and it does lead to issues. To paraphrase it, large companies are used to transacting with other large companies with large sums of money, and the sorts of terms and conditions that come with those kinds of transactions. Universities are used more to a smaller scale; it is more collaborative and so on. The key issues we tend to find are mostly around liability for breach of confidentiality, so the amount of punitive damages that a company might go after a university for, for wilful breach of confidentiality, which could result in substantial losses to the company. In the case of a company like Jaguar Land Rover, it could be losses of sales due to somebody talking about new product introductions and then the inability of the university to insure themselves against that kind of liability, because essentially they are small charities.
Ann McKechin
That is a very particular issue about the insurance sector.
Antony Harper
If you are asking us which is the one issue that it normally boils down to, it is that one.
Ann McKechin
Thank you very much for that. Will, did you have any additional points?
Will Searle
I would add to Tony’s comment that, from a university industry perspective and our experience, where we are often in the middle of this, it is the mindset. We are very aware of the differences. It relates to the earlier question of point of entry into a university. An academic is driven by the right of publishing and research, and a growing level of impact. An industrial is looking for an engagement and a service. We very quickly end up at contractual terms that are very different, and the way we have overcome that is by working on a common framework, with common language and common expectation. If you set the expectation clearly, at the right level in the business world of universities, then you do get clear engagement. That is, from our experience both working on behalf of and with industry, and on behalf of and working with Catapult and universities, it is about addressing a coming‑together of enterprises that have common purpose. Therefore, you need a common language. That is where, when we walk around the university sector, there are so many different voices, but we need commonality. That is our experience.
Dr Hutchins
Just to add very briefly, we have to ask ourselves the question of why we have universities in the first place. The WMG model is very clear that we see ourselves as being here to help promote growth and job creation in companies, within a university context. I am not sure all universities would see themselves in that way.
Ann McKechin
You obviously may have heard this afternoon that we have been talking about the structure of academic careers and the problem, perhaps, of moving between the academic sector and the business sector, and vice versa. One witness to our inquiry told us that “where we have had the self-confidence to appoint people from an industrial background, it had been enormously successful”. I am just wondering, from a business perspective, is the academic emphasis on publication, which you have mentioned, Will, disproportionate in terms of recruiting people.
Will Searle
It is quite an interesting endeavour for us, in that we have a number of engagement models, one of which is that we work with universities to take engineering doctorates through the entire lifecycle of the three years. I was listening very carefully earlier. For me, as an employer of a bright young engineering doctorate, he has spent the last six months working solely on his publication process. For me, that is vitally important for him because, in my business as an industrial, I have to have credibility for the individual. I think the right balance is there for me, but I am an SME with a small team. The dependency on publication does limit the academic environment. Engagement is just as important as the publication.
Dr Hutchins
Just very briefly, it goes without saying that not everybody who works in a university is an academic with academic targets. There are people who work in a university who are very business‑facing and have business‑facing targets. You need a combination of the two, and that is how you can bridge the gap.
Antony Harper
We heard earlier about the cultural differences and that the career paths are rather separate. What we tend to do, particularly in our activities with WMG, is to create environments in which that matters a lot less. For example, we have 250 people over in that building working with the university, and what you can do is you can create programmes and structures of work that allow us to collaborate but, at the same time, academics still publish. They are still doing academic work; they can publish and do everything they need to do, but the knowledge that they are generating through doing that is within a collaborative programme. Actually, that works quite well.
Mr Walker
Another point that came out of Axillium’s evidence, which Will was also touching on earlier, was talking about the different metrics to measure impact for the company funding, from Technology Strategy Boards compared to Research Councils and HEFCE. How do they compare and how do the different organisations see the challenges of those different streams of funding?
Antony Harper
First of all, for the Technology Strategy Board, from our perspective actually the mechanisms for evaluating the value of a particular proposal are pretty natural and pretty intuitive. They are the same sorts of things that we would take to our board to make a case, so they are around impact, around route to market, additional investment, etc. Also, the calls for the TSB tend to be strategically aligned to some challenge that is relevant to both business and society, so you have some very good ingredients there. You have a good agreement on the challenge, calls and funding around projects, and then a business case for each of those projects. That makes a lot of sense from a business point of view. The EPSRC to us is less of that nature. It tends to concentrate purely on academic excellence, which from our perspective is necessary but not sufficient. That is the key message we want to get across: it is absolutely necessary to do that, but we do see that additional criteria ought to be applied to the EPSRC funding to make sure it is strategically aligned to other investments and to the challenges that are laid down by industry and Government.
Mr Walker
That is interesting. Is there a different view from the universities as to the relative merit of the approaches?
Dr Hutchins
I do not think this is within my area of expertise, to be perfectly honest.
Mr Walker
Fair enough. Does it matter that universities and businesses should actually have the same view of the impact, or is it perfectly possible to have collaborations where actually they can take a different approach?
Antony Harper
A number of people have referred to technology readiness levels and manufacturing readiness levels. If you have some sort of mental model that goes from the early technology readiness levels through to the market, then it is important that industry, academia and the Technology Strategy Board, or whoever is involved in an innovation chain, have a common purpose for that chain and its eventual outcome. The roles that each play in that chain are rather different, so a university might play a role of generating research and intellectual property, but it does need to be strategically aligned to some common purpose. The interesting thing about this debate is that we tend to be having this “or” debate. Is it in the pursuit of pure science or is it industrial? For us, that is a zero‑sum game that we do not recognise. It is perfectly possible—in fact, we are doing it all the time—and it is highly desirable to have all of the players in an innovation chain aligned to a common purpose, but playing a different role within that purpose.
Mr Walker
And achieving different objectives from their own perspective.
Antony Harper
And still achieving what they need to do along that chain, yes.
Mr Walker
Just looking at some of the analysis from BIS, there are quite worrying signs, which again we were discussing with the first panel, about the weakness of the UK skills base, basic numeracy and literacy, but also management skills. We are looking, in a separate inquiry, at some of the issues around adult literacy and numeracy. What is Jaguar Land Rover’s experience of the quality of the UK skills base?
Antony Harper
I can only speak from my own perspective as Head of Research. One thing to say is that that is a fairly rarefied perspective, because as Jaguar Land Rover we tend to attract a very high standard—we are at the top of the food chain. As Jaguar Land Rover Research, we are at the top of the top of the food chain, if you see what I mean, so it is a somewhat rarefied perspective. We tend to recruit from the undergraduate and postgraduate population on business behaviours, as much as we do on technical capability. Coming out of an Imperial, a Cambridge or a Warwick, to a certain extent you take the technical part of it as read and then we select on business behaviour, so we do reasonably well. The point I would make around this, which comes back to a number of points that have been discussed, is that when you create collaborative environments such as the environment we have over the road in the Catapult, or when we create a collaborative environment in a large TSB project, then at the same time you tend to mature the business skills of the technical postgraduates that you bring into those collaborations. If we work with a university partner in a large TSB project, for example, and they bring in doctoral students or postgraduates, they cannot help but have their business skills increased through their participation in that project, because they are working with business people. We find that to be a very useful mechanism.
Will Searle
Just to add to that, at the lower end of the food chain where I sit, I am actively recruiting all the time and it is necessary to bottom‑fill my business. I heard the evidence earlier on and the thing I would like to add to it is that I do not think we can teach our graduate community necessarily all the skills in a university period, because I cannot remember very much of my manufacturing and engineering degree. To Tony’s point, what really rings true for me is that, actually, in the collaborative programmes and the cooperative programmes, where you are bringing industry, university and Catapult together, the transfer of real‑life vocational skill is the fundamental glue. That is what empowers us. We see graduates accelerate through R and D programmes not because they are dynamic scientists, but because they have good, clear communication skills or good, sound technical knowledge. That is fundamental to the growth.
Dr Hutchins
Could I go even further back down the food chain back to schools and just mention the fantastic example of business-university collaboration, which is the University Technical College programme, which I am sure you are familiar with? We are opening a UTC here in WMG in September. When we set out on that journey four years ago, and asked businesses, including JLR, “What do you want from these young people?” the very first thing they said was teamwork skills, communication skills, problem‑solving skills and resilience. The maths, the physics, and the English is taken for granted. Yes, you need that at an entry level, but those are the things that they really wanted to come out of a UTC and so, with companies like JLR, they are embedded into the curriculum. It is really important to get them at 14, way before they get to university and a long time before they get into Tony’s team.
Will Searle
I would echo that as a governor of a UTC, a sponsor and a parent, for the record.
Mr Walker
We have a big UTC fan club here.
Will Searle
Absolutely. It is fundamental to what we do.
Mr Walker
I do not know, from any of your perspectives, if there is any difference in this space in terms of the motivation or the skills that graduates have, between UK graduates and graduates that you see from elsewhere in the world.
Antony Harper
It is quite diverse, the global view. Some will talk of Germany or Finland, where undergrads get more of the business acumen through the sorts of mechanisms that we heard about earlier. Others will talk about the Far East and India, where the amount of technical graduates that are being produced is quite high but, anecdotally, the business acumen is very low. It is a mixed picture; we should not assume that everyone else is better than us in this space. It is a mixed picture and we should concentrate on what we know we can do better in the UK, and we have heard a few ideas around that previously.
Mike Crockart
I would like to turn to the particular area of looking at how to design institutions to make sure that they do maximise collaboration. I would like to put Carl on the spot, as the leader of one of the most recent additions to those sorts of institutions. The Institute for Advanced Manufacturing and Engineering is a collaboration between Coventry University and Unipart. How will that institute encourage and maximise the business-university collaboration?
Dr Perrin
One of the things that is really different about the institute, which is being built now and opens later this year, is that the education platform is actually being built and located on one of the Unipart manufacturing sites. The institute is really going to deliver on three fronts: it is going to deliver graduates, so they will get their degree, but the way in which they are taught and the way in which they will learn is partly in the classroom but partly on the shop floor as well, and working in that real environment. We looked at management skills earlier and, in part, it can be taught in the classroom, but I think and believe that management skills are very much on‑the‑job learning. A lot of it is about how to communicate and deal with people, and so they will get that. There is also the research element to it and there is product development, which interfaces in with Unipart, where we will have professors and researchers working in the institute as well. Not only do we have university people working in this institute and learning in the institute, on the manufacturing side, but we have Unipart employees who will be seconded in there. One of the things that I am trying to do through that collaboration, with that bringing together of the two organisations and people from the two organisations, certainly from the product side of things and manufacturing capability, is bridge that gap I was talking about earlier, where the technology and the research can be developed at a low TRL in the institute, and then that team can effectively evolve and pull the technology through, mature it in the institute and then transfer it out into a capable process onto the shop floor into production. It is the model in terms of how we teach and how we co‑locate people to work together that is really different.
Mike Crockart
That was going to be my next question. Is it the co‑location that is the unique extra that is in there, which makes it easier to deliver everything else?
Dr Perrin
It removes a barrier that might otherwise be there—a geographic barrier. It will ease that and there will be no excuses for people working together closely. From an education front, it actually puts the students on the shop floor. So there are two sides. The geographical side of it does help and co‑location, which would be very difficult otherwise. It would be difficult to take students from a university environment and put them into a manufacturing site if we did not have the infrastructure geared up to deal with it there.
Mike Crockart
Can I ask Tony whether that is the case for Jaguar Land Rover?
Antony Harper
From our perspective, if we think about the High Value Manufacturing Catapult activity we have, they are the same ingredients with maybe a slightly different recipe. The activity we have here is around energy storage, particularly batteries for future electrified vehicles. What we have done, together with WMG, but this extends to the universities of Imperial and Oxford as well, is to create a programme of work and research, which goes all the way from the fundamental chemistry of batteries through to how you formulate the powder into pouches, the pouches into modules, the modules into batteries and the batteries into electrified vehicles. That programme of work is very co-ordinated across the TRLs. The ingredients are a programme of work towards a common goal, which is highly linked all the way from lab through to market, if you like; the physical co‑working in a space; and also putting skills development alongside that programme. Those are fundamentally the ingredients. Coming back to the geographical part, one of the things we have found—and it is no comment on WMG or anybody else—is that in order to make it work, we have to roll our sleeves up as a JLR research community and get deeply involved. There is not something that you can just set up as a programme and say, ‘Okay then; off you go; hands off.’ We have found, at least in the first year of getting it up and running and operational, that we have had to get very deeply involved in ensuring the success of the operation. That, of course, is very difficult to do if you are a long way away. Therefore, the geographical proximity is certainly a success factor, at least in the initial phase.
Mike Crockart
How much overlap is there between what the Institute is doing and what the High Value Manufacturing Catapult is doing? Is there any at all?
Antony Harper
Sorry, which institute?
Mike Crockart
How much overlap is there between your institute, Carl, and the High Value Manufacturing Catapult?
Antony Harper
It is difficult to say. We have only just met.
Mike Crockart
Not a lot, then. I think you have answered that one. We will move on. Can we look more generally at Catapults? Because we have had several witnesses to the inquiry who have stated that perhaps dispersal of Catapult Centres across the UK, with several Catapults spawning their own centres of excellence around them, perhaps risks confusing the original aim for these Catapults to be strongly driven by place. Do you think businesses will travel to different Catapults to get the advice, research, and facilities that they need?
Antony Harper
It has been alluded to earlier, and perhaps echoed a little in my previous comments: the Catapult network is pretty nascent in nature at the moment. I have just said that it has taken us some effort to get to where we want to be with this part of the High Value Manufacturing Catapult. I think the answer to your question is that it remains to be seen. As the Catapults are established and as we get past that initial implementation hill, if you like, then that is first base. All of us have got a wish that these are national capabilities that can be accessed from multiple locations. However, the sheer fact of the matter is that, certainly from a Jaguar Land Rover perspective, our R and D is concentrated in Warwickshire. Therefore, it is easier for us to engage in these kinds of programmes in this location. It becomes more difficult to do so as you get further away. We would hope that the mechanisms mature over time, so that when we have a particular piece of work that would potentially be best done by somewhere in Sheffield or somewhere in Bristol, the support mechanisms within the Catapult would allow that to happen at a future point in time without us having to send people to Sheffield and Bristol. That is a matter of maturity and we are not there yet from our perspective.
Will Searle
To give you another perspective, I run a 13‑partner collaboration with five of the HVM Catapult partners in it. It is industry‑led; it has four industrial aerospace partners and it has got five Catapults and three universities. It is also supplied by a supply chain of about 76 smaller businesses and Tier 1s. There is no question of geography at all in that engagement. We rotate, we locate, we co‑locate. I think with regards to the geography and the consideration of space and place, the key requirement for a Catapult to be effective in its engagement is that it must be open‑access. You must be able to facilitate meeting in location, because that is what we require. However, there is a recognition that there is a local aspect of what some of the smaller supply-chain companies want. They do not want to take time and money travelling. Yet it is also part of the give and take. For SMEs, if we want to engage with the physical institute that is the Catapult—and I am probably a little bit different as an SME in that I will go anywhere—then you have to go to where the opportunity sits. I think it was said earlier in the panel: you go to where the business is. As long as you understand that going to a Catapult is on the journey towards business, you should go. Strathclyde is a long way away from Daventry, where I am based, but it does not stop me from going to Bristol tomorrow and Strathclyde on Thursday; that is what I have to do. We need to focus on the access to the centres rather than the physical location of them. I am involved in consultation in defence on this topic. Whether the Catapult is bricks and mortar, or virtual, such as CDEC, which is a fantastic location but what they do is not very tangible, as long as we are connecting the institutes together, I do not think we need to worry about the location.
Mike Crockart
That was going to be my next question, so perhaps I can just pose my next question straight to you. Some of the Catapults do have a very narrow, specific sectoral focus, much more than others. The difficulty was whether that would encourage collaboration with industry, or whether industry potentially wants to have a much more cross‑cutting approach with multiple Catapults. You say you are already doing that anyway. Is the structure that is there and the way that Catapults are designed at the moment not a problem?
Will Searle
Transparently—and it is in the public domain, so I will put it on the record—it is a programme we run for GKN Aerospace. It is co‑led by Bombardier, Spirit and GE. It is a two‑year programme. We have a core presence at Cranfield at the ATI. Through particular projects we have seen the research grow out of the university. We have seen it be matured at the National Composites Centre to a certain level of capability. We have then seen it rotate up to the Manufacturing Technology Centre six months in. It has then been moved up to the Advanced Manufacturing Research Centre at Sheffield 18 months in, and it will be showcased at Farnborough in the physicality and in the virtual sense. So at no point have we stopped collaboration or co‑location. As industry, we have simply moved ourselves to where the best capability is. It is a little different when you are talking about a large enterprise or an OEM. However, I could give you named examples off the record as to SMEs that are travelling with that particular programme. That is a two‑year engagement, with £14 million of industry and Government funding. For me, that is the way that the industry is going. It is just getting bigger and bigger. So, in answer, I think geography is less of a barrier. Physical access and political geography are perhaps challenges. I suspect there is a question here somewhere, but as long as an enterprise of any size and scale can have access to the facility, the relationship, and the programme that are running there, there is less concern.
Mike Crockart
Tony, do you want to come in on that?
Antony Harper
Yes. The funding model of Catapults, which is a third, a third, a third—and a third of that is collaborative R and D, so in effect it is a half and a half, if you see what I mean—means that half of the money has to come from industry. Even doing that is something that industry takes very seriously. Therefore, the programmes of work that are funded from the industry perspective through the Catapults sometimes tend to be quite specific or quite narrow, or from our perspective quite automotive‑focused. That is a good thing as long as they create these innovation chains. In response to your question, the way that some of the focus areas of the Catapult are turning out is a function of the industry funding that is going in and the interests of that industry that is providing the funding.
Mike Crockart
Presumably in your industry you have to deal with multiple Catapults. You will have the transport one that we visited, and the High Value Manufacturing Catapult, and possibly others.
Antony Harper
Yes. They are at different stages of maturity. Our most mature engagement is with the High Value Manufacturing Catapult. We are starting to engage with the Transport Systems Catapult. At the moment, those are the two main ones.
Mike Crockart
I suppose the point of my question was how well you manage to get cross‑cutting collaboration between Catapults.
Antony Harper
At the moment we are not seeing much of it. Again, our endeavour with the HVM is established and is working, and we are really at the very early stages of engagement with the Transport Systems Catapult—very early stages. It may be that at a future point in time there is some kind of convergence, but that is rather difficult to spot from where we are at the moment. Our thinking is that our engagement with the Transport Systems Catapult will mostly be around intelligent mobility and future transportation, clearly. That may or may not have an overlap with the agenda that we have in the HVM Catapult.
Mr Bain
The Engineering Professors’ Council said in its evidence to our Committee that LEPs—Local Economic Partnerships—“do not have the financial resources or knowledge to deliver or support innovation and R and D”. In general, Dr Hutchins, are they right or are they wrong? How is the Coventry and Warwickshire LEP going to change their perceptions?
Dr Hutchins
I think they are right, in general. LEPs are very small entities with extremely small executive teams. They rely on the collective resources of the partners to deliver what they deliver. The Vice‑Chancellor of Coventry University was quite right when he said that both universities, Coventry and Warwickshire, were working together to help and support LEPs in developing their economic plans, their European Structural and Investment Fund strategies, their skills strategies, and so on and so forth. It is at that point that we can support LEPs in giving them the appropriate amount of focus on the importance of R and D and innovation to their local areas. That is exactly what we have done, starting with commissioning Centre for Cities to look at the amount and type of R and D activity in Coventry and Warwickshire, benchmarking it, and looking at how we might improve. So, for example, Coventry and Warwickshire has twice the amount of R and D employment as the whole of Greater Birmingham and Solihull. It has three times the amount of R and D spend than Greater Birmingham and Solihull, and twice the national average. It is an extremely innovative region. However, most of that innovation and R and D activity is invested in about five companies—one of which is at the end of the table here. The challenge there for the LEP is how we get some of that activity to permeate through the very large SME base in the local area. That is where Coventry and Warwickshire, through the LEP, will put its efforts. It will rely largely upon universities to help it deliver that, through organisations like WMG and the IIPSI building at the end of the lake there, where large numbers of SMEs are supported with innovation activity to help them grow and create jobs. There is a massive challenge for LEPs in that they have very little disposable income, if I can put it that way. We await the outcome of the Government’s view on the single Local Growth Fund. As Professor Latham said earlier on, the amount of European Structural Funds available to support this kind of activity is relatively small, at £20 million per annum for Coventry and Warwickshire alone. As Professor Thrift said, there is not much revenue around to support the activity. So we may be able to support the procurement of a piece of critical equipment that might help battery technology or composite materials development, but how are you going to pay for the people to run it, and how are you going to pay for the people to undertake the R and D activity in collaboration with industry? That is a very long answer to a very important question. I think it is complex, but it is extremely challenging for LEPs to drive this agenda forward.
Mr Bain
I will return to some of the implications of that answer in a few moments. Obviously Coventry University and the University of Warwick are very different institutions. What is the strategy of your LEP to get the most out of both institutions?
Dr Hutchins
First and foremost, both universities sit on the board of the LEP, through myself and Professor Latham. Both universities sit on various working groups of the LEP. Both universities support the development of the LEP’s various strategies. Both universities have considerable expertise, as you have been hearing today, in terms of engaging businesses in bridging the gap between the public and private sectors, if I can put it that way. In terms of accessing funding, for example, the universities, in collaboration with LEPs, can support businesses to access the right type of funding and broker them to the right types of business support. As you heard earlier, we are setting up a growth hub as part of the Coventry and Warwickshire City Deal. Both universities are playing an active part in co‑locating full‑time and part‑time people into that growth hub to broker companies into the support that they require. So there are multiple layers of engagement and participation in the work of the Local Enterprise Partnership by both universities working in partnership.
Mr Bain
Good. I was very interested in what you said about LEPs in general terms not having that financial firepower to drive innovation, R and D, and the increases in investment that we all want to see. Do we therefore need changes in policy at national level to support this? Do we need to see more tax breaks for investment to encourage firms in the private sector to put more into R and D and into long‑term investment? Do we need some changes to the banking system, for example, in order that finance is available in a more consistent, predictable, and long‑term basis for companies that want to invest in research? Are these the kinds of changes that might boost what LEPs are able to do on the ground at national level?
Dr Hutchins
Potentially, all of those things can be helpful. If you asked the question five years ago, access to finance would have been the key issue. However, there have been changes to things like R and D tax credits. Certainly my understanding locally is that the uptake of R and D tax credits is improving. Knowledge of SMEs about things like R and D tax credits is improving. That can only be a good thing. I spoke earlier about trusted brands and trusted advisory services. The Manufacturing Advisory Service is a useful mechanism for supporting SMEs in terms of accessing R and D services. It is really important that we do not change the landscape every five years in this regard, because it just confuses businesses. Then we lose another five years while we reinvent what is essentially going to be something extremely similar but called something different. It is always worthwhile to improve services, and of course money is going to be tight, but do not throw the baby out with the bathwater. That is really important.
Mr Bain
Excellent. Will?
Will Searle
Can I add to Richard’s support there? I am an East‑Midlands‑based business. I thought Brian Binley would perhaps have been on the panel. To give you an example to support what your question is, you have also got to look at the collaboration between the LEPs. I am currently active in Greater Birmingham LEP, Coventry and Warwickshire LEP, Lancashire LEP, the Northampton Enterprise Partnership—the list goes on. This is because, as a local enterprise and a local businessman, I recognise that, while there is no funding to help me do this, we can actively support our home LEP—Northamptonshire Enterprise Partnership—on bringing them the resources and skills they need. We get engaged on their behalf with them. You must not underestimate the energy that is in the LEPs. They do want to do this. I am working actively, and I think you have got to support that. Yes, more funding would assist, but it would assist by giving them a long‑term viable business base. Again, to Richard’s request, please do not change the rules. The state aid rules are the state aid rules and they have enabled us to understand the market. Industry understands it now, but if you change the rules we will be going backwards. We need funding flowing through and making LEPs the thing of the future, rather than turning them into the RDAs. The RDAs were a good model but they are the past; we cannot worry about that. What we have got to have is connected entities of enterprises. That is what they are for.
Dr Hutchins
Will just prompted another thought that is important in the context of your question. In terms of revenue funding, there are some “free” resources coming on track, which are the ESIF—European Structural and Investment Funds. These will support skills development and R and D investment, particularly in SMEs. The challenge with that funding is that there will be delays in everybody’s understanding about when and how to access it. It is the sooner the better, otherwise we will not have continuity between the old programme and the new programme, which will cause disruption and delay and confuse businesses. Secondly, it is one thing getting a grant through the European Structural and Investment Funds; it is another thing managing that grant effectively. I think all partners who manage these kinds of funds really do struggle with it. Simplifying that landscape would be enormously helpful for the managing agents as well as the businesses that access the benefits.
Mr Bain
The Government’s innovation strategy is due to be published later this year. What are the top three points you would want to see addressed in that strategy in terms of finance, institutions, and structures that would further and enhance business‑university collaboration on research?
Antony Harper
First of all, I would comment that we are fundamentally optimistic about this space in the UK. There are some very good ingredients. The university base and our research base in the UK are very good. The TSB, as we have also heard, is very good. So our whole approach and mindset to this is that there is an opportunity to be had here with the innovation strategy. It is a fundamentally optimistic outlook that we have. In terms of key things, one of them that has been mentioned before is the Technology Strategy Board. This is very effective, but it is underfunded. We do not see that as a zero‑sum game with the Research Councils. We think there is at least a linear, if not better, relationship between further TSB investment and further innovation and growth activity within the UK. We believe there are several bits of data that would back that up, as well as the anecdotal evidence you have heard here. We also believe, however, that there is a great opportunity to better link the investments that are made by the Research Councils and the investments that are made by the TSB from a strategic point of view. As I said earlier, the investments by the Research Councils are made on research excellence. They tend to be made by peer reviewers within the academic community, and there is little reference to the strategic landscape of the rest of the ecosystem. For us, that is a major missed opportunity. Yes, research excellence is necessary, but it is not sufficient. Also in that vein, we believe that the training and skills agenda also needs to be aligned with that. If we are looking at creating a doctoral research centre in subject X or Y then that should be in the same physical location, and alongside the same R and D programmes, as other investments that are made in X or Y. I guess the last point we would make is that we need to concentrate on critical mass. The fairy dust that we do have, if you like, cannot be spread over too wide an area. It actually comes back to the earlier questions around signposting and where inward investors go. If we know that institution X or Y is the national centre of expertise for X or Y then it is much easier to signpost it. It also means that we invest in critical mass of research funding, of equipment, and of skills. Our feeling is that at the moment there are wasted opportunities due to trying to please too many people too much of the time. We ought to concentrate our funding on more critical mass and excellence.
Mr Bain
Anyone else? Richard?
Dr Hutchins
I will not repeat the points that have already been made, but I will mention one other issue. We need to develop a new generation of innovators. I would argue that there is an opportunity through the University Technical College programme to achieve that. As I mentioned earlier, lots of universities are collaborating with lots of businesses to develop UTCs. There are around 50 in development. As I said before, we are opening our own WMG academy for Young Engineers here in September. It would be nice to see two departments—the Department for Education and the Department for Business—working collaboratively on this programme. UTCs require lots of equipment. There is not a lot of capital around from the Department for Education to support that. That equipment will need constantly updating and replacing. That might be something that the Department for Business could support the Department for Education on.
Will Searle
I would fully echo Richard’s point, by the way, as a person going to a governors’ meeting this evening. I would urge cooperation across all three, because the financial aspect gears the institutions’ activity, that is then made efficient by the structure that you create. These are three overlapping circles, and they are also represented by the three overlapping circles of RCUK’s funding, HEFCE’s funding, and TSB’s funding. We do not need to repeat the numbers to know that there is an imbalance in there. If we want that engine of the innovation strategy to gear us and grow us, the single most important bit is cooperation behind the scenes in that engine. So, making sure that HEFCE is doing the right thing for RCUK so that we can pull it through into TSB and make business from it. That is inside the machinery. Outside the machinery, we need to simplify the rules of engagement. It is fundamental that there are too many vehicles to engage with, even on behalf of large enterprises—which is something I do regularly—right down to the smallest enterprise. How do you engage? How do you walk onto a campus and know where the Catapult is? There are no signposts for where the university tranche or office is. Put signs up—and I mean physical signs. I think that would make it simpler to engage with the infrastructure.
Mr Bain
If we want universities and businesses to collaborate more closely together, you would say that one of the lessons is that government Departments have to collaborate more closely together, think outside of the silos, and be much more cross‑cutting with this agenda.
Dr Hutchins
Yes.
Will Searle
Absolutely. The advanced manufacturing sector team leads, the information economy team leads—everyone at the top of those vertical industrial strategy teams who report to Amanda Brooks and that team—need cohesion and co-operation, just as industry needs cohesion and cooperation.
Chair
That concludes our questions. You have been commendable concise in your answers. Is there anything you would just like to add to anything that you have said before we conclude? I am conscious of the fact that we may not always ask the questions that would enable you to wax most eloquently, or make the most vigorous points. Is there anything there that you feel that we have not covered in terms of our questions, which you feel is relevant to this issue?
Will Searle
I will add some food for thought, really. It came up earlier in the first panel. There is a certain debate that the SME community is perhaps disfranchised. Certainly the numbers that Ann put out were disheartening as well. The question I pose is: how do we encourage enterprises of every size? We have got to gear all enterprises, because today’s small—we did not talk about micros—is tomorrow’s large. We have dropped the term “SME”; we just talk about enterprises, because the entrepreneurial spirit of enterprising is there. The key enabler of that is business mentoring, coaching, and support, whether it be through a university, a Catapult, or industry-to-industry. For me, I have not heard discussions around how the “B” in BIS helps business engage with the “I” and the “S”. As I see it, that is perhaps the function of BIS.
Chair
Thank you; that is very helpful. I would emphasise and reiterate that if, on reflection, you feel there is anything else that you should have said and would like to have said but did not say, please feel free to submit it in further supplementary evidence. We would be most grateful to receive it. Similarly, if, on examination of your comments, we feel there are questions that we should have asked but did not, we would be grateful for your reply if we should submit them to you. Thank you very much. That is very helpful indeed. Oral evidence: Business-University collaboration, HC 249-iv 2