25
Examination of witnesses
Professor Richard Jones, Professor Sarah Main and Professor Graeme Reid.
Q1 The Chair: I welcome our witnesses today to the committee’s follow-up session to our inquiry report, published in August last year, on delivering a UK science and technology strategy. We have Professor Richard Jones, professor of materials physics and innovation policy and vice-president for regional innovation and civic engagement at the University of Manchester—that is an impressively long title—who is joining us virtually; Professor Sarah Main, executive director at the Campaign for Science and Engineering; and Professor Graeme Reid, professor of science and research policy at University College London.
The session is being broadcast on parliamentlive.tv and a full transcript of it will be made available shortly after the meeting for people to make any minor corrections.
All three of our witnesses have recently written about the science and technology policy landscape in the UK; they were published at the end of last year, I think. Professor Jones, you have been writing about science and technology policy in hard times. Perhaps you would like to give us a short opening statement with your thoughts on that.
Professor Richard Jones: Thank you. Yes, this refers to a paper I wrote that was published by the Productivity Institute, based in Manchester, just before Christmas. The report was an attempt to take an overview of the whole of the UK’s R&D landscape, so it included all bits of it: government, universities and the private sector. It was really an attempt to ask what big national questions a science strategy for the UK might want to address.
Your committee’s report, Science and Technology Superpower: More Than A Slogan?, is a good place to start, because when we talk about a science superpower, underneath that is the question: what is the UK’s place in the world at the moment? A strategy for science and technology needs to start with a realistic assessment of that place. In rough numbers, the UK accounts for a little less than 3% of the world’s high-tech economy, so the UK is not the USA or China, and it never will be. None the less, there is a genuine competitive advantage in the UK’s science base, as measured by academic measures—a qualification that needs to be stressed.
The issue we face is how that advantage is applied to the critical issues that the UK now faces as a nation. I titled my report Science and Innovation Policy for Hard Times in recognition of the fact that things are difficult and we have to confront that. We are in an economically difficult situation. We have had stagnant productivity for more than a decade. We have profound economic imbalances in performance across the whole of the UK. We are facing a wrenching transition in our energy economy. I think this is a necessary transition, but I think we can’t overstate how difficult it is to meet our net-zero commitment. We see the problem of keeping our citizens healthy, having a health service that is both humane and effective but also affordable; we are facing that problem right now. I do not need to add that the world looks a much more dangerous place now than it did a few years ago, so national security comes back to the forefront.
We need a broader national strategy that R&D strategy fits into. We need an industrial strategy that includes a strong regional element, we clearly need an energy strategy for net zero, we need a health strategy and a security strategy. Those should inform what has come to be called mission-driven research and development, but there needs to be a lot more specificity—a much tighter definition and prioritisation—than we have tended to see so far.
Of course, we always have to prepare for the unexpected. We do that by seeking the long-term health of our core disciplines, which is one of the key roles of research councils, but also by facilitating radical innovation in the way I hope we will see from the ARIA experiment.
There needs to be a national strategy that is not, in fact, designed by the R&D community but that needs input from that community about what is possible. We will see what happens today, but I will also be very interested to see how the National Council for Science and Technology gets going. In principle, that should play a very important role in collating the nation’s needs of science across the whole of government. We need to revisit the original vision for UKRI in the Nurse review; it as an important two-way conduit between the research and development community and the National Council for Science and Technology.
To go back to industrial strategy, it was a pity that the Industrial Strategy Council was rather abruptly abolished. We have seen proposals from some quarters that it should be reinstated as a statutory committee with a long-term life.
I would summarise it like this. These hard times mean that science and innovation is more important than ever, but we will have to change how some of the system is wired up in order to realise the potential of science and innovation in dealing with the really serious problems that the nation now faces.
The Chair: Thank you. You talk about more specificity about what we will be good at in the UK. Can you give me a “for example”? It does not have to be the right specificity, if you know what I mean. How specific do we need to get?
Professor Richard Jones: There are many examples in the net-zero area. We need new technologies to achieve net zero. The UK will buy some of those technologies from overseas, but in some areas it can make progress.
For example, there is a tendency for people to talk about the hydrogen economy in a very general way without being specific about what we are talking about here. How do we make hydrogen? What are the use cases? What technologies are implied by the different use cases? Is this about making fuel cells or making electrolysers? This is a very broad area of technology which the UK will have some role in, but we need to move beyond fairly airy generalities about the hydrogen economy potentially being important to saying, “Okay, what would the UK actually need to do? Where is its industry base equipped to do that?”
The Chair: Do you mean things like what we need to do to be world-leading in electrolysers or in PEM electrolysers? I am not suggesting that those are the right ones, but is that the level of specificity that you are talking about?
Professor Richard Jones: Yes, exactly.
The Chair: Thank you. Sarah, I think you have been looking at the overall landscape and what it means to be a science and technology superpower.
Professor Sarah Main: Good morning. Yes, Graeme and I have been working on a programme of work over a year or so to think further about what the phrase “science superpower” might mean. We did this, because we noted its prominence over time and the variety of interpretations of it.
We went about our work by trying to consult widely across the UK with stakeholders, in the research domain and out of it, trying to find a real diversity of voices to give their views on what a science superpower is. We took soundings on their reactions to the phrase “science superpower” and to the various merits and attributes of different versions of a science superpower that we proposed to them.
We set out three scenarios and explored the strengths and weaknesses of each. They broadly described a world in which science superpower status had already been achieved by: expanding the current research and innovation system in equal proportions, so we would just get to a larger, more active research and innovation system with the same dimensions as it has today; by trying to grow the UK’s science base by focusing particularly on business investment and R&D; or by the Government of the day focusing on their national priorities and using that as the driver for growth.
We wanted to stimulate debate and highlight the choices that are available to policymakers now, in the hope that airing these different views might enable policymakers better to determine a specific path with optimum outcomes towards science superpower status.
I will briefly summarise some of the reactions to the term “science superpower” that we heard, and then Graeme can talk about the scenarios that I mentioned.
First, we noted that senior figures in government use the phrase “science superpower” in different ways and to highlight different aspects that might be of benefit to government—aligning it, for example, with R&D tax credits or the fiscal environment, with policy and capability in government, or with international ambitions.
We went out and spoke to the community through various round tables and interviews around the country, and we gathered a variety of reactions to the phrase that ranged from positive to negative. I will characterise some of those reactions.
A number of people, particularly among the research community, were uncomfortable with the phrase, particularly the superpower part of it and the connotations of colonialism. They were concerned that this was not a good foundation for the UK’s international relationships in science and research.
Another comment that we heard discussed was that the attribute “science superpower” is not something that the Government can confer on themselves; it is something that is conferred by others. You cannot become a science superpower by proclamation. For us to be a science superpower, it is incumbent on our international peers, the public in the UK and the science community to feel and believe that the UK is one.
We also noted a lack of clarity about the phrase that was reinforced by the different emphasis given by different parts of government to what it means.
Another reaction that I thought was very valuable was that a science superpower is sustainable; that they were not on a programme of increasing research investment just to reach a particular target and then to fall away from it. It should be long term and self-sustaining.
We picked up other reactions from the media, noting comments by businesses that were quite enthusiastic about associating their own goals and investment plans with the language of that term. I think it was widely acknowledged as a political slogan, and as a slogan that was helpful in generating enthusiasm and energy and which they felt they could get on board with.
In summary, for me, it has been helpful hearing the Government, particularly the Science Minister, setting out their views on what constitutes a science superpower, but I would note that there is a very wide range of interpretations of that term among the research and innovation community and different parts of government.
The Chair: We were hoping that the OSTS—the Office for Science and Technology Strategy—would tell us by the end of last year what it thought a science superpower was. We wait to hear what it thinks. Professor Reid.
Professor Graeme Reid: Thank you, Chair. I will develop a couple of those points, if I may. We heard concerns about the term, which Sarah has described, some of which were expressed quite strongly. We also encountered enthusiasm for the term. The enthusiasm is a bit surprising to a research and innovation community that is not accustomed to slogans being used as a headline for the activity.
However, as research and innovation grows in prominence in this country, it may not be surprising that that use of slogans should attach to research and innovation in the way that it does to some other areas of public life. We recorded several public statements in the broadsheet press from large businesses and other bodies expressing enthusiasm for the term “science superpower”. One commentator said, “I don’t know what it means, but I want to be part of it”. I thought that sort of captured the mood.
The term “science superpower” has been used by successive Prime Ministers and Chancellors, a Foreign Secretary, a Business Secretary, a Trade Secretary. It has become a vehicle for taking research and innovation into prominence across a range of government departments. So whatever scepticism we have about it, we have to recognise that it has propelled research and innovation policy to a different place.
We explored three scenarios, each of which was consistent with a statement from one or more senior figures in government, so although we created the scenarios we did not create them in a complete vacuum.
Our first scenario was that the shape of research and innovation in this country remains essentially intact, and every bit of just gets bigger. We thought of that as a sort of null hypothesis: we assumed that it was not really a viable scenario. We found that it had quite considerable appeal for parts of the community that felt under threat from change. It is also a scenario that delivers a little bit of benefit to many people, so in our minds it evolved from being another hypothesis to being almost a default condition, one that will be reached unless sufficient force drives us in a different direction.
The second scenario is one in which the public funding remains intact but the big increase is in investment from business. So we move to a science superpower in which business investment plays a much larger part in the whole. That is seen as an attractive pathway by many observers in the academic, business and charity worlds, but it carries implications about the future career pathways for researchers, many more of whom would be working in business. It also suggests a shift in the locus of policy-making to give businesses considerably more influence if they are making considerably more investment.
Our final scenario—I will stop in a moment—is one in which the research and innovation ecosystem is driven primarily by the priorities of government. Topics such as net zero, public health, and defence and security might become the most prominent parts of the system, with new institutional structures being created to support that.
Two questions came from discussions on that scenario. First, which Government are we talking about, and how are devolved Administrations played into this, given that in some cases they hold profoundly different views on areas such as nuclear policy and genetic modification?
Secondly, how would one ensure sufficient consistency of policy to be able to deliver results in times of political volatility.
I hope that is helpful. I will stop there.
The Chair: That is very helpful background from all of you. I cannot help but be tempted to ask whether Lord Sharkey has any views on the value of a good slogan.
Lord Sharkey: For a slogan to be a good slogan, it has to be difficult to disagree with. For it to be a very good slogan, it has to contain as little real meaning as possible. This one certainly qualifies as a very good slogan.
The Chair: On that point, we move to Baroness Warwick.
Q2 Baroness Warwick of Undercliffe: Thank you. My question follows on very neatly from what Professor Reid has just said, because we are looking now at a very different economic and political outlook for the UK. There have been substantial shifts since we started our inquiry—two changes of Prime Minister and a significantly worse economic outlook. It would be helpful for us to know whether, having done the analyses that you have done, you have perceived these developments to have fundamentally changed anything in the science policy space. Are we dealing with new issues and new problems, or with the same perennial issues just against a less optimistic backdrop?
Professor Sarah Main: My perception is that the Conservative Administration have had an ambitious programme for science and research since Theresa May announced the industrial strategy in 2016 and the targets for rising investment in R&D were set out.
That has been widely welcomed. The political volatility since that time, for six or seven years, has demonstrated the fragility of the commitment to R&D in volatile times, and at several points that I am sure we can all identify, some of those commitments have felt rather vulnerable. Thankfully, they have been reinforced and we are in a current spending review period where we have a three-year commitment, but that was certainly not to be taken for granted. That reinforces the principle of the importance of long-term stability in R&D planning and investment, of clear goals for the UK’s future and of what the current Administration, and Government and Parliament as a whole, see as a positive programme for science and research in the UK.
For me—this relates to work that the Campaign for Science and Engineering is doing—this can be further supported only by a greater degree of public awareness and support for the UK’s research capability and for the notion of investment in research and innovation. We are running a programme at the moment called the Discovery Decade, which attempts to use public insights—from polling and so on—to better understand different types of public opinion and to think about ways in which to energise and support it.
A stronger public narrative for research and innovation would help to calm the waters and help R&D policy to be more stable in the long term, even throughout political volatility.
Professor Graeme Reid: I would say that the heart of this issue remains constant. The challenge of raising productivity in the UK and optimising the contribution of research and innovation not only to productivity but to the productivity agenda are constants.
However, a number of things have changed around us and keep changing. Most recently, the really quite dramatic rise in inflation bears on people across the country and brings the productivity challenge into even crisper focus. It also has a bearing on the research and innovation community, which finds the indexation of grant awards falling a very long way behind headline inflation.
I would point to two other things that are changing: our international context and our regional agenda. Each one of those has been through changes and each of these changes is making it all the more important to have clarity in the science strategy, as the committee recommended in its recent report.
Professor Richard Jones: Clearly, we have had some major shocks; Brexit, a pandemic and a war in Ukraine have been very big shocks to the system. Underlying that, one needs to stress that there is a long-term issue that has been going on for more than a decade and that underlies all our economic problems: the cessation of productivity growth pretty much after the global financial crisis. We have to recognise that what we are seeing in the short term is the chickens coming home to roost: the outcome of a long-term slowdown in the economic performance of the country.
To set that in an international context, if we look at across the world, we see declining rates of productivity growth pretty much everywhere. The UK does worse than anywhere else apart from Italy, but the general phenomenon is the same. There is the paradox that we cannot fail to be excited by the very rapid progress that we see in many branches of science; we see it in AI and with the fantastic mRNA vaccines—a fantastic innovation that has had a huge impact—and we are all looking at quantum technologies and thinking how exciting they are. Still, the paradox is that these are not translating into economic growth. The connection that we have had for all the post-war period between scientific development, economic growth and rising living standards has been broken, so we need to think about how things need to be done differently.
As to how this affects the policy landscape, there will be pressure to focus science and innovation much more strongly on outcomes. I do not necessarily think that is a bad thing, as long as we take a long enough time horizon to think about it. As I say, the economic problem has arisen over more than a decade, so remedying it will take the same kind of timescale and it will need a sustained long-term focus to be able to deliver results.
Baroness Warwick of Undercliffe: Do you see that as a new issue, then, or simply something that we have now exposed more clearly?
Professor Richard Jones: I think it is something that we have exposed more clearly. It is not new. The roots of economic underperformance go back to the global financial crisis and probably even before that. The connection between science, innovation, productivity and economic growth has not been working for some time. It has now become very clear that it is not working.
Q3 Baroness Neuberger: You will be only too aware, as there has been a lot about it in the press, that one of the developments since our inquiry was the ONS’s recalculation of UK R&D spend, particularly the proportion of business R&D spend. That is particularly because it said that small and medium-sized enterprises had not been calculated into that. That meant an overall increase in the percentage spent on R&D to nearly 2.4%, which, coincidentally and happily, was a target.
Has this really changed our understanding of the UK R&D landscape? Professor Reid, your second scenario about business is wholly relevant to that.
Professor Graeme Reid: The fundamental policy ambition is not changed, because the target was just an illustration of how the country might become a more knowledge-intensive and research-intensive nation. None of that has changed. Indeed, in the gestation of that policy, the figure of 3% was mentioned, and some people aimed for higher still. The choice of number is a secondary issue. The policy direction remains intact.
On the other hand, we will now be informed with a different set of data. The revision of the R&D statistics opens up questions about what the regional and sectoral distribution of R&D is if we are adding in a fresh dataset reflecting SME performance. That may not shift the overall direction of regional or sectoral policy anyway, because, as with the overall level of investment, that broad sense of direction will, I suspect, remain intact, but it will be informed with data that might look quite different from the data that we have all been using until now.
Baroness Neuberger: Are you content with this recalculation? Does it seem right or not?
Professor Graeme Reid: That is a very good question. As I understand it, we had an imperfect statistical protocol and we now have another imperfect statistical protocol. I think it is a thoroughly good thing that we should have this debate openly. I am not entirely convinced that we will just jump to the new protocol and that is the end of it. My instinct is that there is a further stage of discussion to be had about the statistics that best reflect the level and quality of R&D investment in the country. I do not think we are there yet.
Baroness Neuberger: Thank you. Professor Jones, do you agree, particularly after your comments on productivity more generally?
Professor Richard Jones: More data is always good. I would point out that the ONS revision is not just a revision of business R&D; there is an uplift in the HE research part, which for the first time takes account of the degree to which universities essentially cross-subsidise publicly supported research from other income sources, particularly overseas fee income. That stresses an important point about the sustainability of the public research system that we should note, so I am rather pleased that that it was included too.
In terms of business R&D, we will have to wait for the outcome of the improved survey. When one thinks about the reasons for the discrepancy between the tax credit data and the BERD survey data, one could think of three possible reasons. There was some outright fraud—HMRC has an estimate for that—but it is clear that the Frascati definition of R&D is not totally cut and dried. If there is money on the table and consultants who are willing to help, businesses will undoubtedly stretch the definitions to meet that. Also, there is likely to be the genuine identification of previously unidentified clusters of ambitious and innovative small and medium-sized businesses. The work that we are doing in Greater Manchester to identify our own innovative business base suggests that there is generally some part of that.
However, we need to go on and think, “What is the purpose of R&D tax credits? What are we doing them for?” We think it is right to subsidise businesses in R&D for two reasons. One is the general, classic economic argument that businesses will underinvest unless they are subsidised, because of the difficulty of capturing all the benefits. This is a technical question about spillovers. We need to think quite hard about what kinds of companies produce those spillovers and how we can encourage spillovers to happen; it is about how we can build regional ecosystems that will raise productivity.
There is also the question of just getting done stuff that the Government or the state want to see done. There is an interesting question about the right balance between supporting business R&D through tax credits and directly contracting for the R&D that the Government want done. The UK is a bit of an outlier in the balance, in that it relies heavily on R&D tax credits rather than direct contracting. If one accepts the view that the Government want to be more strategic about things such as identifying developments on net zero—or defence, for that matter—one might want to think about changing that balance.
Q4 Baroness Neuberger: Thank you. I think Lord Borwick will follow up on that. Before he does, do you agree, Professor Main, that this is a sensible recalculation? Does it have serious implications for where we go in future?
Professor Sarah Main: Of course, like Professor Reid and Professor Jones, we welcome the progress towards full and accurate measures.
It strikes me, when you try to envisage the people who contributed the data to these metrics, that they are very different sets of people. The business expenditure on R&D statistics of yesteryear were completed via a survey to businesses that asked about business interaction with universities and so on. That, I presume, was largely completed by people who were active in the R&D parts of those businesses. I imagine that the new metric on R&D tax credits was largely completed by financial officers who deal with the taxation implications for their company. As Professor Reid said, they are both imperfect sets of measures. Not only are they technically different; they also engage with different communities of people and with quite complex and unclear definitions of what we are trying to measure.
So I welcome the progress on and the attempt to be more fulsome in the measure, but there is further to go to align and fully characterise what this is—leaving aside the issue of how one aligns the UK measures with international measures, which is a separate issue.
It is really important that we acknowledge that the reason for the ambition of the science superpower agenda or the R&D investment commitments to 2.4% was to enact a transformational change in our economy and culture in order for us to be a more research-intensive UK. I would put it to you that, during the months in which the R&D statistics were revised, we have not seen a transformation in our economy and culture. That is still a goal worth pursuing, so I absolutely agree that the endpoint of this economic stimulus is still there to be had.
Through my own work in the Campaign for Science and Engineering and the joint report on science superpower with Professor Reid, we have heard from businesses, and we have not been hearing over the past few months that suddenly there is a greater stimulus in attracting business R&D to the UK. There is huge potential to do much more in that area. I would encourage the Government not to use the language of achieving this goal but to use the language of their ambition to achieve more and to go further to attract business R&D.
Finally, I really do support this Government’s ambition, but it is important that they avoid the risk of shooting themselves in the foot. We have a prime example of that here, where the statistics indicate that there is a larger population of small businesses that are active in research and innovation, which is great, but at the same time the Government announce changes to the rate of R&D tax credits, which makes it more problematic for the small businesses that we now think of as research and innovation-intensive businesses.
The Government have good initiatives in this area and are really trying to lead a transformational change, but I urge them to co-ordinate their efforts to maximise those levers and strategies.
Q5 Lord Borwick: I suppose the biggest victim of this disaster, or problem, of the figures changing by 60% is the reputation of the ONS. Presumably, a mistake of such magnitude raises questions about the other figures from the ONS that we trust. In your opinion, how long has this problem been going on, and why has nobody noticed it before? Have the decisions we made on tax credits been based on these fallacious figures or on the Inland Revenue figures, which were right all the time? Presumably, if the Inland Revenue found a taxpayer who was 60% wrong with their tax payable, it would not exactly call them careless; it would call it something rather more serious than that. Professor Jones, do you have some thoughts on that?
Professor Richard Jones: Clearly there were shortcomings in the sampling methodology that the ONS used for the BERD survey, and I am sure it will have a bit of a post-mortem, comparing what it does with what other international statistical agencies do in order to make sure that the sampling is correct.
The point that intrigues me is that the discrepancy between the BERD survey number and the number implied for the R&D tax credit number is not constant with time; it has grown quite considerably. I do not have the numbers in front of me, but if one goes back to that, one can see it. Apparently, this is not a question of there always having been this bunch of business R&D happening without being noticed by the BERD survey, but the discrepancy has grown rather drastically over just a few years.
That prompts some questions from me. If business R&D had increased at the rate that discrepancy suggests over the period from, say, 2015 onwards and over the next few years, I am sure one would have noticed it in other areas—for example, in labour force measures such as demand for PhDs and that kind of thing. There is more to be done to understand that discrepancy.
Lord Borwick: Is somebody doing that work to find out, or is it just happening in the ONS to justify its mistake?
Professor Richard Jones: I have high regard for the ONS, and I am sure that it is doing its best to find this out. I am speculating now, but it may be a question of how good the communication is between HMRC—it has a very detailed dataset available to it on the basis of the R&D tax credit numbers—and the ONS. I have no reason to doubt that it is good, so I just hope that work is happening.
Lord Borwick: The answer—that the ONS appears to have ignored or not noticed the R&D tax credit figures and then said that they were wrong or not relevant—implies a very bad relationship, does it not?
Professor Richard Jones: I am sure it has noticed. I think that people who have been following this area have seen that divergence happening over the past few years. As I say, it has not been there all the time—that prompts its own questions—but happened over a relatively small number of years. We will see.
Lord Borwick: Professor Main, I think you suggested that R&D tax credits could be reformed as a result of this. Could you expand on that a little?
Professor Sarah Main: I do not think I suggested that, but I would be happy to talk about it. There has been a large movement in advocacy to suggest that the definitions used for R&D in the tax credits system are refreshed and reviewed to bring them up to date with contemporary practice. A prominent example of this is the use of datasets in R&D and the question of whether they should be included in the tax credits system. I was referring to the fact that the tax credit rate was diminished for small businesses, which was an unhelpful move when trying to recognise that a larger number of small and medium-sized enterprises were R&D-active. If that is the case, one would hope that we could support that growth in that part of the R&D sector.
Lord Borwick: I agree. Thank you.
Q6 Lord Mitchell: Good morning, everybody. We are hoping that the Government’s response will include a more specific definition of what science superpower ambition means. Professor Reid and Professor Main, you consulted extensively on what it could mean. Would you like to discuss what it should mean and what you learned from your consultation?
I would like to add an additional point. We talked about “science superpower” being the slogan, but, in your hearts, do you really believe that it is going to happen?
Professor Richard Jones: In my first answer, I outlined what I think should happen. It is not language that I would choose myself, to be honest, but if the outcome of the science superpower policy was that the UK’s undoubted high-quality science base was more effectively translated into economic growth and meeting the other strategic challenges to the state, I would hope to see that happen.
Professor Sarah Main: Do I believe it is going to happen? I believe there is a rare confluence of political will, investment commitment, and—I would not go so far as to say public enthusiasm, but there is at least a degree of appetite, such that one could imagine a strategy that might enable this to happen over the coming years.
You can see, if you look at attempts by other countries to significantly raise their R&D capability, and at examples of where that has succeeded, that it has happened through persistence. If you plot it out, you can see a number of government-backed strategies over the medium to long term that keep trying to achieve the same thing. We are in the midst of an era when the industrial strategy laid a solid foundation for an R&D growth strategy, and you can feel the political intent trying to drive this. My postulation would be that whoever wins the next general election will continue with this agenda and keep trying to put science, engineering and innovation at the heart of the UK’s economic and cultural future.
So I am hopeful, but now it really has to move beyond the rhetoric and the language into goals that are clearly defined, which is something that Graeme and I have tried to surface and examine. We need clarity of goal and clarity of strategy to achieve it. Of course, this is what your committee has been thinking about in its report. If we can get to that degree of clarity and stick to it through the political ups and downs, I think there is a good chance, actually.
Professor Graeme Reid: I will develop Professor Main’s line of thought, if I may, but I want to introduce a new dimension to it. Leaving aside the meaning of “science superpower”, one of the obstacles to progress is co-ordination between the many government interests in research and innovation. This progress cannot be made by one government department alone. We have the Home Office’s interests in immigration. If we are going to expand the scale of research and innovation, we will want to make the UK a demonstrably attractive place for top talent around the world. That is an immigration policy issue as well as a science policy issue.
The Foreign Office has responsibility for overseas development assistance. That level of funding fell very sharply recently, which has an impact on the UK’s international reputation. Are we managing that damage to our reputation, or are we just letting it happen for interests that have nothing to do with science?
The Department for International Trade is responsible for foreign direct investment. An uplift in business investment in R&D will almost certainly depend on making the country attractive to global investors.
We have already given airtime to HMRC’s interest in taxation, and I will mention the Department for Levelling Up, Housing and Communities, which is responsible for regional development—not least as EU funding for regional development comes to an end, setting the regional agenda backwards.
I am sorry for that long answer, but it goes towards demonstrating the range of government interests that contribute to a vibrant research and innovation system and the importance of having administrative machinery in government that can pull together these interests and debate the inevitable and proper tensions that exist within government.
Q7 Lord Rees of Ludlow: As Professor Jones mentioned at the beginning, one area where we have special strength is our academic research in universities. We have four of the top 10 research universities, by some criteria. Many of us working in this system think that that status is under jeopardy. It is clearly not the only thing that we should be concerned about, but it would be sad if we lost our one distinctive excellence.
Do our guests think there are ways in which we can secure this? I worry in particular about the REF, which discourages long-term projects, and the measures of impact, which focus on short-term impacts. Does this perhaps suggest that the balance of our research effort needs to shift from universities towards more stand-alone research institutions, which can provide the long-term, full-time research environment?
Professor Richard Jones: There is a risk, and I have already alluded to the cross-subsidies that are required to make the system work. More sustainable support for science that is carried out in universities would make that more sustainable.
Of course, the flipside of that question is that it is very difficult to make the economics add up for running a stand-alone, purely research institution. With the current funding system we have, that is very difficult precisely because those institutes do not have available to them those extra income streams to cross-subsidise.
I want to defend universities; they are great places to do long-term, difficult research. I think the link between teaching and research is very important; the constant stream of young people coming into the research system in universities is vital to keeping things fresh. There are things we could do differently in the incentive structures that would permit us to take a more long-term view of research in universities, and those are things that we could certainly explore.
In a sense, you could have long-term research institutes that lived in universities if the incentive systems were set up suitably, and it could be easier to do that than trying to set things up from scratch.
Lord Rees of Ludlow: Professor Reid, do you have any comment on this?
Professor Graeme Reid: I should say that I chaired the board of the National Physical Laboratory and have a professorship at UCL, so I can see at least some of both vantage points.
I am aware that there is a wider debate about the balance of emphasis between universities and institutes, which you just highlighted. I think that debate is misplaced. I do not see the distinctiveness between institutes and universities which the debate implies. I find it difficult to imagine a bucket of institutes and a bucket of universities that we can somehow weigh against one another. I say that, because many institutes operate partnerships with universities, and many universities have within them prominent and long-standing institutes, so these are not two distinct populations that can be weighed against one another.
Instead, I would argue that the optimum institutional structure should be chosen for different types of work in the research and innovation system, bearing in mind that universities have built into them a diversity of disciplinary coverage that allows them to be agile in response to fresh challenges by reassembling expertise into new institutes without having to hire or fire large populations of scientists in the process.
Also, universities bring the next generation of highly qualified people into close proximity with the discovery of knowledge. We have students and research taking place within the one institution. That is another hugely important part of the research and innovation system in making sure that we have the intellectual sustainability that spans generations.
Lord Rees of Ludlow: I think everyone would agree with that, but the worry is that those who work in universities feel that they are having a harder time now than they did, and they increasingly envy those in places like the MRC LMB and the Crick, where they have the chance to do full-time, long-term research, which they are not able or encouraged to do by the REF criteria.
Graeme Reid: I would not lay all the blame on the REF, but you have set out a compelling argument for more sustainable funding in universities. Inflationary pressures have made a difficult situation even worse, because grant inflation is not keeping pace with the CPI, and universities are starting with a funding environment that seldom, if ever, provides funds to match the full cost of doing research. So we start with a gap between income and cost and then see that gap subject to inflation running at 10%, while, in UCL’s case, I happen to know that the inflationary uplift from UKRI is a little short of 1.5%.
Q8 Lord Wei: One of the Government’s stated ambitions is to use R&D to assist in levelling up and to increase R&D spend outside the greater south-east. Do you think the Government are on track to achieve this ambition, and are current policies sufficient to make it a reality?
As you answer that, I want to build on something Professor Jones mentioned that I thought was very curious: that we harness the tax credit system to drive a lot of our innovation in this country, and at the moment, or historically, we use less government procurement to directly procure R&D. Would that be part of the mix in a more equal spread regionally, or is there some other reason, particularly as we compare ourselves to other countries, why we are unable to spread R&D more beyond London and the south-east?
Professor Graeme Reid: I will make an observation first, if I may, and then try to get on to the UK. Colleagues and I published some work a couple of years ago in which we looked at the regional distribution of overall R&D in the UK and compared it to similar statistics for other countries. We found that compared with Germany, the US, and the EU taken as one entity, the UK actually had a more even spread regionally than its comparators, but I would be quick to acknowledge that that was by one measure, and you can choose from a large catalogue of measures and find different answers.
The other observation I would make is that the picture varies considerably with the geographic granularity that you choose. London, by some measures, is a large centre of research and innovation. That does not mean that every London borough is a centre of research and innovation; I think I am right in saying that Waltham Forest has no institution of higher education, but if you went to South Kensington and Bloomsbury, you would find a different picture.
That said, I would be wary of pursuing the Government’s stated objective alone, because I think you could meet the objective and not meet the ambition of bringing the benefits of research and innovation through a broader range of people in the UK spread across a broader range of geographies. I think we should concentrate on the purpose of this rather than pursue a rather narrow numerical target.
That ambition has been made all the more difficult by decisions to put a vanishingly small level of emphasis on research and innovation in the Government’s shared prosperity fund, which by some interpretations is a replacement for European regional development funding. European regional development funding had many faults, but one of its characteristics was that sizeable amounts of it went into research and innovation, often in places that did not receive high levels of funding from research funding agencies in the UK.
Professor Richard Jones: I very much welcomed the recognition in the levelling-up White Paper that R&D was an important ingredient for prosperity. We know that strong regional ecosystems bring prosperity, because we can look at the places where this has worked. Oxford and Cambridge are fantastic national successes, where substantial state investment in R&D has led to even bigger investments by the private sector. That tells us how this ought to work. They are great success stories, and the only thing one can say about Oxford and Cambridge is that other factors stop them collaborating quite as much as they could. I would be all in favour of the Oxford-Cambridge Arc, if I were to nail my colours to the mast.
On the other hand, we know that big, second-tier cities in the UK underperform in productivity compared to those in other northern European countries. We do suffer from the fact that we are not investing enough in R&D outside the greater south-east, so I welcome the levelling-up White Paper targets. However, there is a curious thing about those targets: they are at once not ambitious enough and too ambitious. The target to increase public R&D outside the greater south-east by 33% by 2024-25 is not actually a commitment to change the balance of R&D spending; it is a commitment to not make things any more unbalanced, because that reflects the total national increase.
So in that sense it is not ambitious enough. On the other hand, it will actually be quite hard to achieve that, because the current imbalance reflects quite deep structural issues, and I would like to see more effort to tackle those structural issues.
The instruments that the Government have brought forward are actually very small. We have the £100 million Innovation Accelerator programme over two years; I declare an interest in that part of that money is going to Greater Manchester, and I am much involved in thinking about how to use that most productively. It is essentially a two-year programme of £50 million a year confined to three cities, and in the context of a UKRI budget in excess of £8 billion it is very small indeed. I am disappointed that that programme is so small in scale; it is only for two years with no plans to extend it in time or to expand it to other cities.
The strength in places fund was useful, and it is disappointing that it was wound down; there are no new rounds of it. Professor Reid already mentioned the shared prosperity fund and the relatively small amounts of it going to innovation.
The vision is good, but there is no demonstration of real commitment not just to achieving the targets but to achieving the outcomes that those targets are intended to facilitate, which is about improving prosperity and people’s lives outside the greater south-east. We need to build new innovation capacity outside the greater south-east, and that will probably be focused on the industrial, applied end of R&D. Procurement may well play a role in that, particularly in areas like net zero. The places that will build new nuclear reactors—and, for that matter, hydrogen electrolysers—are not in fact in the greater south-east; they are outside it.
We will need new institutions and institutional change to achieve it, but it is really worth doing. If we believe that science and innovation are the instruments for boosting prosperity, why would we not think that we should use those instruments to boost prosperity in the parts of the country that are lagging, when they have been so successful in places like Oxford and Cambridge that have really strong innovation economies? It is a question of looking at what we have done in the country that works and trying to do it in some other places too.
Professor Sarah Main: I agree with much of what has been said. I point the committee to a report by the Campaign for Science and Engineering called The Power of Place, which looks at maximising the local economic impacts of R&D. Our organisation is supported by more than 100 different R&D-led organisations around the UK, so we used that geographic distribution to have conversations on this topic around the UK over a year or so.
The committee can look at the recommendations another time, but one that I want to point to is the important role of local civic leadership. You see outstanding civic leadership in the exemplars of active research and innovation in regions, but, as we observed from our commentators, that varies across the country, as do the structures for it. This is a question that combines some of the issues that we talked about earlier, such as devolution and the extent to which central government is willing to allow civic leadership to have levers that they can use to stimulate research and innovation to a greater extent.
The Chair: Lord Holmes, could I suggest that you direct your question first to Professor Main, because I am conscious that we keep cutting her off and it is a little unfair?
Q9 Lord Holmes of Richmond: That is exactly what I was going intending to do.
Thank you for coming along today. One of the perennial issues raised during our inquiry was the embedding of industrial and innovation strategies in a timeline that is more favourable to, or more aligned with, the research and development timelines rather than perhaps narrower political horizons. Where have you seen this done well in terms of science policy, and what were some of the key factors that enabled that? As previewed, Professor Main.
Professor Sarah Main: I referred earlier to work on international comparisons, and I would recommend that the committee approach UK Research and Innovation, because some of this work remains unpublished, I believe, but I know that it has the data. The Campaign for Science and Engineering and UKRI did some work looking at examples from history and international relations and found several good examples of where a rapid increase in R&D activity in economies had been achieved in approximately 10-year timeframes.
One of the characteristics that I mentioned earlier was that that was sometimes done by sequential strategies, but their persistence as they came and went. That is why, although I am disappointed that the industrial strategy has not continued along the path that it set, that is not without precedent and the important thing is to maintain momentum on the Government’s agenda on this.
There are some examples of very stable R&D commitments by countries that have been really positive. One is Germany’s R&D plan, which sees a consistent 3% uplift for German publicly funded research institutes year on year. That is set out in 10-year timeframes, I think, and has been running for 15 years now.
Often, the challenge has been to land that narrative politically: how can we present that as a positive to Governments? This is where combining the voices of different stakeholders and interest groups in research and innovation is really valuable. Yes, businesses want stability, and rising investment is very welcome, but what they really want is predictability, so it would be valuable if businesses could use their voice to talk about how valuable predictability is. We can all think of businesses that work on very long planning time horizons for their infrastructure and outputs. I remember talking to BAE Systems about its submarine planning, which goes on 30-year horizons, and there are many examples.
We need to use different voices, such as those in the business community, which also relates to Lord Rees’s question about how we sustain the value of excellence in universities; the business voice is very helpful there, too. If we combine that with the public voice and, as I mentioned earlier, really try to build awareness of what R&D is in the UK and the level of public support for it, we might be able realistically to sustain longer-term commitments.
Professor Graeme Reid: I echo the points that Sarah made, in particular her citation of the work that UKRI and CaSE did some time ago. That is a terrific reference point.
I would add one more observation. We often have more stability of policy than the headlines would suggest. Government is much attracted to new strategies. Sometimes they are the incremental development of something that was there before, but it is not presented as an incremental development, it is presented as something brand new, and the brand new bit can be destabilising. If there were to be greater recognition from government about the building blocks on which new policy stands, rather than always presenting policy as something new, our existing policy landscape would take on a greater continuity.
Lord Holmes of Richmond: Thank you. Lord Jones. I am sorry, Professor Jones—although it is a matter of time, surely.
Professor Richard Jones: One of the interesting things that we should perhaps spend more time looking at is what happens in east Asian states. We tend to compare ourselves to European countries and the United States, but it is countries like Taiwan and Korea that have been enormously effective at translating innovation into impressive economic growth. Of course, that means that there is a very different view of the relationship between government in particular and the private sector. It is a much closer relationship than has been common in the British political economy for many decades, which will be an issue.
Looking more widely, it is a very interesting time internationally. The United States has its Inflation Reduction Act and its CHIPS and Science Act, which are very interventionist acts of industrial policy that are leading to similar thoughts in the European Union. The UK needs to understand that the international landscape for innovation policy has changed quite a lot and is changing really rather dramatically. I would be reassured if I thought that the Government were taking that into account.
Lord Holmes of Richmond: Thank you all very much. I also thank the students for showing up as well. I appreciate it.
Q10 Lord Sharkey: During our inquiry, the committee postponed the consideration of some topics because the organisations that we wanted to look at were under review. Some of them still are; we still have not seen the Nurse review, for example, but we have seen Sir David Grant’s review, which is what I want to ask about.
Do you have any specific views on the issues that David Grant identified in his UKRI review? Which of the issues do you think should be addressed as a priority? I am reminded that there were 18 recommendations in the report.
Professor Sarah Main: I should declare to the committee that the Campaign for Science and Engineering hosted a round table for David Grant in the preparation of his review, bringing together stakeholders that were somewhat of a distance from UKRI to provide comments.
I feel strongly that UKRI is a flag-bearer for the UK’s research and innovation. As such, it has great capability to hold that flag in the global context, both internationally and at home, with Governments, the research sector and the public. I sense that David Grant’s recommendations were in the spirit of seeing UKRI grow into an even more effective and impactful organisation, and I would support that.
Through my role in the Campaign for Science and Engineering, I talk to a rich, diverse range of actors in the UK’s research system. Some of them have close relationships with government institutions and UKRI, and some of them do not. One of my observations is that UKRI could expand its reach and engagement beyond the community of organisations that are direct beneficiaries by being in receipt of grants, into a much wider community of organisations that are stakeholders and actors in research and innovation in the UK. I would like to see it be empowered to be an even greater force in our national consciousness and narrative about research and innovation.
I do not feel confident enough to comment on the detail of all 18 of those recommendations.
Professor Graeme Reid: I should declare an interest, because I was a member of the advisory group that Sir David Grant convened while he was preparing his report.
I offer two thoughts. First, David Grant was clear in his admiration for the things that UKRI does right, and we should recognise and remember that; it is the sort of organisation that does many things well. It was created, among other things, with a view to creating greater harmony between the nine constituent councils. That has proved considerably more challenging than the original architects of UKRI had imagined. We should be careful what we wish for.
There are nine councils for good reason; they provide diversity of perspective and diversity of funding opportunity, which I find valuable. However, there is room for quite a bit more harmonisation in both communication and substance. There are some areas of research that would benefit from measured harmonisation between two or more parts of it. It is six years since the legislation was passed, and I think it would be reasonable to expect a higher level of harmonisation than we have seen so far.
Professor Richard Jones: The Grant review was a thorough and important review, and I hope that it is carefully considered and acted on.
A couple of points stand out to me. First, there is a big strategic question. The Higher Education and Research Act removed autonomy from the research councils, giving the Government more direct control over them. The goal was to make the system more responsive to the Government’s strategic goals and to give the science community a strong voice in government in achieving those goals. Those were worthy goals, but the risk was always that they would hobble the research councils’ freedom to operate and experiment, as well as impose more Whitehall bureaucracy. I am afraid that the latter has happened rather than the former. There are many examples in the Grant review of the extra bureaucracy that has been imposed—the approvals that have to go through BEIS and the Treasury, business cases flying here, there and everywhere. That is an issue.
It has also exposed UKRI more to rapid shifts in government policy. We saw that with the scrapping of the Clark-May industrial strategy and the consequent run-down of the industrial strategy challenge fund. We saw it with the abrupt removal of ODA funding, which was very damaging for the UK’s reputation as an international partner. That is what I would see as the verdict on the overall plan to bring the research councils closer to government.
In terms of the internal operation of UKRI, the Grant review makes serious points about the lack of strategic coherence. To quote the report, “there is little evidence that UKRI has made strategic decisions to prioritise particular goals and the bulk of spending has not shifted between different councils, activities within councils or activities across UKRI”. This reflects a structure in which it is not clear what the board does and how the insights of individual research councils and their many advisory bodies get integrated into it. That is a serious issue that should be addressed.
In terms of operational issues, I do not think that UKRI’s promise to improve interdisciplinary research has been realised. It has never been made clear how the priorities of the strategic priorities fund were arrived at; it now seems to be being wound down, but I am not sure what its replacement will be. The integration between Innovate UK and the research councils has been disappointing. There are changes happening—I know that the current CEO of Innovate UK is changing matters—but the review says that “the advantages of having Innovate UK within UKRI have not been fully realised”. We do not get joint working between the research councils and the innovation side.
One place where there has been some progress is in the integration of skills across PhDs. That should be addressed much more widely. The splitting of HEFCE into the OfS and Research England was unfortunate, because it separated the function of universities, supplying the skills for the research workforce, from their research activities. I have talked about regional imbalances; I do not think there is not enough conviction on levelling up.
I just want to finish with this point. I make it tentatively, but I think it addresses some of the worries that Lord Rees expressed in an earlier question. This may be me rather than the Grant review, but I get the impression from colleagues that there is a decreasing level of confidence in the community about research councils’ ability to run a peer review system that really identifies and supports the most long-term and innovative research. One symptom of this is everybody being so worried about losing the European Research Council. We worry that we are not in a position to provide the rigour of peer review that the ERC demonstrates very clearly.
Lord Sharkey: Thank you. That is very interesting.
Q11 Baroness Northover: I will sweep things up, as it were. Are there any new issues arising since the committee’s inquiry, or issues that we have not discussed in this session, that you think we should press the Government on with regard to science policy?
While we have been sitting, a new department, the Department for Science, Innovation and Technology, has been set up, with Michelle Donelan heading it; I have not seen who will cover her maternity leave. There is also a new Department for Energy Security and Net Zero—rather like DECC during the coalition—which will be headed by Grant Shapps. Those were flagged this morning, so you are probably well aware of them.
In the light of those changes, perhaps you might like to comment more widely. I will take your answers alphabetically. Professor Jones.
Professor Richard Jones: I think it is great to have a Science Minister in Cabinet. That is a really important signal and is hugely welcome. We will have to see how the responsibilities are carved up, but the key to success is not just in a stand-alone department. Science goes right across government, so it is about how effective that Minister will be in co-ordinating health and social care, defence, energy and net zero, DLUHC, as well as the skills aspect with DfE and what is left of BEIS with trade. Science runs through what all those areas need in order to achieve their goals. If this measure means that there are serious discussions across government and in Cabinet about the nation’s priorities and how science can support them, that is great.
The other thing I would ask is: who gets to focus on productivity? In my previous answers, I have stressed how important I think the productivity question is. In a sense, there has always been a debate in government around whether it is the responsibility of the business department or the job of the Treasury. We saw that with the Clark-May industrial strategy effectively being replaced by the Treasury-driven plan for growth.
Success comes down to the Treasury. There has always been a tension between the Treasury’s role as a finance ministry and its role as a department of economic affairs, if you like. If the Treasury can fully back the science ministry and fully support the need for science to feed into industrial policy—I do think that the Treasury ought to be less resistant to vertical industrial policy than it has been over the past few decades—the new structure has a chance of succeeding.
Professor Sarah Main: I will respond to the first part of your question first about whether there are any things that we have not discussed. I just put it to the committee that it is so important that in pursuing this agenda, which I think we all support, the Government and Parliament use what has already been done effectively.
One example of that is the fact that, over the past year, the Office for Science and Technology Strategy and the Government’s Chief Scientific Adviser have done a lot of work on identifying 10 major challenges that should be addressed in order for us to be a science superpower. I believe that document has not yet been published, but they consulted widely with a compelling group of stakeholders to come up with their recommendations; one of them was on procurement, which I think was the subject of an earlier question. It was a comprehensive and valuable piece of work. The new Secretary of State must use what has gone before effectively and listen to the consultation and all the work that went into it in order to help progress this agenda.
I agree with Professor Jones that the creation of the new department is a welcome signalling of the importance of science to the Government. It also provides the structural connections within government for science to be better connected across the many departments that impact on the health of the environment in the UK as a place to do science research and innovation. Professor Reid pointed to specific areas earlier, and I agree with him, but this has to be a whole-of-government ambition, not a single departmental issue, and I hope that the creation of this new department and the role of the Secretary of State will help that to happen.
However, machinery-of-government changes can be time and resource-intensive; that is well recognised. So my hope is certainly that, while this creates profile, it does not take away from the energy, commitment and resources in pursuing a science and technology strategy that we have discussed today.
Across much of what we have talked about today—perhaps Lord Sharkey’s professional expertise could be well used here—I feel that the UK is lacking a compelling national narrative for R&D, which could really help to harness and bring in a much broader coalition of support behind the agenda that we are talking about.
Professor Graeme Reid: I will struggle to add to the comments that we have just heard from Professor Jones and Professor Main, because I agree with so much of what they said. I just want to emphasise one point, if I may. The creation of the department is a good idea; it will raise the profile of research and innovation in government. The question is what we do with that. We must use it to create a narrative for research and innovation that a wide range of government departments feel they have ownership of and can use in the development of their policy. It is also about taking advantage of the greater prominence to make progress on the co-ordination of the many policy areas that bear on, and indeed benefit from, research and innovation. These things would turn the new department into a towering success. Without them, we have just fiddled around with government.
The Chair: Finally, Lord Winston may wish to throw in a curveball.
Q12 Lord Winston: Thank you. This has been a really interesting session. I declare a slight interest as somebody who retired from the CDEI recently.
I suppose my question is this: can you really stimulate innovation? Have we not had a problem in Britain with translating it into finance for a very long time? It is not just about the past 10 years. To some extent, it is disasters that make a real difference to humanity. War and pandemics create an innovative situation, and I wonder whether we end up coming back to Lord Rees’s argument, which I think is very much in favour of universities, where you at least have that broadness that has been described so well.
Professor Graeme Reid: First, I think it is a good thing that we keep asking your question, Lord Winston. In so far as there are international comparisons, the UK comes out reasonably well—better than commentary often suggests—in our innovative capabilities. However, the observation of that in daily life is the thing that I miss. When I look at the performance of our economy and some of our societal challenges, I ask, “How come we have such a highly performing research base, but have such trouble resolving some of the difficulties that we face in life?” The bit I just cannot understand is whether we have a distinctive weakness in the UK or whether this is something that people around the world wring their hands over. I have tried to understand that, but I can never satisfy myself that I understand it.
Giving more political profile to research and innovation will help if that profile is followed by stronger relationships between the different bits of government that often tackle these challenges. A new department will not solve these problems, but it might create an opportunity to solve them.
I do not know whether that answers your question. It is a pretty difficult one, if I may say so.
Lord Winston: Interesting answer. Professor Main, would you like to comment?
Professor Sarah Main: To clarify, is your question about how we meet the challenge of creating more economic outputs and benefits from innovation?
Lord Winston: Yes. Part of the problem I see is that there is a tension between what we are trying to do to get more into the economy, and blue skies research, which of course Britain has always been particularly good at and which is generally done in universities.
Professor Sarah Main: My comment earlier about Lord Sharkey’s professional expertise was not made flippantly. I think there is a considerable issue with how we, as advocates for the R&D sector, describe R&D. We are failing to include the full range of research and innovation when we talk about the R&D system, which means that the public, government and policymakers see it in very black-and-white terms as maybe universities and maybe businesses, missing what I think is a real strength of the UK: the diversity of actors in the research and innovation space that sit at the interfaces between the public, private and third sectors. Our charities, research institutions, and public sector research establishments that provide national capability are national assets. We are failing to see and to shine a light on the richness of this domain. That colours all these questions and perhaps leads to failures in metrics and policy levers to fully account for where innovation is taking place.
There are metrics that would indicate that the narrative that we are not very good at innovation is not fully supported by the evidence. I talk to businesses and investors in the R&D sector, people who support science parks and property companies. They have an appetite for a lot more, and I feel that there is huge potential to drive further and faster on the UK’s innovation end of its research and development spectrum. We tend to underestimate that part of the R&D spectrum; we do not talk about it as if it is a full two-thirds of our R&D economic activity, which of course it is. The CBI has done great work in bringing to light some of the specific needs of those parts of the economy.
When you talk to those businesses and universities, they are quite clear about the mutual benefit that they get from each other. The businesses are very clear that their location decisions into the UK are for the skills pool and the technical output of excellence in research universities, and vice versa. So I think there is a lot to be optimistic about and huge potential to grow that further.
Lord Winston: Professor Jones, you mentioned Taiwan, which was a really interesting point. You did not mention Singapore or Israel, for example, and I think there are very good reasons why you did not, but Taiwan was really quite interesting. Do you want to expand on that?
Professor Richard Jones: There is no cultural reason why the UK is no good at innovation; we just do not try. Applied research translation is unglamorous and expensive, and we do not do it very well because we wound down public sector research establishments as a matter of policy. The catapult centres that we currently have are good, but they are underpowered compared to the size of our economy. Professor Reid’s colleague in UCL, Jon Agar, a great historian of science, wrote a book called Science Policy Under Thatcher, which completely explains that this was a deliberate policy; it was underpinned by a rationale for doing it. So we should not be surprised that if you run down your applied research enterprise, you get to be less good at innovation.
Taiwan is fascinating. It has a great translational research centre called ITRI, the Industrial Technology Research Institute. Probably the greatest, most valuable spinout ever, the TSMC—the Taiwan Semiconductor Manufacturing Company—came out of ITRI and now has the world lead in advanced integrated circuits. So there is a fascinating story there.
More generally, going back even further, the historian David Edgerton, in one of his books, makes the comment that the British state has always used science policy as a cheap substitute for industrial strategy, and I think there is a lot of truth in that.
The Chair: Thank you. That perhaps aligns with Lord Winston’s comment that it sometimes takes a crisis to get some of these things right. I think we still need to reflect on what we learned from Covid and what we managed to do extremely quickly in linking our universities to industry to solve a national problem in a very short space of time, and the committee will perhaps come back to that.
We have had a long session, and I thank our panel for giving us so much time and so many interesting inputs.
