Written evidence submitted by University of Strathclyde (USC0010)

Scottish Affairs Committee: Call to Action: Universities & Scotland

The Committee calls for evidence for the inquiry on the following issues:

1)      The scale and nature of challenges and opportunities around funding for Scottish universities including funding models, deficits, overseas, and EU students’ fees;

2)      How Scottish universities research fits in with UK university research; and

3)      UK government policy and how it effects universities, students, employees, and research in Scotland.

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Introduction

The University of Strathclyde is a research-intensive, socially progressive, leading international technological university. As an institution firmly grounded in the heart of Glasgow, contributing to the social, economic and cultural life of Scotland with a global reputation and influence, a key focus of our Strategy[1] is the translation of research outcomes for the benefit of business, industry and society as a whole. We work with an extensive range of partners across the UK and internationally and have had significant success in securing competitively won research and innovation (R&I) awards funded at a UK level. Through our connectivity with Scottish Government, Catapult UK and industrial partners we have been able to win SG/SE, Industrial Strategy, Innovate UK and Catapult funding for major initiatives including the National Manufacturing Institute Scotland and the Medicines Manufacturing Centre.

We refer to the Universities Scotland submission for a wider perspective on the issues raised by the Committee and focus here on Research and Innovation, and its relationship with business R&D and economic and social impact. Our experience of working successfully at the nexus of research, innovation, business and economy enables us to provide the Committee with examples of successful R&I investments that underpin our comments on UK government policy.  Key points included in this submission include:

1. Scottish Universities are structurally more dependent on overseas student fees than those in England, due to the need to support costs of home undergraduate students and public- and charity- funded research as they are currently funded.
2. The fundamentals of the “dual funding system” for research and innovation are sound, but it is important that both are funded properly going forward. The doubling of the UK Government R&D budget over 5 years, as discussed in the BEIS R&D Roadmap provides a financial challenge to the Scottish part of this dual funding system. Devolved research funders should be fully represented alongside Research England within UKRI. It is important that the new UK Shared Prosperity Fund can be used to support major Research and Development projects.
3. While the Committee has, in Issue 2, focussed on the relationship between Scottish and UK research, we argue that successful research impact requires us to look at the broader picture of Research and Innovation and also to consider international collaboration alongside Scottish/UK research work.  Two key examples are provided to illustrate how collaboration between Scottish, UK and international Universities, Research and Technology Organisations, and companies can produce excellent research and economic impact.
4. Strathclyde has found success in tackling large scale research and innovation through a highly collaborative approach and the creation of an “Innovation Ecosystem” that has a primary physical presence across the Glasgow City Innovation District and the Advanced Manufacturing Innovation District Scotland. The Strathclyde Innovation Ecosystem was highlighted in the BEIS R&D Roadmap, and provides a focus for collaborative R&D, and for investment by public sector agencies and by UK and international companies.   

Issue 1: The scale and nature of challenges and opportunities around funding for Scottish universities including funding models, deficits, overseas, and EU students’ fees;

Strathclyde has been part of discussions underpinning the Universities Scotland submission to the call which highlights the broad sectoral sustainability issues exacerbated by the coronavirus pandemic including

• Levels of Quality Research funding and the need for cross-subsidisation of research from overseas student fees and potentially significant reduction in overseas student numbers. 
• Access to international research funding particularly in the context of Brexit

We are supportive of the much broader response being made on behalf of the Scottish sector.

Due to the Full Economic Costing (FEC) system for competitively allocated UKRI research funding, Universities receive a maximum of 80% of the specified costs of the project.  As a result, universities must use other income sources to subsidise research and an important source for this at all UK Universities is overseas student fee income.  Strathclyde, like all Scottish Universities, must subsidise not only research and innovation in this way but also the costs associated with Scottish undergraduate provision which are not fully covered by SFC fees. There are, therefore, great challenges and difficult choices to be made at all Scottish Universities.

The key opportunities are around the doubling in R&D funding proposed by UK Government and recently reiterated in the BEIS R&D Roadmap.  The FEC issue will be challenging for all universities, particularly Scottish ones. FEC issues aside, Strathclyde is well positioned to take advantage of the opportunities in the R&D Roadmap in terms of its focus as a Leading International Technological University and its collaborative approach to R&D with companies, innovation organisations and other universities.  We have invested to build an ‘Innovation Ecosystem’[2] in which we and our collaborators can work successfully, as discussed further below.

Issue 2: How Scottish universities research fits in with UK university research

Within our response we focus on the model of high-impact R&D that has proven successful at the University of Strathclyde to the benefit of our City Region, Scotland, and to the wider benefit of our industrial partners. UK-level funding mechanisms and policies around R&I and regional development are critical to this.

The dual funding system for research ensures that core research and innovation funding comes to Scottish Universities through Scottish Funding Council, predominantly through Research Excellence Grant, Postgraduate Research Grant, and Universities Innovation Fund, with Strathclyde receiving approximately £25M pa from these funds. Similar arrangements exist in other countries within the UK, with the largest funds available being to Universities in England through Research England (which is one of the constituent organisations of UKRI, unlike the Scottish Funding Council). This core funding is awarded based (largely) on overall quality assessments made in the Research Excellence Framework (REF).  Universities throughout the UK compete intensively to do well in these assessments because their core research funding depends on it.  That core research funding then provides a base and ensures that universities can be competitive at UK level in individual research funding applications to research councils.

Between 2013-2014 and 2018-2019, we maintained our share of Research Council income (winning £26M from UKRI in 18-19) against a backdrop of ongoing reduction in Scotland’s overall acquisition of RCUK competitive funding (from Audit Scotland and TRAC analysis), and in doing so have substantially raised our industrial research income through the co-funding models for our industrial research centres (detailed below). Our industrial research income rose from £11.3M in 2013-14 to £17.7M in 18-19. Many UKRI funded projects incorporate substantial contributions from industry including, as an example, the Engineering and Physical Sciences Research Council (EPSRC) Prosperity Partnership projects of which Strathclyde holds 4 with industrial partners including GSK and M2 Lasers (now one of the UKs leading Quantum companies).  Throughout this period, we have consistently been in the “top tier” of universities of our main funder the EPSRC as a Tier 1 Partner (formerly called Framework Partner).  Despite the challenges brought about by the coronavirus pandemic, as a result of our approach to R&D, Strathclyde continues to identify opportunities and partners, and is committed to delivering the ambitions in its strategic plan, Vision2025. 

A key sectoral trend over the last few years has been the shift to larger research grants with multiple academic and industrial partners. This has played to Strathclyde strengths in connecting together people with the right research skill, leveraging our involvement in Innovation Centres and Catapults, and attracting industrial partners through our reputation of successful application of research to the benefit of organisations. Our strategy has been to collaborate intensively with other R&I organisations and with businesses through strategic partnerships, and to encourage many research and innovation organisations to create a base at or close to Strathclyde. This model, which involves working in an agile way with entities based near to the University, across the UK, and internationally, is delivering inclusive economic growth.   It is clear to organisations with whom we have established relationships that investing time and resource in research and innovation at Strathclyde leads to tangible positive impact as our examples below show.

Our ability to build collaborations and win funding to develop organisational and physical infrastructures that support impactful research and innovation was recognised in the UK Research and Development Roadmap (published on the 1st July 2020) where the ‘Strathclyde Innovation Ecosystem’ is a case study. This has been achieved by linking Strathclyde research centres with broader innovation partners and hosting many independent research and innovation organisations on our campus: Our Advanced Forming Research Centre (AFRC) is a node in the High Value Manufacturing Catapult and four Catapult organisations are based across our sites, ensuring strong collaboration. Strathclyde hosts four Scottish Funding Council Innovation Centres on its campus - Industrial Biotechnology Innovation Centre, the Digital Health and Care Institute, Centre for sensing, imaging and Internet of Things (CENSIS) and Datalab. It is also a host site for two of the UK National Measurement Organisations, the National Physical Laboratory and the Laboratory of the Government Chemist. In collaboration with Fraunhofer Gesselschaft, we have brought Fraunhofer – Germany’s leading Research and Technology Organisation - to the UK and created the Fraunhofer Centre for Applied Photonics. This is now one of the most successful UK organisations– alongside the University – in attracting Quantum research funding, and a core part of Strathclyde’s “Quantum Cluster”. 

Translational research and innovation has been driven by the establishment of multiple centres in collaboration with industry (including the Rolls Royce University Technology Centre, Continuous Manufacturing & Crystallisation Centre (CMAC), Advanced Forming Research Centre (AFRC), and Power Networks Demonstration Centre (PNDC)). The variety of centre type and sector coverage demonstrates the flexibility in the structures and funding sources that our model creates, and its resilience as a result of the range of funding sources being utilised.

The key benefit of bringing many organisations together at “innovation eco-system” level is to be able to properly address the place agenda, working to change the competitiveness of our industry and creating economic impact in our cities and regions. Two Innovation Districts, Scotland’s first Innovation District, Glasgow City Innovation District (GCID) in the centre of Glasgow, and the Advanced Manufacturing Innovation District Scotland near Glasgow Airport, provide the physical locations for research and innovation organisations, the university and industrial partners. We provide two example cases showing the importance of cross-cutting collaboration and the range of Scottish, UK and International funding in creating successful and internationally competitive innovation organisations.

1)      The Continuous Manufacturing & Crystallisation Centre (CMAC) programme was established in 2011 in collaboration with pharma companies with the aim of transforming the manufacturing of medicines. With research labs based in our Technology and Innovation Centre (TIC) in the heart of GCID, it has attracted support and international funding from Tier 1 partners including GlaxoSmithKline, AstraZeneca, Bayer, Lilly, Novartis, Pfizer, Roche and Takeda, grant support of EPSRC and SFC, capital funding through the UK Research Partnership Investment Fund, and a range of long standing academic collaborators from other universities, including international universities. That internationally leading research collaboration, which has a £150M funding portfolio, has now led on to major £56M capital investment from the UK Industrial Strategy Challenge Fund, Scottish Enterprise, AstraZenica and GSK in the Medicines Manufacturing Innovation Centre (MMIC), being built in Glasgow’s new Advanced Manufacturing Innovation District Scotland and operated by the Centre for Process Innovation with the University as its core scientific partner.  

2)      The Advanced Forming Research Centre, based near Glasgow Airport, was founded through a membership agreement with founding partners Rolls-Royce, Boeing, Mettis Aerospace and Timet in 2008.  With the support of Scottish Enterprise the physical centre was opened in 2010 and AFRC become a founding member of the UK’s High Value Manufacturing Catapult organisation in 2011. AFRC has grown rapidly gaining both a UK wide specialist role and a wider Scottish function in support of Scottish Manufacturing. Working closely with Scottish Government, the University developed the National Manufacturing Institute for Scotland to sit alongside the Medicines Manufacturing Innovation Centre and the Advanced Forming Research Centre as anchor institutions for the new Advanced Manufacturing Innovation District Scotland. Boeing’s recent £11.8M investment into Scotland was a sign of the trusted and mutually beneficial partnership built through many years of collaboration and co-investment in the Advanced Forming Research Centre.

The examples above show that major R&D initiatives can be built in a relatively short period by working collaboratively with a range of academic, industrial and public sector organisations that share a clear vision and which have the means to invest.  As the new post-Brexit R&D funding landscape emerges it is vital that the key mechanisms are in place.  The R&D Roadmap sets out a clear vision but we would highlight the additional need to ensure that the Shared Prosperity Fund – the replacement for the European Structural Funds – is able to play a key role in supporting R&D capital infrastructure:  ERDF funding contributed, for example, to the creation of the Technology and Innovation Centre (TIC), opened only 5 years ago, at the heart of Glasgow City Innovation District.

The TIC and associated Inovo Building is now full of companies, innovation organisations and research teams, and we have advanced plans for expansion to create a larger TIC Zone in GCID.   Alongside the Quantum Cluster and our existing clusters in Energy and Enabling Tech, we are developing clusters around 5G, Space, Industrial Informatics, Digital Health, FinTech centres and the Quantum Cluster mentioned above. GCID is a collaborative initiative with Glasgow City Council, Scottish Enterprise, and the Chamber of Commerce as core partners.

Issue 2 asks “How Scottish universities research fits in with UK university research”.  It should be clear that success in the current university research and innovation landscape requires strong collaboration between universities at Scottish and UK levels. However, Strathclyde’s success is also dependent on collaboration with universities in Europe and globally. Research is necessarily specialised, and to be world-leading you must collaborate with other key world-leading researchers. Furthermore, the same is true for innovation:  We need to be able to collaborate in the UK, in Europe and Internationally with innovation organisations like Catapults and Fraunhofer, and indeed with international businesses.  The nature of modern research and innovation is they are interwoven and international.  Key research and innovation partners are those with complementary strengths who are prepared to co-invest and to share the benefits of that co-investment.

Issue 3: UK government policy and how it affects universities, students, employees, and research in Scotland

The key UK policy areas that impact on Universities are those directly related to research (UK R&D Roadmap, Innovation Strategy) but also those related to regional development (Place Strategy, Levelling up agenda) and policies related to immigration (including the forthcoming People & Culture Strategy and creation of the Office for Talent).

As indicated in the introduction, we focus here on research and innovation issues. As illustrated in our response to Issue 2, investment in the UK Research and Innovation system can bring major benefits to the cities, regions and nations of Scotland and the UK. We fully support the general approach and ambitions set out in the UK Government’s R&D Roadmap, and were pleased to see Strathclyde’s Innovation Ecosystem highlighted there. It is imperative that the implementation of the R&D Roadmap begins quickly, along with the promised increase in investment in R&D.  Despite the Covid-19 pandemic, other countries – including China, the US and Germany – are continuing to invest.

A major strengthening of translational research funding will enable Scotland, and the UK more broadly, to benefit from the world-leading research capability that we already have across the UK’s universities. This funding must be used to stimulate co-investment from UK companies to develop capabilities and products that will benefit our economy, hence lifting our overall level of investment in R&D from its current, relatively low, level amongst other leading economies.

Further investment in place-based R&D infrastructure should be made possible through the Shared Prosperity Fund, the uncertainty around which is of great concern.  As part of the economic recovery from Covid the government should look to find “oven ready” projects in research and innovation that can stimulate the local economy and attract foreign direct investment.

As the UK leaves the transitional period after its exit from the European Union, it is important that we do not lose the integrated research and innovation capacity we have invested in for many years, and we should continue to be associated to the Horizon framework research programme. There are serious implications for UK R&D if this is not possible or not effectively replaced.  However, the UK should also take advantage of the new international situation by establishing wider collaboration programmes that aim to attract inward investment in R&D, establish a wider set of mechanisms for international research and innovation, and which attract international entrepreneurs and start ups.  Scotland is growing a vibrant entrepreneurial culture and is well set to benefit from such policies at UK level.  Universities UK will shortly publish a set of proposals for future international research and innovation funding which we strongly support.

October 2020