Written evidence submitted by Materials Processing Institute (LEA0266)

• The Materials Processing Institute is an Open-Access Technology Centre serving organisations in the UK and internationally, which work with materials, materials processing or energy. It specialises in challenging processes, particularly those involving high temperatures, hostile environments and high specification materials. The Materials Processing Institute is based around a purpose built laboratory and pilot plant complex in Teesside, with facilities over a range of scales from fundamental laboratory scale experiments through to the construction and operation of demonstration scale pilot plant.

• The Institute was founded as the British Iron and Steel Research Association (BSIRA) in 1944, as a central research centre for the UK iron and steel industry.  Serving British Steel through nationalisation then privatisation it subsequently was part of Corus then Tata before taking itself independent in 2014 as a not for profit company limited by guarantee.  Profits are returned to the business to support research and investment in new facilities.

• Chris McDonald is Chief Executive Officer of the Materials Processing Institute.  He was appointed as the Innovation Lead for the UK Metals Council in 2016, and sits on industrial advisory boards at a number of universities, including Oxford and Sheffield, and is an associate faculty member at the University of Warwick. Chris is a Fellow the Institute of Chemical Engineers, and of the Institute of Materials, Minerals and Mining, and is a graduate of the University of Cambridge.

SUMMARY

1. In leaving the European Union, the United Kingdom faces many challenges but has an opportunity to build on its strengths in product design, engineering, materials and manufacturing, to create trade led, manufacturing growth. The rebalancing to an international trade based economy, will require new investment in infrastructure and more complex supply chains, which together reveal that the materials and Foundation Industries are a crucial aspect of Sovereign Capability.

2. To ensure that the UK can capitalise on these opportunities and protect its global interests, an innovation centred industrial growth strategy is needed, to deliver innovations in energy, processing, metals and materials.

3. This will require the UK to take back responsibility for innovation in the materials and Foundation Industries, support industry led initiatives such as the proposed new innovation ‘Catapult’ for the metals and materials sector, and free up the small businesses in these supply chains to innovate, invest and grow.

4. Creating this solid industrial foundation, through innovation and infrastructure, will give the confidence required to reliably invest in British manufacturing, creating much needed jobs and growth in communities and regions, throughout the United Kingdom.

5. For the UK to thrive in the post-EU world the emphasis must be on policies which support trade and it is the trade in manufactured goods which has the greatest potential to create jobs, grow the economy and attract inward investment.

6. The only strategy that could achieve this success is one with innovation at its core. It is innovation that will drive the improvements in productivity, new products and customer services that will give Britain the edge in this international trading environment.

What the effect of the various models available for the UK’s future relationship with the EU will be on UK science and research, in terms of:

• Collaboration;
• Access to EU-funded research facilities, both in the UK and abroad
• Intellectual property and commercialisation of research

7. Fundamentally, innovation is about the commercialisation of research within industry. Britain is recognised as being strong at research and has made great improvements in innovation in the last decade, but to realise the opportunities of this new environment, the status quo is not acceptable. Britain must move rapidly to adopt an industrial strategy founded on innovation and the following actions are required:

8. Continued Access

1. Secure continued access to the network of innovation partners in Europe is essential.

2. Continued access to funding is not as important as continued access to facilities, capabilities and expertise.

3. The real value in collaboration lies in the knowledge that others bring to a project and the work that the project partners undertake, which is effectively ‘free’ to the other participants. Norway and Switzerland are examples of countries that have achieved a settlement of this nature with the EU and it is to be expected that the UK could negotiate a similar arrangement.

9. New Innovation Strategy

1. A fundamental review of UK innovation strategy is required.

2. The purpose of a nation’s innovation strategy is to support industrial strategy. In the UK the basic formation of the industrial strategy was set some years ago and is based around a set of narrowly defined sectors. This does not include key areas of the manufacturing economy, such as the Foundation Industries, for example.

3. Such omissions were less of a concern with Britain in the EU, when the European innovation strategy could be relied upon to fill some of these gaps. Now the UK must take back responsibility for these important areas of its own economy and provide the innovation support that it needs, in addition to the currently defined automotive and aerospace sector strategies.

10. Achieve Potential

1. Realise the opportunities presented around international trade and sovereign capability.

2. Recognise that different trading partners, in different trading regions, will mean that to be successful the UK will need to make different choices about: managing risk, making investments and dealing with the flow of goods, finance, human resources and crucially, information.

What science and technology-related legislation, regulations and projects will need to be reviewed in the run up to the UK leaving the EU.

Research

11. UK universities are rightly recognised as world leading, but this does not necessarily lead to improvement in industrial output.  The UKs public research budget is heavily weighted towards fundamental university research, with ten times as much funding targeted at this part of the innovation supply chain, as compared with the industrialisation of the research. 

12. This model runs counter to actual experience of commercialising research, where funding needs to be weighted towards the more risky and expensive final stages.  Without this support, the investment in early stage research is entirely wasted, as the results are either never commercialised, or are published and used by competing overseas nations. 

13. Exporting research results is of little economic value when compared with the benefits from exporting the goods and services that are the product of implementing the research in industry.

14. For this to happen the research must be upscaled and commercialised.  A number of key UK sectors, including metals and materials, highlight a lack of upscaling facilities.  Fortunately the steel sector is quite well served with the piloting facilities at the Materials Processing Institute and these could be quite readily be augmented to create a national multi-metals, multi-materials pilot and upscaling facility.

15. What is proposed is a fundamental shift in innovation policy, with a clear recognition that the driver for innovation is to serve the needs of industry and with greater cultural value attached to commercialisation rather than knowledge development.

Design

16. The British brand stands for design and quality throughout the world.  British designers and architects are rightly recognised for their creativity and inventiveness.  This design expertise reaches across media and marketing, into fashion and product design. 

17. By recognising and including this design expertise in industrial innovation strategy, the UK can embed a competitive advantage in its manufacturing companies. 

18. Bringing together designers and engineers yield new approaches to product design, for instance, that combine aesthetics with functionality. 

19. It should also be recognised that successful and innovative design relies on and is enabled by, innovative materials.  The link between form, function and the properties of materials of construction is intrinsic and essential and so it is clear that for the UK to fully exploit its global leadership in design and to integrate this into successful manufacturing, metals and materials must form part of the nation’s industrial innovation strategy.

Innovation Strategy Review

20. The UK needs to undertake a review of its innovation strategy and build in those essential items that are currently missing and would previously have been dealt with at a European level.  A good example of this is in the area of raw materials where the British Geological Survey has defined a list of critical raw materials. 

21. Managing the long-term availability of these raw materials was previously considered throughout the EU, but the territorial bounds on which this now needs to be applied have been reduced to the level of the nation state. 

22. This creates a requirement for Britain to unleash the forces of innovation and creativity to understand how these precious materials can be conserved, tracked, separated, reused and recycled, within the geography of the UK. 

23. Such an initiative can be part of a much larger drive for a circular economy, with a ‘cradle-to-cradle’ approach to manufacturing that is not only more environmentally sustainable, but which yields highly efficient and profitable manufacturing.

24. To achieve these breakthroughs, the UK needs, quite specifically, to create a clear focus on innovation across the multi-metals and materials sectors.  This is a cause that has long been championed by the sector in the UK, but has not yet received the full backing of the relevant innovation agencies. 

25. In a world with Britain outside the EU, the country can no longer rely on the beneficence of others to undertake its much needed research in materials, processing and energy and so it is even more essential than ever that the much supported and well publicised proposal for a Materials Catapult, is swiftly implemented.

What other measures the Government should undertake to keep UK science and research on a sound footing, with sufficient funding, after an EU exit.

Changing nature of trade

26. Part of the rationale for Britain leaving the EU is to increase the capability of the country to trade with non-EU nations.  It is to be expected that UK Government policy will be designed to support and promote such trade.  It is worth considering how this shift in trade from Britain’s near neighbours to a more globalised approach will change the nature of trade itself. 

27. In a physical sense, we would expect an increase proportion of goods to leave the UK, or be landed in the UK through bulk carriers, container ports, or air-freight.  A reduced portion will arrive by rail, or road transport via continental ferry. 

28. Such a shift will require Britain to invest in its infrastructure in airport and port capacity, but also in rail to support the collection and distribution of goods between factories and ports and airports: 

1. Investment in the infrastructure to facilitate global trade will have an immediate impact on demand for engineered materials.  This will affect all materials classes including ferrous, non-ferrous, light metals and rare metals, partly for construction, but also for electronic equipment.  Concrete, glass, ceramics and brick, will also feature strongly.

2. A lengthening of global supply chains for materials and manufactured goods, increased inventories, increased working capital and increased vulnerability to supply chain interruption associated with climatic, commercial, or financial interventions.

29. Despite these clear arising needs, UK has significant gaps in processing capability for many of these important materials classes.  These include copper melting, significant parts of aluminium processing and some steel processing capabilities. 

30. The most significant driver in the offshoring of these industries is the relatively high energy costs in the UK, with 5% of world electricity used for mineral processing an example of the energy intensiveness of this sector. 

31. It will be important to UK sovereign capability, in a post-EU situation, that the issue of energy be addressed, to enable the economic reshoring of parts of the metals supply chain. 

32. Innovation has an important role to play in designing new and improved processing technologies, improving productivity and yield, reducing energy consumption, designing new integrated energy systems, delivering industrial integration and creating the materials of the future.

RISKS

What mitigation measures, if any, should be considered to reduce the likelihood or impact of any risks, or to increase the likelihood or impact of potential opportunities.

33. The ability to maintain sovereign capability outside the EU in the materials and foundation industries, relies upon the following combination of factors:

1. Effects of more internationalisation in trade on UK infrastructure and supply chains
2. Recognition that greater attention must be given to security of supply of critical raw materials
3. A desire to exploit the UKs competitive advantage in product design
4. An understanding of the UKs leading position in materials research

34. This recognition creates an imperative for Britain to take back responsibility for innovation strategy in materials and fully integrate this with the other sector strategies.  The materials and Foundation Industries should be supported in the way that the industry has requested, by establishing a Materials Catapult, building on existing capabilities in the UK innovation sector.

35. Creating this solid industrial foundation, through innovation and infrastructure, will give the confidence required to reliably invest in British manufacturing, creating much needed jobs and growth in communities and regions, throughout the United Kingdom.

This response incorporates content from the Materials Processing Institute paper, “Goodbye EU; Hello World - Vision for an Innovation Centred, Industrial Growth Strategy for the United Kingdom” http://www.mpiuk.com/news-details.php?news_id=65

August 2016