Written Evidence Submitted by The British Academy

(RFA0074)

What gaps in the current UK research and development system might be addressed by an ARPA style approach?

1. The UK economy has experienced stalling labour productivity since at least the 2008/09 financial crisis, with implications for wages and sovereign debt. It is often argued that this is due to the lack of translational research, the gap between the results of discovery research – where the UK is a global leader – and product-level research and development. The challenge of ‘pulling through’ discoveries into products and services is a complex one and a new research funding agency could attempt to narrow this gap. A well-formed ARPA could help the UK to apply many insights currently being developed in universities to the wider economy.
2. However, this is not solely about manufacturing and technology. A constant issue in the UK is fostering adoption of new technologies - this is considered a key factor to improve productivity in business, and in public services. The new approach needs to think not just about developing the technologies which are needed as a solution to a problem, but also what needs to happen to enable their adoption and integration, and the humanities and social sciences are key to this. Disciplines such as psychology and economics, and linguistic and cultural knowledge of societies worldwide are needed to facilitate the global roll-out of new technologies, environmental programmes, or indeed vaccines.  
3. The British Academy is currently investigating the nature and role of R&D within the areas of the service sector most closely linked to arts, humanities and social sciences, to understand more about how research in these disciplines leads to development and innovation. We expect to have draft findings in August and would be happy to discuss this further with the Committee.
4. The close connection to the single customer of the military helps address the ‘pull through’ challenge for DARPA, the United States research agency on which the UK ARPA is deliberately modelled, and this is facilitated by one of its technical offices, the Adaptive Execution Office, which has a focus on enabling adoption of new technologies.
5. Rather than focusing on a particular sector or challenge, the new UK equivalent could focus on identifying, developing and supporting individuals who can be facilitators in maximising the potential for innovation and application of research across the spectrum. In this way it could complement and enhance the effectiveness of the substantial volume of funding allocated to InnovateUK, helping to deliver greater value for money from the research budget as a whole and support multiple innovation systems.

What are the implications of the new funding agency for existing funding bodies and their approach?

6. The creation of UKRI was intended to improve coherence within the research funding system; while our funding landscape remains diverse (and this is of benefit to the wider research effort), adding another body could hinder more than help. We may already be facing greater complexity if it is necessary to implement alternatives to Horizon Europe. It may be better to focus on what is seen to be the bureaucracy and limitations of the existing system, rather than adding to the complexity.
7. While a new research funding agency modelled on DARPA presents an opportunity for the UK, it is vital that this should not be at the expense to Britain’s world leading university sector. In a knowledge-based economy, universities are crucial as the only research organisations which combine a within their mission research, teaching and knowledge exchange. Research and innovation require steady supply of skilled researchers, who have been taught by those undertaking ground-breaking research themselves. This combined mission has been the cornerstone of the continued existence and success of universities.
8. Successful technological innovations need to be embedded in an ecosystem of complementary knowledge intensive services to support their design, production and marketisation. Knowledge intensive services rely on the skills of higher education graduates from a wide range of disciplines, who will be working in these complementary businesses which are beyond the research and innovation ecosystem in its narrowest sense.  If the Government’s goal of levelling up the country is to be realised, we need to continue our support to higher education institutions, as only these provide a regional skills base, cutting-edge research and local engagement with businesses in many locations across the country.  
9. As discussed below, one of the strengths of the US DARPA is the calibre of the project managers it employs. If the UK follows the same model (potentially focused on individuals skilled at facilitating innovation as suggested above), this raises questions about how this will fit in the UK research career pathway. These individuals need sufficient expertise to be credible, but also need to be innovative, entrepreneurial thinkers – we may need to look in unconventional places to find them. Recruitment of programme managers could provide new routes into research for those with doctorates who have moved out of academia, thus helping to facilitate greater links between research institutions and the private sector.
10. If the new agency adopts a ‘high risk, high reward’ approach, this raises questions about public tolerance for this in relation to public funding. The current system, with layers of peer review and governance provides assurance about how public funding is allocated, underpinned by the Haldane Principle that decisions about research funding should be made by researchers rather than politicians. There will also need to be a change in research culture for greater tolerance for failure as a valid outcome of research and a change in policy attitudes from the emphasis on demonstrable impact.

What should be the focus be of the new research funding agency and how should it be structured?

11. DARPA has benefited from having a very clear, focused customer – the US military. While it has resulted in the development of technologies which have had wide application, this has been fortuitous, rather than by design. The UK already has agencies designed to address military research needs and therefore this is not an appropriate focus.
12. The US subsequently created an Advanced Research Projects Agency-Energy (ARPA-E) and the Intelligence Advanced Research Projects Agency (IARPA), again focused on specific sectors.[1]
13. It would be possible to identify a 'challenge' (or multiple challenges) as the focus instead, but the 'market' for the innovations developed is then far less obvious, reducing the likelihood of generating further investment and commercialisation. We have previously raised concerns about the narrow conception of the Industrial Strategy Challenge Fund, its failure to acknowledge that 80% of the UK economy derives from the services sector, and the well-known risks of ‘backing winners’.
14. If a thematic approach was to be adopted, then a diverse and inclusive range of stakeholders needs to be involved in identifying this, including the wider public as well as academic expertise.
15. We would propose two possible areas of focus:
1. addressing the UK’s productivity problem by focusing on the behavioural, social and cultural change needed to adopt new technologies in business and industry.
2. tackling environmental challenges, an area which is likely to achieve strong public support.
16. For both of these areas, truly interdisciplinary approaches will be needed with science, engineering, social sciences and the humanities coming together to think about creating new technologies, and the associated behaviour shifts required. Evidence from the United States show that the most important drivers of innovation at a local level are the combination of science and creative insights, where technological services and products are woven with the aesthetic and cultural conception of consumers to make their adoption visually attractive.[2]
17. As the current pandemic shows, behavioural issues should be at the forefront of any innovative push: the best scientific evidence or new technology is useless if the advice is not understood or not adapted due to an inability to thoroughly understand the complexities and non-linearities of human behaviour. Silicon Valley is technologically and economically successful mostly because of its development activity included an understanding of behavioural factors on how to embed technology into people’s lives. This requires a well-founded and context specific understanding of cognitive and emotive factors that can hamper or support technological adaptation by citizens. 

What funding should ARPA receive, and how should it distribute this funding to maximise effectiveness?

18. Government will need to allocate sufficient resources to achieve the stated purposes, within realistic timeframes, if these new approaches are to be successful.
19. Government announcements have indicated that the new agency will receive additional funding, rather than taking away funding from elsewhere in the system, and this must continue to be the case. Care must also be taken not to duplicate approaches already being taken by other funders, such as the Wellcome Trust’s Leap Fund; a legal and not-for-profit entity which seeks to accelerate discovery and innovation by taking risks and providing funding at scale for ambitious scientific goals. The relationship with other bodies such as the catapult centres also needs to be clearly delineated.

What can be learned from ARPA equivalents in other countries?

20. The Defense Advanced Research Projects Agency (DARPA) is a federal agency, created in 1958 in response to the Soviet launch of Sputnik with the main purpose “to make the pivotal early technology investments that create or prevent strategic surprise for U.S. national security.”  This overarching mission translates into the strategic goal: “to advance defence technology in many critical areas and to help the [Department of Defense] create military capabilities of a character that the Military Services and Departments were not able or willing to develop”. However, the discoveries that have emerged from the programme have not been limited to defence applications, as they include ARANET, a precursor to the internet, automated voice recognition, and GPS (Global Positioning System) receivers.  DARPA does not own any research facilities in its own but funds research in academia, industry and national research institutions.
21. The reasons behind DARPA’s success include:
1. Its independence (it is independent of other military research and development and reports directly to senior Department of Defense management) and autonomy in identifying projects to receive funding.
2. The calibre of its programme managers, who are appointed on short term contracts which is seen to drive them to deliver results, and who have autonomy to shape their programme of research, choosing how to fund teams in universities, companies and government labs.
3. A very high tolerance and appetite for risk (50:50 success/failure rate is seen as acceptable), alongside a scale of funding which allows for ambitious projects to be tackled, with funding concentrated in projects deemed most likely to succeed.
22. The experience of Germany is also worth consideration: on the one side there are traditional translational institutions, the Fraunhofer Institutes, that are well established. Specifically created for innovation in disruptive technologies, the Agentur für Sprunginnovation (SPRIN-D) was founded by the German Ministry for Business and Energy as well as the Ministry for Education and Science. Having been established in December 2019 and with an annual budget of 100m Euro per year it is still too early to draw from its experience, but it is notable that the agency is located in Leipzig and not within long established technology clusters in the west of Germany.

What benefits might be gained from basing UK ARPA outside of the ‘Golden Triangle’ (London, Oxford and Cambridge)?

23. If the UK ARPA follows the DARPA model, it would not require a large physical presence, as its purpose would be to identify promising research already being undertaken in existing research centres. Nevertheless, even locating the small centralised administrative function within the Golden Triangle could tend to increase the current Matthews effect where existing strengths beget strengths, because of the proximity of these universities to the decision makers.
24. A ‘spatially level’ playing field could be created by locating the UK ARPA closer to the geographical and manufacturing centre of Britain in an area with good transport access to the rest of the country, enabling better face-to-face coordination which is necessary for communications in the fast moving, uncertain environments typical of radical innovations. There are a number of appropriate locations with existing strong research and innovation capacity beyond the ‘Golden Triangle’ and this would contribute to achieving the Government’s levelling-up agenda and ambition to facilitate greater place-focused research funding investment.
25. Big, new, physical infrastructures take a long time to create, and tie up investment in single centres which may find it difficult to be agile and change direction. On any given challenge, a variety of research approaches and views are needed, which may not be best achieved within a homogenous unit.

About the British Academy

• The British Academy inspires, supports and promotes outstanding achievement and global advances in the humanities and social sciences.
• We are a fellowship of over 1000 of the most outstanding academics and an international community of leading experts focused on people, culture and societies.
• We are the voice for the humanities and social sciences. We use insights from the past and the present to help shape the future, by influencing policy and affecting change in the UK and overseas.

(July 2020)

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