A lay-by on the road to market

July 8, 2005

University-business ventures are in desperate need of an R&D rethink, says Simon Davey

UK university-business collaboration has been unsuccessful for too long.

The UK has an exceptionally strong science and technology base, founded primarily in our university research capability. Yet business and academia consistently fail to translate this resource into profitable world-leading technologies and products made by companies with sustainable futures. Both sides are equally to blame.

Business continues to limit its investment in university-led - and, in effect, state-subsidised - research and development. In the UK, business spends only 2 per cent of its available budget on university research.

Academia, on the other hand, consistently refuses to acknowledge the link between research and profit.

In April, Lord Broers commented in The Times Higher that many university research teams were "not well informed or motivated to produce external impact". Academia continues to focus significant research effort on areas in which business is not interested.

But why is it so difficult to bridge the gap between the laboratory and the market? A fundamental reason is that everyone - the Government, business and academia - is using the wrong R&D model, the Frascati model, originally devised postwar by the Government solely for the statistical analysis and cross-comparison of R&D output. In fact, Frascati has become globally adopted as a "mental model" of the real world of R&D, with disastrous results.

In the Frascati model, progress from research to development is linear. It moves from basic research, through applied research, to experimental development with strategic research tacked on as an aside. And it stops there. But technology transfer - the move from the conceptual to the commercial - is a far more complex process, especially given the sophistication of many technologies.

Contrary to Frascati, there is no straight line between basic research and finished product, and dragging technology directly from the laboratory to the market - the spin-off scenario - can be painful and unproductive. It may have delivered isolated success - it has not delivered consistent results.

We are missing a "mezzanine" level, which could unblock this stalemate.

This middle band of innovation would focus on emerging areas of university research, defined by the Government as being of greatest strategic importance and defined by the market as having greatest potential for profit.

The mezzanine would be placed early in the product development process or "value chain". This would ensure that the full potential of core technologies would be exploited, that the technologies would be thoroughly tested and that the end result reflected the needs of the consumer.

The Government is a keen supporter of our science and technology base, believing it crucial to our economic defence against the threat posed by Asia, especially China. Our crucial advantage lies within our academic scientific research community, but this advantage will not last for ever.

Asia is not only an economic threat, its massive investment in higher education shows it as an economic threat as well. We must nurture our pioneering research and translate it into wealth-generating business, and our Government is not the only one keen to see this happen. The City is watching progress closely, funds at hand.

The mezzanine I propose - which would be embodied in an institute or other mechanism - would provide a controlled environment in which the technologies of the laboratory could safely flourish (or safely fail). Examples have emerged - Intel Research Cambridge is one - but we urgently need to develop our own mezzanine model if our world-leading technology base is to survive.

Simon Davey is chief executive, Scientific Generics.

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