Reach for the skies: applied research is half as lucrative

Russell Group report raps government failure to grasp value of serendipity. Hannah Fearn reports

November 13, 2008

Blue-skies research driven by curiosity can have a far greater social and economic impact than research carried out with a specific commercial application in mind, according to a study from the Russell Group of 20 research-intensive universities.

The report, based on data from 82 projects by Russell Group institutions, shows that the commercialisation of blue-skies research generated average returns of £44 million for the group - more than twice the average returns from applied research. Of the top ten projects measured by financial return, eight were the product of basic research.

The group has used its findings to warn against the government-driven push to direct more funding at applied research, where economic impact is predicted in advance. Based on the case studies, the report says that the universal application of such a policy would have resulted in a loss of £1.2 billion to the UK economy.

"Funding policies that require a hypothecated impact could jeopardise outcomes that may arise unexpectedly, or that may take many years to come to fruition, yet have huge commercial significance," the report says.

Wendy Piatt, director-general of the Russell Group, said: "It is important that we - the sector - explain the importance of serendipity. Some of the most ground-breaking products have resulted from a research project that set out to explore something completely different."

Philip Esler, chair of the Research Councils UK knowledge-transfer and economic-impact group, said: "The research councils' commitment to blue-skies research is unwavering. (We) invest on the public's behalf; and ... a balanced portfolio is needed, of basic, applied and strategic research."

Alasdair Rawsthorne, a computer scientist at the University of Manchester who has attracted investment of $30 million (£19.1 million) in his company Transitive, said: "Research excellence is driven by curiosity and not by strategic diktat."


Universities' income from spin-off companies and other knowledge-transfer activities is likely to dry up because of the global economic crisis.

That is the warning from Tom Hockaday, head of Isis Innovation, the University of Oxford's technology-transfer company.

Spin-off companies would be hardest hit, he said, because "it's going to be harder to raise investment at every stage of the process".

Academics who have had their products licensed may also find that fewer customers are buying them, resulting in a drop in income, he added.

But Mr Hockaday said there were some opportunities to break into new markets during the economic downturn, especially with academic consulting services.

"If you take a global perspective, there are certain parts of the world where there is a lot of cash, so we need to diversify the university business."

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