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Technical Note for PSA 2

URN No: 02/1613/A2

PSA Target 2. Improve the relative international performance of the UK’s science and engineering base, the exploitation of the science base, and the overall innovation performance of the UK economy

… the relative international performance of the UK’s science and engineering base

Data, success criteria and timings

The Office of Science and Technology (OST) will appoint a contractor by the end of 2002 and agree with them an appropriate set of qualitative and quantitative measures and the countries with which the UK should be compared. The contractor will be charged with providing historical and baseline data for the agreed measures, on the basis of which specific targets for the Spending Review period will be agreed by the end of February 2003.

The measures are likely to include data from such reputable sources as the Office for National Statistics (ONS), Eurostat, OECD, the European Patent Office (EPO), the US Patent Office (USPTO), the Institute for Scientific Information (ISI) and the academic community. The first three of these are national or international statistical organisations. ISI is the only supplier of bibliometric information at the level of detail required.

The timeliness and frequency of data will depend on the measures chosen. Some are likely to be annual, with different measures becoming available at different times of year. Some data sources are lagged by up to around six months. It can however be several years before complete sets of data are available for all the key comparator nations from the OECD.

Definitions

The science and engineering base is taken to mean basic and strategic research carried out by the universities and Research Council institutes. 

… the exploitation of the science base

Data

Data regarding the broad spread of exploitation activity has not, to date, been collected comprehensively and systematically. For Higher Education Institutes (HEIs), most of the data will be collected by the “Higher Education Business Interaction” (HEBI) survey. OST part-funded the first HEBI survey with the Higher Education Funding Councils for UK in 2001. The Analytical Services Group of Higher Education Funding Council for England (HEFCE) are currently undertaking the second survey.

The survey will be conducted annually, with the intention – subject to consultation with the sector – to migrate to future data collection via HEIs’ annual returns to the Higher Education Statistics Agency (HESA).

Numerous academic studies and individual surveys are conducted which may focus on some or all of the individual indicators. Most recently, UNICO and Nottingham University Business School, supported by ESRC, have just completed a survey of IP commercialisation activities. A meeting of survey leaders and stakeholders is to be held by January 2003 to discuss robustness of data, appropriateness of indicators, and to consider other indicators that measure exploitation in its broadest sense.

In respect of the commercial exploitation of science by industry, work will be undertaken to establish suitable metrics or proxies from available data, taking into account the DTI’s business support review in establishing meaningful success criteria.  It is expected that in many cases it will be possible to extract relevant material from generic work on commercial innovation and its knowledge inputs, as noted below under “the overall innovation performance of the UK economy”.

Timeliness of the data

Data will be collected annually. The data for the academic year 2000-01, which is currently being collated, will be ready in Autumn 2002.

Territorial scope

UK

Success criteria

Increased exploitation and knowledge transfer from the science and engineering base as judged by an increase, over the spending period, in relevant indicators drawn from the following basket. NB this list is indicative and may change as a result of the ongoing work described above.

·    Number of patent applications

·    Number of patents granted

·    The number of licensing agreements

·    Income from licensing intellectual property

·    Number of spin-outs

·    Business representation on Governing bodies

·    Income from business

·    Full time equivalent staff employed in commercialisation/industrialisation liaison offices

·    Number of Science and Engineering students (undergraduate and postgraduate) receiving enterprise training

·         Publication and patents jointly authored between science base and industry.  (This is not covered by the HEBI survey and is tentatively included subject to the data being easily available.)

… the overall innovation performance of the UK economy

Data
The Community Innovation survey (CIS), which is a four-yearly postal survey of a sample of business enterprises in the UK collecting quantitative and qualitative information on a range of innovation-related activities. It is undertaken by the ONS on behalf of DTI. The CIS uses a questionnaire and definitions of the relevant variables, agreed by international experts and based on the agreed Oslo manual. A network of academic researchers constitute a user group who carry out their own research using the CIS data and report any problems or deficiencies with the data.

Note Details on the CIS, including the questionnaire employed can be found at www.dti.gov.uk/iese/ecslist.htm

The Oslo Manual, agreed by experts in OECD member states, defines the activities and outputs involved in technological innovation. It can be found at http://www.oecd.org/dataoecd/35/61/2367580.pdf

Business Enterprise Research and Development Expenditure (BERD) undertaken by ONS using an annual survey. The BERD Survey uses internationally agreed definitions of R&D from the Frascati manual and is a long standing national statistic.

Note: The Frascati Manual defines the activities involved in Research and Development and provides the definitions used by OECD member states in collecting data on R&D expenditures by business. It can be found at http://www.oecd.org/document/6/0,2340,en_2649_201185_33828550_1_1_1_1,00.html

UK origin Patents in the UK, European and US Patent Offices. Patent data is routinely supplied by the Patent Offices concerned. Patents are official statistics, routinely collected and used by many researchers and government agencies.

Timings
For the CIS, the baseline will be calendar year 2000 and the reporting period will be calendar years 2002 to 2004, based on the next survey in 2005. The most recent CIS was carried out in 2001, covering the period 1998-2000 and providing data for the baseline for SR 2000 PSA targets.

Both the BERD and patent data are available annually with a lag of approximately 10 to 12 months.

Territorial scope
UK

Success criteria
Improvement in overall innovation performance will be defined as an improvement, compared to the baseline, in three out of five of the indicators below with none of them worsening: -

·         The share of economic activity in UK businesses that are ‘innovation active’.

·         The percentage share of New, Improved and Novel products (including services) in business turnover.

·         Breadth and depth of UK business linkages with external science, engineering and technology sources, assessed through increases in the share of businesses accessing the science and engineering base, other technology and knowledge sources and the share of employment in these businesses.

·         Investment in innovation directed activities, including R&D, as a percentage of business turnover.

·         Shares of qualified scientists and engineers in total business employment.

Note: ‘Innovation Active’, ‘New, Improved and Novel Products’ and Investment in Innovation Directed Activities’  are innovation indicators derived from the CIS data.

In addition to the above indicators, which are derived from the CIS, data on patenting and R&D expenditures will be monitored. An increase compared to the baseline, measured between 2002 and 2006 will be expected in the following:-

·         Share of R&D (Business Enterprise Research and Development – BERD) in GDP. Note data are available with a lag of 10 months. Particular attention will be paid to the performance of  sectors with R&D ratios below the OECD average.

·         Levels of Patenting. Measured by numbers of UK-origin patents granted in European and US patent offices (EPO and USPTO, respectively).

Policy interventions by DTI to influence these indicators and the means, including  a range of test statistics, monitoring and evaluation processes to assess impact on the targets, will be developed in the course of the Department's business planning process for 2003-06, which is due to conclude early in the new year, and then published via an amendment to these Technical Notes.