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Knowledge Transfer Partnership Awards 2007: Keynote speech

Margaret Hodge MBE MP,  Former Minister of State for Industry and the Regions
Marriot Hotel, Grosvenor Square, London,  14 March 2007

I am delighted to be at the Marriott this afternoon to celebrate this year’s Knowledge Transfer Partnerships award winners and the crème-de-la-crème KTP Associates each selected for a Business Leaders of Tomorrow award.

We all know that science and innovation is central to our future economic prosperity. At no time since the industrial revolution has the restructuring of global economic activity been so great: Asia is moving from the fringes of the new world economic order to the centre. Barriers to world trade are coming down. The world's division of labour is also being redrawn.

Technology and scientific understanding are changing our world faster than ever before and creating new opportunities. Developments in ICT, new materials, biotechnology, and nanotechnology, all of these fields are creating a new wave of innovation and new opportunities for entrepreneurial businesses, large and small, to create a competitive advantage for the UK.

The key is to match the ideas being developed with wealth and this is an enormous challenge.

When an idea is matched with a high potential business, the explosive effects spark a chain reaction to jobs, wealth and higher productivity. And that is what we see every day from Knowledge Transfer Partnerships. Knowledge Transfer Partnerships provide that support to companies whose principal need is to bring skills or knowledge into the business that is of core strategic importance.

This week we are celebrating National Science and Engineering Week. This audience knows that the links between the science base and industry are paramount to encouraging innovation and knowledge transfer. KTP mechanism provides just one way of making these links between the world of academia and business.

KTP has given British firms new opportunities. Opportunities to break into new technologies, new markets, new processes and production methodologies.

Today, the opportunities are even greater, as we build into today’s demands for shorter projects - with a greater range of Associate experience, and in topics such as performing arts, the media, and the social environment.

We now have over 1,000 partnerships in progress across the country. These high calibre graduate Associates and their academic supervisors are injecting fresh ideas straight into key businesses.

Knowledge transfer has been given a high profile since the Lambert Review of business-university collaboration in 2003 and that policy is set out in the 10 Year Framework for Science and Innovation. Translating the knowledge being created in our rich research base into commercial products and services is vital to the future of the UK economy.

The Government’s investment in the research base over recent years has been highly effective, we’ve expanded it and it is to be applauded. We’ve doubled science spending since 1997 to £3.4bn in 2007/8 and it is important that Government continues to invest in the research base for future prosperity.

Research Councils are continuing to increase their interactions with business. For example, the Engineering and Physical Sciences Research Council works with over 2000 businesses and over 40% of their grants have business interactions.

We know that we are much more successful on the spin out firms from universities thanks to the Higher Education Innovation Fund (HEIF) and its analogues in other parts of the UK. The top 25 university spin outs over the last 3 years have a market capitalisation in excess of £1.5bn.

We now have the emergence of a new profession of knowledge transfer practitioners: the people who help academics and researchers to set up spin-out firms or licensing deals; and who also help businesses to understand what research can do for them and get the benefit of our investment in the science base. Recent estimates put the number of such people at nearly 10,000 in the UK alone.

I am delighted to see that we are about to see in the UK and Ireland the world’s first professional body which is designed to help knowledge transfer professionals achieve recognition, professional accreditation and validated continuing professional development.

The Institute of Knowledge Transfer will be launched on 9 May and I am particularly pleased that Sir Brian Fender, who as past Chair of the Higher Education Funding Council for England, is to be the Institute’s first President.

This is by no means the end of the story and there is a real buzz of activity happening across the country both at a national and regional level. ONS figures show more and more British businesses are now innovating successfully, in terms of bringing new products to market.

However, we need as a country to get many things happening at once to create a step change in innovation for UK based companies and to really put us on the map for inward investment.

The Regional Development Agencies’ innovation policies are now working better and in a more focused way to address these challenges in commercialization, knowledge transfer, promotion of innovation, and improvements in skills. Science and Industry Councils have now been set up in each region to guide RDA innovation spending, and I am particularly pleased to see a growing commitment from the RDA’s to sponsor the National KTP programme to meet the needs of regional priority sectors.

R&D Tax Credits that we have introduced are being effective. It normally takes about five years for a new scheme to bed down, but here after only two years they are worth £600m a year to British business.

And 2007 will see a new Technology Strategy Board established to drive forward the Government’s Technology Strategy as announced in the budget last year. The TSB will act as a hub pulling together a coherent package of activities to ensure again that the UK is at the forefront in innovation. In fact the Knowledge Transfer Partnerships business support product will be part of their remit along with funding for collaborative R&D projects and the complementary Knowledge Transfer Networks.

The money invested in the partnerships is well spent. Most firms recoup their investment in the first year and go on to make on average a quarter of a million pounds extra profit in each subsequent year.

Each project results, on average, in two new research papers, eight new jobs and ten existing company staff trained. Put another way, for every £1 million that Government invests, the economy gets £4.2 million, we probably create over 100 new jobs and 214 existing company staff are trained as a direct result of KTP.

These are all the statistics, but what really brings KTP to life are the people and businesses that we are celebrating today. Up and down the country I’ve read thousands of success stories. More than half of the people that start end up working in the business their project is with. And, in virtually all cases, Associates say that their KTP experience and training gave them an edge over their contemporaries in the job market.

The success story of KTP is due to the broad community it serves and I pay tribute to those individuals who participate. The academics who reach out to business offering their knowledge and expertise; the participating firms whose senior management understand the importance of innovation; and the Associates who are the linchpin to a partnership success, often changing the culture within their host business.

Finally, I would like to thank the sponsors, the university-based KTP Offices, Momenta and the network of KTP Advisers who all participate to keep the show on the road, now in its 31st year!

KTP is a body-contact sport and collectively we really do touch people’s lives and make a significant contribution to the UK economy. Thank you to you all and my congratulations to the winners.