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Lord Sainsbury of TurvilleUniversity of Oxford Science and Technology Day |
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I am delighted that you have invited me to talk to you about the way ahead for industry and universities because I believe it is an issue of critical importance for our industrial future. For the greater part of the 20th century, two forces have shaped the idea of the university. The first is the triumph of the natural sciences, and the second is the rise of democracy and the demand for mass education that has inevitably gone with it. Now, however, a new set of ideas is getting the attention of both academics and politicians, and that is the concept of "the knowledge economy". In this view of the world the university is not just a creator of knowledge, a trainer of young minds and a transmitter of culture, but also a major agent of economic growth. The UK is well placed to take advantage of this new industrial order. In the first place we have an outstanding science base. We have 1% of the world?s population, yet we do 6% of the world?s science, produce 8% of the world?s scientific papers and receive 9% of the world?s citations of scientific papers. In terms of internally recognised prizes, UK scientists have steadily claimed around 10% of all awards throughout the century. In the last year prizes won by UK scientists include John A Pople?s Nobel prize in chemistry, Professor Holgate?s King Faisal International Prize for medicine, and Sir Robert May?s Balzan Prize. The UK has a vigorous venture capital industry as well as an excellent science base. These two factors combined with a change of culture in our universities are already producing a stream of new high-tech businesses. I recently led a DTI team which looked at biotechnology clusters in the UK. What we found was both encouraging and exciting. The UK leads Europe in biotechnology and the UK sector has grown rapidly to more than 270 biotechnology SME?s, accounting for around a quarter of all European biotechnology SMEs and three quarters of those which are publicly listed in Europe. If a wider definition is used, which includes consultancy and services, there are some 460 bioscience companies employing 40,000 people. It is also encouraging that the venture capital industry has invested some £344 million in biotechnology over the last 10 years. Oxford University is, of course, at the centre of one of the key clusters. It is a leading bioscience research university, it has a leading research hospital, the John Radcliffe, and a number of important research institutes such as the Institute of Molecular Medicine and the Wellcome Trust Human Genetics Centre. More than 50 biotechnology companies are based in Oxfordshire, many of whom are spin outs from Oxford University such as Oxford Glycoscience, Oxford Molecular and Oxford Asymmetry. It also has a pool of skilled staff, local venture capitalists and business angel networks, a range of supporting services with legal, patent, recruitment, and property advisers, incubators, science parks, regional biotechnology associations and a strong image and awareness of being a cluster. And despite the relatively high property values, investors are keen for biotechnology companies to locate in Oxford, in order to benefit from these factors and to be associated with the image of Oxford as a leading scientific centre. In the last two years Oxford?s technology transfer unit, ISIS Innovation has filed 100 patents and managed the spin out of 10 new companies, and taken together the companies Oxford has helped to establish and grow, have already created 3000 jobs and have a market capitalisation of £1.6bn. It is not, therefore, surprising that Oxford has won the Queen?s Anniversary Award Prize for excellence in innovative technology transfer not once, but twice. While rapid changes are taking place, the Government believes it still needs to do more to fully transform the UK into a knowledge driven economy. First of all we are determined to maintain the excellence of the science base. That is why in the Comprehensive Spending Review we announced last year we delivered for science the largest percentage increase of any area of public finance a public/private package with the Wellcome Trust of £1.4 billion over three years. The Government?s contribution alone increases the 2001-02 science budget in real terms by some 15% above this year?s level. There is £400 million additional funding for high priority new programmes. There is an extra £300 million to finance university research through HEFCE. And the minimum stipend for PhD students through the Research Councils was increased by £1000 over and above the adjustment for inflation - the first real increase since 1966. The Comprehensive Spending Review also reflected the fact that we are on the verge of a new era in the life sciences. The Medical Research Council received an extra £90 million - a 6.8% increase in income. The Biotechnology and Biological Science Research Council received an extra £52 million - a 4% increase. And the partnership with the Wellcome Trust to fund a new £100 million high intensity synchrotron x-ray source will provide an additional research aid in many of these fields. We are not seeking, however, to alter the balance between fundamental and applied research. The example of universities such as MIT, Stanford and Berkeley show that the best research universities are often the ones who have the most favourable impact on the economics around them. Our Competitiveness White Paper which we issued in December 1998 brought together many ideas for encouraging entrepreneurialism and stimulating innovation, and we have in addition introduced two major schemes to improve the transfer of knowledge. Through the University Challenge Fund opportunities are being created to capitalise on the excellent ideas being put forward by science and engineering researchers in our universities. In March awards were announced totalling £45m to fifteen university-based consortia spread across the country - including Oxford who received an award of £3m to establish a £4m seed capital fund to invest in the early stages of promising R and D projects in science, technology and medicine. The funds created by the competition will help universities encourage the exploitation of research by funding the first stages of commercialisation of projects, for which up until now finance has been notoriously difficult to find. Each seed fund will make a number of the investments of between £25,000 to £250,000 to fund scoping studies, market research, developing prototypes and setting up spin out companies. It encourages innovative and imaginative approaches to seed funding drawing on a wealth of external expertise. Each fund will be managed by an experienced professional manager answerable to a board mainly drawn from outside the university world and including in particular people with industrial and venture capital experience. The Government has recently made an extra £10 million available towards a follow-up competition. Plans for this are under consideration and an announcement will be made in due course. I was delighted to hear today that Oxford University is building upon the University Challenge Fund by setting up the ISIS College Fund with an investment of £11m. This will be operated by Quester Capital Management Ltd, and is an excellent example of the sort of partnership between the financial community and universities that we want to encourage. In addition, through the £25 million Science Enterprise Challenge, eight new centres have been endowed which will bring the new teaching of entrepreneurship and business skills into the science curriculum. They will help to inspire and equip more young scientists and engineers to commercialise their knowledge. The centres will also act as centres of excellence for the knowledge transfer process, bringing together specialist teams to organise science commercialisation effectively. They will draw on best international practice, and become a world class focus for scientific entrepreneurialism. A third scheme which will I believe in due course have a major effect on universities is the Reach-Out Fund which has been set up by the Higher Education Funding Council, DfEE and the DTI to reward and incentivise universities for interacting with business. The Research Assessment Exercise has created great pressures on universities to focus mainly on research. This for many universities may not be the best strategy. And so we have introduced a third leg of funding, the Reach Out Fund, to sit alongside the Research Assessment Exercise and the Teaching Quality Assessment. This should enable universities to choose from a diversity of strategies. The level of funding in the first phase is modest, certainly in comparison to the level of funds available for teaching and research. But nor should we underplay the significance of what the fund is trying to achieve; a sustainable, systemic change in the culture of our knowledge base, in which the value and esteem accorded to working with business is comparable to the recognition academics receive for research and teaching. And with "Reach Out" we are talking about a sustained programme of funding which I am sure will grow with time, not a "one-off" scheme. The Fund will encourage a diverse range of university/business interactions and will build on the many excellent activities which already exist in industry. These include the textile department of the University of Leeds, the Innovative Manufacturing Centre at Nottingham University, the Knowledge House which provides a single point through which companies can access the expertise of all the Universities in the North-East, and the Polymer Centre of the South West at the University of Exeter. As well as schemes such as University Challenge, Science Enterprise Centres and the Reach-Out Fund which will affect universities directly, the work which we are doing to support clusters will also have an indirect effect on them. The Biotechnology Clusters Team which I led listed ten factors which are critical for successful cluster development and made eight major recommendations. These ranged from policies on intellectual property to lessons which can be learnt from the US about ways to stimulate R and D in SME?s. Of particular importance to places such as Cambridge, Oxford and London is the need to ensure that planning restrictions are not a significant barrier to the growth of clusters and that the conflict between environmentally sensitive areas and growth are resolved in innovative ways. An innovative planning solution, consistent with the development of clusters, which we are now looking at, is to manage high technology growth by fashioning ?Urban Networks?, and to designate zones where innovative clusters may develop. These ?Urban Networks for Innovative Cluster Areas? (UNICAs) consist of a research and incubator-intensive ?mother city?, well-linked by digital and land-transport communications to modest and accessible growth points for specialised production, analysis, testing and services. Existing axes such as the M11 in Cambridgeshire and the M40 and A34 in Oxfordshire could form the spinal links to local growth points nearby. In this policy area as in many areas, I believe that the Regional Development Agencies have a key role to play and I very much welcome the fact that not only has SEEDA been involved in organising this day, but that the Regional Development Agencies are giving such a high profile to innovation in their strategies. In the last two years the Government has taken these major steps forward and we are now introducing a R and D tax credit for small businesses and doing work place to make certain that our policies on standards, competition, regulation, procurement and intellectual property are designed to encourage innovation. The Competitiveness White Paper put universities at the heart of the knowledge-driven economy, and we are now developing policies to provide incentives for private innovation across the economy. Our aim is to enhance the entire system of private entrepreneurship, investment, and scientific and engineering opportunities, using policy tools to encourage and enable rather than direct the deployment for these resources. As only in this way do we believe that we will be able to succeed in a global economy where there is an abundance of cheap labour and where prosperity is dependent upon creativity, skills and innovation. |
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Other speeches by Lord Sainsbury of Turville
(the following are available from the archive) |
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