The Role of Government

Enterprise is no less important within universities than it is within a large commercial organisation or a small business. Much, therefore, is down to universities themselves. To recognise and better exploit their existing strengths, particularly in research; to build creative partnerships; and to lay new foundations in support of their future role. But Government can help. It can enable and incentivise.

In March last year I was delighted to award a total of £45m to fifteen university-based consortia under the University Challenge Fund. With their matching fund, Universities have brought the total funds to over £60m. This money is helping to support the early stages of research exploitation by providing the seed capital to fund scoping studies, market research, prototype development, and the setting up of spin-off companies. We are already seeing investment from the funds in the first new ventures. And thanks to the success of the first round, we'll be taking advantage of a further £10m from the Treasury for a further competition this year.

Government support for University Challenge has proved a vital catalyst to the provision of finance for commercial exploitation. We have complemented this through the centres for entrepreneurship established through Science Enterprise Challenge. Indeed I was pleased to announce last week awards to a further four institutions and consortia, enabling new centres to be established at Durham, Warwick, Ulster, and Oxford. By stimulating entrepreneurship and incorporating the teaching of enterprise in science and engineering courses, the centres will help build the skills and competencies required by our future business leaders, and accelerate the development of links between the commercial and academic worlds.

A further key measure that the government has introduced is the Higher Education Reach Out to Business and the Community fund. This aims to provide the opportunity and the means for a wider range of institutions to further develop their capabilities in working with business and other partners. Demand for the first round was strong, and with applications for a second round of funding announced in February this year, I hope that we will shortly be adding substantially to the 87 awards already announced. It was encouraging to see the diversity of projects the fund has already been able to support, ranging from business incubator units through to programmes for staff exchange, to the provision of consultancy and other services to SMEs. By the time we have announced the outcome of the second round we expect to have successfully engaged and supported the majority of universities in England and Northern Ireland.

New Faraday Partnerships

I am particularly delighted to announce today the Government's support for four new Faraday Partnerships. Faraday Partnerships bring together leading researchers in universities and intermediary organisations with businesses of all sizes to develop new products and processes. They enable businesses to access high quality research by making more cohesive use of all the various support mechanisms - schemes like LINK, TCS, Craft and CASE.

Within each partnership, "technology translators" play a key role - people who understand the differing worlds of research and business, and who have the skills and experience to make links between them. The translators work to ensure that good ideas feed through into innovative products and processes, and to enable researchers to see more clearly and more directly the value and importance of working in areas of direct industrial relevance.

There is no single model for a Faraday Partnership. Each has been designed by people in a sector to meet the needs of that sector, but taking the importance of Foresight and future sectoral growth into account.

Let me mention some of the new partnerships we will be supporting. The Faraday Plastics Partnership will bring together one of Europe's leading Independent Research Organisations, RAPRA, with the Warwick Manufacturing Group. Focusing on enhancing the innovative capacity of the UK plastics industry, devising new plastics and new uses for plastics, the Partnership will be at the heart of a strong network of complementary organisations, pooling resources and capabilities, to provide industry with a seamless delivery of research, knowledge transfer, and education.

The second new partnership will be based around the Smith Institute for Industrial Mathematics and System Engineering, an independent, not for profit organisation. Together with leading universities in mathematics, the partnership will spread the application of mathematics and computer science to areas as diverse as manufacturing and process engineering, risk management, transport, telecommunications and information security. The UK is a world leader in mathematics and we want to see that lead transferred into business applications.

The Technitex Faraday Partnership is being formed to promote the competitiveness of the UK technical textiles sector, where again we are world leaders. End uses range from the medical sector, in producing "artificial skin", to the manufacture of new composite materials for the automotive, construction, and defence industries. The core of the Partnership includes Heriot-Watt and Leeds Universities, UMIST, and the British Textile Technology Group with a projection to include over 100 firms within 5 years.

Last but not least, the Faraday Partnership in Aerospace and Automotive Materials will based around Oxford, Oxford Brookes, and Cranfield Universities, the Motor Industries Research Association, the Oxford Trust, and Heart of England Business Link. It will develop the capabilities of the cluster of materials manufacturing firms in the Thames Valley and South Midlands, combining leading edge materials research with training and the creation of new spin-out companies.

Added to the four existing partnerships established in 1997 - NPL SIRA (INTErSECT) Partnership, the White Rose Partnership, the 3-D Matic Partnership and the Prime Partnership - these four new partnerships take DTI and the Engineering and Physical Sciences Research Council another important step towards fulfilling the commitment we have made to establish a national network of about 20 Faraday Partnerships by 2003.

I am also pleased that DTI and the Ministry of Agriculture, Fisheries and Food have committed to support a new Partnership in Food Process Engineering; I look forward to establishing an even wider sponsorship base in future.

I want to see a network of Partnerships that will help business work with our best researchers. Bringing together the know-what, with the know-how, and the know-who. To drive forward the rate of innovation that is vital to our future economic prosperity.

Looking Forward

I want now to look forward to where we might go from here. To a longer term vision, and how we might move forward together.

Diversity with Excellence

In his Romanes Lecture last year, the Prime Minister spoke of "diversity with excellence" as a key principle for this Government's policy towards all aspects of education. This principle must be at the core of our thinking. But what does it mean in practice, particularly for universities in their newly prominent role as engines of economic growth ?

I believe it means universities adopting different missions. All universities must focus on producing world class teaching though the nature of teaching may vary. In addition some universities will want to focus on world class research and some on world class knowledge transfer and some on a combination of these.

If we are going to see this diversity of missions we need to see a consolidation and development of a genuine "third stream" of funding. Funding to complement and sit alongside existing funding streams for teaching and research.

I have never made a secret of my view that the existing third stream of funding needs to strengthened, and that its existing component parts need to be brought together in a more coherent way. I think it is fair to say that when viewed in its totality, the funding for knowledge transfer in its current shape and form has emerged, rather than been deliberately planned. There are good arguments in favour of this evolutionary approach; we have learnt as we have gone along. However, there is certainly more that we need to do to present a set of structured, compatible incentives, and to achieve a critical mass sufficient to bring knowledge transfer activities into the mainstream. So that excellence in knowledge transfer can be equally regarded alongside blue skies research and teaching. So that more universities see the case for investment in the core competencies required. And so that nationally we can achieve the scale and depth of activity to reap the economic and social rewards in the short, medium, and long term.

This is an ambitious vision, and we need to be realistic. It will take time to achieve. And much will depend on the many demands on public funds. But it is a vision in which I strongly believe; and I also believe that it is shared by many in universities, in business, in government, and beyond.

Conclusions

I've covered a lot of ground this morning. So let me leave you with two clear messages.

The first is Admiration. Admiration for the transformation which is already taking place in the links between universities and industry. The story of what is being achieved has not yet been properly told. I hope that today I have made a small contribution to communicating it.

The second message is one of support. I hope from what I've said today that the Government's support for knowledge transfer, in all its forms, is clear. This support reflects a pressing economic and social imperative; and it is driven by a clear commitment from the very top. The new Faraday Partnerships that I have announced today testify to the continued development of this support now and in the future.

The way that the Universities have risen to the challenge of the Knowledge-Driven Economy is impressive, but more needs to be done if we are to create the wealth and new jobs we all want to see. The message I hope you will take away this morning is that the Government is enthusiastic to play its part in taking forward this new agenda.

Note 1: Romanes Lecture, Oxford, 2 December 1999

Note 2: "British by Design", The Economist, 3 June 2000