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LINK nanotechnology programme and the national initiative on nanotechnology - evaluation report 24


URN No: 94/530

EXECUTIVE SUMMARY

Terms of reference and background

Evaluation Aims

  1. In September 1993 PA Cambridge Economic Consultants (PACEC) in association with PA Technology were commissioned by the Department of Trade and Industry (DTI) to carry out an evaluation of the LINK Nanotechnology Programme (LNP) National Initiative on Nanotechnology (NION).
  2. The purpose of the evaluation was to assess the extent to which the objectives of the LNP and NION had been achieved and value for money secured. It also had the wider purpose of testing the rationale of the programmes both as stated at their launch and as might be appropriate at the time of this evaluation.

LNP and NION Background

  1. The LNP was one of the first programmes to be run within the LINK scheme which provides a Goverment-wide framework for the promotion of collaborative research involving industry and academia. The Programme was closely related to NION which had been established two years' earlier (in 1986) by the National Physical Laboratory (NPL) to promote awareness of nanotechnology.
  2. Nanotechnology was described in DTI case-papers as "a cross-sectoral enabling technology dealing with the technology of manufacture to dimensions or tolerances in the range of 0.1 to 100 nanometres (1 nanometre is I millionth of a millimetre)". The rationale for initiatives to promote awareness of the potential of the technology and collaboration in its development in the UK was stated to be three-fold:
  3. the extent of technical risk;
  4. the cross-sectoral nature of the technology;
  5. limited awareness of the capabilities of nanotechnology which tended to remain in particular industrial sectors.
  1. Under the aegis of NION, and adopted by the LNP, a Forum had been set up representing industrial and academic interests in nanotechnology and a Nanotechnology Strategy Committee (NSC) was established to advise the Government on all aspects of nanotechnology and specifically on the appraisal of LNP projects and NION activities. The National Physical Laboratory (NPL) administered both initiatives with the assistance of consultant coordinators.

LNP and NION budget and project status

  1. The LNP budgetary situation at the end of 1993 was that, if all NSC approved projects were to be agreed for funding, the budget allocation from DTI and the Science and Engineering Research Council (SERC) of £11.5 million would be almost totally committed. The Programme in fact closes for funding in June 1994 with NION continuing through to 1995.
  2. The number of LNP projects approved by the NSC is 27 with four of these waiting on funding approval at the time of the evaluation (November 1993). The first project started in 1989 and the first completion was in July 1991. The completion of the final LNP project is likely to be some time in 1997 or early 1998. Only 7 projects were completed or close to completion at the time of the evaluation, representing 18 per cent of the total project costs of all NSC approved projects.
  3. There were 86 participants in the 27 NSC approved projects of which 59 were private sector firms (16 small/medium sized enterprises - SMEs) and 34 universities or government research laboratories.
  4. The NION has a DTI budget allocation of £0.5 million (1992-1995) to provide the mechanism for disseminating infortnation about nanotechnology developments in general and LNP projects in particular. The NION Forum comprises 900 members from industry, academia, government and the media who are invited to conferences and seminars and receive regular newsletters.

Evaluation method

  1. Evidence on the appropriateness of the LNP and NION, on their effectiveness and efficiency and on their management and administration was sought by a mixture of face-to-face and telephone interviews, postal survey and a review of existing monitoring data for each LNP project.
  2. Given the tight schedule for the evaluation, the greatest effort was devoted to canvassing the participants in the LNP projects and particularly the project managers who were most likely to have the best over-view of project progress and prospects. This focus was also thought to be required because of the need to base estimates of programme impact more on anticipated rather than actual project outcomes.
  3. We covered all completed or active LNP projects bar two with face-to-face interviews with project managers. Three-quarters of participating universities/Government laboratories were interviewed face-to-face or by telephone, 55 per cent of the non-SMEs and nearly all the SMEs. We also interviewed ten of those involved in rejected, withdrawn or potential projects, the NPL and SERC administrators and coordinators as well as members of the NSC.
  4. A postal survey was carried out on a random sample of one third of Forum members with a usable response rate of 35 per cent ie. about one hundred members.

Evaluation conclusions

  1. The overall conclusion of our evaluation is that both the LNP and NION have been successful initiatives in terms of their administration and management and in the extent to which they have met their objectives and those of LINK programmes in general. We think it likely that the view of one participant we interviewed - that it is the "best research funding scheme I have ever been involved with" - would with justification be endorsed by others.
  2. The effects of the LNP were highly additional. No projects would have gone ahead on the same scale and timing without support. Whilst only 4 out of 21 projects would have been completely abandoned in the absence of LNP funding, in all the other (partially additional) cases the programme led to the project being carried out on a much larger scale and/or markedly faster. It has been estimated that additionality averaged about 70% for those respondents quantifying their expected sales. In other words, of the commercial benefits expected as a result of projects supported by the LNP, roughly 70% would not have been achieved in the absence of the programme. The LNP's additionality was also high in terms of collaboration. Over half of the respondents said they would not have collaborated at all without the programme and only 2 out of 21 projects would have involved the same partners in the absence of the LNP.

Administration, management and monitoring

  1. Administration of the LNP benefited from the resources dedicated to its coordination and from the combination of the NSC, comprising a broad church with diverse interests in nanotechnology, the independent secretariat at NPL, and the support of energetic and enthusiastic coordinators at NPL and SERC. This eased the process of project start-up although the involvement of both SERC and DTI in funding approval caused some difficulties and delays.
  2. Management of the LNP projects was generally effective, bringing a focus and incisiveness to the work which otherwise would not have been present. Progress on the collaboration and against budgets and objectives was regarded by participants and monitors as good or satisfactory in most cases. Serious problems leading to premature completion of the projects occurred in two or three cases and schedules slipped in six projects.
  3. Monitoring was approached in a systematic way with regular reporting to the NSC. However, whilst we have no doubt that the secretariat and the NSC were alerted to any problems arising, monitoring was not undertaken in a way which enabled convenient and comprehensive review of progress (especially non-technical progress) across the LNP portfolio of projects. Moreover, monitoring policy appeared to be to limit dissemination of the monitoring data within the NSC, secretariat and coordinators.
  4. Administration, management and monitoring of NION were generally effective. Membership of the Forum has increased over the years although our survey elicited a surprisingly high number of responses from members claiming no interest in nanotechnology or the Forum. In each year since 1988 one or more Forum conferences or seminars have been held with an average attendance of 90 members. The organisation, quality and impact of the conferences and especially the specialist seminars were given a high rating by the Forum members we canvassed.

The effectiveness of the LNP and NION

  1. Progress in general was satisfactory if not excellent in terms of meeting the technical and commercial objectives of the LNP projects:
  2. 65 per cent of LNP participants claimed their technical objectives had been fully or partly met and 70 per cent that the probability of technical success was high. These claims were consistent with previous reviews and monitoring reports. We conclude that it is likely on performance so far that the LINK target will be achieved, ie. at least 75 per cent of projects realising their technical objectives
  3. 71 per cent of projects (45 per cent of participants) have produced publications in scientific journals, most on more than two occasions. The assessment of project monitors and of project participants on other LNP projects confirmed the quality of the scientific and technological output to be high, often at the leading edge in world terms. We conclude that the LINK target of 50 per cent of projects producing at least one scientific publication has been exceeded.
  4. One quarter of LNP participants claimed that commercial exploitation had already commenced (in terms of sales achieved or planned in the near future). About 40 per cent attached a high probability to the achievement of commercial success. After allowance for optimism bias, we estimate that LNP participants could achieve £15-20 million sales per annum over the next decade. Adjustments for non--additionality, substitution and displacement reduce this to net UK sales per annum of £8-12 million over the next ten years attributable to participation in the LNP. Roughly one third of this could be generated by SMEs. We conclude that the LINK target of 50 per cent of projects being developed further by UK industry within three years will be achieved by the LNP. We further conclude that there is a medium to high probability that the LINK target of at least a quarter of projects leading to profitable activity will also be achieved.
  1. Increased collaboration within the nanotechnology network has been achieved by the LNP. The additionality of the collaboration was high in terms of the extent and intensity of the collaboration rather than in the proportion of participants for whom collaboration was new. Most LNP participants had already collaborated with other organisations on R&D projects; half with some of their LNP project partners; and 40 per cent with their partners on a previous nanotechnology project.
  2. In general the experience of collaboration had been successful and 70 per cent of participants expected to continue to collaborate. Of those who had not previously collaborated with their partners, 60 per cent intended to continue to do so with some of their partners. However, LNP or some similar funding was thought to be a necessary condition for this by about half those who declared they would continue collaboration.
  3. We conclude that collaboration was an essential ingredient in the success of the LNP, that it had broadened if not transformed the perception by many participants of the opportunities presented by nanotechnology, but that its impact on the enhanced sustainability of collaboration without Government funding had been more limited.
  4. NION Forum activities were of high quality and effective in increasing awareness of nanotechnology-based opportunities and in assisting LNP collaboration. However, their effectiveness was much lower in transmitting information on LNP projects and in technology transfer across the nanotechnology network.
  5. We attribute the relative weakness in technology transfer to lack of NION resources for this activity, reluctance on the part of LNP participants to share information on outputs, and the use of national, formal rather than regional, informal activities and events.
  6. We conclude that NION sought to achieve the appropriate blend between broad-based enhancement of awareness across the nanotechnology network and more narrowly focused increased awareness and technology transfer within specific clusters of nanotechnology applications. We conclude that it has been more effective in raising awareness than in technology transfer.

The efficiency of the LNP and N1ON

  1. In the field of Government funded R&D support there are few benchmarks to assess the efficiency - the cost-benefit or cost-effectiveness ratios - of the LNP and NION. Public sector costs per job are used in the assessment of urban and regional economic development but they are not appropriate for funding in support of R&D where job generation or safeguarding is not the primary objective.
  2. On the basis of the LNP costs and estimates of the benefits in net additional sales revenue, we conclude that for every £1 of DTI spend on the programme there is likely to be at least £1 net additional sales per annum over the next decade. We conclude that on any reasonable assumption of the value-added from these sales, the LNP has offered a good return on DTI's investment.

The appropriateness of the rationale and objectives for the LNP and NION.

  1. We are convinced that the emphasis in the original rationale on technical risk lack of awareness and barriers to industrial - academic transfer of technology and knowledge was appropriate with regard to nanotechnology. We are less convinced of the inter-sectoral nature of the market failure as a general proposition but recognise that it may have had more force within specific clusters of nanotechnology applications.
  2. At the outset of NION and then the LNP it may have been difficult and possibly misleading to have had a narrowly defined strategic focus on specific applications. We have two comments on this:
  3. first, if the broad, exploratory and project driven approach was appropriate, then we conclude that the programmes were over-burdened with too many, diverse objectives, blurring rather than clarifying their focus;
  4. second, if that was the appropriate approach, we think it should have been accompanied by a requirement, to be met during the unfolding of the programme, to give more precise specification to where the market failures were most pronounced and where the programme should be strategically focused.

Recommendations

  1. The LNP will close for funding in the summer of 1994 and NION will continue through until 1995. Therefore, we confine our recommendations to three issues - the treatment of ongoing projects, the completion and possible extension of NION, and the case for a future LINK programme in nanotechnology or related technologies. We make our recommendations in the context of the Governments White Paper on Science, Engineering and Technology (May 1993).

Administration and monitoring LNP projects

  1. We recommend that monitoring and an effective response capability to any problems arising will continue to be needed for on-going projects. The experience and expertise for this resides within NPL and the LNP co-ordinators. We recommend it should continue to do so and that comprehensive and systematic monitoring should be enhanced to facilitate this.

NION activities

  1. We concluded that the technology transfer activities of NION need to be developed. Therefore, we welcome the technology transfer project proposals recently approved by the NSC. We recommend that NION should be energetic in its support of these initiatives (once funding approval has been given through its specialist seminars, newsletters and other work. The achievements of NION in this should be reviewed in 1995 and a decision made then on whether it should continue to complement and support the technology transfer projects.

A future LINK programme

  1. We conclude that the LNP has been an effective programme. But we are doubtful that the rationale and objectives should have remained as general as they were expressed at the programme launch. The unfolding of the prograrnrne brought to light specific new nanotechnology application areas which could now be built on and developed.
  2. We believe a case could be made for a related LINK programme - not an LNP2 but built on some of the techniques and potential applications emerging in the latter half of the LNP, eg. medical and bioscience applications and extending into others not fully embraced by the LNP, eg. "smart" materials and structures.
  3. We recommend that the NSC should be urged to submit a case for such a programme in well-defined clusters of techniques and potential applications. We suggest that the appropriate rationale would emphasise high technical and commercial risks which could be reduced and/or spread through industry-academic collaboration and technology transfer and increased awareness of the benefits of cross-disciplinary co-operation.
  4. We further recommend that consideration should be given within any such submission to the advantages of a single funding source for strategic clarity and administrative convenience and to complementary awareness generating and technology transfer activities through a programme such as NION

Minister responsible

David Willetts is the minister responsible for this policy area.


 

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