FST JOURNAL

Following the formal presentations, the speakers joined a panel to respond to questions from the audience on topics including: tax credits; spinouts; scaling up; silos; new fields of technology; and challenge-led funding.

One of the issues with R&D tax credits is that, while they seem to work well for small firms the picture is not so clear for big firms. Many big firms are carrying out R&D anyway. But we should not be subsidising activity which would have been undertaken in any case. The UK is, in fact, unusual in the amount of tax credits for R&D it offers. Supporting the five priority technologies in the UK Science and Technology Framework is easier through direct investment than through tax credits.

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What should be done about all the successful university research spinouts who are sold to a foreign corporation? This reduces economic benefit because they do not stimulate long term growth in the UK. It is one aspect of the UK system that is currently not producing results for the UK economy. The problem is not with the spinouts – the UK does very well at spinouts – the problem is with scaling up. So there is a great deal of wonderful R&D in the UK, but manufacturing then takes place overseas, while most of the value capture is in manufacturing. High value-added manufacturing brings a great deal of economic benefit to the country hosting it.

Our system is siloed. People go to university and never leave. If they do leave, they go to a business and stay in business. There needs to be much more movement of people between academic, business, policy and investor sectors. With the right churn of people, the whole system would be better connected.

In all areas of investigation, where there is a new way of thinking about a subject, this will drive discoveries incrementally for a while and then they will plateau. For example, AI is going to have a dramatic impact on the way that we are able to do science, the amount of money it will cost. In that area, scientific productivity is not going down. In addition, discoveries like AI have revolutionary impacts and create whole new fields.

Private investment will always provide a higher proportion of R&D than public investment. But if the balance is right, then productivity will increase which in turn will generate more national wealth to invest. Challenge-led funding has been very successful in leveraging private sector investment and indeed, in driving those investments through very rapidly to products in the market. In the end, though, success is dependent on people and we have to think about the place that innovation has within our culture and our society.

 FURTHER INFORMATION

UK Science and Technology Strategy 

ONR: Research and Development Expenditure 

ONR: Regional UK business research and development, methods