Universities must make the most of their innovative ideas in science and technology to secure wealth for the nation, argues Ian Taylor
British science is world class and builds on a tradition of excellence that has developed from the fundamental research and discoveries of pioneers such as Michael Faraday and Ernest Rutherford. Successful commercial exploitation of the country's excellence in generating new ideas is key to securing competitive advantages in world markets.
Underpinning this is our need to have a well-educated population, able to understand, recognise and manage the problems that will face this country's manufacturing and service businesses. Universities are a fundamental part of the infrastructure in this country and play a pivotal role not only in this but also in undertaking research that has contributed to a recognition of the United Kingdom's strength in the international community.
In the 1996/97 financial year, the Government will spend a total of Pounds 6 billion on science, engineering and technology, of which Pounds 2. billion will be devoted to the science and engineering base. In the past decade, Government funding for the science and engineering base has increased by over 8 per cent in real terms. Most of this money is devoted to basic and strategic research, and the Government will continue to remain the principal provider of funds needed to sustain British expertise at the forefront of the core disciplines of physics, mathematics, biology and chemistry. But decisions about priorities within the science base should also take account of relevance to wealth creation and quality of life. A balance has to be struck between strategic funding in areas of perceived relevance and responsive funding of excellent basic and strategic research.
Building partnerships between industry and the scientific research community has been a key focus of Government policy and actions since the 1993 SET White Paper and the DTI Competitiveness White Papers.
The Technology Foresight exercise helps to develop those links and generate consensus about which areas of science and technology are most likely to help the UK win in the world markets of tomorrow. Technology Foresight is helping to inform decisions about priorities in both business and Government. In addition, the research councils have a variety of arrangements for taking account of user interests, and schemes for supporting collaborative research and development with industry and for promoting technology transfer.
But is all this effort achieving the desired effect? The recent report by the Parliamentary Office of Science and Technology Post suggested that the success of the policy to encourage commercialisation of public sector research base work could be evaluated by examining data on trends in the numbers and commercial value of patents granted to government research establishments, research council institutes and universities.
The POST report noted that there is no centralised source for data on patents held by, and royalties paid to, universities. Similarly, the report noted that the picture would be confused by UK universities which may file patents in the names of their technology transfer companies, or patents resulting from collaborative research might be filed by an industrial partner.
A more fundamental point is, however, that the UK Patents Act and the European Convention state that patents shall be granted for inventions that are susceptible of industrial application, which are new and which involve an inventive step. They also stipulate that discoveries, scientific theories and mathematical models are not inventions. The reference to industrial applicability means that patents are granted for tangible products and processes, but not necessarily for the results of research. It follows, therefore, that a great deal of excellent science falls outside the patent system and it is hardly surprising that, in the main, patents are sought and obtained by industry.
A range of technology transfer options may be appropriate to different technologies, different sectors and different circumstances. Emphasis should, therefore, be placed on arrangements that maximise the exploitation of the research, and create the right incentives in the research community to encourage innovation.
Despite this, and although the numbers are small, universities are taking greater interest in patents as one strategic mechanism for facilitating technology transfer (Table 1). It is surprising that the UK accounted for only 5 per cent of the total number of patents granted in 1994 by the European Patent Office (Table 2). One might question whether these figures indicate that notwithstanding the excellence of British science, and the efforts we have made to facilitate technology transfer, we are failing to match our competitors in translating scientific excellence into innovative products and processes.
Patents exist to safeguard the investment in new business ventures and are essential to capture and control the results of research for exploitation in certain industrial sectors. We cannot afford to ignore one of the indicators which reflect this country's performance at being innovative in launching new products and services into the market place. There are no instant solutions. Industry, the public sector research base and Government all have their roles to play in ensuring a strong wealth-creating culture.
Industry must recognise the critical nature of innovation in both products and services as a main factor in maintaining market share and competitiveness. And the pursuit of intellectual property protection by the use of patents should be seen as a strategic commercial decision, not as a cost decision. The official fees payable to the UK Patent Office for obtaining a UK patent are under Pounds 300, and although applications to the European Patent Office are more expensive, the European route allows patent protection to be secured in up to 17 countries, that is all the major markets in Western Europe. Although the cost of potential litigation is perceived to be a big disincentive against patenting, the overwhelming majority of patents are not litigated, and as a general rule those which are challenged in the courts are inventions that underpin highly profitable products.
Innovation and competitiveness requires an investment in research and development and a determination to exploit the results of that research. Government will continue to be the main funder of basic and strategic research in the core sciences so critical to technological development. It will continue to encourage partnerships between the science base and industry, and to support and encourage mechanisms for technology transfer.
It will also continue to promote the messages of innovation and best practices by the work of the DTI Innovation Unit, Managing in the 90s programme and Business Links. Universities must strategically assess what role they individually must play in providing the education of our future society, the generation of knowledge and other contributions to the benefit of the country. I am clear that although I would not prescribe a universal "patent" medicine for universities to improve technology transfer, I do agree with the POST report finding that "exploitation of the results of research should be the prime objective, and management of IPR is an issue within this".
Patenting is not an end in itself, and it may be that patenting may not be the most appropriate form of gaining competitive advantage, but monitoring the volume of royalties resulting from patent licensing and the size of individual patent portfolios and activity are two possible indicators of commercialisation success. The signs are mixed, and it is clear that, however well we are doing, we must do better. A number of ideas are being floated, but I like to keep an open mind to any more.
The author is minister for science and technology.