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On Tuesday 26 November the UK~IRC’s final Innovation Summit takes place at the British Library on the ‘Future of Science and Innovation Policy. The conference includes presentations from Rolls Royce, Trampoline Systems, University of Manchester, SPRU, NESTA and HEFCE.

Welcomes & Introduction

Professor Alan Hughes, UK~IRC Director welcomed delegates to the fifth annual UK~IRC Innovation Summit.

In 2004, he explained, there was major look forward via a 10 year science and innovation framework taking a medium term look at policy in this area which set a number of targets for R&D investments. However during this time government expenditure fell, although Higher Education R&D rose. In the last 10 years the business sector has failed to increase its R&D as expected, with declining investment, and should be a focus in the future. However, much of the UK’s R&D is global, relying on overseas funding which has advantages and disadvantages. Notably also 10 large firms account for around a third of R&D whereas independent small firms account for less than 4%.

Key issues going forward, therefore, are the relation of universities and business, and public sector procurement, which will be discussed in sessions today. It was also noted that businesses funding university research has declined relative to other countries.

However, Professor Hughes explained there are other ‘pathways to impact’ including people-based activities such as universities roles in developing skills, problem-solving and commercialisation. So going forward it’s vital to look beyond R&D investment to think of different types of impact and how to justify future levels of government spending.

Finally, today the UK~IRC launches its latest report on this area entitled ‘Connecting with the Ivory Tower: Business Perspectives in the UK’.

Parallel Sessions

At this point, participants divided into two sessions, either Financing and Skills for Innovation or Public Sector Procurement.

Parallel Session 1: Public Sector Procurement

This session is chaired by Luke Georgiouh from Manchester Business School with presentations from his colleagues Jakob Edler and Elvira Uyarra, with Mark Phillipps from the Renfrew Group and Colin Cram from Marc 1 Ltd providing a practitioner perspective.

Luke Georgiouh introduced the session by explaining that public and economic policy tends to focus on regulating demand, whilst it is rare to think about the quality of that demand and direct it towards innovation. There has been, he argued a growing realisation that public procurement has a lot of potential, gaining greater attention in recent years, but without effective implementation as yet.

Elvira Uyarra described the Manchester Business School survey examining barriers and drivers to innovation in public procurement. They targeted suppliers to the UK public sector, many of which had introduced service, product and process innovation. It was noted that procurement had an impact on innovation and on sales in the private sector.

Jakob Edler then looked more closely at key examples from the results, showing several core challenges for public bodies including poor definition of need, risk and high learning / adaptation cost. It is important to note, he explained, that these challenges differ for each organisation. MBS had conducted detailed case studies on NHS, Greater Manchester Authorities and HMRC. Success in adopting innovation requires strong motivation within senior management team, as well as creating opportunities for co-generated learning where the supplier and public body work in partnership to adopt the innovation. In conclusion, he showed that demanding public sector procurement instantly becomes more innovative is impossible without addressing the deep and complex challenges these organisations face. It requires incentives, support, leadership initiatives, instruments and enabling organisations to help share knowledge across public bodies.

Michael Phillips from the Renfrew Group, a product design consultant, argued that innovation in procurement is most important, particularly in tenders, early engagement with procuring organisations and outcome-based specifications. One vital point is the ‘intention to purchase’ by all parties at the end of the innovation process helps to drive the development.

Colin Cram from Marc1 Ltd, a public sector consultant, explained that procurement innovation is a powerful tool for the government to generate economic growth. This has been recognised since the late 80s but hasn’t been implemented. One of the reasons for this is the fragmentation of UK public procurement, with more than 35 in the Manchester area alone, with little commonality between them, making innovative solutions very difficult. To remedy this, genuine access to expertise is necessary for organisations as well as some internal changes to processes. It was noted that central and local governments need to address ways to implement innovation in procurement processes and develop a more coherent, efficient and cost-effective approach which can have huge benefits for the UK economy.

Parallel Session 2: Financing and Skills for Innovation

This session is chaired by Paul Nightingale from SPRU with presentations from his colleagues Alex Coad, Marc Cowling and Josh Siepel

Paul Nightingale opened the session by asking where are the small firms that grow into large ones and is this prevented by skills or credit constraints. By focusing 97% of firms who do get credit, we overlook the 3% or who could be innovative and likely to grow.

Marc Cowling discussed SME motivation in high tech sectors which requires an increase in STEM graduates for who there is a high demand. Non UK firms, he argued are more likely to reinvest in graduates, than UK firms.

Josh Siepel examined long-term performance and the effects of general and specific human capital on long-term growth and survival.  He asked what success would mean in this area and whether this is mere persistence or survival, but firms with STEM graduates are associated with higher performance.

Alex Coad talked about diversity, the dimensions of which depend on variables with conflicting results; so having younger founders showed higher entrepreneurial growth and technological skill secured high growth and employment.

Paul Nightingale then noted that there are issues with demand as well as supply, and whether there was too much underperforming entrepreneurial activity in the UK? He argued that firms fusing STEM with arts and humanities knowledge will experience higher growth. In conclusion, he argued that using high-growth firms as the basis for policy-making is misleading as firms dies, but technologies live on.

Keynote Speech: Ben Martin – 15 Challenges for Innovation Studies

Ben Martin, Professor of Science and Technology Policy at SPRU, University of Sussex and Editor of Research Policy, delivered the keynote session just before lunch, in which he looked back at half a century of innovation studies in order to identify the challenges and research focus for the future.

Innovation Studies, Martin argued concerns the ‘economic, policy, management and organisational studies of science, technology and innovation (STI) with a view to providing useful inputs to decision-makers concerned with policies for and the management of STI.’ In the last 50 years, he argued, the field has made 20 core advances including a refocus from the individual to the corporation; a move to multi-factor explanations; taking a resource-based view of firms; from single to multi-technology firms, and from closed to open innovation. Some of these changes had a specific impact on managing technology and innovation, while others were geared towards national and international policy.

Professor Martin then outlined his 15 challenges for the future, some of which represent major shifts in understanding, some concern managing intrinsic tensions and others are more general problems for scholars and practitioners. The first challenge, therefore, is to acknowledge and develop metrics to measure other forms of innovation which Martin currently describes as ‘dark’ such as incremental, financial or social innovations.  Another challenge, which links to our UK~IRC project, is the move from traditional forms of innovation which still dominate academic study, to a greater focus on services which now dominate activity in most advanced countries. Greater focus also needs to be given to more mundane innovations, he argues, that in many ways contribute more to humanity and well-being such as domestic appliances, and those that alleviate poverty, as well as a focus on global systems of innovation linked to sustainability.

Finally, Martin stated, researchers in this field must do more to maintain integrity and avert misconduct, by being particularly sensitive to issues of data-borrowing and self plagiarism. In conclusion, he believes this is a good opportunity to assess past achievements but also to open debate about the type of field innovation scholars want to be in.

These challenges he argues are intended to provoke debate, but by engaging with these questions it create an opportunity to influence the shape and purpose of the field for decades to come. During the Q&A Martin explained that scholars cannot work alone. To move things on in both economic policy and in the ways it is perceived, the innovation community should work together to share evidence and address some of the more ambitious challenges outlined.

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Parallel Sessions

Parallel Session 3: University-Industry Links

This sessions is chaired by Ursula Kelly from Viewforth Consulting Ltd and includes presentations from David Sweeney of the Higher Education Funding Council for England (HEFCE), Hamid Mughal from Rolls Royce and UK~IRC Knowledge Hub Director, Michael Kitson

David Sweeney gave the first presentation in this session and started by praising the UK~IRC for presenting research based on how things really are rather than what people want to here. Sweeney forsees the future of interactions as university-industry partnerships, which no longer adheres to a one-size fits all system as the new UK~IRC report points out. Very few sectors of the economy can claim to be as valuable to the UK as Higher Education he argues, having probably the second-best university sector in the world. As well as creating new knowledge, the sector needs to create impact from that knowledge – and HEFCE through the REF is currently looking at how connected those two objectives are. A performance-based funding system is quite advanced in the UK but finding ways to unlock private funds is a current challenge. David Sweeney explained that a lot of effort has already gone in to understanding these relationships, by both universities and businesses, leading to constructive mutual-learning discussions. Universities are there, he claims, to partner other sectors on an equal basis. Universities are, therefore, in a good position for the future and the building blocks are there for the sector to play a part in the story of economic growth.

Hamid Mughal from Rolls Royce focused on one strand of the relationship with universities, manufacturing. Globalisation, he argues, is creating radical change both good and bad, leading to 24 hour operations that results in a lack of ‘organisational headroom’. Current product development processes that can take 20 years to develop a product means that productive partnerships, particularly with universities is highly valuable. Quality time to think and focus on problems in depth, tapping into world-class research and people is major advantage of university partnerships. Going forward the nature of such links will no longer be one university working with one firm, but groups of both parties working together to find valuable solutions. This, he explains, is changing the model of university-industry partnerships. These joint catapult centres work because they can overcome internal organisational concerns, be substantially more cost effective and lead to long-term gains. Universities, he claims will be radically transformed in the next 5-10 years and require newer business models in order to take a more collaborative approach with industry. UK universities are a huge asset and to be successful in the feature they need to start thinking differently.

Michael Kitson, UK~IRC Knowledge Hub Director looked at the regional impact of business links. We only looking at part of the picture, not just scientists but arts and humanities are necessary too. The UK~IRC surveyed 2500 businesses and 22,000 academics and Michael presented some of the findings. First the applied / basic research label is more complex than currently believed with many academics across disciplines stating they do both. Second in technology transfer involves lots of different types of engagement – not just commercialisation but problem solving and community-based activities. Technological innovation he argues is important for businesses but its not just developing products but services, logistics and human resource management.  In conclusion he states there are 5 problems to consider; how and why to connect; importance of boundary spanning activity; how to bundle small and discrete problems of SMEs; 120,000 academics and nearly 5 million business, how can they engage; need to focus on longer-term impacts. The academic ivory tower is therefore a myth.

Parallel Session 4: Networks Innovation

Based on the UK~IRC research project, this session is chaired by UK~IRC Research Director Ammon Salter and includes presentations from practitioner Charles Armstrong from Trampoline Systems and Hasan Bakshi from Nesta. The final presentation is an insight into the research from Ammon Salter and Antoine Vernet.

Hasan Bakshi explained how Nesta convenes partnerships between different players in the innovation system moving on to explain its creative economy work demonstrated through its Digital R&D Funds for the Arts. The fund unites cultural institutions, technology companies and academic researchers. Over 12 months, Nesta held over 200 events to connect with innovators, one which led to a 24% increase in Twitter connectedness between delegates.

Charles Armstrong from Trampoline Systems explained that innovation is dependent on connections through key stakeholders. One project involved analysing the connectors and geography of tech city companies, and building platforms that can correlate larger and larger data sets. Fundamentally, it is vital to understand the structure of innovation communities.

Ammon Salter and Antoine Vernet presented their research on innovation networks, particularly focused on community-based models arguing that individual behaviour is shaped by social networks, facilitated by Open Source Software (OSS). This allows customers to obtain, modify and redistribute source code without requiring a licence. UK~IRC research is looking at the mechanisms that drive and propel open innovation, the nature of decision-making and how such communities evolve over time. Our research, the presenters explain, has a number of implications including the importance of being part of networks that diffuse information effectively, and understanding incentives and motivations for participants.

Panel Session: What is the Future of Science and Innovation Policy in the UK?

The final session of this year’s final UK~IRC Summit is panel discussion chaired by our Director Alan Hughes, bringing together the various strands from today’s presentations for an open discussion. Panellists for this final debate are Ben Martin, SPRU; Hamid Meghal, Rolls Royce; Dame Nancy Rothwell, Council for Science & Technology & University of Manchester; regular UK~IRC collaborator Rashik Parmar, IBM and David Gann, Imperial College London, who appeared on the panel at UK~IRC’s first conference in 2009.

David Gann opened discussions by focusing on technologies of innovation themselves which are often a precursor to the ways things develop. Digitally there are a huge number of technological advances and how do we create data rich models that can have predictability within in order to change the innovation process. What is the future of data-driven innovation – science is changing, so innovation studies has a rich area to mine which is not yet attended where data can help to shape innovation as a process and individual or organisational behaviour.

Ben Martin then argued for continuity in knowledge exchange for science and innovation policy. Longer term policies have been developed and some continuity will be expected in the future. However, the concentration of research funding in particular institutions is not entirely a useful model in the current context, he argues, and a further debate is necessary to reconsider it. second, he suggests that the dual funding system has been beneficial but there are alternatives, such as the US where funders contribute 100% of the costs. The current UK system, Ben Martin suggests has had a knock-on effect in wider academia such as a greater emphasis on research and targeting 4* journals rather than teaching. So a discussion on these approaches is valuable.

Dame Nancy Rothwell, University of Manchester, stressed de-training scientists in order to encourage better application of research knowledge and being able to engage with a variety of interested parties. She suggests more attention should be paid to incentive and reward, and reiterates Ben Martin’s concern on concentration of funding – how much should be local, regional or national – but there should be greater focus on collaboration than competition between universities.

Rashik Parmar, IBM, discussed the need for innovation policy to not just inspire new technologies and combinations, as well as generating future technology leaders. Ecosystems for innovation, he suggest, need to be able to commercialise value through the creation of trust between players in the innovation community and sustain it to share rewards fairly across the region or nation.

Alan Hughes then asked the panellists to name a policy change they would like to effect. David Gann suggested that linking new, open and public data together, available through universities, can be hugely valuable for business and debates on innovation in government. So we need targeted policy to help guide and develop this. Nancy Rothwell suggested policy to encourage businesses to work with universities would be helpful and ways to encourage innovation in SMEs and financial services. Rashik Parmar also noted the value of big data so finding ways to link that and finding policies to share information from a variety of places is vital. Ben Martin argued for incentives for energy companies to work with universities.

Closing Remarks

Alan Hughes closed the final UK~IRC Innovation Summit and what has been an exciting day of debate and discussion around key issues of policy and the future of innovation study. The UK~IRC, he noted has contributed a reduction of innovation policy tourism, by providing solid research-based evidence and the engagement through the Knowledge Hub.

He thanked all those who had supported and worked with the UK~IRC in the last 5 years including our funders ESRC BIS, TSB and Nesta, and the many companies and public institutions who had worked with us to advance our evidence-based research findings and engagement with policy-makers.