My heroes are not the sporting greats, famous statesmen, brilliant writers, or film stars. The people I most admire are inventors: they improve the world in practical ways, and leave a legacy that can benefit millions for generations.
To me, the legends of yesteryear are individuals such as Michael Faraday, Thomas Edison, Alexander Fleming and Frank Whittle, while today’s British equivalents would be James Dyson and Tim Berners-Lee. Their genius was not merely theoretical: they achieved insights that have changed the world. Unfortunately, too much science today is not applied. It is reckoned that half the world’s published academic papers are never read by anyone except the authors, peer reviewers and editors of the journals in which they appear. All that research and so little development. Huge amounts of brain power and expenditure, yet such mediocre returns.
Our higher education funding bodies are right to increase the emphasis on capturing the value of research. The importance of impact in the Research Excellence Framework has been raised to 25%, which means universities that commercialise research will be favoured. Technology transfer from academia is the way to fuel job growth and higher productivity.
The endless complaint from politicians, academics and the media is that there is too little patient capital in this country to exploit our inventive flair. They assert that we lack the investment to translate inventions into commercial innovations that can be exploited here. If we can take better advantage of our intellectual capabilities then we could boost our poor levels of productivity.
I am not convinced that a shortage of financial backing is the main challenge. I chair the Institute of Cancer Research, a post-graduate establishment, which in recent years has generated more royalty income from its drug patents than either Oxford or Cambridge universities from any of their inventions. We fund our operations via charities such as Wellcome and Cancer Research UK, from public donations, government aid, and earnings from our own intellectual property. Institutions should be more creative in raising cash — just as they should be with their research activities. Oxford has just raised £750m via a 100-year duration bond paying a mere 2.5%. This is cheap money, and shows higher education is not short of money.
Moreover, if there is a problem with funding for scientific breakthroughs, it is not purely a British one. A recent book called Venture Investing in Science, by Douglas Jamison and Stephen Waite, argues that the US venture capital sector is too focused on software investing, driven by the success of companies such as Facebook, Twitter and Uber. What the authors call deep science ventures are being neglected because such projects tend to take longer to come to fruition. The sort of technologies they mean are robotics, hydrogen fuel cells, quantum computers, precision health, additive manufacturing and suchlike.
In its new industrial strategy, the government commits to growing research and development as a proportion of GDP from 1.7% to 2.4% by 2027. Such a shift over 10 years is a steep increase — in effect, a rise of 41%. It promises to boost public investment to £12.5bn by 2021-22, and wants to target areas such as AI, electric cars and clean energy. But the state contribution is still only about 30% of overall spend. The private sector must invest the other £27bn every year. And let’s hope these taxpayer funds are deployed wisely. Too often political imperatives conflict with the best decisions, so money is diverted to the wrong regions, or focused on schemes that tick politically correct boxes, or used to fulfil social objectives, not maximise results for the economy.
Following the Patient Capital Review, the government is launching a £2.5bn investment fund within the British Business Bank. Meanwhile, investors already benefit from tax breaks connected with venture capital trusts and Enterprise Investment Schemes, which will be redirected towards innovative knowledge-intensive companies. Pension funds will be encouraged to back VC investment and other illiquid assets. The stock market remains open to interesting listings from domestic technology companies, and there are specialist funds such as Neil Woodford’s Patient Capital Trust and IP Group, as well as institutional VC funds based in the UK. Finally, there is more crowdfunding and angel investment than ever.
So there is money for good ideas. What Britain needs is more scientists who are commercial, and more entrepreneurs who really understand technology.