Kathryn Allen looks at the changing environment of R&D funding.
In the 2016 Autumn Statement, Chancellor of the Exchequer Philip Hammond announced £4.7bln in the period to 2021 to boost the UK’s position as a world leader in science and innovation. Following this, in the Spring Budget 2017, the Chancellor stated that £210m will fund the creation of new fellowships, including programmes aimed at attracting global talent to conduct research in bioscience and biotechnology, quantum technologies and satellite and space technology.
The aim is to help the UK remain an attractive location for investment in R&D as it prepares to leave the EU. The type of R&D funding required depends on the type of project and how much investment is needed. Funding can come from public, government or private investment or crowd funding. But how is this money allocated?
In June 2016 the UK Government put forward the case for creating the UK Research and Innovation (UKRI) public body. Following the passing of the Higher Education and Research Act in early 2017, UKRI will be established on 1 April 2018 and will bring together the seven Research Councils UK (RCUK), Innovate UK and the research and knowledge exchange functions of the Higher Education Funding Council for England. The aim of UKRI is to create a more efficient, single research and innovation funding body that will manage the allocation of £6bln of annual funding. The Government envisages that it will improve collaboration between researchers and the business community, allowing more efficient research commercialisation.
Funding can currently be gained through RCUK, which collectively invests £3bln annually in research across universities, research institutes and through supporting the commercialisation of research. According to RCUK, the relevant council, using independent peer reviewers, awards research funding on a competitive basis. These peer reviewers can be from academia, government or industry, and the process may involve a peer review panel in addition to independent reviewers.
Between 1 April 2015 and 31 March 2016, the Engineering and Physical Sciences Research Council (EPSRC) examined 2,425 research grant applications through the peer review process, funding 784, which amounted to £509m. The EPSRC offers various funding routes, including standard grants, funding for new academics and funding for international collaboration – each with its own eligibility criteria. Innovate UK, a non-departmental public body, also funds innovation and is sponsored by the Department for Business, Energy and Industrial Strategy. Since 2007, it has agreed to allocate more than £1.8bln to innovation.
Naomi Weir, Deputy Director of the Campaign for Science and Engineering (CaSE), an independent advocate for science and engineering, told Materials World, ‘UKRI is one of the biggest changes to the funding landscape in the UK for a while and, as with any big change, there's a diversity of opinion concerning it. There's the opportunity for it to improve the join-up across the different funders within the system. But there are also risks relating to how directed funding is and the autonomy of the different disciplines. CaSE will be working hard to ensure that the right governance structures are in place, so that UKRI has the right people with the right amount of authority and autonomy to make decisions at the right level. Getting this right could help improve an already high-performing system.’
CaSE and other industry bodies have already influenced UKRI policy as the Higher Education and Research Bill moved through Parliament. Amendments made to the bill included how funding appointments are made and who has to be consulted in different circumstances, expansion of the upper limit of UKRI Council size and the establishment of an executive committee. CaSE plans to hold a meeting with its members and UKRI Chief Executive Sir Mark Walport in autumn 2017.
Supporters of UKRI hope it will improve funding across interdisciplinary research. Addressing potential benefits and concerns, Weir said, ‘UKRI could help disciplines that feel they've fallen between the cracks – for example mathematics and statistics, which fall into various research areas but don't have their own council. [CaSE is] keen that funding decisions are done strategically, with a view across all the councils and a balance struck between exploratory research and applied research. As government communicates with one person, instead of seven – the CEO of UKRI rather than representatives from RCUK – it is crucial that that person acts as a collective voice, not a divisive voice.’
Commercialisation driving innovation
Commercialising research – making it attractive to business – can fund its development. Universities can collaborate with businesses or may have subsidiary companies that commercialise university research, potentially managing licensing opportunities or helping with the creation of spin-out companies.
Explaining this process, Dr Stephen Pyke, Commercialisation Manager at the University of Sheffield’s Research and Innovation Services, UK, said, ‘Academics can get in touch with their faculty-facing Commercialisation Managers initially to discuss the opportunities available, whether that’s financial support and advice throughout the process or help securing external investment. The key point to note is that it’s never too early to start considering the commercial potential of research ideas and addressing key questions such as do we definitely own the Intellectual Property (IP), what further development is required to get it to a commercially compelling point and what market is there for it. Secondary estimations of market size are less important than getting direct corroboration from industry to validate our ideas of the market.’
Once ideas have been validated as having commercial potential, Pyke explains that Research and Innovation Services can provide assistance in forming a business plan, IP protection or patenting support and funding. ‘This funding may be used flexibly, for example, to engage a consultant to determine the market in more detail, to build a proof-of-concept prototype or for initial investment into a spin-out,’ said Pyke.
IP ownership is one of the most common pitfalls with commercialising research, according to Pyke. ‘We may not own it if it has been funded by a third party company or we may have already disclosed key components of it via papers and conference presentations, so it can be difficult to obtain IP protection. A common sticking point is that significant amounts of funding can be required to get university research to a point where it is sufficiently de-risked for outside investors or companies to take it up – this can be met with the universities’ own commercial fund but it may not be enough. The increasing pressures in university environments to bring in research funding and produce high-quality publications can often present a conflict with the demands of commercialisation where a focus is needed on development and delaying publication of results, rather than novel research.’
Pyke does, however, point out the benefits of commercialising research, including potential financial profits for the academic and university as well as driving innovation and economic growth.
Navigating the patenting process
One of the keys to commercialising research is adequate IP protection and in the materials industry, this mostly takes the form of a patent. Jason Teng, Senior Associate Patent Attorney at European intellectual property firm, Potter Clarkson, told Materials World, ‘Once in place, a patent is a property that can be sold, licensed or mortgaged, and can therefore be used to raise capital to fund future innovation. The monopoly provided by a patent can be used as a means to attract financing and should therefore be viewed as one of the most valuable assets within a business.’
UK patent protection can be sought by filing a patent application at either the UK Intellectual Property Office (UKIPO) or the European Patent Office (EPO). Teng explains, ‘After the patent application is filed, the UKIPO/EPO will conduct an examination to assess whether a patent should be granted. If the UKIPO/EPO objects that one or more requirements for the grant are not met, it will inform the applicant who can amend the patent application or submit arguments to overcome the UKIPO/EPO’s objection. When the UKIPO/EPO is satisfied that the patent application meets the requirements for grant, it will then issue a patent that can provide UK patent protection for up to 20 years from the filing date of the patent application.’
When navigating this process, without the right advice, businesses can fall into some common traps, according to Teng, ‘Sometimes businesses fail to protect their invention in markets where it is used, sold or manufactured or they do not specify sufficient information about the invention or they request only narrow protection that can be circumvented. Teng also points out that ‘the opportunity to obtain patent protection will be lost if the invention, is disclosed in a non-confidential manner prior to any patent application being filed, since the invention is no longer “new”. Steps should be taken to either file a patent application before any disclosure, or ensure any disclosure to third parties is carried out under conditions of confidentiality’.
In May 2017, CaSE outlined what a thriving research and innovation environment should look like post-Brexit, placing importance on prioritising stability and harmonising regulations and standards for science and engineering, increasing the total level of private and public funding to 3% of GDP in the long-term and seeking UK participation in EU R&D programmes, such as Horizon 2020.
Weir said, ‘As we leave the EU our relationship with its research structures will change. The UK is currently a net beneficiary of EU R&D funding, but as this is unlikely to continue after Brexit, the Government needs to increase funding to stand still. We want to seek UK participation and influence in priority EU R&D programmes but the difficulty is on what terms. It's highly likely it will be more expensive for the UK to participate. While there is the funding element of those programmes, it's also the collaboration and the networks built that are really valuable and can multiply beyond the initial project.’
While the potential impacts of Brexit on R&D funding remain unclear, UK patent applications and existing UK patent rights attained either nationally or via the EPO will not be affected by the UK leaving the EU, says Teng.
There are many routes for funding R&D, but with the impending formation of the UKRI and the UK’s exit from the EU, how effectively funding will be allocated and which areas of research will be prioritised remain to be seen.
Naomi Weir is the Deputy Director of the Campaign for Science and Engineering, UK.
Dr Stephen Pyke is Commercialisation Manager at the University of Sheffield’s Research and Innovation Services, UK.
Jason Teng is a Senior Associate Patent Attorney at patent and intellectual property firm Potter Clarkson, UK.