Funding and the Future

Materials World magazine
,
29 Oct 2018

Idha Valeur investigates the lay of the funding-land, the current R&D situation in the UK and what to expect with Brexit looming in the new year.

Ever since the UK’s Autumn Statement of 2016 was released, the government’s financial statements have been dominated by efforts towards building a stable and, hopefully, still attractive UK to businesses and investors. Remaining a hub for innovation seemed to be a key element of the financial statements dating from 2016 up until the latest presented this spring.

The Chancellor of the Exchequer, Philip Hammond, said in his Autumn Statement presented on 23 November 2016 in Parliament, that he could confirm an additional investment in R&D, rising to an extra £2bln per year by 2020-2021, which was originally announced by Prime Minister, Theresa May.

Then in the Spring Budget of 8 March 2017, Hammond continued to focus on R&D by allocating £270m to launch the Industrial Strategy Fund to support R&D in universities and businesses for areas such as artificial intelligence (AI), robotics and batteries. A further £300m was allocated to ‘enhance the UK’s position as a world leader in science and innovation’, by supporting ‘the brightest and the best research talent, including support for 1,000 new PhD places and fellowships, focused on STEM subjects’, Hammond said.

United UK with UKRI

When the government put forward the plans to create the United Kingdom Research and Innovation (UKRI) body in 2016, its aim was to gather all the seven research councils, with Innovate UK and Research England under one roof, to create one main research funding body. The goal was to make it easier to know where to go for funding, and prevent that areas without their own councils from falling through the funding cracks. Running since 1 April 2018, UKRI has a combined budget of £6bln.

Singing the same R&D song of international attractiveness and increased funding from the government, Innovate UK and Campaign for Science and Engineering (CaSE) also hope that funding for R&D innovation will reach 2.4% of Britain’s GDP.

Dr Sarah Main, Executive Director of CaSE, told Materials World that UKRI has made a lot of progress and is working closely with the government to ensure the UK has a positive environment for science and engineering.

‘It has been establishing its organisational structure and recruiting people into senior roles, and that has gone really well,’ Main said. ‘It has got some great people leading the research councils and Innovate UK, constituency bodies and also leading the UKRI central team. [UKRI] has also launched a number of new funding initiatives which include the Industrial Strategy Challenge Fund, the Strategic Priorities Fund, and the Strengthening Places Fund. So, they have got a range of funding initiatives under way, have published a strategic perspective and they are expected to give some more detail on each research council strategy in the next few months.’

Nick Cliffe, Head of Advanced Materials at Innovate UK, told Materials World he finds the current R&D situation in the UK exciting.

‘It is quite interesting,’ he said. ‘Predominantly because we are in this new mode of operation – we’re in this together. I have been with Innovate for almost four years now, which is not quite half its life, but a decent chunk. I’ve seen a few changes along the way. [It is] very interesting how it moves forward now that we are much more closely integrated with the research councils. So I think what this offers us, is a much more seamless and integrated approach to how we fund research and development right at the early stage of academics in a lab thinking “what can we do with this?” to fully fledged commercial, or de-risk for investment commercial innovation.’

Main agrees, saying a closely integrated body is a positive change for interdisciplinary research, making it easier to navigate the funding process. ‘It is still early days. I think one of the key stimuli for the creation of UKRI was to encourage and make it easier to attract funding for interdisciplinary research,’ she said. ‘What we have heard from UKRI is that the change in the organisation has led to changes in ways of working, which they think will enable that to happen – opportunities for leaders across the different constituency parts, across the research council and Innovate UK to tackle things together – that will hopefully lead to a more joined up approach to funding things that require a range of disciplines.

‘I believe they are hopeful that organisational changes will lead to a culture which fosters that interdisciplinary research. And I think that the nature of the funding available from the Industrial Strategy Challenge Fund and the focus on addressing challenges will necessarily lead to bids for research to tackle those challenges that draws on many disciplines, because those challenges are all ones that are for big societal changes that can’t be solved by any one discipline alone, so I think that will lead to multi-disciplinary consortia, bidding for the money available for those.’

Looking to the future, Cliffe is positive about a post-Brexit R&D environment in the UK, believing it will not have a large impact on either international collaboration nor funding. Might it be an opportunity for researchers to seek collaborators more proactively?

‘I think the UK is an attractive place to do R&D, and will remain so,’ he says. ‘Undoubtedly, we still have an incredibly strong research base. We have a pretty vibrant culture of innovative SMEs and entrepreneurs. We’ve got big international companies here still that form anchor points pulling innovation through the development cycle. We’ve got absolutely top class facilities. We will be putting more money available for funds and de-risk R&D here. But in terms of the impact of Brexit, I still think it is too early to say [...] I think we’ve got everything we need for it not to have an impact, and in fact, I think of it as an opportunity to go out there and be even more active in securing international collaboration and making the UK the best place in the world to do collaborative R&D.

‘People are still going to want to come and do their research here, because this is where the ideas are. People are still going to want to come and do their research here, because this is where the facilities are, this is where the people are. It’s a great place to do R&D.’

Put a patent on it

Jason Teng, Patent Attorney and Partner at Potter Clarkson, UK, explained to Materials World that taking out a patent on an innovation can make it an asset, thus making it possible for funding to be secured. ‘The monopoly [a patent provides] can be used to increase market share and thereby reassure potential investors that legal protection is in place to enable effective commercialisation of an invention. It can also be used as a marketing tool in a variety of circumstances, to showcase a company’s ability to innovate and to highlight new technology developed by the company. The patent and even the patent application that will precede it is an item of intellectual property (IP) and thus can constitute an asset against which funding can be secured. This can be particularly important, for example, in the case of an early-stage R&D-focused company that may have few other assets and no income stream.

‘There is no “one size fits all” patent strategy for securing funding, as early-stage funding rounds may be satisfied with the filing of a patent application, while later funding rounds might require a large and more mature patent portfolio. Whatever the circumstances, a patent must be drafted to a high standard to minimise the risk of future revocation and prevent competitors from easily designing around the patent.’

What now, then?

Although there is no way to predict exactly what will happen with R&D funding post-Brexit, it is clear that UKRI, Innovate UK, CaSE and the UK government are working towards a solution where the UK exits the EU in the strongest way. Main said, ‘Our basic aim is to try to make sure the UK has as positive environment for science and engineering as possible. And so, we are quite focused on exploring the government’s ambition to increase research intensity in this country by raising R&D investment across the economy.’

Teng also remains confident saying, ‘there will be no change in terms of patents post-Brexit. Applicants will continue to be able to seek separate, national patent protection in the UK and in EU countries, as well as make use of the European and The Patent Cooperation Treaty (PCT) patent application systems that are independent from the EU regime. When it comes to other forms of IP protection, the UK government has recently issued guidance on EU design and trade mark rights in the event of a no deal Brexit. Existing rights will continue to be enforceable in the UK through an equivalent design or trade mark registered in the UK.’

The full picture remains to be seen after 29 March 2019.


ON THE TOPIC OF BREXIT

Jason Teng: The UK has long enjoyed a favourable environment for R&D investment with initiatives such as Patent Box encouraging businesses to innovate. According to statistics released by HM Revenue & Customs, over 1,000 companies have claimed nearly a billion pounds in tax relief using the Patent Box scheme in the fiscal year 2016-2017, which provides UK companies with a lower rate of corporation tax on profits from patented inventions to aid the development and commercialisation of their intellectual property. The government underlined its commitment to supporting innovation when it launched its industrial strategy 12 months ago, with the Industrial Strategy Fund being a key pillar in its plans to increase funding for research and development.

Dr Sarah Main: One of the key things we are working on is to examine and inform the government’s ambition to increase research intensity in this country to 2.4% of GDP. And that is enormously affected by the outcome Brexit in a range of ways. But, I think that is the long-term environment for the research and innovation landscape over the next decade. So, for us at CaSE, it is important to be in the midst of conversations about how the government intends to stimulate that increase in research intensity in the views of companies, businesses, the charity research sector and SMEs and all the difference constituency parts of the research and innovation landscape.

Nick Cliffe: Like every department, we are putting the mechanisms in place now to ensure that seamless transition [...] Where it will go afterwards? Who knows? We’re certainly planning for it,
we’re certainly thinking about it, and we’re certainly talking to people about it.