The Royal Society of Edinburgh is pleased to respond to the Select Committee’s request for comments on the Forward Look 1999 in connection with its Inquiry into Government’s Expenditure on Research and Development. The RSE is Scotland’s premier learned society, comprising Fellows elected on the basis of their distinction, from the full range of academic disciplines, and from industry, commerce and the professions.

In considering the levels of spending across Government, it is important to recognise that devolution has changed the patterns of political responsibility for regional components of the research and development (R&D) base and should enable regional priorities to be articulated.

The specific areas of consideration are addressed below:

The levels of spending across Government on research and development and the use that is made of departmental research and development budgets, both in terms of addressing Foresight priorities and Ministerial objectives

Basic research is the bedrock on which the ability of the R&D base to address immediate and long-term needs rests. It must be characterised by focus in areas of research opportunity and need, and diversity which gives flexibility to address new opportunities. The infrastructure costs of modern science are very large, and it would be prohibitively expensive even in a relatively substantial economy like that of the UK to maintain a world-class capability across all fields. Decisions on the levels of spending across Government, therefore, have to be made about investment priorities. Whileintellectual curiosity will always be a driving stimulus to science, an R&D base, which paid no regard to the needs of the economy and society generally, would be an unaffordable luxury. Driving the R&D base to address problems based on need alone, without heed to their tractability, is also a recipe for waste. Priorities should therefore be set in areas where there is a conjunction of tractability and need. However, although investment choices must be made, they must not lead to over-specialisation which reduces the capacity to exploit unexpected innovations. The key to retaining the flexibility to exploit such opportunities lies in maintaining a broad capability in basic science which continuously re-synthesises specific knowledge in the form of general understanding with broad applicability.

While it might seem attractive only to maintain applied R&D capabilities which directly underpin current needs, this is not a viable option. In setting priorities and objectives it needs to be recognised that the technologies which underlie most daily life (medical care, natural resource use and environmental protection) are increasingly driven by scientific innovation. The time taken to pull innovation in basic science through into application in new technologies appears to be getting shorter, producing shorter-term interdependence of basic, strategic and applied research. Basic research will continue to be the engine of strategic and applied research in developing new technologies, and must be maintained if only to support them. Moreover, knowledge developed elsewhere, which may create new technologies, is not automatically made available to another country. Effort and deep understanding are needed to acquire it and harness it to domestic needs. A national capacity to absorb foreign knowledge requires a domestic capacity to perform research at high, internationally competitive levels. A productive and robust modern economy cannot depend largely upon scientific output from elsewhere.

The trends in Science Budget and departmental expenditure on research and development in the context of trends in industrial research and development as demonstrated in the R&D scoreboard

A strong "pull" from users is the best means of ensuring that the R&D base is effectively exploited. It is important to be aware of the needs of users, and for users to be aware of the potential of the R&D base. This applies to the outputs from all the streams of knowledge and expertise in supporting and promoting industrial and economic development, in supporting government policies in health, education, environment, etc, and in providing advice to legislators and citizens.

At present, Scottish industry suffers from very low levels of investment in research and development. For instance, the multinational companies that dominate one of the most important of its industrial sectors, the information and communications industry, have hitherto undertaken virtually no research, design or even development work in Scotland, limiting interaction with universities to the provision of trained manpower. As a consequence, industry cannot pull through or exploit science base innovation as effectively as in other economies with a more mature industrial base.

Strong interaction is crucial in linking strategic and applied research to its industrial application. The success of Japanese industry in marketing new technology through the 1980s is believed to reflect their capacity to mobilise two-way flows of information between R&D and production divisions in vertically integrated company structures. Steps should be taken to ensure that the many routes by which the public purse funds the R&D base and its exploitation are managed in such a way as to maximise opportunities for efficient vertical integration, and that public/private partnerships are facilitated. The recent White Paper on competitiveness emphasised the importance of regional partnerships between the SET base, industry and statutory agencies. For these to be effective, there must be mutual understanding of the objectives and strategies of partners in the region, and they must be aware of national and European policies and opportunities. It is also important to create an environment which encourages entrepreneurial attitudes, and which is able to provide finance to support those who see opportunities for the development of innovative technologies.

The point along the basic-applied research spectrum at which public funding is replaced by private funding is a key policy issue. A helpful model of the role of public sector intervention is provided by recent developments in the microelectronics industry in Scotland. Microelectronic manufacturing, largely by inwardly investing companies, has become a major industrial sector in Scotland. It has not however included a significant R&D capability, and has not been able either to respond to technological change (unless the overseas parent companies decide to implement innovations in Scotland) nor to interact with the R&D base. During the last two years, a US company, Cadence, decided, because of the excellence of microelectronics and computer science research in Scotland, to invest in a significant R&D capability in Scotland, and to link its development with training and research within the universities. It is now hoped that other companies will do likewise as part of the Scottish Enterprise Project Alba, and that home-grown service companies will develop to broaden R&D based activity and pull more strongly on the R&D base. This hoped for pattern of closely knit activity involving different types of companies, the R&D base and government agencies is the essence of the Scottish Enterprise 'cluster strategy'. The challenge now is to create analogous development in other areas such as biotechnology, biomedicine, wider dimensions of information technology, optoelectronics, chemistry, etc.

The role of the Office of Science and Technology (OST) in advising on departmental decisions on research and development expenditure

Many modern science based issues have proved politically intractable because scientific information is inevitably incomplete on any single issue at a given time, and because Governments have found it difficult to come to terms with scientific uncertainty, both in formulating policy and in communicating it to the public. The OST needs to address the over-compartmentalisation between government departments and between scientific disciplines. The lack of co-ordination across the wider R&D base will tend to frustrate an effective, integrated use of the R&D base in policy formulation. In addition, the OST needs to inform civil servants and politicians that ‘science’ rarely produces complete answers to a given problem, and can only assist in a helpful manner by defining problems more clearly and evaluating risk.

OST’s role in co-ordinating such activities

It is important that devolution does not lead to fragmentation of basic research in the UK, and that basic R&D in Scotland remains well integrated within the UK system as part of an evolving European R&D base. It is also important that the Research Councils, which are reserved UK institutions in the Scotland Act, continue to operate within their UK-wide remit effectively and that Scotland continues to compete UK-wide for R&D funding.

Scotland, however, has an opportunity to develop distinctive solutions to the management of its R&D base. With a population similar in size to Denmark and Norway, it will be fortunate in having an R&D base which is an integral part of the larger, world class, UK R&D base. Application of the principle of subsidiarity, in which decisions and actions are taken at the level at which they can be most effective, will be vital to the successful operation of the R&D base in a devolved Scotland.

At the Scottish level, this devolved responsibility facilitates:

• greater support from the R&D base for issues that are specific to the region in health, education, agriculture, fisheries and the environment;
• promoting wealth creation and the quality of life through greater co-ordination and shared strategies between key players (universities, colleges, research institutes, enterprise companies, industry, finance and government) in ways such as those proposed in the recent Scottish Office report Scotland: Towards the Knowledge Economy; and through enhanced investment in R&D intensive industry;
• a better reflection of public values in Scotland in the creation of public policy in such areas as the environment (e.g. issues such as Brent Spar, genetically modified crops, wind and nuclear energy or hydroelectric schemes) involving innovative methods of public consultation and participation;
• support of policy formulation and scrutiny by the new Parliament and executive, though better advisory arrangements to provide that support effectively are likely to be needed.

At the UK level, the Scottish SET base must remain an integral part of the UK system of basic research. Its scale benefits Scotland and the other regions of the UK by stimulating international competitiveness, through the inherent flexibility of a large system to adapt to change whilst focusing major efforts in areas of current need and the capacity to attract and retain scientists of international calibre. Realising these objectives will require enhanced co-ordination both within Scotland and with the rest of the UK, and the OST should ensure that financial and organisational barriers to full integration in the UK R&D base are minimised or removed.

The Research Councils, which are a reserved UK function and which should remain so, and the devolved Higher Education Funding Councils should recognise their important roles in maintaining the UK SET base. At the same time, devolved powers can be a basis for more effective application of the SET base through the creation of regional alliances, as advocated in the 1998 White Paper on Building the Knowledge Driven Economy. The means whereby these latter objectives are attained will vary from region to region, depending upon the nature of devolved responsibilities. It is important that, as constitutional arrangements become more complex, means of co-ordination of the UK SET base appropriate to the new arrangements are developed, and this will be a key role for the OST.

Additional Information
In responding to this inquiry the Society would like to draw attention to the following Royal Society of Edinburgh publications which are of relevance to this subject: The Scientific Advisory System (June 1998); Devolution and Science (April 1999) and Science and Society (June 1999). 

Further information is available from the Research Officer, Dr Marc Rands