The Royal Society of Edinburgh

1	The Royal Society of Edinburgh (RSE) is pleased to respond to the UK Governments consultation on a ten-year investment framework for science and innovation. This response has been compiled by the General Secretary, Professor Andrew Miller and the Research Officer, Dr Marc Rands, with the assistance of its Fellows, and others in the Scottish science base, with considerable experience in this area.
2	Research-based universities are now regarded as important drivers of economic development. Although they are most effective in this where there are mature R&D-based industries able to "pull" on the research base, the example of the USA demonstrates that research/university "push" can also be a powerful driver of regional development and the creation of R&D based industry. It is primarily for these reasons that the USA continues to allocate about 2.5% of GDP to support tertiary education and 2.7% of GDP to support research, and why other countries (e.g. China, Singapore, India) are committing major sums to enhance universities and their research roles. In contrast, EU investment in Tertiary education is an average of 1.2% of GDP, and 1.93% of GDP in research. Research funding has also grown at rates less than that of our competitors, and the financial flexibility/viability of the universities has been severely eroded.
3	The key issues highlighted in this response are summarised below: In order for the UK's science base to remain internationally competitive, the university research base needs to consist of a diversity of research institutions, ranging from large high quality research universities to smaller institutions with research strengths in specific departments, across the whole of the UK. In Scotland, there is the potential to develop strengths in bio-engineering and biophysics, biomedical sciences, communications, environmental technologies, nanotechnology, energy technologies, the arts and humanities and in the high growth digital interactive entertainment sector. Firm and transparent performance indicators for practice-based and applicable research, should be developed well in advance of the next Research Assessment Exercise (RAE). The RSE supports the aim of understanding the full economic costs (FEC) of research, and of using this information in pricing (for all research funders) and in managing university research. However, the proposed "Transparent Approach to Costing" model could result in serious under funding for some subject areas in science and engineering. New streams for business-relevant research are important, however, it will be important that these are funded at FEC to allow those institutions with little Funding Council RAE based grant to compensate for the lack of income from the dual support system. Regional Development Agencies (RDAs) should facilitate knowledge transfer in their regions, however, it should be recognised that in some regions (such as Scotland) the industrial base simply does not exist in all areas to exploit the scope for collaboration with academia. Universities will, therefore, need to collaborate with industry outside their region or indeed outside the UK. Industry has a huge choice of contract researchers to choose from in the medical/biological/chemical disciplines but not in engineering and computing. Financial incentives, such as distinction awards, should be put in place to address this, as well as steps taken at primary and secondary school level to encourage more students to go on to study these subjects. Greater effort should be made to further public understanding of the exciting uses and social benefits of science through training science correspondents and liaison officers, resourcing projects and "science centres" where information and speakers can be made available for community meetings on areas of concern. Most attention has been focused on the transfer of technology and knowledge out of universities, however, as recently highlighted in the 2003 OECD report "The Sources of Economic Growth in OECD Countries", it is business, rather than public, R&D which had the greatest impact on economic growth. In medical research, more needs to be done to translate basic ideas into clinical practice or innovative products. In particular, the NHS and Universities with medical schools should establish a national framework for local agreements to cover partnership working, with agreed managerial and financial processes for conducting non-commercial and commercial clinical trials. While the UK is successful in winning EU research projects, in a purely financial sense, universities do poorly from European framework funds, receiving only 20% overheads with marginal cost contracts. In many European countries, the state makes available matching funding for EU framework contracts, effectively to compensate universities for the indirect costs of support. This does not, however, happen in the UK.
4	The specific issues identified by the consultation paper are now addressed below:
	*1) Are these the right areas for the Government and its partners to target over the next ten years?*
5	The RSE endorses the proposed target areas selected for the next ten years, but it will require close co-ordination between those addressing the various areas.
	UK Science: Performance and Impact on Innovation 2) Which strengths of the UK science base could be further developed; what are the weaker areas that need to be addressed; and what are the risks to the UK’s continued production of internationally competitive levels of research?
6	The Government has been conducting various forms of foresight exercises since the mid-nineties, either being driven by the desire to spot winners or by industries willing to engage in very long-term speculation whilst being unwilling to reveal their own strategic thinking in the medium term. However, it should be recognised that futures’ gazing has not had a great history of informing disruptive technologies. Most of the really important advances may come from interaction between the physical sciences and engineering on the one hand, and the biological sciences on the other. The immensely fruitful interaction between the physical sciences and engineering has driven the industrial revolution for the past two centuries and it is increasingly likely that the development of bio-engineering and biophysics will drive the next century at least. Scotland also has research strengths in biomedical sciences, communications, environmental technologies, nanotechnology and energy technologies.
7	Underlying this question, however, is a more worrying trend towards the highly selective funding of a very small number of universities with large science and engineering Faculties based on the results of the Research Assessment Exercise. This policy is at variance with the history of innovation, as scientific discoveries have occurred in almost any department, regardless of its RAE score. For example, liquid crystals were discovered at Hull, one of the most successful muscle relaxant drugs, atracurium, at Strathclyde, amorphous silicon at Dundee, all in moderately rated units.
8	What large and well-funded units do have, however, is an ability to take discoveries from round the world and incrementally improve them. However, it is a mistake to imagine that a small number of quite large institutions of very high quality can exist in isolation. They need to rest on a base of institutions, perhaps less prestigious, but where capable staff can do valuable work and in which new staff can make a reputation and possibly be recruited to the top research groups. There exists a continuous spectrum of distinction in research.
9	A healthy system must be dynamic and flexible. The danger of creating new demarcation lines is that they may become very rigid and hierarchical, inhibiting cross-boundary interactions. Depending upon the regional distribution of differentiated institutions, it may also limit the expectations for regional economic growth and cause further imbalance in demographics between regions. This approach will also run the risk of an overly great focus of people and resources into a narrow range of topic areas. This may be good for the research output but will have detrimental effects on the range of knowledge and skills available to the UK economy.
	3) In which key technology-based sectors does the UK have the potential to maintain and grow internationally competitive value added over the coming decade? What are the barriers to capitalising on our strengths and addressing areas of relative weakness in business innovation and R&D? How can investment in the UK science base and Government support for business R&D best contribute to that growth?
10	In addition to the research strengths identified above, Britain has recognised advantage in aspects of computing science, in the arts and humanities and in the high growth digital interactive entertainment sector.
11	In terms of the potential barriers to capitalising on these strengths, Scotland’s economy is dominated by small to medium sized enterprises (SMEs) and it is widely recognised that it is extremely difficult to achieve effective interactions between our universities and this highly diverse business sector. The importance of this issue was recognised by Technology Ventures Scotland, which produced a report Bridging the Gap (2003) specifically to considering the barriers between SMEs and the intellectual capital residing in our universities. (See response to Question 9 below)
12	In addition, one of the hazards with the creation of the entrepreneurial university model (including spinouts and consultancy) is the increased profile given to the value of intellectual property. As a consequence, universities and individual academics have begun to seek early financial reward for the intellectual property they acquire. This can create a barrier to engagement with the SME sector, since many small companies become concerned that they may face significant costs in gaining technology access without any guarantee of gaining business benefits.
13	Another key issue is that more emphasis needs to be given to increasing and improving the technician skills of the UK workforce, where there are major skills shortage in industry at the basic and intermediate levels. There is a need for a more significant take up of technician training schemes such as Advanced Modern Apprenticeships and more recognition that training as a technician leads to a respected professional status in its own right, with excellent employment and career prospects. Also for those who have the ability, it can provide a route to higher education and career success that is every bit as valid as the more traditional A level route.
	4) In order to inform decisions on the future investment framework, and building on the Research Councils’ extensive consultations with stakeholders, in what areas are there opportunities for the UK research base to excel and contribute to the economy and society, which might form the basis of future strategic research programmes over the next ten years?
14	The special programmes identified by the Research Councils are key areas that should be supported over the next decade.
	Management of the Science Base 5) In the light of the changes to be made to the next RAE, how can funding mechanisms build on existing resources and research assessment reforms to reward excellence and underpin sustainability?
15	The RSE agrees with Sir Gareth Roberts Review’s recommendation that Research Quality Assessment panels should ensure that their criteria statements enable them to guarantee that practice-based and applicable research are assessed according to criteria which reflect the characteristics of excellence in those types of research in those disciplines. It will, however, be important to establish firm and transparent performance indicators for these areas, well in advance of the assessment. There is as yet no accepted measure of applied research or knowledge transfer in terms of excellence, nor has such measurement been attempted on a discipline basis.
16	Nevertheless, in developing support for applied/practice based research it should be recognised that attempts to encourage universities to adopt the additional goal of knowledge transfer will endanger the research base unless adequate additional funds are provided. Universities have a major teaching role and a major role in fundamental research. This means that commercialisation has to take its place among these other priorities. Universities can make a contribution to commercialisation but their ability to be mobilised "in a major way in support of economic development" should be kept in context. If sufficient funds for this new activity are not provided, the attempt to include knowledge transfer as a goal of universities may damage the universities without refreshing UK industry.
	6) What are the main barriers or challenges to the achievement of a sustainable public research base in the medium term? What further action could the Government take, in partnership with universities and other funders of research, to create robust incentives on all parties to work together to deliver greater financial sustainability of the UK’s research base?
17	The RSE supports the aim of understanding the full economic costs (FEC) of research, and of using this information in pricing and managing university research. Ensuring the long-term sustainability of research is an institutional responsibility and within institutions the extent of the problem depends on approaches to cost recovery but also institutional accounting practices. Institutions which are making surpluses after full depreciation of assets are currently generating sufficient capital resources for sustainability of their businesses as a whole. However, for institutions with only small levels of Funding Council block grant (QR) the paper’s proposals will make it harder to grow research capacity in new disciplines or research areas.
18	In addition, whilst it is true that the Transparent Approach to Costing (TRAC) methodology has moved us substantially closer towards a fuller understanding of the real costs of research taken in the round, it is not clear that this highly aggregated methodology can be easily expanded to cover the costs of research carried out in a large number of substantially different disciplines. There will continue to be debate on a project-by-project basis between researcher, institution and external funder as to the validity of QR or other funds being used to underpin a particular activity. Certainly, to enjoy support across the higher education (HE) sector, this methodology will have to reflect in a transparent way the real costs of research, and this will be far from easy to achieve. The original TRAC methodology, for example, is unacceptable to the European Commission as being far to broad-brush in nature and whilst we would strongly support the development of better models we are under no illusions as to the difficulties that this would entail.
19	Full economic costs will also vary by subject and by geographic location. There is a broad consensus that the proposed model will result in serious under funding for some subject areas. In typical Engineering/Science projects the grant would be either no better than at present, using the 70% of FEC formula, or actually less using 60% of the FEC formula. A project with a large item of equipment, which is expected to attract no overhead, will receive less than the direct costs and would therefore no longer be viable. It could be argued, therefore, that the Research Council should pay either 100% of the FEC cost, or pay full 'traditional' direct costs plus an affordable percentage of academic investigator costs and indirect costs. Variations should be allowed but "in bands" where claims for inflated prices would need to be fully justified. Some of these issues may be dealt with in the current ten university pilot scheme under the auspices of the Joint Costing and Pricing Steering Group (JCPSG).
	7) How could funding for universities provided by Government and other funders create stronger incentives for the effective creation management and usage of the research base infrastructure over the next decade?
20	The science base is currently being skewed by medical charities which have insisted that in their funding of research, that every pound raised by the charity be matched by a pound from the tax-payer. However, desirable as the objectives of these charities may be, they are by this activity draining funds from elsewhere in the science base. The Government’s move towards Full Economic Costing is an important step towards establishing a more strategic approach in this area, but there remains doubt that this will provide a real solution. The issue of matching the funding is now passed to universities, which may not be best equipped to solve it.
21	An emerging issue is also supporting the capital funding needed to address applied research and knowledge transfer, together with the teaching needs associated with flexible delivery of postgraduate training at Masters and Doctoral levels. This is particularly important for emerging relevant for European Research Area opportunities.
	*8) What is the optimal means of developing access to large research facilities at national and international level? How should funding of large facilities be prioritised?*
22	The question of how the provision of large facilities can be tensioned against other needs of the science base is important. In principle, the only real answer is through the Haldane principle, i.e. that the choice of which research to support be made on scientific criteria, at ‘arms length’ from political considerations. Since its inception ten years ago, EPSRC has tried several methods of both funding and initiating major facilities. Attempting to charge the full costs to individual grant holders severely distorted the system, whereas hiding the costs, however well intentioned, infuriated those who were not dependent on such facilities. There has to be a balance, and the current international assessments of disciplines being carried out by EPSRC may offer a possible model. The UK should also recognise the benefits to the host nation of large international central fascilities.
	Knowledge Transfer and the Lambert Review 9) The Lambert Review was based on extensive consultation during 2003. Reactions to the analysis and proposals set out by the Lambert review, and in particular to the Government’s proposed response, are very welcome.
	New funding streams for business-relevant research and knowledge transfer
23	There exists a continuum of interactions between universities and industry/business, including the newly formed Scottish Intermediate Technology Institutes, Scottish Enterprise’s Proof of Concept Fund and the Scottish Higher Education Funding Council’s (SHEFC) Knowledge Transfer Grant. However we note that the broad range that currently exists in Scotland, varying in scale, intensity and duration, represents an essential aspect of ensuring the necessary flexibility to respond to opportunities of all types. Nevertheless, while it is relatively easy to get first stage funding for a good business plan, there are still difficulties in accessing second and third stage (proof of product) funding and in financing changing designs of sophisticated prototypes for high tech clients en route to a tested final product.
24	However, for those institutions with little Funding Council RAE based grant, seeking to move towards more business-relevant research, the level of support often provided does not compensate for the lack of income from the dual support system. This results in an incentive for the University to divert its activities towards more fundamental (and potentially less economically valuable) research. Should Regional Development Agencies be tasked with funding business-related research activities, this must be at FEC to ensure sustainability, as for Government Departments.
	A greater role for the Regional Development Agencies in facilitating knowledge transfer in their regions
25	Regional Development Agencies are not the natural bedfellows of the higher education and Research Institutes and they need structures and incentives to work together. Some of these mechanisms already exist in Scotland, for example, through the Conditions of Grant imposed on Universities by SHEFC, but SHEFC and Scottish Enterprise have also been looking at further means of promoting Knowledge Transfer processes. In addition, in 1996, the Royal Society of Edinburgh developed, in partnership with Scottish Enterprise, a national strategy for commercialisation (the Technology Ventures Strategy), which aims to encourage more of Scotland's science and technology to be commercialised in Scotland. This Strategy is co-ordinated by Technology Ventures Scotland (TVS) and is just one example of a number of ways in which this Society continues to work with Scottish Enterprise.
26	However, despite the considerable emphasis placed on encouraging commercialisation of research-generated ideas, one of the major weaknesses of the Scottish economy in this respect is the absence of locally-based businesses capable of developing such ideas. The current model is very much one of higher education institutions (HEIs) 'pushing' research findings out into the community rather than industry 'pulling' such ideas and actively developing them. Scotland does not lack 'institutional push'; it does, however, lack 'industry pull'. Of the top ten publicly-quoted companies in Scotland, five are either banks or utilities and as a country, we have too few major directly research-dependent industries. Most Scottish companies are small to medium sized enterprises (SMEs), often in rather ‘traditional’ sectors. In many of these SMEs the barrier to knowledge uptake is that the companies are not able to analyse their business process in a way that allows them to envisage technological solutions. Moreover, there is a paucity of university staff with the knowledge, ability and time to undertake the kind of business or process analysis required to interact successfully with these companies.
27	There is, therefore, perhaps an insufficient recognition that in some regions the industrial base simply does not exist to exploit the scope for collaboration with academia. In some cases world class researchers cannot find any local businesses to work with and need to collaborate with industry outside their region or indeed outside the UK. It is not easy to see how this can be addressed beyond encouraging such local collaboration as can take place, promoting academic spin-outs and attracting appropriate inward investment. In this context, the Royal Society of Edinburgh in partnership with Scottish Enterprise has run a successful series of Enterprise Fellowships since 1997. These one-year Enterprise Fellowships have equipped post-doctoral researchers, or younger lecturers, with the hands-on business knowledge to enhance the commercialisation potential of their own research. They encourage the establishment of new start-up companies and allow young researchers to devote time to develop their research from a commercial perspective. In Spring 2001, Scottish Enterprise commissioned SQW Ltd to carry out an independent review and evaluation of the 13 Enterprise Fellowships that had been completed at that point. Its report concluded that: "The Enterprise Fellowship programme is shaping up to be an excellent contributor to economic development in Scotland. It is enabling progress to be made in the commercialisation of university research and the establishment of technology-oriented new businesses." The companies which these Enterprise Fellows have created to date include: Intense Photonics, Microemissive Displays, Surfactant Solutions, Edinburgh Biocomputing Solutions, Photonic Materials, Kymata and Intrallect. In recognition of this, Scottish Enterprise announced this year a major expansion in the number of Enterprise Fellowships to be run by the RSE, with funding of £5.5 million for a further 80 new Enterprise Fellowships in Scotland. £50 thousand has also provided by the Gannochy Trust for an Royal Society of Edinburgh Innovation Award to recognise individual young innovators in Scotland.
28	However, spin-outs may not be practical in all cases. In some cases the international quality and complexity of the research in our institutions means that it can only be exploited by international companies. Collaborative research with such companies can bring real benefits to the institutions, and to Scotland and the UK, and improve our standing as a centre of excellence at an international level. A key objective must, therefore, be to increase the number of companies performing effective R&D in these regions. This will be a long-term goal and, therefore, while efforts to attract inward investment should continue, these should be matched with a comparable development of Scotland's indigenous industry. It has to be recognised that building an R&D culture and capability is both risky and expensive for smaller companies and is, therefore, unlikely to happen without significant public investment.
	Development of model contracts and a protocol for intellectual property (IP) to speed-up IP negotiations
29	Issues of IP are often difficult to resolve. Universities seek to recover the often onerous direct and indirect costs associated with the development of IP and its protection through patenting or other means. In addition, given that not all investment in IP is successful, universities frequently seek an element of risk-related profit as well. However, universities also recognise that they are usually not the most effective vehicle for exploitation of IP. They will wish to own the research (for publications, RAE ratings and further research) but will normally wish to have agreements on the exploitation of IPR with commercial partners in which the interests of all parties (the university itself, the academic staff involved in the invention and the commercial vehicle) can be fairly accommodated. This position is now common amongst universities in the UK, though skill in handling IP certainly varies across institutions. Further information on these issues can be found in the joint Scottish Higher Education Funding Council/Scottish Enterprise report on Knowledge Transfer and in the Technology Ventures Scotland report "Bridging the Gap". In practice however, very few spin-outs reach substantial value, and when they do, they usually have had so much additional funding and self-generated innovation that the original invention responsible for the spin-out is only a small part of the final value realisation. It may, therefore, be more practical for Universities to cut ‘quick and dirty’ deals for 10% of the equity, and let such spin-outs happen as often as possible, with the emphasis on ‘letting many flowers bloom’.
	Businesses to take a greater role in influencing university courses and curricula
30	Guidance to students about the range of opportunities in the job market is vital, but manpower planning has a history of failure. It must not be assumed that university education is generally for a specific job. It is designed to develop capacities that are of wide applicability. The proper relationship between business/industry and the universities is one which recognises the respective strengths of each, and plays to them in practical partnerships, as was the case in graduate apprenticeship schemes of the past.
31	It should also be noted that prospective students are far more intelligent and far-seeing than they are normally given credit for, and they do understand that poorly paid employment in science and engineering-based industries, requiring years of intensive and difficult study, is not intrinsically attractive. This, coupled with poor school teaching, especially in mathematics and physics, is leading to a major crisis in all developed countries. The economic solution: far better pay for scarcity-subject teachers and far higher salary levels in the science and engineering-based industries appears to offer political and commercial problems that have proved insoluble hitherto. Unless these problems are solved, universities will continue to abandon core science subjects, as many already have, and move into areas where they can be sure of filling their places.
	Education, Skills and Public Engagement with Science 10) Following the 2002 review by Sir Gareth Roberts of the supply of scientists and engineers and the Government’s response, what is the emerging evidence on the prospects for the supply and demand of science, technology, engineering and mathematics skills? What further steps could the Government take to ensure that the supply of these skills is responsive to the demands of the economy over the coming decade? How could women and other low participatory groups be more encouraged to pursue higher education in science, technology, engineering and mathematics and to pursue careers in these areas?
32	Industry has a huge choice of contract researchers to choose from in the medical/biological/chemical disciplines but this is not so in engineering and computing. Engineering in the UK attracts insufficient high quality undergraduates (unlike medicine) and as a result there are too few high quality graduates in this area. Job opportunities for engineering graduates abound in industry, especially in the oil and gas industry, with the shortfall in engineering graduates being filled by graduates from overseas. Few engineering graduates, therefore, continue into postgraduate and postdoctoral research at university. In general, the engineering industry does not reward the PhD with an enhanced salary until very late in a career. As a result, the net present value of a research degree is strongly negative. However, in certain areas, such as computer aided engineering, newly qualified PhDs are actively sought after and can demand significantly better salaries than before their postgraduate training. To obtain high-class engineers and scientists, the country needs good educators. However, with the already insufficient number of academics and researchers in the engineering sciences increasingly attracted into industry, there is likely to be a serious shortfall of such scientists and engineers in universities. This could result in HEIs being unable to provide well-qualified researchers in the future.
33	In engineering sciences it is now difficult to persuade top graduates to study for a PhD and, consequently, difficult to recruit academic staff from the UK. A primary consideration must be to make a career of teaching and research within the university more attractive and this includes attention to the laboratory and teaching infrastructures, which have declined over the last few years at a worrying rate. Financial considerations are also very important in terms of encouraging graduates to continue at university for postgraduate study. The difference between a Research Council studentship and an industrial starting salary in a high technology company can be very large.
34	It is probable that unless addressed, shortages in academic/research staff in these areas could lead to less well-educated graduates which industry will find unattractive. Incentives have to be in place to address this. In Northern Ireland there is a select ‘distinction award’ aimed at retaining some of the best students. These awards are split between science and engineering, and the humanities (the ratios favouring science and engineering), and then split between institutions based on graduating class numbers, Research Assessment Exercise results and any embargoes due to poor completion rates. There would be merit, therefore, in a Scottish ‘distinction award’, similar to that in Northern Ireland, to provide material inducements to postgraduate study.
	Encouraging women to purse careers in science, technology, engineering and mathematics
35	The UK does not need more students studying science in general to satisfy industry's needs. It needs more high quality students studying quantitative sciences and better graduates with better rapport with their subjects as a preparation for their careers in industry and commerce. The decline in physical sciences and engineering has to be arrested and the UK needs to take a more positive line in encouraging students to study the "hard" sciences and engineering. If the quantity and quality of those admitted to undergraduate degrees in these subjects can be improved, the numbers going on to postgraduate work should increase accordingly. Therefore, steps need to be taken at primary and secondary school level to encourage more students to go on to study these subjects, as noted above, as well as seeking to attract more girls to study such subjects.
36	However, if the posts are currently unattractive and few in number, then it is hard to see why they should be attractive to women any more than to men. The problems identified are as much associated with low innovation and R&D spend by companies as anything else. Scientific and technical careers will be more attractive where those entering them can see the prospects of continuity of funding. Mechanisms to support researchers in stepping from one project to another are still in short supply and a system of transition grants could be useful in facilitating this; these should include the opportunities for further development of skills for researchers during the course of their careers.
	11) Do UK business leaders and managers have the necessary skills and knowledge to exploit new technology and research to maximum effect? Where are the areas of greatest weakness and opportunity in terms of sector size of enterprise and level of management? What can and should be done to bridge the gap?
37	In terms of new hi-tech companies, there is a significant risk to the growth of innovative companies once they have proven their innovation in the market and are beginning to reap commercial rewards. At this stage, it is fairly common to need to grow the skills of the senior management, or to replace them with more experienced management with the founder taking on the role of ‘technology strategist’ or similar. This, coupled with the ‘Venture Capital Clock’, which leads Venture Capitalists (VCs) to seek a return on their investment between 5 and 10 years after investing, leads to a prevalence towards a trade sale. It is often much easier to obtain an exit for founding management and VCs by selling the business, than by refinancing and building a new management team. As most well-funded technology businesses are based overseas, often from the USA, this leads to the continuing loss of corporate headquarters from the UK. There are a number of important factors, ranging from the relative lack of larger amounts of follow-on investment capital, capable of giving VCs an exit, to the relative liquidity and power of the USA’s technology stock markets, which are difficult to address.
	12) What should the role of Government be in improving the interaction between science and society? Are there areas where Government could improve the promotion of science in society? How can we improve public confidence in the Government’s use of science? What should we be aiming to achieve in this area in the next ten years?
38	Scientific advances are now so rapid and sophisticated that there is a danger that they will be moving so far ahead of society's understanding that scientists and technologists will be viewed as part of a powerful and dangerous power structure that needs to be curbed. In this situation those individuals in the media who have the responsibility of translating new developments for society's appraisal have an almost impossible task given the demands of the public (and editors) for an eye-catching story, especially given the custom of some special interest groups to show bias in interpreting scientific results. In addition, the scientific community has a responsibility to communicate discoveries to society more effectively, and to have a greater understanding of public concerns. It is therefore evident that much greater effort should be made to further public understanding of the exciting uses and social benefits of science through emphasis on training science correspondents and liaison officers, resourcing projects and through greater use of public consultation exercises and "science centres" where information and speakers can be made available for community meetings on areas of concern.
39	An educated and informed electorate will respond to science-based policy decisions within the national political arena provided that Government and the industry concerned are prepared to adopt an ‘open information’ approach. In Britain the Freedom of Information Bill should address this issue in part. Public caution is understandable and desirable but present attitudes to scientific advances and their commercial exploitation are rarely based on rational appraisal and often exhibit a failure in popular understanding of risk.
40	In Scotland the Consultative Steering Group for the Scottish Parliament has also recommended that techniques for engaging the informed general public in debates about the future of science and technology, such as consensus conferencing, should be pursued in order to widen the base of participation in political decisions. This degree of openness to more imaginative approaches should be welcomed and encouraged. Events involving senior school pupils building on the concept of consensus conferencing, by organisations such as the British Association and the Royal Society of Edinburgh, represent useful initiatives at developing public awareness of science issues.
41	In general, however, there is insufficient understanding of the wider social and cultural aspects of science and that insufficient attention is paid to the critical role of science teaching in schools as a preparation for both a career in science and for a wider public understanding of such issues. With the difficulty of obtaining teachers with science and technology skills, particularly in Primary Schools, it is even more important to find opportunities to expose children to scientific concepts. The ‘Generation Science’ project, which has grown out of the Edinburgh International Science Festival, tours highly entertaining scientific demonstrations around Scotland’s schools (last year presenting shows to over 70,000 children). This project is overwhelmingly private-sector led, and should be encouraged to grow throughout the UK.
42	In addition, a number of new Science Centres have been created in recent years, largely funded by Millennium Lottery awards. Now these centres are completed, they are finding it difficult to operate commercially, as was envisaged. This has resulted in the lack of investment in replenishing the displays (which is essential) and a tendency to cut costs by reducing staff. However, there are no substantial science centres in the world which exist without subsidy and such centres deserve ongoing public support.
	Partnership Funding 13) What is the outlook for business investment in R&D over the next decade? How can business investment contribute to the success of a ten year framework for science and innovation?
43	For many years now, the UK Government has promoted a change in culture within the university community, encouraging greater dialogue, partnership and collaboration with business and industry, and the Royal Society of Edinburgh has played a role in supporting this. Most attention has been focused on the transfer of technology and knowledge out of universities, with less being done, until recently, on the transfer into companies and innovation within companies. The importance of this, however, was recently highlighted in the 2003 OECD report "The Sources of Economic Growth in OECD Countries", which showed that it was business, rather than public, R&D which had the greatest impact on economic growth.
44	However, the response of industry has been patchy: for example, small to medium-size enterprises (SMEs) have not sought to take as much advantage of links with academia as might be hoped. In many of these SMEs the barrier to knowledge uptake is that the companies are not able to analyse their business process in a way that allows them to envisage technological solutions. Moreover, there is a paucity of university staff with the knowledge, ability and time to undertake the kind of business or process analysis required to interact successfully with these companies. (See response to question 9).
	14) What are the research aspirations and funding plans of the medical charities over the coming next decade? How best can Government and charity funders work together to enhance the impact of their complementary research efforts on national and global health outcomes and contribute to the development and maintenance of a sustainable UK science base?
45	It will be important to continue with the current dialogue with charities and others to ensure full costs are paid to researchers on all research contracts. The consequences of low overhead rates are experienced not only by the groups that actually undertake the research, but across whole institutions. (See response to question 7).
	15) Are there ways in which Government support for medical research – in terms of both institutions and the distribution of funding - could be better structured in order to maximise the benefits of investment from partners in industry and the medical charities? What should Government and the NHS be doing over the ten years of the science and innovation framework to ensure successful partnership working in medical science in the long term?
46	The partnership of medical research funders in the UK have still some way to go to improve the translation of basic ideas into clinical practice or innovative products. Most "clinical research" in the NHS is undertaken by University clinical academic researchers who also provide leadership within the NHS and the relationship between Universities and the NHS is crucial to the successful exploitation of medical research. To strengthen these relationships, the NHS and Universities with medical schools should establish a national framework for local agreements to cover partnership working, with agreed managerial and financial processes for conducting non-commercial and commercial clinical trials.
	16) In light of the second Wanless Report, where are the weaknesses in public health research capacity? How can we improve the links between academics and deliverers of public health, to ensure a strong evidence base both on causality and on effective, well-targeted interventions? How should the roles of the various research bodies be better co-ordinated in relation to public health, to ensure the public health research requirements are met in a structured and coherent way?
47	There is increasing difficulty in performing clinical trials in the National Health Service system with more and more time being required to gain approval at local level, either for national (MRC) trials or locally generated research. This also coincides with NHS consultants coming under increasing pressure on the use of their time, and that of their support staff. One potential solution would be to support more academic leadership of clinical research (both clinical trials and translational research) in the major hospitals. Alternatively, due weight could be given to the importance of having clinicians take responsibility for clinical research, with an appropriate allocation of time in their job descriptions for this activity.
48	Establishing causality with broad based Public Health interventions is often difficult (e.g. tobacco and lung cancer, since those who smoke do not necessarily get lung cancer). They will only be established with shared understandings and good communication between policy makers, academics and practitioners, and well-designed initiatives which are ‘evaluatable’, such as those being developed by the Glasgow Centre for Population Health. This new initiative is a collaborative project between the City Council, the NHS Board and Glasgow University, funded by the Scottish Executive.
49	There should also be increasing collaboration and partnerships between public health research bodies. One area where a further look should perhaps be undertaken is in the linkages between human and animal health. Creutzfeldt-Jakob disease of the brain has been a timely reminder that alarming and fatal hazards can appear in the human population but the cause often lies in the animal population.
	Science and Research across Government 17) What are the public service objectives and priorities for science and research over the next decade to contribute to policy development service delivery and the wider economy? How can the wealth creation potential of investments in R&D across different Government programmes be increased?
50	The wealth-creation potential of Government investment in science could be enhanced by using public sector funding to leverage private sector investment in R&D. Innovative technology businesses still experience severe difficulties in obtaining access to public sector markets in the UK. There is a natural risk-averse nature to public sector purchasing which makes it extremely difficult for them to procure new technology from smaller early-stage UK firms, as the risk is simply too great for them. It is much easier and safer to buy less innovative technology from large, usually US-based, corporations. There should be special measures which specifically drive public sector procurement to encourage the purchase of innovative technology from smaller early-stage companies.
	18) How can Government best secure greater synergies between research funding, investment and strategies across different public programmes, and link the Government’s overall objectives for research outputs with the capabilities in the UK science base?
51	Greater co-ordination between the policies and objectives of different Government departments is essential
	19) How can the Government and the Regional Development Agencies and their equivalents in the Devolved Administrations help integrate funding of science research on a predominantly national basis with development and delivery of regional economic strategies? In particular how can Government and RDAs strengthen partnership working to facilitate more effective knowledge transfer and research collaboration?
52	A number of these issues are developed in response to question 9. The RDAs have a key role to play in engaging the company base in R&D and knowledge transfer.
	20) Are there barriers facing business and the science base in effective engagement with EU research programmes? How can the UK more effectively influence and benefit from EU research funding and policies? In what ways can action at Community level add value to UK science and innovation policies? How can national and community funding complement each other more effectively?
	Barriers facing the science base
53	Figures from participation in the Framework 5 programme in 2000 showed the UK to be doing reasonably well, with UK participants in more than 50% of all funded projects and a 16.54% participation rate (slightly higher than nearest competitors Germany and France) and with total income to UK participants amounting to 17.7% of FP5 spending, against a ‘juste retour’ of 15.8%.
54	However, this is not a straightforward issue. In a purely financial sense, universities do poorly from European framework funds, since almost all universities utilise the marginal cost contract approach rather than the shared cost contract. Marginal cost contracts offer only a small contribution to the indirect costs incurred by universities in carrying out research, and on a purely financial basis undoubtedly require subsidy from the universities' core income. A difficulty here is the different way in which university research is funded in different parts of Europe; in many European countries, the state makes available matching funding for EU framework contracts, effectively to compensate universities for the indirect costs of support. This does not, however, happen in the UK. The 20% overhead figure imposed on framework contracts is, therefore, a compromise which leaves UK universities substantially out of pocket.
55	Most UK universities, however, have taken the decision to subsidise Framework research contracts on the basis that the strong and worthwhile collaborations and research networks that have developed throughout Europe have immense intangible benefits. For example, raising the level of research performed, enhancing the research capacity, developing some genuinely 'European' young scientists and collaborations of continuing character, and levering additional funds from other research funders. These intangible advantages outweigh the poor financial rewards from earlier Framework programmes. However, there remain a broad range of opinions on issues such as whether the programmes lead to appropriate and exploitable outcomes, whether there is enough basic research, whether the right disciplines are included and excluded, and whether there is too much politics overriding science.
	Complementarity of national and community funding
56	In terms of community funding, a European Research Council is being proposed (e.g. by the European Research Area (ERA)) to help break down the perceived fragmentation of European research by providing support for high-quality, long-term, curiosity-driven research, based more on scientific decision as opposed to political decision, devoid of the principle of juste retour, and as such providing funding for the top research excellence in the ERA. In general, countries with large effective research bases wish to see these preserved whilst smaller countries with ineffective research bases favour the development of stronger European facilities. The RSE's belief is that the UK would wish to see any European Research Council complement, and add to, rather than replace or draw resources from, UK national Research Councils.
57	Hitherto, applications for Framework Programmes have been judged both by permanent officials, in order to ensure strategic added value and by standard scientific peer review, based upon ad hoc panels. Clearly, a European Research Council operating purely on the scientific merit of proposals which put more emphasis on long-term research, but in a way which also added to, and complemented, the work programmes of the Research Councils, would have considerable attraction for universities. Certainly, if a European Research Council were to be set up its remit should be limited to those programmes and areas that cannot be supported by the individual states within the EU and that require concerted inter-state interactions. For example, when the cost or specialisation of a research base cannot reasonably be supported by a single state (particle physics and astronomy are traditional examples but the technology of impact now extends strongly into the biological sciences) or transnational research that inevitably crosses national boundaries, such as marine pollution and global warming.
	Additional Information
58	In responding to this consultation the Society would like to draw attention to the following Royal Society of Edinburgh responses which are of relevance to this subject: A Science Strategy for Scotland (July 2000); Review of the supply of scientists and engineers (August 2001); Scottish Higher Education Review (January 2002); Research and Knowledge Transfer in Scotland (September 2002); Review of Research Assessment (December 2002); A Vision for the Future (December 2002); UK Science and Europe: Value for Money (January 2003); Science and the Regional Development Agencies: The Scottish experience (March 2003); Lambert Review of Business-University Collaboration (April 2003); The Future of Higher Education (May 2003); The Role of the Universities in the Europe of knowledge (May 2003); The Sustainability of University Research (September 2003); Review of Research Assessment (October 2003).
	April 2004