1.  The Institute of Physics is an international learned society and professional body for physicists. With over 23,000 members it looks after the interests of professional physicists and promotes physics education and understanding to all. Institute of Physics Publishing, a wholly-owned subsidiary, is a major publisher in physics.

  2.  The Institute of Physics is pleased to submit evidence supplementary to its submission of 13 March, 1998 [1]. Several developments have occurred in the area of UK innovation policy during the last year. In particular the budget allocations announced from the 1998 Comprehensive Spending Review, the joint DTI-Treasury Green Paper Innovating for the Future: Investing in R&D [2] and the more recent DTI White Paper Our Competitive Future: Building the Knowledge Driven Economy [3]. In this supplementary evidence the Institute will specifically follow the issues raised by the DTI's Competitive White Paper and refer to the paragraphs of that document in round parenthesis.

THE IMPORTANCE OF UNIVERSITY PHYSICS RESEARCH TO INDUSTRIAL INNOVATION

  3.  The Institute believes that the positive impact on the national economy of publicly funded scientific research has been amply demonstrated [4]. The Institute notes the relative economic decline of the United Kingdom during the twentieth century (1.3), yet today the UK has a world class science, engineering and design base (2.32). The Institute is drawn to question whether the dominant difficulties with wealth creating innovation lie not with the quality of the UK science base but, with the competitiveness of British industry and its ability to draw full benefit from scientific and technological innovation.

  4.  The Institute reiterates that the greatest economic benefit from publicly funded physics research lies not in the direct exploitation of specific discoveries or the related intellectual property, but in pervasive and intangible benefits. These benefits include the creation of new networks, the development in individuals of tacit knowledge and the transfer of codified knowledge and analytical skills from academia to industry and the service economy. The outflow of trained people at graduate and post-graduate level is certainly the key output of the university research system [5]. The Institute is encouraged by the mobility of knowledge and has been most impressed by the importance of physicists and physics to sectors as diverse as financial risk management (derivatives), the development of internet communications and innovation in medical diagnosis and therapy.

  5.  Occasionally specific technologies and discoveries will emerge directly from our university physics laboratories, some of these may spawn whole new industries and government is well advised to foster this process (2.41, 2.42, 2.44, 2.45). The Institute has been pleased to note several key technologies that have spun out of UK university physics laboratories in recent years, to international admiration and acclaim. In particular the Institute notes the recent interest, reported in MIT's magazine Technology Review, in the work of Richard Friend and co-workers at Cambridge Display Technology [6].

  6.  Narin and coworkers of CHI Research in the United States have elucidated some of the key issues involved in understanding better the relationship between university research and industrial technological innovation [7]. These authors have considered the rapidly increasing level of US patent activity and shown that 73 per cent of the research cited by such patents was undertaken not by industry but by publicly supported universities and laboratories. In addition these authors have shown that US firms have disproportionately increased their citation of US and UK academic research while their citation of French, German and Japanese research remains less frequent and has increased far less dramatically [7, figure 1]. The industrial importance to the US of UK academic research is particularly impressive. Narin et al highlight a strong correlation between the nationality of patenting firms and the county of origin of the research papers. Therefore it would appear clear that a strong UK science base will indeed be vital for a strong and innovative industrial base in the UK (1.9).

  7.  The recent surge in patent activity in the United States has itself been the subject of investigation [8]. Kortum and Lerner have concluded that this surge is not a consequence of changes in the US legal framework but, rather, that it does genuinely reflect an increase in US innovation.

  8.  These studies are also consistent with the view that for physics it is applied science that is closest to industrial innovation as evidenced through patents. It would be inappropriate, however, to conclude that publication in applied physics journals necessarily indicates research groups which have been directed by research managers to focus their interests on solving technological problems. The Institute draws the Committee's attention to the conclusions of Etzkowitz and Webster when they say [9]:

"The intellectual transformation of the research role of the professor that ensues from the capitalization of knowledge is that instead of thinking only in basic research terms they also think in terms of applied research funding and commercializable results. Rather than auguring a shift from basic to applied research orientation, this broadened focus typically occurs through adding on another activity as faculty adopt a "layered" rather than a "substitution" strategy of research resource seeking and problem selection. Faculty keep their basic research program going but they also add on an applied project and interrogate each research line for implications for the other."

  9.  In considering issues of technology spin-out from university physics departments it is important that policy-makers do not lose sight of the principal (people-centered) benefits of all university physics research, discussed earlier.

  10.  There have been several important studies of linkages between UK university scientific research and industry. PREST's recent substantial study considered the areas of expertise of university owned companies [10, Table 24]. The Institute would wish to highlight that the very wide applicability of the discipline of physics may well result in physicists contributing to university owned enterprises in many industrial sectors.

  11.  The White Paper discusses the importance of collaboration between all stakeholders in the innovation process (3.2). The Institute has long held the view that physics is special in that its applications and relevance pervade a huge range of human activity. The Institute has noted with interest a recent Australian study which has shown that in that country academic physicists (as defined by publication in physics journals) are among the most likely to be pursuing their university research within a department of a different subject [11]. The Institute is keen to ascertain whether this observation would also reflect the position of publishing physicists in the UK.

  12.  The Institute is conscious that in some cases there is an absence of sound data on which to base science and technology policy. Recognising the importance of post-doctoral researchers and the repeated expressions of concern as to their career development, the Institute has commissioned an extensive study of the attitudes of former post-doctoral researchers to their own career experiences. The Institute's consultants DTZ-Pieda are currently in the process of analysing over 600 responses to targeted questionnaires. The initial report on this study is expected in April 1999. The Institute trusts that this study will help to inform policy with regard to this important part of the knowledge economy. The Institute is pleased to note the interest of the Research Careers Initiative, chaired by Sir Gareth Roberts, in this study (2.43). Sir Gareth is currently President of the Institute of Physics.

  13.  The Institute would commend to the Government the view of Keith Pavitt (SPRU, Sussex University) when he declares that "the main objective of national policy should be to maintain world class basic research, in the hope that other policies—private as well as public—will get most of British Industry to the world technological frontier" [12].

RECENT POLICY INITIATIVES TO FOSTER TECHNOLOGICAL COMPETITIVENESS

  14.  The DTI White Paper [3] highlights several recent Government initiatives aimed at fostering high-technology innovation and the knowledge economy. In particular, the Institutes notes reference to:

15.  Public Sector Research Establishments (2.38)

  The Institute welcomes the Government's interest in the commercial development of research outputs in this sector and its plans to consider these matters further. The Institute commends the Rutherford Appleton Laboratory (RAL) for its pioneering relationship with high technology companies such as Ceravision [13]. Companies such as Ceravision and CDT (referred to earlier) illustrate Britain's world-leading expertise in novel display technologies. These technologies are founded on physics and intimately connected with some of the UK's most prestigious research centres (in these cases RAL and Cambridge University Physics).

16.  NESTA (2.39)

  The Institute believes that NESTA has an opportunity to add greatly to the fostering of individual achievement in science, technology and the arts. The Institute aims to engage itself constructively with the realisation of the NESTA concept and plans to respond constructively to the current NESTA consultation exercise. The Institute cautions NESTA not to be overly ambitious and to seek modes of operation that build common ground across all of NESTA's endeavours.

17.  Faraday Partnerships (2.44)

  As noted in the Institute's original evidence, the Institute welcomes the establishment, initially by the EPSRC, of Faraday's Partnerships. The Institute especially welcomes the plans outlined in the DTI White Paper [3] to build a national network of Faraday Partnerships. This should be done from DTI resources rather than from the budgets of Research Councils. Establishing a national programme of Faraday Partnerships lies beyond the resources and missions of the Research Councils.

18.  EU Framework Programmes (2.47)

  The Institute commends the UK Government for its role in successfully pushing forward this vitally important programme during the recent UK presidency of the EU. The EU Framework programmes provide key benefits for UK physics, not only in bare financial terms but also in fostering ongoing and pervasive international collaborations. The Institute notes with interest the thematic nature of Framework 5 and trusts that the Framework process will continue to be receptive to the ideas and talents of physicists.

19.  Foresight (2.50, 2.51)

  Further to the comments made in the Institute's original evidence [1] the Institute is pleased to add that it is an "Associate Programme" of the current Foresight exercise. The Institute aims to be constructively engaged in the Foresight process and to assist with beneficial innovations such as the knowledge pool and Foresight's new thematic structures. The Institute reiterates that it believes that the principal audience for Foresight must be private industry and that the greatest benefit is to be obtained by the smallest companies. Public bodies engaged in supporting academic research must not overemphasize or misunderstand the nature of their relationship to the Foresight concept.

20.  Lifelong Learning (2.56)

  The Institute was pleased to offer evidence in response to the Government's recent consultation document The Learning Age [14]. The Institute has emphasised that lifelong learning must not only allow adults to gain vocational skills but must also allow individuals to climb coherent ladders of learning throughout their lives. In this context the Institute is becoming concerned for the provision of regional points of access into physics higher education as smaller university physics departments contract or close their undergraduate programmes.

  21.  To ensure that the Learning Age is achieved the Government must give urgent attention to the crisis in the recruitment and training of new physics teachers.

22.  University for Industry (2.60)

  The Institute regards the UfI as part of a wider vision for Lifelong Learning in the UK. The Institute commends to those guiding the development of the UfI that physicists in schools, colleges, university and industry have much to offer the UfI project. The UfI must be prepared, however, to cover the full costs of educational innovation by public sector providers. The Institute is concerned that the term "university" in the name of UfI may be a source of confusion regarding this body's welcome purposes and capabilities.

REFERENCES

    1.  Institute of Physics, letter of evidence to the House of Commons Science and Technology Committee, 13 March, 1998[25].

    2.  Innovating for the Future: investing in R&D, DTI/HM Treasury, (1998).

    3.  Our Competitive Future: Building the Knowledge Driven Economy, DTI, Cm 4176, The Stationery Office, (1998).

    4.  B Martin and A Salter, The Relationship Between Publicly Funded Basic Research and Economic Performance, A Report for HM Treasury, SPRU, Sussex University, (1998).

    5.  The Links Between University Physics and Industry, SPRU, Sussex University, (report for the Institute of Physics), (1997).

    6.  Technology Review, January/February 1999, pp 68-73.

    7.  F Narin, K S Hamilton, D Olivastro, Research Policy, 26, pp 317-330, (1997).

    8.  S Kortum, J Lerner, Research Policy, 28, pp 1-22, (1999).

    9.  H Etzkowitz and A Webster, Entrepreneurial Science: The Second Academic Revolution, in Capitalizing Knowledge, Editors, H Etzkowitz, A Webster and P Healey, State University of New York Press, Albany NY USA, (1998).

  10.  J Howells, M Nedeva, L Georghiou, Industry Academic Links in the UK, HEFCE Document reference 98/70, (1998).

  11.  P Bourke and L Butler, Research Policy, 26, pp 711-718, (1998).

  12.  K Pavitt, Why Basic Research Matters (to Britain), ESRC Seminar Series: Innovation Agenda, at Institution of Civil Engineers, London, 3 December, 1992.

  13.  John Dunn, Bringing up flat-top baby, The Guardian, 26 January, 1999.

  14.  The Learning Age: a renaissance for a new Britain, DfEE Green Paper, Cm 3790, (1998).

4 February 1999