Cable to put the kybosh on UK business innovation?

Businesses looking to innovate are increasingly turning to academia. Perfect time for funding cuts, then...

by Emma Haslett
Last Updated: 06 Nov 2012

One promising statistic we noticed this week: the number of business looking to partner with academic institutions for innovation work is apparently at a record high. Knowledge Transfer Partnerships, which places science grads in businesses to work on specific R&D projects, reckons the number of applications from businesses has doubled in the last year. That's good, because it suggests that businesses are feeling confident enough to think ahead and invest in the future again. On the other hand, since this trend has been underpinned by Government funding, which is about to get the chop, it may be a short-lived phenomenon...

According to KTP’s figures, the number of businesses applying for R&D projects jumped from 177 in the whole of 2009 to 326 in the first half of this year – the highest number in the 35-year history of the programme. OK, so this is still a relatively small number, and it doesn't prove that UK R&D is back with a vengeance. But it does at least show that more businesses are seeing academic tie-ups as an effective way to innovate (and a cheap one too, since the state-funded Technology Strategy Board foots two-thirds of the bill). Britain has some world-class universities, and arguably UK plc has not made enough use of them in the past. So this has to be a step in the right direction.

Sadly, there's a catch. This week Vince Cable confirmed rumours that universities are likely to see their £6bn annual science budget cut by up to 30%: apparently, the plan is to channel money into areas where the UK has already established a ‘reputation for excellence’. That means the universities will have less money to spend on research, which could make it harder for commercial firms to find suitable academic partners. And of course, there's also a chance that KTP's budget might not escape the axe either (hence, presumably, why it's so keen to stress how well it's doing).

‘There is no justification for taxpayers’ money being used to support research which is neither commercially useful nor theoretically outstanding,' Cable said this week. That's as may be - but who's to say in advance what's going to be commercially useful? And is the Government really best placed to decide something like that? Hardly. 

Then there's the value for money argument. KTP reckons the cash it invested last year will result in an extra £150m of profits for UK plc. We have no idea how true this is (we haven't seen their working). But at a time when the Government is supposed to be encouraging a private sector-led recovery, cuts that will limit innovation and discourage private firms from investing in R&D do seem pretty counter-productive.

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