My Lords, I, too, congratulate the noble Lord, Lord Soley, on obtaining this debate. I have a number of interests. I chair the international visiting committee of the Department of Engineering at the University of Cambridge and the trustees of the China executive leadership programme at the Cambridge Judge Business School. I am on the court of the University of Lincoln, I am a long-term trustee of the American University of Sharjah and I hold a professorship at Monash University. I am a fellow of the Royal Society and a past president of the Royal Academy of Engineering.
Like many Members of this House, it has taken me some time to adjust to Brexit, to stop being consumed by regret and to start looking for the opportunities of even a hard Brexit. I think there are possibilities in the support and funding of innovation and science. What I shall say assumes the worst: that we are no longer going to be able to participate as a full member of EU programmes.
When I returned from the USA 30 years ago, I relied on EEC funding for my research and worked with the Interuniversity Microelectronics Center in Leuven. This is an amazingly successful organisation, founded as a collaboration between Flemish universities and the Flemish Government, that has become perhaps the leading research and innovation laboratory in the world of microelectronics with 2,500 employees and an annual revenue of €415 million. It is a notable example of what has been achieved with the aid of European funding and shows that it is possible to live with the huge bureaucracy that inevitably surrounds a programme open to more than 20 countries. However, there are problems with the bureaucracy, especially for small organisations, and this is where there should be opportunities for the UK, should the most unfortunate circumstances arise and we are no longer able to remain within the EU programme. It should be possible more efficiently to focus our funding, especially on innovation, which is what I want to concentrate on in this short speech.
I want to talk about how we should handle the money that we have in effect been spending on Horizon 2020 and the SME instrument, where 20 UK SMEs have been successful in the latest round. I have not been able to find out how much we have been receiving specifically through these programmes but it is certainly significant. Overall in the seventh European framework programme, the UK came second only to Germany in terms of grants and held 15% and, in total budget share, 17%, equating to €7 billion.
In the official words of the EU framework programme for research and development, Horizon 2020,
“promises more breakthroughs, discoveries and world-firsts by taking great ideas from the lab to the market”.
Horizon 2020 is therefore not a curiosity-driven research programme; it is a programme designed to take ideas from the lab to the market, and this is where it particularly resonates with the needs of the UK. I do not need to repeat that, while we have a world-leading science base, we are not leading in taking of our great ideas to market. There are, of course, notable exceptions, but overall we have fallen behind our competitors and are still exploring the most effective ways to link our university research with the needs of the commercial world. Some of the catapults are doing this effectively, as are other initiatives, but we are still learning.
Innovation, or in oldspeak “product development”, is a quite different activity from curiosity-driven research. It is driven by schedule, cost and an understanding of potential markets—in other words, by the impact it has in the commercial world. Such criteria are destructive when applied to curiosity-driven or, as some refer to it, pure research. Pure research is devoted to gaining a better understanding of the world around us and is driven by curiosity and the desire to explore. Constraints arising from the need to meet schedules and cost targets are in general destructive to the pursuit of pure research. The two activities require separate strategies and funding mechanisms, and this is why I do not think the proposal to move Innovate UK into the same organisation as the research councils is a good idea. However, we will have this discussion when considering the Higher Education and Research Bill, and in any case I understand that every effort will be made to provide independence to Innovate UK. It is here that I have a proposal.
My proposal, should we have to leave the EU programmes, is to ring-fence the money that we are at the moment in effect contributing to Horizon 2020 and the SME instrument and allocate it to Innovate UK, which would distribute it to industry and the universities through programmes optimised for the UK. Innovate UK programmes, such as the catapults, of course include university researchers but are driven by the need to take ideas from the science base to the market, which is where I started. Will the Minister reassure us that whatever happens as we proceed with Brexit, adequate emphasis will be placed on taking our great ideas from the lab to the market as well as on supporting our science base?