Advanced Research and Invention Agency Bill – in a Public Bill Committee at 3:01 pm on 14th April 2021.
Q We will now hear oral evidence from our fifth panel of witnesses, which comprises Adrian Smith, president of the Royal Society; Felicity Burch, director of innovation and digital at the Confederation of British Industry; and Professor Sir Jim McDonald, president of the Royal Academy of Engineering. We have until 4.30 pm. I would be grateful if the witnesses please introduced themselves for the record. I believe we are waiting for Professor Sir Jim McDonald to appear.
I am Adrian Smith, president of the Royal Society, and I have a day job as director and chief executive of the Alan Turing Institute, the national institute for artificial intelligence and data science.
Thank you very much. I think we are still trying to get Professor Sir Jim McDonald online. We will start off with Chi Onwurah, our shadow Minister.
Q As my first question was for both the Royal Society and the Royal Academy of Engineers, I will start with a question to Ms Burch. Neither the ARIA Bill nor the explanatory notes refer to private sector investment. Is that an issue, and is it possible for ARIA to achieve its mission without engaging with the private sector? Can you suggest improvements to the Bill or its context in order to ensure that that happens?
That is a really important question. It is definitely the view of the business community that ARIA needs to be designed with the business community and the private sector in mind. When we think about some of the challenges that we are trying to solve in the UK, as well as the science superpower ambition and the goal of spending 2.4% of GDP on R&D, we will not hit any of those targets unless businesses are involved and engaged. The design of ARIA will be quite important to whether it will work for businesses or not.
The wording of the Bill is less important than the design and make-up of who is involved in ARIA and in thinking about what challenges the institution is trying to solve. Thinking about the individuals for a moment, we would very much like to see industry represented alongside the science base. Thinking about the design of it, we would be making sure that we do not focus too much on whether we are looking at basic or applied research or commercialisation, but flipping that on its head and thinking about what market problem we are trying to solve, who the end customer is, and then working back and thinking about who you need to engage along the way.
Q Just to come back briefly, you have made an important point that echoes some of what we have heard already today. In terms of setting out a mission, or where ARIA should be looking, do you feel that more direction needs to come from Government or from public engagement, or should that be left more generally to the executives? As to ensuring private sector engagement, we echo the Government’s ambition to reach 2.4% of GDP spend on R&D; indeed, Labour wants us to go from the average to the excellent, and reach 3%. The private sector is integral to that, so perhaps there could be a little more detail on how to ensure the new agency supports that ambition.
Definitely. It is great to hear an even bolder ambition for R&D investment. I am sure the majority of the business community would support that as well.
Thinking about the role that ARIA can play, particularly in the role of missions, what is really exciting about a mission, a problem statement or a challenge is that it not only does gives an opportunity to bring together cross-sectoral players—we just heard about the role that AI and biotechnology can play when you combine them, and having a really clear mission helps to bring together those cross-sectoral players—but it also helps to advertise what you are doing.
One of the really exciting things for me about ARIA is that it is a big play—a big investment—that the UK is saying we are now making in science and innovation: “This is a change in the way that we are doing things, and this is the problem that we are trying to solve.” I do not think it matters, necessarily, if that problem is defined now or by the challenge director, but we need to think quite carefully about what the problem or challenge might be, and about some of the criteria that sit around that.
For me, there are probably two things that stand out as vital. The first is the sense of a market for a product at the end. One of the strengths of ARPA and DARPA in particular in the US is that customer relationship and an end customer saying, “This is the challenge that we need to solve, and probably we will buy it in the end if you do that really well.” The other thing that we want to think about is what challenges we need to solve as a society. What are the really thorny issues, where we know we need some game-changing steps forward in technology and where potentially Government can play a big role and have a big lever? A couple of areas that stand out in conversations with businesses are things like net zero and health, where clearly we have some big commitments that we want to reach as well.
Q Thank you very much, those are excellent answers. I see that we have been joined by Professor Sir Jim McDonald, so before my next question I want to welcome all three witnesses and say how much we appreciate your joining us this afternoon.
For Adrian Smith and Professor Sir Jim McDonald: we have, very recently indeed, achieved some clarity on this year’s science budget. I know that that was a matter of concern for both the Royal Society and the Royal Academy of Engineering. There has certainly been a sense, and I wonder whether you would echo that sense, that we need long-term funding certainty—that it helps in the support of science and research more generally. Where do you see ARIA sitting in providing that long-term funding certainty, and how do you feel it can or should fit into the wider research environment? I will first ask Adrian Smith, please. It is nice to see you.
Thank you. Going back to the allusion to recent uncertainty about next year’s funding and where the Horizon Europe fee would come from, I stress that we need a coherent narrative and plan, not chopping and changing, and creating uncertainty. Uncertainty is bad, both within the community and for those who have to plan in the UK, but also for what we hope and assume will be our narrative of the UK being a global science and innovation player. Clarity of narrative and sticking to the plan is fundamental.
Where does ARIA fit? The starting point that most have accepted and signed up to is that having a new kid on the block in the high-risk and high-reward long-term space is welcome. Even though we have a plethora of agencies in the current ecosystem, there is nothing that sets out defines itself in that way. However, if this is to work, there are a number of things still to be clarified. I will mention a few, and Jim can pick up on this. ARIA has to have operational independence, if we are in the high-risk and long-term space, but it also has to have high focus. If we are aiming for £22 billion by 2024-25, £800 million is not a large sum of money, so if we have a plethora of missions, then I think we will go wrong. ARIA has to have focus of mission and a commitment to the model over the long-term, but also, and fundamentally, leadership.
This is an incredibly difficult agency, given the multiple stakeholders out there, and it will only work if it has the image and the street cred to attract and retain talent. I welcome the addition to the landscape. We need long-term commitment, but the recent experience of uncertainty about next year’s funding, the chopping and changing, and the lack of clarity about Horizon, would not bode well for this. We need absolute clarity on the plan and how this is going to fit into that.
Q Thank you very much. Professor Sir Jim McDonald?
Just to echo what Adrian has been saying, I welcome Felicity highlighting net zero and health. The additional funding is absolutely welcome. As you have pointed out, there was great concern about the uncertainty around the funding generally. The Government’s commitment to making the UK a science, engineering and innovation superpower is exciting. It is built on what is a genuinely world-class research base here in the UK, but of course traditionally we have not done the D in research and development terribly well, so ARIA coming forward to fit into the landscape is key.
To Adrian’s point on longevity, it would be good to get a planning horizon that was long—10 years de minimis and hopefully even longer, because many of the technological developments that come through these accelerated high-risk, high-reward programmes can take decades to come to fruition. Felicity mentioned the concept of a customer, and I could not agree more. The customer might be a Government Department but, for this acceleration of technology for solving challenges of scale at pace, we would increasingly need to see agencies, companies and industry sectors that can take these technological advances into practice. Late-stage R&D, which costs a lot of money, would be counter-productive. In fact, it would be even more damaging if we start the journey to have this innovation acceleration, this high-risk, high-reward agency, only to discard it within a few short years. I think that would damage business confidence, and we would also miss out on the opportunity to get the translational ability to feed out from the UK’s great research base to create new technologies.
Of course, there are a number of schemes that are suggested—Felicity touched on them—and there is the exciting legal commitment that the UK Government have made to net zero. There is an economy and opportunities to build around that. Healthtech, and the whole piece around global health and how we deal with that, is another great opportunity for the UK to mark out its capability.
ARIA should fit and integrate within the existing landscape. It should be a disruptive innovator, but it should not necessarily damage the existing system, much of which is working well, but there are gaps that ARIA can hopefully fill in the coming years.
Can I follow up briefly with Adrian and Sir Jim? Thank you very much for your responses—[Interruption.]
Order. The sitting is now suspended. I shall resume the Chair at 4.9 pm. I apologise to the witnesses; it is how this place works. If you can just hang on, we will see you in 10 minutes.
Q Thank you very much, Mrs Cummins. I shall endeavour to restart the exact sentence I was saying. It is noticeable that, while the Bill provides a minimum length of time for ARIA’s existence of 10 years, there seems to be no provision for a minimum length of time for funding. Those research scientists who have recently lost their funding at very short notice because of cuts to the overseas development aid budget may not feel reassured by that.
I have three very specific questions. Adrian represents the Royal Society; Jim represents the Royal Academy of Engineering. We have had some discussion about whether ARIA should be looking at blue-skies research or transformational translation. I assume that you both think it should do both. Or maybe not—will you let us know?
Secondly, the Bill makes provision for public sector R&D funding to be spent by ARIA internationally. I understand that there might need to be collaboration —collaboration drives research—between UK and international bodies, but do you think it would be appropriate for ARIA to fund exclusively international research programmes?
Thirdly, do you think the UK should get some kind of tangible return from this level of investment in high-risk, high-reward research?
The answer is both, of course. If there were no research element, it would be something we completely understood and all that was left would be to deploy it, in which case this does not seem to be the right kind of agency to do it. I think it starts off with a substantial element of R, but that is perhaps pointless if it does not end up with the D.
Internationally, it is hard to think of anything really, at scale—even if it were only in terms of being a magnet for global talent of one sort or another, an international dimension is almost inevitable and appropriate, but if it were all offshored, that would make nonsense of the agency.
I have now forgotten what your third question was.
Should the UK get a return on this investment?
High risk, high return is the mantra, isn’t it? So I think an expectation of substantial transformational return is implicit.
First and foremost, ARIA should be a funding mechanism that delivers innovative solutions to ambitious, real-world challenges, bringing together and developing breakthrough research and technology. It is worthwhile reiterating that. Of course, that has to be driven by substantial funding. The flexibility—I am sure we will come back to this—the independence and autonomy for this agency are going to be fundamental to its success.
Adrian has mentioned skills a few times. I absolutely agree with that. While the fundamental research is not viewed as the primary focus of ARIA, it should be keying into a rich base to draw from in the UK research base. Of course, there is an opportunity here for international collaboration as we drive development towards application. However, it is not unreasonable to imagine that ARIA could commission basic research work that emerged as it sought to solve some of these major challenges.
The international connectivity is important, even at the highest level. Telling the world about our ambitions around being a science superpower and trying to become one of the world’s most innovative nations is not something that we should keep to ourselves. We should be promoting that, showing confidence in the UK that we are building on our outstanding research base but we now have another mechanism through which we can drive technologies, find solutions and indeed build economies. So I echo Adrian’s point: this could be a great magnet for talent into the UK and those excellent international individuals who want to come here, some of them pursuing research but many of them also engaging in that exploitation, in that high-risk, high-reward programme. So I would encourage international connectivity, but, speaking as an engineer, I would like to see good outcomes that impact on the economy positively, build industry, support the creation of supply chains, support indigenous supply chains and create new ones around new technologies, whether in net zero, health tech or AI, to build an industry through which we can drive the economy to keep that virtuous circle of driving economic strength so that we continue to invest in science, research and innovation. There is a circularity here, and I would suggest that we do not fragment and see these things in a systems perspective—that is what engineers will propose in any case—but see ARIA as part of a larger system. But driving that through to economic and societal benefits is key for me.
Thank you very much for your answers.
Q Welcome to the witnesses—it is lovely to see you this afternoon. I have two questions that are relevant to all three of you, please. Given that we know how important ARIA is to the UK economy, what importance do you put on patience when we think about funding high-risk transformational research? How necessary is it that we have a long-term view?
As I know you are aware, I think having a long-term approach to funding R&D matters hugely. From the perspective of the business community, having institutions that are in it for the long run that they know they can come back to and that they are aware exist is really important for their own confidence to invest.
Thinking about the agency slightly more specifically, when it comes to its own patience, one of the things that CBI members have highlighted to me as a particular benefit of the DARPA model is the commitment to funding their programmes for significant periods of time. For example, there might be 10-year funding with three-year gates to check if the project is working. Those commitments, with that 10-year view—so long as everything is going more or less according to plan—is hugely important for bringing business funding alongside that. So if we can bake a long-term view and patience into ARIA from the start, it will certainly help it to be successful.
It is nice to see you, Minister. There is a requirement here to have a significant cultural change—that is embedded in your question—to move away from the value-for-money concept that is deeply embedded in the UK Research and Innovation funding structure. That is important, but of course we would need to innovate the funding model, which is what is being sought here. Value-for-money assessments for disruptive innovation may not be assessed, as you indicated, until decades later, so we will need a longer-term outlook or alternative approaches to assessing value, such as a means of building capability and capacity in both technology and skills.
Of course, projects that were deemed unsuccessful in achieving their goal may produce value in terms of people, skills and lessons learned, so we must take a long-term view. I think we see that notion of patience, but it is about the ability to have that highly driven, focused approach that the executive officers and the board of ARIA will take and—we may come on to this—the ability to fail fast and elegantly and not be punished for failure as long as the process has been driven openly, transparently and with excellence underneath it.
I would say, absolutely long-term vision and drive forward. If everything worked and everything was successful, we should challenge ourselves and think maybe the questions were not quite as challenging as we thought they might be. Failure is not something we should be discouraging—it is about risk and collaborative approaches to driving problems to a solution—but long-term vision is absolutely essential. That is why, as you have heard from Adrian and Felicity, that patience and that long-term view is key. It should become a very natural part of the UK landscape, so that it is something that we boast about and that acts as an attractor for business and investment, and to attract and retain talent.
Let me echo everything that Jim said. The scale of mission that we would hope to see from such an agency means that the timescales will be long and we will need to build new research capability over those timescales, in so far as we are interacting with technologies, and perhaps new supply chains. If those are to come out of the woodwork, they need to believe that we are in it for the long term and that there is patience on the part of the funders and others. The timescales are really important, not just in terms of if it is a hard problem, it will take a long term to solve; if it is a hard problem, we will need to build all sorts of new capabilities and capacities. To have the courage to invest in those, we need to know we are in it for the long term.
Q Thank you. Sticking with you, Sir Adrian, I was thinking that we have heard an awful lot about the importance of ARIA recruiting people from a variety of backgrounds. I wonder how we attract the best people, from industry in particular.
Is that a question for me? It is probably a better question for Felicity. Going back to the earlier comments, a fundamental is to trust long-term commitment from the Government that we are really in this, and we have a plan with clear funding milestones and we will stick to that plan. That is what will give the international community the message that we are in it to be really serious. That serves two purposes: for the narrative of the UK, and as an attractor for brilliant people, whether they are in research or industry around the world, to come and join in this long-term challenge.
How do we attract them? The scale of the ambition will be a major attractor to someone, with that executive excitement and experience that they will bring. Large-scale ambition and, as we said earlier, a commitment to the long term to making this work for the UK, in that it is a long-term integrated approach. I suggest that the CEO would have to have experience beyond academia; preferably, as you have suggested, Minister, including industrial experience—that ability to take the journey from concept through to proof of concept, demonstration at scale and deployment. Ultimately, commercial exploitation is key.
I can assure you that the engineering community will be well engaged with this as we help to bring forward individuals of the right stature. Industry expertise and understanding should be a prerequisite for ARIA personnel. An interesting example, which many of our colleagues in the Committee will be familiar with, is the vaccine taskforce: bringing together industrial expertise—traditionally competitive companies large and small within their supply chain—with Government officials and the National Institute for Health Research. That was a fantastic microcosm of large-scale, high-risk and ultimately high-reward outcomes. In many ways, that gives us a precursor for some of the approaches and cultural changes that would be needed to take that forward. For the chief executive or chair of the board, it would be great to have industry-relevant background, a commitment to innovation and excitement about the scale and potential impact of the work that they are taking on.
I listened to a number of the earlier sessions, and I was delighted to hear about the focus from so many stakeholders on the need to build a diverse team within ARIA, but also thinking about the diversity of the community that we engage in it. One of my reflections is that we are trying to build something that looks a bit like US DARPA, but we are 60-plus years on now, and the international, national and social picture is completely different. We have an opportunity to build something that really excites, for the next generation of researchers and business people.
If you look at businesses that are trying to achieve those same goals and the practices they put in place to try to recruit brilliant people, you will see that, first and foremost, purpose really matters. Clearly defining the mission of what ARIA is trying to achieve when we get the team in place, making sure that it is something that excites people, having a clear market, and also solving national and international social problems will help encourage really bright, brilliant people to get involved.
Secondly, it starts with the senior team. We are building this team from scratch, and we need to make sure when the team is being recruited that it is diverse in the broadest sense possible—that we see women, ethnic minorities, and those with disabilities represented on the senior team for ARIA to really send a signal that the way we want to innovate in the UK is diverse and that we want to make the most of all our talents around the country.
One of the really exciting opportunities from ARIA is the potential for joint ventures and engagement. Essentially, my answer here is pretty short. Go ahead and do it, but make sure you engage with business communities a bit further down the line in exactly the design of how those funding mechanisms might work. Different businesses at different stages of their journey will be interested in different funding mechanisms.
Q Thank you. Sir Adrian, speaking to your professional interest and expertise as a Bayesian statistician, which I share as a layman, how can we use Bayesian statistics to help decide which projects to fund and also when to pull the plug?
I was not expecting that question. The problem with the kind of mission that we would like to see in ARIA is probably that there are very few precedents. So where we are going to get our prior information from to deploy my wonderful Bayesian analysis, I am not quite sure. Let me use that to point out something else. It will be very interesting to see how we creep up on a mission and why ARIA would be appropriate for that mission. There are two things that you will all know about and I am involved in. I am on the board of the UK Atomic Energy Authority, and fusion, you could say, is the ultimate mission of all time. The mechanism there is with an authority and long-term Government funding in a different model. Solving the problem of batteries you could say would be an absolute fundamental mission, but there we have set up the Faraday Institution. I suppose the question as we go along is: what makes ARIA the right kind of place for what mission, given that we have lots of missions and lots of other ways of trying to solve them?
Perhaps we need someone with particular expertise in portfolio management as well, because it seems the risk/reward of these missions is so key. I will leave it there.
Q Good afternoon, all. I have a quick question for Felicity. We heard earlier from Dr Highnam from DARPA about the high level of churn among the project managers and that they move between academia, business and, in their case, DARPA and that creates the right culture. Presumably it requires flexibility from the businesses themselves. Do you see your members embracing that kind of secondment into a research body such as ARIA, even though it may not lead to anything?
I have not talked to them directly about this in the context of ARIA, but I can reflect on conversations about business and university collaboration more generally. I think our members do see value in seconding people to research teams to learn new skillsets. Likewise, we would love to see more people from university sectors being seconded into businesses. Were there a world-leading agency like ARIA, being able to say, “My people have worked on one of these teams” would be quite a prestigious thing for businesses. I guess the flipside of that is this: how do we make sure that we build ARIA to be that prestigious body that businesses feel comfortable seconding their people to?
I think that time and again we hear businesses saying that that fluidity of people between the business sector, the university sector and the research sector more generally is really important for successful innovation and building an ecosystem. I am sure that if any business pointed to any one individual, they might not want to lose them, but I think this is much more about how we build a really flexible and really brilliant innovation ecosystem, and to that extent I think that businesses would be really happy to see those moves.
Q Have you any advice on how we should approach building such an organisation?
Yes. You said that we have to build an ARIA that encourages that kind of collaboration. What is your advice about doing that? Where are the risks and rewards from an employer’s point of view?
One of the challenges is making sure that ARIA has its own clear purpose, so that businesses know why they would second people to it. The truth is that we have a lot of other institutions in the research/innovation landscape, as we have already referred to throughout this conversation, and as you have heard from the previous panels today. However, once ARIA is up and running, has a clear mission, and has some really great people on it who you can point to as being leaders in their field and really pushing the boundaries—when you can tell a clear story about what the organisation is set up to do—it will become a lot easier for a business to make the case that, “Yes, it makes sense for me to put a person on there; they are really aligned to what I am doing,” or not.
Q A few years ago, we were told that there was no magic money tree. That seems to have been parked temporarily, but I fear that it will return at some point. I detect enthusiasm from all of you for this project, but how much is your enthusiasm dependent upon the money being genuinely new and additional in terms of the wider research environment?
I have a second question. Through the day, we have heard from different witnesses mainly a view that there needs to be a mission but also some difference of opinion as to who should set that mission. Who do you think should be setting it? Maybe I can go to Sir Adrian first.
In terms of new money or old money, I think the key thing is really to look at the big picture. The aspiration—the 2.4% aspiration—is aiming at the average of the OECD, which has probably crept up now in any case to 2.5%. In the meantime, the United States is around 3% and Israel is around 4.7%. The big picture stuff is the total amount of investment in the R&D landscape. So I think there would be less warm support for this body if it were at the expense of that wider investment.
As for who sets the mission, I think it is an extremely interesting question. There is an interesting tension between what most of us would see, which is that if this agency is to have real street cred, it needs tremendous operational independence, but on the other hand the thinking behind it is that the mission will be of great benefit to the UK. Clearly, therefore, Government and a multitude of stakeholders have an interest in what the mission will be, and how the leadership of the new organisation will satisfy the desire on the part of all those stakeholders to have a finger in the pie of influencing the mission. I think that will be very interesting to see.
Q That sounds like a gloriously British response to me, but I agree with it. Felicity?
Similarly to Adrian’s response, support for this body comes alongside the fact that it is new money, and we need the new money in order to grow the level of R&D in the UK. The level of Government spending on today’s level—obviously, there are longer-term plans, but at today’s level—would not hit the target. I think we do need new money in the system, and it makes sense that ARIA is one of the places to which that money is directed. But we do not want to undermine other institutions, such as UKRI and Innovate UK, and catapults in particular are hugely important to businesses. We do not want to undermine that, and this is definitely about building up a coherent system.
One other thing to note is that we have tried to create something that looks like ARIA quite a few times before. For a long time, there has been a sense that we needed to do something like this. Initially, when what was the Technology Strategy Board was founded, people talked about it looking like a UK version of ARPA. When we established the industrial strategy challenge funds, people also talked about them being a UK version of ARPA. The difference with ARIA is the legislative approach and the creation of an independent body, which means we are genuinely doing something different. This is a really exciting way to leverage some of the Government’s R&D investment. As to who precisely sets the mission, I understand that BEIS would like the ARIA team to do that. There is a lot of sense in that, but they cannot do that in a vacuum; it needs to make sense to a wider science innovation community, and to society in fact. That comes back to the importance of a long-term market and the social issue that we might want to address with ARIA. We will be looking out for it to do those things.
Thank you. Coming back directly to the question, this must be new money to enhance the credibility of what is sought to be done. As you know, we said earlier that the UK’s research, science and innovation base is an absolute national asset. We cannot exploit that research base if it is underfunded and not attracting the very best talent with the very best facilities. This has to be additional investment to complement existing funding.
I agree with some of the implicit elements of your question that that investment must sit within the system perspective, so although this will be a new funding model that brings a new type of leadership into the research and innovation landscape, there must be plenty of dialogue between ARIA leadership and UKRI, BEIS and other entities that Adrian mentioned. There might be some competition, which would be healthy, but there may be some articulation in complementarity that will emerge if we are doing the right things. It needs new money and long-term commitment.
As to who should lead this, I buy into the model of greater independence and autonomy. The customer will exert influence; to go back to the comment about the customer being a Government Department or Departments, and industry as well, they will have an influence and try to prioritise where the CEO and the team and board will take the direction of travel for ARIA. I would like to see it exercise independence and autonomy going forward.
This may have been raised earlier, but I think public communication will be critically important. Let us have the public understand why this is important, and give a voice to the science, engineering and innovation community. They should be accountable for ensuring that the idea is understood by the nation. I am not suggesting that the public would be directly involved in the agenda, but that public engagement would raise awareness of what science innovation is all about and turn some of the Government’s superpower commitments into a reality for individuals out there in society.
New money, please, and a long-term commitment, and let us give this entity independence and autonomy but the accountability that sits behind it should respond to our customers’ drive for new technological solutions. That should be done in a way that drives value into the UK economy.
Thank you. We will have a very quick sneaky question from the shadow Minister, Chi Onwurah.
Q Thank you very much. Adrian, I was very interested in what you said about the number of people in organisations who want to influence the terms of the mission. Obviously, if the Government set the mission, they have a democratic mandate. If the CEO or the director sets the mission, how would you suggest that we can test that he or she is not simply being influenced by their pet projects and preferences? What kind of test could we set out?
Whoever is chosen to be the chief executive and whoever surrounds that person in governance must be people the rest of us will trust. They will have the stature to be trusted. Without that, I think we are in trouble.
Q So you think it is only trust, and there has to be trust in governance?
I think it is an essential element. As I said earlier, I think genuinely that whoever is going to lead this and oversee the governance has to think very hard about how you interact with both the hard-nosed stakeholders and, as Jim and others have alluded to, the public, in terms of taking them along with the idea that this is a mission that is ultimately for the good of all of us.
Thank you very much. If there are no further questions from Members, then we are dead on time. May I thank the witnesses for their evidence before we move on to the next panel? Thank you very much.