Innovation ticks the boxes

The UK’s Technology and Innovation Centres will provide research services to bridge the gap between industry and academia. Elisabeth Jeffries reports

If it has become possible to carry the complete Penguin classics under one’s arm on a train, that is partly thanks to major innovations in flexible display screens, which cut pounds of weight off computers. Plastic Logic, a small company with research headquarters in Cambridge, UK, is one of the companies racing to lead this emerging sector. But in 2007, something unusual happened. The company chose Dresden, Germany, as the site of its first plant.

Attractive German incentives relating to manufacturing were a factor behind the decision, explains Mike Banach, senior research manager at Plastic Logic: ’There are UK incentives and tax breaks for R&D, but not enough tax credits for capital expenditure, for buying equipment,’ he states. Some time afterwards, the launch of the company’s new product, an e-reader, was put on hold because of fierce competition from similar devices emerging onto the market. 

These travails are typical of the kinds of problems many start-ups face as they wobble to their feet, particularly in emerging industries. There are many issues affecting the choices the company made, though not all are to do with the innovation climate. However, there is little doubt that most start-ups depend on a very supportive venture capital and innovation infrastructure to develop. That, of course, is as true for the chemicals sector, with which small businesses like Plastic Logic may collaborate, as it is for industry as a whole.

Incubating innovative small and medium sized enterprises (SMEs) and keeping production and employment in the UK have, of course, worried politicians for decades. So it was to strengthen the innovation infrastructure that early in 2011 the government announced it would put ?200 million into a network of six technology innovation centres (TICs). 

The new institutions will be known as Turing Centres after UK computer scientist Alan Turing, and the first three to be announced will cover high value manufacturing, cell-based therapies and offshore renewable energy. ’The idea is to focus on where we have the potential to be world leaders and get some critical mass on that,’ says Colin Tattam, projects director at the Chemistry Innovation Knowledge Transfer Network (CIKTN). 

Following Fraunhofer’s lead 

Partly modelled on the German Fraunhofer Institutes (FIs), the aim of the TICs is to create a clear stepping stone between industry and scientific research in universities. This vision was articulated by entrepreneur Hermann Hauser - founder of Acorn computers - in a UK government review on innovation published in 2010. ’The UK falls short on translating scientific leads into leading positions in new industries,’ he stated. ’This is in part down to a critical gap between research findings and their subsequent development into commercial propositions that can attract venture capital investment or be licensed.’  

According to Mike Oldham, programme manager at the Technology Strategy Board, the UK government’s innovation agency, the TICs are partly about creating ’a dedicated team of the right people with the right mindset - not just a move to the next area of blue skies research...successful centres will take a step outside the universities. But it takes academics and professors with a particular mindset to make that work.’ 

Academic research institutes are sometimes accused of sitting on intellectual property (IP), though this is not always true. Many UK universities, including Manchester, Edinburgh, Warwick and Imperial College London, have well established IP commercialisation hubs - such as Imperial Innovations - which may also provide early stage seed funding for spinout companies. Many universities are also linked to later stage spinout funds, such as Techtran Group, which runs a Leeds University fund. 

The spinouts, in turn, may have emerged from specialist research centres such as the James Watt Nanofabrication Centre at the University of Glasgow or the Warwick Manufacturing Group, which forms part of the high value manufacturing TIC along with the Centre for Process Innovation (CPI) in Wilton, Teesside. It is hoped that these centres, serving different industries but all part of the same TIC, could help each other, as Tattam explains: ’There are synergies that exist in continuous manufacturing. We can learn from other sectors and vice versa.’ 

If successful, the TICs will take this process further, focusing on later stage knowledge transfer and commercialisation and including more industry involvement. Only a third of their funding will come from the state; another third is to be sourced from the businesses that use the centre and the rest from other funds such as EU grants. Above all, the focus of the TICs is to coordinate commercialisation strategies across the country for particular fields, and hence drive forward the economic growth that may accompany innovation. 

Building on existing strength

Some elements in the TICs are not new - the CPI was formed in 2004 - but the government has placed a heavy emphasis on cohesion and coordination of innovation of old and new centres in particular fields or areas of expertise. One centre, the Industrial Biotechnology Development Facility (IBDF), has benefited from fresh funding. Also part of the CPI, it has increased its scale and capacity 10-fold since March, with vessels and fermenters of up to 10 tonnes now available for pilot schemes.  

Potential clients - mainly small chemical companies - could take advantage of consultancy services and assistance in areas such as interpreting future market demand for products; developing and demonstrating new processes; and manufacturing prototypes or trial quantities of products. Future new products may be also germinating at the CPI’s Printable Electronics Technology Centre. It is developing new technology for backplanes, which form the basis of different kinds of display panels, including computer screens: the kind of work Plastic Logic is engaged in. One of the strategic aims is to help develop a future supply chain for the sector. 

Yet there is some cynicism about the TICs among experts. For one thing, the Fraunhofer Institutes operate in a very different industrial culture than that of the UK - one with a larger number of family-based businesses and a greater integration of engineering skills. Founded in the aftermath of the second world war, the 60 centres each specialise in a different sector or technology with a strong engineering theme. Stephanie Jung, the Fraunhofer organisation’s manager of strategy development, explains that the Fraunhofer network is a non-university system, but the director of each centre is a university professor who is also a shareholder. ’A Fraunhofer director knows well the demands of industry and is the most free person you can imagine in terms of decision making,’ she declares. 

30 per cent of each institute’s funding comes from the state, with the rest from industry, the EU or local government grants. They are a household name; nearly every business in Germany knows them and many use their services. Typically, Fraunhofer institutes work on projects as far as the prototype stage, then either create a spinout or find a partner. Some institutes compete in the same industrial sectors, losing staff if they don’t come up to scratch. The regime is tough: ’if a customer doesn’t like the results of the project, they don’t pay us,’ explains Jung, describing the control of development topics as ’demand driven’.  

Comparing them with UK centres of excellence, Jung suggests the industry sponsorship model, more common in the UK, is not always satisfactory: ’Sponsorship money goes into the system or into R&D somehow, and sometimes there’s some output,’ is how she views it. The German network, she argues, is also somewhat flatter in shape than typical UK research organisations and expected to be staffed by very good rather than world class scientists, in order to meet the everyday needs of SMEs. On the other hand, Deputy Prime Minister Nick Clegg, launching the TICs, described them as ’elite’ centres. 

By comparison with this deeply rooted and extended network, the TICs look modest. Some academics are doubtful for other reasons too; it is not the first time they have seen new centres like these unveiled in the UK. In the late 1980s the UK government launched the Faraday centres, a series of hubs with a similar aim which turned into the knowledge transfer networks. Specialist institutes also existed in the 1970s but were either closed down or privatised. MPs, experts suggest, like nothing better than cutting ribbons and opening new departments. 

’There is a political line - a need to be seen to be doing something,’ observes John Bessant, professor of innovation and entrepreneurship at Exeter University business school, conceding however that ’the knowledge created in university spinoffs is just a small piece of the puzzle. They produce all sorts of knowledge, new products and processes. It’s a long frontier with a lot of traffic. Skills are increasingly about knowing where to get knowledge from, so having these centres is a good idea.’ 

Bridging the gap 

The function of centres like the TICs - known as intermediaries - is viewed positively among many innovation specialists, providing they are correctly set up and funded. Previous centres had to be responsible for their own funding and this absorbed them so much that the research focus was affected; this time, the government is providing a third of the cash.  

Intermediaries are the scene of different kinds of learning: ’The benefit of these organisations is the informal sharing of knowledge as well as solutions for a company’s problems,’ comments Ben Martin, professor of science and technology policy at the University of Sussex. Research in the field indicates that intermediaries are useful for sharing tacit knowledge and experience, akin to the process of learning to ride a bicycle. ’Research and development is not just about codified knowledge that can be written up in textbooks,’ he emphasises.  

Presumably, chemicals companies can benefit from this type of learning too. In the chemicals sector, the TICs could help join the dots of expertise around the country and facilitate strategic planning. Possible benefits anticipated by the CIKTN include better exploitation of IT for manufacturing innovation, more formulation activity and higher throughput technology (making products more quickly), as well as materials research relating to electronics, glass, telecommunications, paints and other products. The CIKTN foresees significant business growth in industrial biotechnology, amounting perhaps to a ’?12 billion opportunity for UK plc’. 

Solvert, an SME based near the CPI in Wilton, is one of the companies hoping to get a share of that cake. Its activities in turn could generate growth through competition and supply chain development. The company has developed a process for producing acetone and butanol from renewable sources such as green waste, and plans to build this business using the IBDF, part of the CPI facilities. ’No-one else is producing butanol from waste,’ says Kris Wadrop, Solvert’s chief executive. A process to make it from cereal and other plants was invented nearly a century ago and largely forgotten. The company has taken this a step further by using it in the waste supply chain, bringing in other existing processes. 

There are many questions to be answered, including how to deal with the unpredictable waste streams that arrive at the company’s plant every day: ’the challenge is that the feedstock changes from one day to the next. It’s a variable process. A large aspect of the research is to understand the feedstock and analyse the variability,’ Wadrop explains. One of the main ways in which the IBDF will help is by providing facilities with much larger fermenters than have been available to the company so far on its own premises. ’It’s our first pilot plant, that’s the beauty of it. We don’t need to build our own pilot. That saves us something in the order of ?15 million,’ he says.  

One of the principles behind the company’s philosophy is to start with ’easy wins’ by using existing processes, which Wadrop suggests is a good starting point for the sector and will help it develop. Following trials, Solvert management plans to have a commercial plant up and running by 2015. There is no production of acetone or butanol from any source in the UK at the moment, but both are consumed in large quantities as solvent and chemical feedstocks. The Turing centres, it is hoped, will help kick start this and other new industries. 

Elisabeth Jeffries is a freelance science writer based in London, UK