Written Statement - R& D Review Panel Report

I am pleased to inform you the R&D Panel convened to address the issue of enhancing Wales’ share of R&D income, has produced its final report with key recommendations for the Welsh Assembly Government. I gave the go-ahead for the R&D Panel’s work in April 2010, with support from the Deputy First Minister and the Minister for Children, Education and Lifelong Learning. The Panel has also had considerable input from the Department for Health and Social Services.

As Chair of the R&D Panel, I have drawn in expertise from Higher Education, Business and Research Funders. I am particularly grateful for the valuable input of our external representatives, Professor Aled Jones, Aberystwyth University, Valerie Barrett, Chair of the Welsh Industrial Development Advisory Board, and Brian McCarthy, Technology Strategy Board (TSB), to the Panel. The Review Panel also took into account the recommendations and evidence given to the Ministerial Advisory Group (MAG) who finalised their report on R&D and Commercialisation in June.

Three meetings were held between April and June 2010 and the Panel has produced its final report which has fed into the Economic Renewal Programme (ERP) announced on 5th July 2010. Wales could perform much better relative to the rest of the UK in attracting R&D funding from external sources. For example, the proportion of TSB competitive funding won by Wales in the period 2004-8 was approximately 3% of the UK total. This Report recommends steps that can be taken to improve research performance, increase the level of research income in Wales and, ultimately, have a positive impact on the Welsh economy. In particular, the report makes recommendations to address:

• the relatively low investment in business R+D in Wales;
• Welsh HEI performance in winning competitive research funding from the Research Councils  and other funding bodies;
• the opportunity for Business and HEIs to collaborate and access more funding from bodies such as the TSB, European Commission Framework Programmes and charities; and
• how we can build on and celebrate key areas of excellence for Wales.

Celebrating key areas of success was an important theme for the Panel. The current R&D scene in Wales is one of a number of excellent and truly world-class R&D centres in a variety of disciplines, which must form the core of a more successful programme in the future. However, on average, Wales has a low level of R&D when compared to the rest of the UK. This is what we are seeking to address.

The Welsh Assembly Government’s focus on four R&D sector priorities, namely Digital Economy (ICT), Low carbon economy, Health and Biosciences and Advanced Engineering and Manufacturing recognises the fact that the economic environment in which Wales will need to secure its future will be highly competitive. A country of Wales’ size will need to be selective in areas of Intellectual Property (IP) development to maximise its chances of success.  The same principle applies to the increasingly competitive environment for securing Research Council funding and Technology Strategy Board funding where fewer but bigger grants are likely to be the predominant pattern driven by centrally chosen priorities.

The Panel agreed we need to build on existing successful partnerships across Wales and explore future possibilities of co-funding strategically important initiatives, pulling together all Welsh funding sources to this end. We will continue, within the For our Future framework, to drive reconfiguration and collaboration in order to increase scale and scope of research groups within Wales, as well as focusing on and encouraging sharper research strategies and stronger research management in all our universities. The Panel agreed that strong collaboration is key to Wales’s success and we already have some excellent examples. We need to raise the profile of these areas of research excellence in Wales across the Research Councils.

The recommendation is for greater targeting of both business and the HE sector when we are promoting opportunities for R&D funding, for example, the TSB Small Business Research Initiative (SBRI). We must also identify specific areas of strength within Wales to improve the success rate of bids, including considering the potential benefits of greater involvement in the TSB Innovation Platforms. Knowledge Transfer Networks (KTN) have huge potential for our businesses and academics and we will continue to promote their benefits and seek greater Welsh engagement.

We will co-ordinate a strategic ‘Wales plc’ response to the Department for Business Innovation and Skills (BIS) on the forthcoming Framework Programme 8 consultation, using all available governmental, business and HE channels as part of this strategic approach and offer clear and well-publicised support to companies and universities to support preparation of bids. We will also develop a register of Welsh Panel members on framework theme areas and work with anchor companies in Wales who have been successful in engaging with the FP application process.

Within the wider Economic Renewal Programme context, we will use Welsh Assembly Government levers to encourage indigenous business to invest in R&D and also to attract new R&D investments from outside of Wales. The Panel took valuable evidence from the Research Foundation Wales model, pioneered by the Welsh Assembly Government and EADS and saw this as a model that can have a far wider impact in Wales and can lead us to develop local clusters around anchor companies.

We will also make greater use of existing facilities and academic centres in Wales where considerable investments have already been made and promote their relevance for research to the wider community e.g. ECM2, Positron Emission Tomography (PET) Centre, Low Carbon Research Institute and the Institute of Life Sciences and we will develop the idea of sharing facilities with organisations outside Wales. The Panel agreed that we need to continue to raise awareness of the positive benefits of industry working with academia by showcasing exemplar partnerships and the impact they are having on the Welsh economy and promote how the Innovation Vouchers available in Wales can be used to support this activity.

Success on the R&D agenda is essential to Wales’ future competitiveness and is, therefore, an absolutely crucial element of the Economic Renewal Programme. We have some great successes but it is still the case that Wales could perform much better in attracting external R&D funding. Building on the strong partnership between Government, HE and business, I will now take forward the Panel’s recommendations and ensure we address the issues identified in the coming months.