Email
As the recession deepens, ministers are looking increasingly to universities for ideas on how to boost the economy. Universities have been asked to train those in work and the recently unemployed, help improve businesses' performance, and give new graduates advice, training and work experience with the help of a £50m scheme launched by the funding council, Hefce, last month.
But a small group of research elite universities have come up with a far bolder proposition. Led by Imperial College London, they want ministers to create a £1bn fund to finance the early stages of university spin-outs - companies that could become money spinners in a few years' time and help boost the UK economy after the recession.
It sounds a lot of cash, especially given the sector's decade of relative feast in terms of government investment and the potential famine it now faces. It also seems particularly audacious in a time of tightened public spending. But the government looks to be seriously considering the proposal.
Lord Drayson, the entrepreneurial science minister, who has a seat in the cabinet and a hotline to the prime minister, is said to be keen on the idea. Drayson told Education Guardian: "Last week, the prime minister signalled his support for rapid action on removing the barriers preventing IP [intellectual property] companies from obtaining venture capital - something I endorse.
"US companies such as Microsoft, Amazon and Genentech all received early investment from VC [venture capital] funds backed by the federal government. I am working urgently to consider all available options - including a fund of sufficient scale to replicate the success seen in America - to realise the potential of the research taking place in UK universities."
In a recent speech to the Foundation for Science and Technology, Drayson raised the question of whether the balance of investment needed to be shifted, particularly in light of the competition presented by the US, which has pledged to increase massively science spending as part of its economic stimulus package. "They're raising their game," Drayson said. "We must identify where our competitive advantage lies and play to our strengths."
Medical research was given as an example, but Drayson is said to be pushing for the £1bn fund to finance ideas from all areas of science and engineering. According to a spokeswoman for Drayson, the idea is "growing in momentum" within the government. "The bottom line is that academics generate more ideas that look interesting to translate into products than universities can fund," explains Professor Sir Roy Anderson, Imperial's rector, who is leading the bid (see left). "We would like to see the British government create a national fund that can translate these science and engineering ideas into companies that make money and jobs."
The group behind the bid comprises Imperial and the universities of Cambridge, Edinburgh and Oxford. They would prefer the fund to be run outside of government, perhaps by the National Endowment for Science, Technology and the Arts. A panel with technology, financial and development experts and scientists would help pick the potential winners, which would not exclude universities outside the research elite, although they would be expected to take the lion's share of funding.
The upside for the government would be a return on the public investment as and when the companies the fund creates make money.
"Supposing the government put up half the money and the other half came from pension funds," explains Anderson. "If this is taxpayers' money, wouldn't they like to see the return on some of the big wins?"
"Big wins" can take years, but the potential rewards are huge. An anti-obesity company, Thiakis, financed by Imperial's own venture capital fund, Imperial Innovation Group, sold for £100m last year.
But while the proposal has support, it is not unqualified.
"We're all for moves to increase the impact of science across the spectrum and this sort of initiative is aiming to do that, hoping it will drive forward future economic recovery," says Dr Hilary Leevers, assistant director of the Campaign for Science and Engineering. "But it should be with new investment of funds. Anything that redirects the way the science budget is already distributed would raise concerns."
The debate that began with ministers calling for "more impact" from science has quickly moved towards focusing on and identifying particular areas, not necessarily with consensus in the sector, she says.
"We don't think the best response to the recession is focusing only on particular areas. You can't just rely on a little bit of expertise - we need to maintain our breadth."
;