Connect and Catalyse

Connect and Catalyse A strategy for business innovation 2008-2011

Our vision: for the UK to be a global leader in innovation and a magnet for innovative businesses, where technology is applied rapidly, effectively and sustainably to create wealth and enhance quality of life

A strategy for business innovation | 2008-2011 Contents 03 Executive summary 12 Thinking and acting globally 16 Our customers and partners 16 Working with business 04 Our world 13 Connecting innovation 16 Working with the knowledge base 05 Our objectives 14 How we will make investments 16 Working with government 05 What this means for business 14 Knowledge Transfer Networks 17 Government departments 14 Knowledge Transfer Partnerships 17 Devolved administrations and 06 Our investment strategy 14 Sandpits regional development agencies 06 Budget 14 Feasibility studies 17 Research councils 06 Investment criteria 15 Exploratory awards 18 Measuring success 07 Challenge-led innovation 15 Proof of concept 18 UK innovation trends 07 Commitments 15 Collaborative Research 18 Measuring our impact 07 Key application areas and Development 07 What this means for business 15 Large projects and demonstrators 19 In conclusion 08 Innovation Platforms 15 Centres 20 Glossary 08 Challenge competitions 15 Standards, regulation and 08 Delivering innovation measurement through procurement 09 Technology-inspired innovation 09 Commitments 09 Key technology areas 09 What this means for business 09 Emerging technologies and industries 10 The innovation climate 10 Commitments The Technology Strategy Board is an 10 Knowledge exchange executive non-departmental public 11 Networks body sponsored by the Department for 11 Clusters Innovation, Universities and Skills (DIUS). For more information, visit: www.innovateuk.org Technology Strategy Board B1, North Star House North Star Avenue Swindon SN2 1JF Tel: 01793 442700 Email: enquiries@tsb.gov.uk Contents | 01

A strategy for business innovation | 2008-2011 The Technology Strategy Board has Innovation, the successful exploitation of already come a long way. We inherited new ideas, underpins economic growth. from government a strong foundation Our job is to ensure that the UK is in of successful programmes promoting the forefront of innovation enabled by innovation, on which to build. Now, we technology. To achieve this, we will help have new vision and ambition. We want to businesses on their journeys of discovery. make the UK a global leader in innovation. How? That is our destination; this strategic plan is our roadmap for the coming few years. • By providing strategic innovation leadership and investment The journey will involve experimentation and discovery; success and disappointment; • By bringing people together in challenge and solution; risk and reward. partnership and working across business, government and the research community We have listened to many businesses and partner organisations about what • By ensuring that the UK has the is needed; thank you for all your input. necessary capability in key technologies Informed by all we have heard, we believe • By taking a global perspective that we need to connect and to catalyse. And in doing so we are focusing on three • By investing in networks and specific areas: innovation in response knowledge exchange to societal and economic challenges; • By promoting the importance of innovation inspired by the existing and innovation and technology. emerging technologies where the UK leads or could lead; and the ‘climate’ or We are building on Lord Sainsbury’s culture in which innovation can grow. review ‘The Race to the Top’, the DIUS white paper ‘Innovation Nation’ and the These themes are at the core of the BERR strategy document ‘Enterprise: strategy outlined in this document. It’s an Unlocking the UK’s Talent’. And we take exciting, important journey which we are all into account leading reports from bodies making together, and it begins now. such as the Commission on Environmental Iain Gray Markets and Economic Performance. Chief Executive Technology Strategy Board May 2008 02 | Introduction

NoveLELS is a collaborative project led by Enfis Ltd, which is establishing the techniques needed for the commercial production of solid-state lighting units. These innovative technologies will deliver energy efficient environmentally friendly, long lifetime lighting with wide applications in the aerospace and computer industries and beyond. 50% of the project cost is Technology Strategy Board investment. Executive Summary We aim to make the UK a global leader in Over the next three years we will: A message we consistently get from innovation. This strategic plan outlines business is to keep it simple. With • Increase our focus on challenge-led how we will promote and invest in our focus on innovation enabled by innovation and helping business find innovation enabled by technology for technology, we will: opportunities in societal challenges the benefit of business, to increase such as climate change and the • Understand the support required by sustainable economic growth and to ageing population business and provide a coherent improve quality of life. view of what is available, from us • Double the number of Innovation We will provide leadership to invest in and from others Platforms, which take a new cross- new ideas, build networks, and promote cutting approach to these challenges • Ensure that our support is flexible and knowledge exchange. meets the needs of business • Develop strategies in key market We will act as a catalyst to stimulate new application areas representing major • Simplify and streamline our delivery areas of activity for business and provide a societal or economic challenges to longer-term view of future technology and • Invest in some areas with a higher level the UK innovation needs across the UK economy of risk, as part of a balanced portfolio and globally. • Understand, strengthen and invest • Evaluate our investments to keep in the UK’s capabilities in core, Working with the regional development them effective underpinning technologies agencies and the research councils, we • Work with partners to make businesses will jointly invest over £1 billion in the next • Develop and implement a strategy to in the UK more open to innovation and three years. Our proven ability to obtain promote the rapid commercialisation of share with them the credit for what we matching private sector investment will emerging technologies and industries all achieve. at least double that to over £2 billion. In • Carry out a strategic review of the ‘Business as usual’ will not achieve addition, we will continue to work with Knowledge Transfer Networks and our vision for innovation in the UK. government departments, the devolved reinforce and extend their role We plan to stimulate a debate about administrations and other funding partners • Double the number of Knowledge the appropriate scale of ambition and to increase the overall total. Transfer Partnerships and increase how to measure progress. With a wide remit covering the whole of the their flexibility This strategic plan is the beginning of UK economy, we will have to make choices. • Pilot a reformed Small Business a long-term programme of action. The This document sets out our priorities. Research Initiative rewards are potentially far-reaching. The We plan to invest according to three Technology Strategy Board welcomes the • Work to maximise the positive impact of main strategic themes: innovation led challenge. We are confident in the UK’s government procurement on innovation by challenges; innovation inspired by ability to deliver. technology; and the innovation climate. • Think and act globally. We aim for our annual investment to be targeted in these areas, in a ratio of 50%, 25% and 25% respectively by 2011. Executive Summary | 03

A strategy for business innovation | 2008-2011 Our world The world is changing rapidly. Climate Innovation takes many forms and has change, globalisation, the ageing many drivers. For the UK to achieve its full population and worries over security pose potential, we need to focus on: major societal challenges for us all. Challenge-led innovation Businesses face additional challenges, including rising energy and raw material Treating the societal and economic costs, growing competition, the search for challenges of the future not just as talent and skills, ever more sophisticated threats, but as opportunities for innovative consumers, and a perpetual revolution in solutions that enhance quality of life and business models and methods. increase wealth But where there are challenges, there Technology-inspired innovation are opportunities. The businesses most A collaborative research and development project likely to succeed are those which see Maintaining core expertise and leading led by Wireless Fibre Systems Ltd is developing the challenges most clearly, embrace edge technologies to underpin UK innovative underwater telecommunications devices using advanced radio technology. The picture shows innovative ideas and adopt cutting-edge business growth and to invest in the next early trials of an underwater broadband data link at technologies – in a climate of confidence, generation of technologies and industries Deep Sea World, with resident shark looking on. aspiration and intellectual enquiry. The task of the Technology Strategy Board is to The innovation climate help them succeed. Fostering a national confidence in the Our vision is for the UK to be is a power of innovation to create opportunities global leader in innovation and a and raise sustainable economic growth, magnet for innovative businesses, and a commitment to making that happen. where technology is applied rapidly, Our task at the Technology Strategy effectively and sustainably to create Board is to connect and catalyse. As an wealth and enhance quality of life. organisation we work for business – our customers – and in partnership with government and the research and financial communities. We will embody innovation in our business practices and we will not be afraid to take risks and challenge received wisdom. 04 | Our world

Treating the societal and economic challenges of the future not just as threats, but as opportunities for innovative solutions that increase economic growth and enhance quality of life Our objectives We will: Understand and communicate What this means for business the drivers of innovation. Promote a culture of confidence We will help maintain the competitive in and enthusiasm for innovation. • Understand markets – and why some position of our world-leading businesses businesses are better at innovation and sectors against global competition. • Provide innovation and technology than others This includes areas of manufacturing such leadership to our partners, including as biosciences and aerospace, as well government departments and agencies, • Provide insight into the process of as high-value services including financial regional development agencies, turning innovation into wealth. services and the creative industries. devolved administrations, research Collaborate with business and our councils and others We will identify and grow sectors and partners to stimulate innovation. businesses with the capacity to be among • Celebrate the UK’s innovation • Work with businesses, the financial the best in the world. We will encourage success stories community and government and other them to fulfil their potential. • Increase the appetite for technology expert bodies to understand how best We will help to turn today’s emerging and innovation to stimulate innovation markets and new technologies into the • Foster multidisciplinary collaboration • Advise government on barriers growth sectors of tomorrow. We will use and connections to innovation and the exploitation our investments to reduce the time it takes of technologies, and make to bring new products to market. • Encourage co-ordination between recommendations for removing businesses, and between business and these barriers partners, to overcome fragmentation in the innovation ‘ecosystem’. • Align innovation support mechanisms and contributions from partners with Invest to help innovative businesses our own strategic activities, delivering become and remain successful in the stronger and more aligned support global marketplace. for business. • Encourage business investment in Be a high-performance innovative technology and innovation to increase organisation that gets things done. sustainable economic growth and improve quality of life • Be a great place to work, able to attract the highest quality people and invest in • Invest to stimulate the emerging their development. technologies and industries of tomorrow. Our objectives | 05

A strategy for business innovation | 2008-2011 Our investment strategy We will invest to generate sustainable Budget Yet the scale of the challenge facing the UK economic growth and improve quality should not be underestimated. Innovation Our budget for 2008-2011 is £711 million, of life. We will join up the fragmented is seldom cheap. Our biggest impact has plus aligned funding from the regional technology and innovation landscape in to come through our work as catalyst and development agencies of £180 million the UK, including international links. connector, rather than through the simple and at least £120 million from the distribution of funds. Fortunately, our track We are open to working with businesses Research Councils. record of success in leveraging both public in any part of the economy and we are With related funding from government and private sector funds means we are particularly committed to encouraging departments and the devolved confident that the total impact of our work knowledge transfer between sectors. But administrations, this will bring investment will be investment in innovation of well we will not provide support indiscriminately by ourselves and our partners to well over beyond £2 billion over the same period. and we will not spread our resources too £1 billion over the next three years. This thinly. We will focus on those areas of the is a substantial level of resource, and a Investment criteria economy where the UK has strength and testament to the progress that we have which will provide the greatest impact. We will have to make choices as to already made in sharpening support for where we invest. We will do so using innovation enabled by technology in the following criteria: the UK. • Does the UK have the capability? • Is there a large market opportunity? Investment Criteria • Is the idea ready? Does the UK have the capability? • Can the Technology Strategy Board • Do we have the capacity and capability and skillbase in the UK to research, develop and exploit make a difference? the technology or innovation? • Do we have - or can we build - a strategic presence or a UK centre of gravity in this area? We will make informed decisions on where we invest and evaluate Is there a large market opportunity? performance. We will be willing to stop investments that are not performing. • What is the size of the global market opportunity? • Will it create added value in the UK, taking account of the global market potential? • Will innovation in one company or sector transfer to others, boosting the overall returns? Is the idea “ready”? • Is there a clear opportunity to which this is a timely response? • Is the science or the creative application of technology developed far enough to underpin the innovation? • Will bringing it to market make enough impact quickly enough to be commercially rewarding? • Will it speed progress towards more sustainable economic growth? Can the Technology Strategy Board make a difference? • Is there a clear Technology Strategy Board role? Can we add value? • Will our investment promote sustainability and quality of life? • Can we bring partners or programmes together to create more than the sum of the parts – for example in cross-government co-ordination? • Will our involvement limit or spread risk, or enhance opportunities? Are there gaps that we can bridge? Can we create challenges to which others will respond? Can we address barriers to progress? Can we inspire a culture of innovation? 06 | Our investment strategy

We will use a range of mechanisms to foster innovative responses to challenges Challenge-led innovation To unleash the UK’s full innovation Commitments What this means for business potential we need to change many of We will increase our investment We will identify challenges, establish the ways in which we all think. It would in challenge-led innovation activities priorities in each of these key application be easy to feel overwhelmed by the to approximately 50 percent of areas and develop strategies which many challenges that the world faces, our budget. specify the key interventions. We will put such as climate change, the ageing into place appropriate responses, aimed population, globalisation and • We will develop strategies in the at generating an innovation answer to the security threats. main areas where we plan to invest, key challenges. In doing this, we will listen taking international perspectives But the very things that seem to to the voices of others including business, into account. threaten us can be used to stimulate Innovation and Growth Teams, Knowledge responses that enhance the quality • We will double the number of Transfer Networks and government of life and increase wealth. The Innovation Platforms responding to departments including the sector teams in Technology Strategy Board will use societal challenges to 10 and invest the Department for Business, Enterprise a range of mechanisms, levers and up to £100 million annually in them. and Regulatory Reform (BERR). initiatives to foster innovative responses • We will address the energy challenge, Major challenges break down into to challenges. including investing up to £20 million subsidiary challenges. Examples of these In doing so, our role will be to connect annually in the Energy Technologies and the possible responses include: and catalyse – and then let the market Institute. • Promoting UK strengths in low carbon select the best solutions. • We will encourage more innovative energy generation and oil and gas procurement by working closely extraction, by investment in energy with government departments generation and supply technologies, and agencies. including our investment through the Energy Technologies Institute Key application areas • Investing to maintain the leading We are developing strategies in a position of the UK’s pharmaceutical number of broad areas representing and healthcare sectors Changing proportions of major societal challenges or associated Technology Strategy Board financial • Promoting the competitiveness of the with the challenge of maintaining investment over 3-year period UK aerospace sector, by investment in a world-leading position. Currently, alignment with the National Aerospace they include: Technology Strategy and the UK Civil 2008-09 2010-11 • Medicines and healthcare Space Strategy • Energy generation and supply • Improving the resource efficiency of UK • Transport business by minimising pollution and • Environmental sustainability waste, and increasing energy efficiency • Built environment • Creative industries • Addressing the challenges facing the • High-value services. creative industries arising from the rapid pace of change in digital technology, developing and implementing appropriate responses • Evaluating and prioritising opportunities for the innovative use of technology in other high-value service sectors and The innovation climate acting accordingly. Challenge-led innovation Technology-inspired innovation Challenge-led innovation | 07

A strategy for business innovation | 2008-2011 BRE Innovation Park. The Code for Sustainable XXXXXXXXXXXXXXXXX Homes shows how government, taking a long term view, can stimulate innovation, create new markets and deliver policy objectives. This national design and construction standard requires all new homes to be zero carbon by 2016, giving business clarity and an incentive to invest in innovative approaches. Our Low Impact Buildings Innovation Platform is bringing business and government together to focus on this area. Innovation Platforms For example: Delivering innovation through procurement Innovation Platforms are one of the • Climate change is perhaps the greatest principal ways in which we support challenge we face. At least part of the UK government procurement currently challenge-led innovation. An Innovation response is likely to involve accelerating runs at around £150 billion each year, Platform is a new approach to delivering the introduction of low carbon vehicles, much of which addresses societal innovation which targets one of today’s which the Low Carbon Vehicles challenges, directly or indirectly. If we can major policy, societal or market challenges. Innovation Platform will address. increase the proportion that specifically It means understanding the role of aims to stimulate innovative responses, • Another challenge relating to climate government regulation and procurement in rather than ‘business as usual’ activities, change is the energy efficiency and changing markets, working with business then there will be a direct impact on the environmental footprint of buildings. and research organisations to identify UK’s overall innovation rate. And if large The Low Impact Buildings Innovation their response to these changes, and market opportunities arise from that, then Platform addresses this. then supporting programmes to deliver the overall impact could be enormous. innovative solutions. • Meeting the demand for independent We will work with government departments living for the elderly and the chronically Innovation Platforms embody our and the Office of Government Commerce ill is a challenge already identified, which principles of ‘connect and catalyse’ and to help identify future procurement the Assisted Living Innovation Platform we expect them to: opportunities with the potential to stimulate will seek to address. innovation. An initiative in this area may • Bring together businesses which already • Achieving greater security of electronic be particularly valuable for small and participate in these markets with those networks is another large societal medium sized businesses. They tell us who would not normally do so – and the challenge. The Network Security that a government contract is often better government departments which control Innovation Platform will address this. for them than a grant, making it easier for policy, regulation and procurement in them to attract investment and grow. these areas • The Intelligent Transport Systems and Services Innovation Platform will work We will act on the recommendation in • Adopt a multi-disciplinary approach to improve transport efficiency and the Sainsbury Review and put forward which fosters all types of innovation, reduce congestion. a proposal for encouraging innovation bringing together public and private in small business through government funding where the two can usefully Over the next three years, we will procurement of research. We will work with reinforce one another introduce a further five Innovation the Department for Innovation, University Platforms in areas which address other • Make something happen that would not and Skills (DIUS) to pilot a reformed major societal challenges. otherwise happen, and above all lead to Small Business Research Initiative commercial benefit and a change (SBRI) with the Ministry of Defence and Challenge competitions in behaviour. the Department of Health, prior to wider We will pilot competitions where we set deployment from April 2009. We are currently investing, along with the challenge, with both business and business partners and a number of public government, and allow the market to sector organisations, in five Innovation provide the solution. Such competitions Platforms. These focus on assisted living, will encourage a multidisciplinary intelligent transport systems and services, response, bringing together organisations low carbon vehicles, low impact buildings which might not normally work together to and network security. They are charged create new and exciting solutions. They will with promoting challenge-led innovation also provide a way of testing feasibility of within their respective areas. future Innovation Platforms. 08 | Challenge-led innovation

Maintaining core expertise and investing in the next generation of technologies and industries Technology-inspired innovation In the race to innovate, the UK has a Key technology areas • Invest in UK strengths in control stock of assets that few nations can systems and power engineering, plastic We will invest in specific key match. Our best universities, and the electronics, displays and lighting, data technology areas: wider research base in both the public and image acquisition, integration and and the private sector, have few rivals. • Advanced materials interoperability, and communications Our track record for innovation is • Biosciences • Use the UK’s electronics and photonics already among the best in the world. • Electronics, photonics expertise in system level design and Many of our technologies are world- and electrical systems embedded systems to exploit end-use beating, and can be used to inspire • Nanotechnology applications new waves of innovation to carry the • High value manufacturing economy and society forward in the • Information and communication • Invest in the development and twenty-first century. We are building on technology (ICT). exploitation of component technologies strong foundations. and end-to-end ICT systems that We will be clearer about the long-term are rapidly configurable, informed, It is vital that the UK maintains core timing of these investments. intelligent, dependable and user-centric expertise in leading edge technologies We will invest with partners to promote to underpin UK business growth. It is • Promote a high value approach to the rapid commercialisation of no less vital to maintain a pipeline of manufacturing by investing in product emerging technologies and industries new advances to keep UK businesses and process technology and by at the leading edge. The venture capital encouraging service innovation and What this means for business industry has contributed significantly business model innovation to increase in this regard, as has our financial Input from a range of partners has helped UK manufacturing competitiveness system generally. us to identify a number of priorities across • Invest in modelling and engineering of the key technology areas. In taking forward The Technology Strategy Board complex systems across sectors these priorities we will: will seek to build on this, investing • Invest in the development and exploitation in areas where the UK is strong, to • Develop, publish and implement of second and third generation bio-fuels. provide capability, taking account of strategies, and technology roadmaps the recommendations of business that justify and prioritise our Emerging technologies and industries groups such as the Confederation of interventions, and run collaborative R&D British Industry and bodies such as the competitions focused on these priorities The Technology Strategy Board will seek Council for Science and Technology. out emerging technologies that offer • Invest in materials technologies, We will identify emerging technologies significant potential to disrupt existing particularly in areas which address that could have a major disruptive markets and enable new business the challenges of energy and the impact or the potential to create opportunities. Those that connect across environment, promote a ‘reduce, re-use new industries. different disciplines create particularly and recycle’ focus on sustainability, or attractive opportunities. have healthcare applications Commitments We will work with businesses and • Review the network of Micro and We will invest approximately 25 percent government partners on an integrated Nanotechnology Centres to identify of our budget in core technologies that strategy to promote the rapid areas of real strength and determine are critical to the UK’s success. commercialisation of emerging technologies how best to further exploit these to the and industries. This will embrace the national benefit of UK business Emerging Industries Working Group which we will establish and lead. Technology-inspired innovation | 09

The innovation climate Innovation is something that people Commitments Knowledge exchange choose to do. To accelerate innovation We will continue to invest in When people with different perspectives in the UK, it is essential to build networks and knowledge exchange. share what they know, it enriches confidence and raise aspirations. We Our investment in this area will be them, sparks new ideas and delivers need a culture that enables, celebrates approximately 25 percent of our surprising benefits. We want to inspire and ultimately rewards talent and overall budget. and enable people to play their part in innovation – and that retains and the innovation economy. attracts talented people. The market for • Working with our partners, we will talent is global. We have to compete in double the number of Knowledge We will: that market. Transfer Partnerships and introduce • Complete the process of doubling more flexible and short-term A vital part of the role of the Technology numbers of Knowledge Transfer partnerships, increasing our annual Strategy Board is therefore to catalyse Partnerships by Spring 2011, including investment to £35 million and connect with our partners, fostering an increase in those involving further between us a national confidence in the • We will invest in networking education providers power of innovation. Through our work activities both in the UK and • Roll out flexible ‘mini-KTPs’ in conjunction and by working with other organisations internationally, primarily with the regional development agencies, such as the National Endowment for Knowledge Transfer Networks devolved administrations and the Science, Technology and the Arts • To build an innovation culture, we research councils (NESTA) and the Design Council, we will invest in research to inform our want to excite people about technology • Engage a wider range of co-funders, thinking and to help businesses to and innovation and provide insight and including research charities understand the latest developments expertise to the wider community. • Pilot other ways to increase the scope • We will undertake a programme to of Knowledge Transfer Partnerships, understand the factors which make including international partnerships an innovative culture and where our interventions can make a difference • Investigate other people-related knowledge exchange mechanisms • We will develop a programme such as mentors, business-to-business of public engagement activities exchanges, entrepreneurs-in-residence including communicating and and fellowships celebrating innovation success stories • Work with research councils and knowledge transfer groups to enhance • We will champion entrepreneurial the openness of research to business. leadership. 10 | The innovation climate

A strategy for business innovation | 2008-2011 Hareesh Kallambella, working at Jones Stroud Insulations in a Knowledge Transfer Partnership with the University of Central Lancashire, to optimise manufacturing processes and introduce new product development projects. Networks Clusters Networks are a central component of an Clusters of innovative activities in cities effective innovation culture. Knowledge or regions can be highly productive. Transfer Networks fulfil a variety of Proximity between businesses, and with vital functions and set the tone. They universities or other institutions, can connect broader business and academic generate mutually reinforcing relationships communities, with the overall objective of – whether supplier, customer, competitor, accelerating technology transfer into collaborator or all at once. UK business. Clusters also create local labour markets They drive the flow of people, knowledge for highly skilled people. Businesses and experience between business and involved gain brand value and the knowledge base, between businesses enhance their reputations as innovative and across sectors, between supply organisations. and demand sides of markets, and We welcome the attention paid to between experienced and inexperienced cluster development by our partners innovators. in the regional development agencies They also provide an expert forum for and the devolved administrations. We a coherent business voice in particular will engage with regional development technology areas, acting as the eyes and agencies, devolved administrations, ears of the Technology Strategy Board universities and other partners to invest and advising on technology needs or on in existing and emerging clusters, where issues which enhance or inhibit innovation research and business technology in the UK. strengths are concentrated. We will: • Review our investment in networks, including Knowledge Transfer Networks, to ensure they support our strategic priorities • Increase the international outlook of the Knowledge Transfer Networks • Work at joining up effective local, regional and national networks, as well as linking to international networks • Work at a regional level with clusters, science parks and science cities. The innovation climate | 11

A strategy for business innovation | 2008-2011 Thinking and acting globally We want to help UK companies succeed • Work with others to enhance globally. To do this, we and they need an international understanding of the UK’s international outlook and an understanding innovative capacity and potential, and to of worldwide trends and technical promote the UK as a global innovation developments, international partnerships centre of excellence - with internationally- and value chains. focused partners such as UK Trade and Investment, RCUK International, In the international arena, we will: the British Council, and British • Strengthen support to generate greater embassies including the Science Photo by Paul Heyes UK business involvement in the EU and Innovation Network Framework Programme and other • Benchmark the performance of the European Union activities such as UK against other countries and also EUREKA, Eurostars, Joint Technology benchmark the Technology Strategy Sue Riddlestone, Managing Director of BioRegional Initiatives and ERA-NETs, where there is MiniMills (UK) Ltd, demonstrates paper made from Board against other similar organisations benefit for UK business straw. This collaborative research and development globally, to assess performance and project is developing small scale technology for • Look at new ways of internationalising to share best practice treating black liquor, the effluent produced during paper making. With applications in many countries UK innovation, for example, collaborative • In the near term, concentrate particularly around the world, this will enable agricultural residues projects involving businesses, such as straw to be made into paper locally, putting on interactions with the European Union, governments and researchers from waste to good use and relieving pressure on the the US and other established and world’s forests. more than one country emerging economies which we identify • Foster collaboration and support the as areas of focus. Knowledge Transfer Networks to link with international networks giving UK business knowledge of leading edge global developments • Working with our partners, enhance UK influence in European innovation programmes to encourage their funding priorities to reflect UK strengths and needs 12 | Thinking and acting globally

The landscape is complex; there are many paths to innovation. Business requires greater clarity and a more connected approach Connecting innovation The technology and innovation landscape Businesses need coherent support from in the UK is fragmented. According to Lord government. To this end, we will create Sainsbury’s 2007 report, The Race to the a UK innovation map to help them to Top, “industry is faced with a bewildering access the most relevant support quickly. array of organisations and schemes, many It will also act as a catalyst to encourage of which cover the same ground.” innovative thinking. The government’s Business Support The UK innovation map will help business Simplification Programme is already access the right support at the right time beginning to address this complexity. and provide a continuum to move ideas From our perspective, a joined-up much more quickly from early concept approach to innovation is vital for the UK’s to the market. As part of the innovation future competitiveness. map, the Technology Strategy Board will work with other organisations providing technology and innovation support, to bring together the different types of support available. A longer-term aim will be to ensure greater consistency in rules and application processes. The Technology Strategy Board is helping businesses like the Morgan Motor Company to use different elements of innovation support to meet their needs. Matthew Humphries is one of several graduates working to enable rapid development of new vehicle designs, in a Knowledge Transfer Partnership with Birmingham City University. He helped to develop the Morgan LifeCar, a fuel cell hybrid sports car through a collaborative research and development project led by Morgan with Technology Strategy Board investment. The partnership won a Lord Stafford Award in 2007, Matthew was recognised as a ‘business leader of tomorrow’ at the 2008 KTP awards, and the car made its debut at the Geneva Motor Show in March 2008. Connecting innovation | 13

We work in all sectors of business, and with organisations ranging from the largest to the smallest which are distinguished by a commitment to innovation and growth How we will make investments We work in all sectors of business, and Knowledge Transfer Networks The scheme has been operating for with organisations ranging from the largest over 30 years and during that time has Knowledge Transfer Networks are national to the smallest which are distinguished by remained largely unchanged. We believe networks which aim to improve the UK’s a commitment to innovation and growth. that to meet a greater range of needs innovation performance by increasing it has to evolve. For example we will We will use a variety of mechanisms to the breadth and depth of knowledge introduce shorter placements and look help business. This will allow us to tailor exchange between companies and at the potential of other models such as our service to their needs. between business and academia. one or more associates working with There are 24, including a new network for We will: several businesses in a specific area. We creative industries due to be launched will also look at the possibility of placing • Provide more coherent support in 2008. people from business in a research for business Knowledge Transfer Partnerships institution, increasing partnerships in the • Give the most relevant support using further education sector and establishing Knowledge Transfer Partnerships, led a menu of investment mechanisms international partnerships. by the Technology Strategy Board with • Increase flexibility with different seventeen other public bodies, enable Sandpits combinations of products firms to take advantage of the wealth of scientific, engineering management and A sandpit is a week-long workshop which • Refine and enhance the investment technological expertise available in the brings together a range of organisations mechanisms we use ‘knowledge base’. In a Partnership, a and experts to develop and articulate • Balance our portfolio with some recently qualified person (an ‘Associate’) problems where the solution seems initially high-risk, high-return investments joins a company working with staff complex or ill-defined. Sandpits are based to embed the knowledge the company on a model used by the research councils. • Connect with partners to provide a range is seeking. of support from initial concept through to Feasibility Studies market launch. Feasibility studies are a way for companies The rest of this section outlines the to carry out exploratory studies which mechanisms by which we can invest in could lead to the development of new business success. products, processes, models, experiences or services. The study could involve for instance investigating the technical feasibility of a new idea. 14 | How we will make investments

A strategy for business innovation | 2008-2011 A consortium led by Stratophase and co-funded Geomerics Ltd is leading a consortium in a by the Technology Strategy Board is developing Collaborative Research and Development project to bio-chemical sensor chips; disposable, highly- bring about a step change in the quality of graphics sensitive microchips which enable detection of for computer games. The new technology, called harmful biological pathogens such as anthrax or Enlighten, can create realistic illumination effects in real E.Coli. Applications of the technology include both time, in dynamic lighting environments within a game. medical diagnosis and security, for example to detect biological attack.The picture shows part of the production process, using an ultra-precise laser to ‘write’ an optical circuit onto a blank chip. Exploratory awards Large projects and demonstrators Standards, regulation and measurement Small, early investments can stimulate We plan to continue investment in large innovation. For many businesses, this validation projects and demonstrators Standards, regulation and measurement initial funding is the difference between an seeking public funding greater than £5 are important drivers for innovation. idea taking off or going nowhere. We plan million. These projects must address Standardisation and metrology facilitate to provide funding for exploratory awards our strategic priorities and promise a the pull through of products, services and to stimulate activity such as the formation significant impact. processes into the market. Standards – as of initial relationships between SMEs and with the Code for Sustainable Homes – can universities. Initially, we will work with the Centres also be used to set longer term targets. Knowledge Transfer Networks to deliver A network of 23 micro and this type of investment. Regulation can be seen as an innovation nanotechnology centres around the inhibitor, but used effectively it can in UK was established by government to Proof of concept fact act as a driver and a source of new create a recognised and sustainable business opportunities. We can encourage Early-stage and near-market proof of infrastructure of centres of strength in this regulators to think more about innovation concept projects are part of the support area, for the benefit of UK business. We and help businesses to take advantage of needed to make an idea investor-ready will review these centres to identify areas opportunities arising from new regulations. and are often important for raising venture of greatest value and determine how best capital. As part of our toolkit, we will work to exploit them for business benefit. Across all our activities, we will work with with DIUS and the RDAs in establishing a a range of organisations to look at how Innovation and knowledge centres more co-ordinated approach to the proof standards, regulation and metrology are centres of excellence designed of concept support available. can stimulate innovation and provide to accelerate and promote business competitive advantage to UK business. exploitation of an emerging research Collaborative Research and technology field. They offer a We will: and Development shared space and entrepreneurial • Work with the BSI British Standards to The Collaborative Research and environment in which researchers, pilot standards activity in areas where we Development mechanism supports potential customers and professionals can provide the UK with a competitive innovative proposals in which the business from academia and business can work advantage and research communities work together side-by-side to scope applications, on projects to deliver new products and business models and routes to market. • Work with the National Measurement services. Projects must involve two or We are investing in two such centres, System including institutes such as the more collaborators, at least one of which in association with the Engineering and National Physical Laboratory to ensure is from a business. The level of grant Physical Sciences Research Council UK business is taking best advantage of support varies between 25 percent for and the Biotechnology and Biological the effective use of measurement projects nearer to market and 75 percent Sciences Research Council, and will • Examine the potential innovation for those more concerned with looking at consider further opportunities. opportunities arising from the the commercial potential of ideas coming implementation of EU regulations. from the knowledge base. How we will make investments | 15

Any UK company can be our customer irrespective of size, maturity, sector or national ownership Our customers and partners We occupy the space between business, UK business currently invests far more Working with the knowledge base government and the research community. in research and development than we Universities, further education providers, Our main focus and the main reason for have at our disposal. In 2007 alone, the research and technology organisations, our existence is to support UK business total was more than £16 billion. We will and other research providers are an in the area of innovation enabled by work with business in areas that we both integral part of many of our activities to technology. This is our purpose. We see consider important and jointly leverage foster innovation. Bringing them together businesses as our customers. our investment and skills to maximise with business in collaboration stimulates the benefit. We want to provide leadership in new ideas and generates an exchange technology and innovation, both in the We will: of knowledge which can help drive future UK and internationally. Through our own business and economic growth. The UK • Provide business with a clear view staff, the expertise that resides in our has a world-leading knowledge base in of the support that is available from Knowledge Transfer Networks and by many areas and we need to ensure we us, from others in the UK and bringing together experts from many capitalise and build on that expertise. internationally, and work to ensure disciplines and business sectors, we that it is a coherent offering will lead the debate and address key Working with government questions of relevance to UK business • Be relentless in simplifying the support We will only be able to achieve our and government. we provide and ensure that it is efficient, objectives by working in partnership with effective and meets the needs of government bodies. We work closely Working with business individual businesses with three distinct groups of government The Technology Strategy Board has an • Bring people together to generate new partners – government departments and enabling role in supporting UK business, ideas, transfer knowledge and create their agencies, devolved administrations as a champion, influencer and investor. new relationships and regional development agencies, and Our primary focus is providing UK based the research councils. We view these • Work with the UK Intellectual Property business, irrespective of size, maturity, organisations as our partners. Office to provide advice to businesses, sector or ‘national’ ownership, with the helping them to capitalise on the We will work together, leveraging our skills technology and innovation insights and benefits of innovation and jointly supporting activities, and we support required to make a difference. We will use our leadership role for working support business by: • Help businesses to see new across government and co-ordinating opportunities with a longer-term • Providing guidance, expert knowledge technology and innovation activity. view of technology and innovation. and opportunities Working also with other potential providers • Providing funding to invest jointly in of funding such as venture capitalists research and innovation and business angels, we will build on the • Working with business to overcome strengths of UK business and provide barriers to innovation. the opportunities for business to be at the forefront of technology and innovation globally. 16 | Our customers and partners

A strategy for business innovation | 2008-2011 The Assisted Living Innovation Platform, launched in November 2007, brings together The Department of Health, the Engineering and Physical Sciences Research Council and the Economic and Social Research Council. It will develop innovative technology-enabled products and services to meet the increasing demand for independent living from the growing numbers of elderly people, who may suffer from chronic conditions. Government departments Devolved administrations and Research councils regional development agencies We will work closely with departments right The research councils are the main across government, particularly in the area The Technology Strategy Board has public investors in fundamental research of societal challenges. a UK-wide role and will work with the in the UK. We will work with them to devolved administrations of Scotland, understand the capabilities and outputs This means understanding governmental Wales and Northern Ireland and the of the UK universities and to support policies and how we can work with them English regional development agencies areas of research that show commercial to good effect. It means helping to ensure to understand how their strategies and promise. We will do this by strengthening that public procurement acts as a stimulus activities align with our national strategy, business engagement with the research to innovation and that longer-term goals and to support activities which address base, by maximising the potential for are set which provide business with the national and regional priorities. commercialising basic research and confidence to invest. It involves working accelerating the process of doing so. closely with the chief scientific advisors. We will: It means using standards, measurement The broader remit of the Technology • Identify and follow through on priority and regulations to stimulate innovation and Strategy Board will make it easier to areas where the Technology Strategy working with bodies such as the BSI British work with those research councils where Board and the devolved administrations Standards, National Physical Laboratory perhaps there has not been any significant and regional development agencies will and the UK Intellectual Property Office to previous activity. work together make this effective. We will work with research councils on • Use the recently established Strategic Finally, it means advising government areas we both consider a priority. Over the Advisory Group to provide advice on where there are barriers to UK business next three years, the research councils will how regional support should be aligned. innovation and feeding back what we learn commit at least £120 million in support of to improve future thinking. Lord Sainsbury’s review ‘The Race to Technology Strategy Board activities. the Top’ recommended that the regional We will also work with the research development agencies should invest councils on their strategic cross-council £180 million over the next three years in research programmes, enhancing links activities aligned with the Technology between areas and links with other Strategy Board. We will aim to exceed this partners such as regional development figure, focusing on shared priorities. agencies and devolved administrations. These programmes include energy, living with environmental change, global security, ageing, nanoscience and the digital economy. Our customers and partners | 17

A strategy for business innovation | 2008-2011 Measuring success UK innovation trends Measuring our impact The UK has one of the most innovative We also need to measure the Technology economies in the world, according to the Strategy Board’s contribution to raising 2007 European Innovation Scoreboard. the innovation performance of the UK. This places the UK among Europe’s As a publicly funded organisation, we will leading nations for innovation (along with evaluate all of our activities, to assess both Denmark, Finland, Germany and Sweden) their impact and their value for money. and ahead of the USA. Indeed, the 2007 The very nature of innovation presents UK Innovation Survey indicates that the some challenges. First, it takes time for majority of UK firms (64 percent) surveyed innovation to bear fruit in the market. had actively engaged in innovation in the Second, many of the benefits ultimately previous three years. accrue to other companies or even other Innovation is not, however, easy to sectors. Because of these lags and measure. There are many other indicators, diffusion effects, separating out our own such as R&D spending, and they are only impact from that of other drivers is bound part of the picture. to be difficult. That means that the trends in innovation To address these challenges and are hard to spot. For example, the 2007 begin measuring our impact, we will UK survey showed only a marginal draw on the experience of other public increase in reported innovation compared sector organisations, including similar with the 2005 survey. But other indicators, organisations around the world, as well as such as trends in the commercialisation business exemplars, to establish a best- of university research, paint a much more practice appraisal and evaluation regime positive picture. for all our own activities. It is vital to know what the trends in We will extend into other areas the good innovation really are. A new Innovation measurement practice already seen Research Centre will be established by in Knowledge Transfer Partnerships in DIUS, NESTA, ESRC and the Technology capturing the real business benefits of the Strategy Board to ensure a steady supply investments made. of high quality innovation research into the UK innovation policy community. And we will contribute to a range of initiatives including the Annual Innovation Review, to be published by DIUS for the first time in autumn 2008, and the Innovation Index, a pilot version of which is to be published by NESTA in 2009. 18 | Measuring success

This is a journey of partnership to put innovation at the heart of business life in the UK In conclusion Innovation and the application of • Challenge-led innovation, finding technology are vital to boost the opportunities for innovative solutions UK’s economy, address social and in current and future societal and environmental challenges and help economic challenges commerce to thrive. To achieve these • Technology-inspired innovation, ambitions, businesses need inspiration maintaining the UK’s expertise in and investment. They need access to technologies where it leads, and breakthrough thinking. They need to investing in the next generation of join forces with experts and business technologies and industries, and partners. And they need to operate in an environment that is open to new ideas and • The innovation climate – fostering which supports them. confidence in the power of innovation to create sustainable economic growth This is the mission of the Technology and a climate in which this can happen Strategy Board over the coming years. through knowledge sharing, networking We will connect and catalyse to address and celebrating success. these needs, concentrating on three The DIUS white paper ‘Innovation Nation,’ main priorities: published in March 2008, highlighted the core role the Technology Strategy Board will play in driving innovation in the UK. In this strategic plan we have outlined how funding of £1bn for the years 2008-11 (with partner contributions), together with matching funds from business, will provide a total investment of at least £2 billion in innovation over the next three years. Working with our partners, we will have many tools at our disposal to help make connections happen, invest in research and drive innovation. This is the start of a journey of partnership which we hope will put innovation at the heart of business life in the UK. We believe that this is an urgent and vital task. We are ready. Let’s go. In conclusion | 19

Glossary BERR The Department for Business, ErA-NET The European Research Area NESTA The National Endowment for Enterprise and Regulatory Reform; (ERA), is a concept in which different Science, Technology and the Arts, a the government department primarily national funding agencies work to create a non-departmental public body devoted to responsible for business in the UK. joint approach to funding and to promote supporting talent, innovation and creativity free movement of researchers and ideas in the UK. BSI The BSI Group includes BSI British across the continent. European Research Standards, which as the national standards Research councils The seven primary Area Networks (ERA-NETS) have been set body of the UK develops and sells standards government-funded basic research up in specific areas of research, to help and standardisation solutions to meet the organisations in the UK. Comprised of co-ordinate national research policies and needs of business and society. the Engineering and Physical Sciences activities in terms of objectives, expertise Research Council, the Economic and Collaborative Research & Development and resources, with funding from the Social Research Council, the Scientific and A Technology Strategy Board programme European Commission. Technical Facilities Research Council, the which invests in innovative research and Innovation Platform An approach to Natural Environment Research Council, the development projects. Competitions are innovation which addresses a major policy Arts and Humanities Research Council, held inviting proposals from business-led or societal challenge by working with the Biotechnology and Biological Sciences consortia, often including knowledge base business and research organisations to Research Council and the Medical partners. Formerly part of the DTI’s identify their response to the issue and the Research Council. Technology Programme. market opportunity, understanding the role Regional development agencies DIUS The Department for Innovation, of government regulation and procurement, Government funded bodies based in Universities and Skills. The government and supporting programmes to deliver the regions of England which co-ordinate department which sponsors the Technology innovative solutions. regional economic development Strategy Board. Key application areas A framework and regeneration. Devolved administrations (DAs) of broad areas of enterprise which the RCUK Research councils UK, a strategic The devolved governments in Northern Technology Strategy Board has identified partnership of the seven research councils. Ireland, Scotland and Wales. as key fields where the application of innovation and technology can address Sainsbury Review A review of Energy Technologies Institute (ETI) societal or competitiveness challenges. government’s science and innovation policy A public/private partnership organisation by Lord Sainsbury, entitled The Race to the established in 2007 to develop secure Key technology areas A framework of Top and published in October 2007. sustainable and affordable energy supplies core technologies in which the UK leads or for present and future generations. The which are critical to its success, designed Small Business Research Initiative Technology Strategy Board is a funding to focus and prioritise Technology Strategy (SBRI) A government procurement partner of the Energy Technologies Institute. Board investments. programme designed to make it easier for smaller firms to obtain procurement EU Framework Programme Knowledge Transfer Network (KTN) contracts from government bodies to The Framework Programme for Research National networks, funded primarily by the conduct research and development. and Technological Development, the EU’s Technology Strategy Board, which aim to main instrument for funding research in improve the UK’s innovation performance UK Trade & Investment (UKTI) Europe. The Seventh such programme is by increasing the breadth and depth of The government organisation which currently in progress; known in short as FP7, knowledge exchange between companies works to enhance the competitiveness of it will run from 2007 to 2013. and between business and academia in companies in the UK through overseas specific areas of technology. trade and investments and attract a Eurostars A programme launched continuing high level of quality foreign in October 2007 by EUREKA. Eurostars Knowledge Transfer Partnership (KTP) direct investment. provides public/private funding for research A UK-wide programme, funded by the by high-tech small and Technology Strategy Board and 17 public medium-sized enterprises (SMEs) in Europe. sector partners, in which high-calibre, The programme issued its first recently qualified people from the call in February 2008. research base work within a business on innovation projects. EUrEKA A pan-European network for market-oriented, industrial R&D, created National Contact Point (NCP) as an intergovernmental initiative in 1985. A Technology Strategy Board service EUREKA aims to enhance European providing information and advice to help competitiveness through its support UK business participate in the latest to businesses, research centres and European Framework Research and universities who carry out pan-European Development Programme. projects to develop innovative products, processes and services. 20 | Glossary

A strategy for business innovation | 2008-2011 About the Technology Strategy Board The Technology Strategy Board is an executive non-departmental public body sponsored by the Department for Innovation, Universities and Skills. It is made up of a team of executive directors and staff who develop strategy and tactics, provide management and deliver the organisation’s work programmes, while a Governing Board sets the overall direction. The current members of the Governing Board are: Dr Graham Spittle (Chairman) VP Software, UK, Ireland and South Africa, IBM Dr Graeme Armstrong Director, Research, Development and Innovation, Akzo Nobel Eur Ing Nick Buckland Board member, South West RDA Dr John Brown Chairman, BTG plc Dr Joseph Feczko Chief Medical Officer, Pfizer Anne Glover CBE Chief Executive, Amadeus Capital Partners Ltd Dr David Grant CBE Vice Chancellor, Cardiff University Jonathan Kestenbaum Chief Executive, NESTA Professor Julia King CBE Vice Chancellor, Aston University Andrew Milligan Head of Global Strategy, Standard Life Investments Dr Peter Ringrose Chair, BBSRC Dr Jeremy Watson Director of Global Research, Ove Arup & Partners Iain Gray (Chief Executive) Technology Strategy Board B1, North Star House North Star Avenue Swindon SN2 1JF Tel: 01793 442700 Email: enquiries@tsb.gov.uk www.innovateuk.org

Technology Strategy Board B1, North Star House North Star Avenue Swindon SN2 1JF Tel: 01793 442700 Email: enquiries@tsb.gov.uk © Crown Copyright 2008 T08/004 Printed on Evolution 75% recycled paper www.innovateuk.org

Connect and Catalyse

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