AIRTO (the Association for Innovation, Research and Technology Organisations) welcomes the recent government announcements that confirm the increased levels of public investment in science and technology, and put innovation at the heart of its plans for recovery and growth.

These announcements include the Budget 2021 statement, the accompanying ‘Build Back Better – Our Plan for Growth’, ‘Global Britain in a Competitive Age – the Integrated Review of Security, Defence, Development and Foreign Policy’, and the government’s recent policy statement on the new Advanced Research and Invention Agency (ARIA).

Commenting on these recent announcements, AIRTO’s Chair, Dr Paul Howarth FREng said:

“The country faces unprecedented challenges in the recovery from the COVID19 pandemic and its effect on the national economy and prosperity, and in the drive to make the UK a net zero carbon economy by 2050. AIRTO has been working with government and other stakeholders to identify key issues and consider how they can be addressed, and is pleased to see that this thinking features in these recent announcements. We will continue to work with government to ensure the maximum national benefit is obtained by incorporating and prioritising innovation into the evolution and implementation of these plans.

However, there are some immediate causes for concern. Uncertainty over the budget for the UK’s participation in Horizon Europe, and the notice of possible cancellation of existing UK Research & Innovation (UKRI) sponsored projects because of the temporary reduction in Official Development Assistance (ODA) funding are worrying. Both have the potential to severely damage the UK’s R&D sector and its standing in the world, and detract from the target of raising the level of R&D to 2.4% of GDP by 2027 target. A rapid, satisfactory resolution of these issues is needed.”

The Budget 2021 statement

The ‘Budget 2021’ statement confirmed the previously announced increase in government support for science and innovation. In 2020, AIRTO called for and welcomed this increase in government support in our position statement ‘More D!’, and we continue to advocate that it is directed towards applied research and development (R&D) to ensure the benefits of the UK’s world-class science base are realised by the nation as rapidly as possible. This support should not be at the expense of support for the science base, but the increase in R&D funding should focus on rebalancing the investment of public money towards market-led but high-risk translational research, development and demonstration of applications. This rebalancing is necessary to ensure that the maximum return to the nation is obtained from applying the undoubtable achievements of the science base.

AIRTO also welcomes:

• Measures to support highly innovative companies in raising investment funding for growth and scaling up, and support for SMEs in the areas of IT and management practices.

• The super-deduction capital allowance which will raise investment by UK companies in new equipment (which is currently poor), allowing innovation to be introduced to both products and processes and levels of productivity and efficiency to be raised.

• The announcement of a review of the R&D Tax Relief system (in which we will be participating). Enhancements to this system have the potential for increasing investment by UK companies that will result in more competitive and productive industry.

• Investment and flexibility in trainee and apprenticeship schemes, which are a key part of the delivery mechanism for skills needed by the UK’s workforce, and should be seen alongside positive enhancements to further and higher education. These are particularly relevant to the UK’s future national challenges such as reaching net zero carbon and for which the skills of the future workforce need to be developed now. In this regard, reforms to the immigration system are welcomed by AIRTO both for its members’ own workforce development, and for the recruitment of skilled professionals by their industrial partners.

However, AIRTO laments two noticeable omissions from the Budget 2021 statement:

• Details of how the UK’s participation as an Associate Country in the Horizon Europe R&D programme  will be funded.
• The mechanism by which the UK Prosperity Fund (replacing EU Structural Funds) will operate.

AIRTO urges the government to correct these omissions as a matter of urgency. This information is crucial for planning the response of the Innovation, Research and Technology (IRT) sector to the current crisis and challenges, and is also vitally important for many other parts of the UK economy and infrastructure.

‘Build Back Better – Plan for Growth’

AIRTO applauds this plan which was published alongside the Budget 2021 statement, outlining three core pillars for growth:
o Infrastructure.
o Skills.
o Innovation.
AIRTO particularly welcomes the stated ambitions of levelling up across the UK economy, the transition to net zero carbon emissions by 2050 and support of the vision for a global Britain. We welcome the Prime Minister’s foreword to the plan foretelling a new age of invention, with strong, active government investment in science and technology, as a part of a dynamic, enterprise-based economy. However, AIRTO contends that discovery and invention is only one part of this story for the UK. Invention must be combined with innovation, applied research, development and demonstration, to ensure that the real benefits of this dynamic culture are captured for national economic and societal benefit. Innovation and its application will be crucial to the rebuilding and growth of the UK economy, and it needs to be an integral and joined-up part of all the government’s plans, including those for infrastructure and skills. It is vital that this opportunity to ‘do things better’ is not missed.

The transition to net zero carbon emissions is a huge challenge for the UK. A recent AIRTO Position Statement, ‘Towards Zero’, discusses key actions that need to be taken to ensure the UK is fit and able to address this challenge through support for skills and innovation. This includes the support and development of the knowledge and resources of the IRT sector, which is already highly active in addressing the challenge and planning future actions.

As well as being a crucial part of the UK’s infrastructure, the UK’s IRT sector has a global footprint and will play a key role in the government’s commitment to the ‘Global Britain’ and ‘Science and Technology Superpower’ visions.

‘Global Britain in a Competitive Age – the Integrated Review of Security, Defence, Development and Foreign Policy’

AIRTO commends the newly published Integrated Review of Security, Defence, Development and Foreign Policy, which is comprehensive and far-reaching in its current and future positioning of the UK in the world. In taking account of the UK’s strengths and challenges in the light of the current global environment, we welcome the way the government has positioned ‘science and technology’ as a key theme running through the document, and the stated aspiration for the UK to be a ‘Science and Technology Superpower’, securing this status by 2030. This shift articulates a change in emphasis from the previous aspiration to be a ‘Science Superpower’ – a broadening of ambition which has repeatedly been called for by AIRTO over the last year and is crucial if the UK is going to derive real economic and societal benefit from its current and future capabilities, both domestically and in its activities throughout the world. Achieving success in the aspiration to become a ‘Science and Technology Superpower’ depends upon the commitment to public support of R&D and bolstering the UK’s global network of innovation partnerships, particularly in the areas of climate change and biodiversity loss, which are contingent on the political landscape in partnering countries, as well as their state of economic development. Particular reference was made of building more links with the Indo-Pacific region, and partnering with China to address climate change. Many of AIRTO’s members have active collaborations worldwide, including in these specific territories and stand prepared to play their role in the enactment of this UK government policy.

The UK faces challenges in a rapidly changing global landscape, with other countries also seeking to attain a competitive edge in R&D, and its exploitation. AIRTO welcomes the government’s recognition of the need to maintain a clear competitive edge and to address the problem of support for R&D falling away before ideas originating in the UK are fully commercialised. AIRTO strongly asserts that innovation and intellectual property must not be allowed to leave the UK before national benefit is achieved both from indigenous use and appropriate commercial agreement with other countries.

AIRTO fully agrees that the role of the development of regulations and standards in global competition should be an area of priority for the UK to enhance its competitiveness. AIRTO’s members are very prominent in the arena of shaping industry sector-based, national, European and worldwide regulations and standards, and is highly supportive of recent moves (led by BEIS) to better coordinate national activities.

The Advanced Research and Invention Agency (ARIA)

AIRTO further welcomes the government’s recent policy statement on the new Advanced Research and Invention Agency (ARIA), following on from its previous announcement in 2020 and a House of Commons Science and Technology Committee Inquiry and recent report, to which AIRTO submitted evidence.

The government’s intention is that ARIA will be a new, independent research body to fund high risk, high reward scientific research, and be led by world-leading scientists who will have the freedom to identify and fund transformational science and technology with an initial budget of £800m for the remaining life of the current parliament (~4 years). AIRTO believes that this new funding agency, modelled to some extent on the successful US ARPA model, will provide a huge benefit to the UK both economically and in its plans to be a ‘Science and Technology Superpower’. Independence from government and bureaucracy is welcomed for its selection of projects to sponsor and their execution. However, AIRTO contends that creating links to national imperatives and priorities, via government, is essential to ensure that the new agency serves the overall national interests and that it is endowed with capability to follow through to the point of exploiting its inventions within the UK economy and society. ‘Mission Science’ will ensure projects have clear end goals which can be directly achieved, with well defined milestones that can be used for effective project monitoring.

The mandate to fund high-risk, high-reward projects is welcome, along with the tolerance to technology failure, the ability to start and stop projects, and appropriate redirection of funding. This will entail effective project monitoring and management by ARIA staff, with implications for the size and quality of the workforce the agency will require.

AIRTO notes that both the level of funding and initial programme timescale are modest compared to the US ARPA model, and many transformational projects will need significant time to realise their benefits. Plans for long-term activities and their funding must be put in place irrespective of the initial timescale, otherwise there will be a risk that the initial investment could be wasted if promising projects are not taken through to completion.

AIRTO welcomes that the funding agency will provide the opportunity for collaboration between all players in the research and innovation community, from universities, through IRT sector organisations, to industry and other end users. These comprehensive collaborations must be built and properly supported financially as ARIA projects, to ensure there is a clear path for exploitation of the resulting knowledge.