Is it Time The Government Said ‘You’re Fired’ to The Technology Strategy Board?

Rather than identifying the next generation of innovators, the UK’s government backed industrial research and redevelopment program has become a costly spectacle that promotes style over content.

The Apprentice and Dragons’ Den give tired old farts, with little left to offer industry, the chance to pee on the heads of young whipper-snappers climbing the ladder beneath them. These shows also punish anyone who displays inventiveness and youthful enthusiasm: qualities despised by the couch bound television viewing public. Even so, they are entertaining and generate a great deal of money for television production companies. This does not mean, however, the concept translates well into the real world and it has fallen down badly when used as a model for the government’s research and development strategy.

Over five years ago what was then the Department of Trade and Industry adopted a competitive approach to funding innovation in a broad range of industrial sectors ranging from energy to healthcare. Any organisation seeking a grant for research and development was asked to pitch their idea to the newly formed Technology Strategy Board. (TSB). The TSB was, and still is, responsible for deciding priority areas of research for UK industry, then designing funding programs to suit and building suitable competitions. All this kicked off in the age of New Labour when the idea that ‘it’s on television so it must be true,’ prevailed. It was not long before elements of reality TV filtered into TSB funding programs. And here is where it all started to go horribly wrong.

Successful candidates do well out of their appearance on a reality business game shows: becoming celebrities, even it they perform less well in the real world job they win. There is similar triumph of style over content in TSB competitions with rewards for efficient networking and elegant PowerPoint presentation. Having learned how to perform, the same competitors tend to appear time and again on the winners list.

In line with other government departments the TSB outsource much of their workload. Third parties are tasked with promoting competitions and recruiting candidates. Consultants and academics assess applications. Event organisers handle briefing sessions, road shows and workshops. The scope here for costs to run away is obvious. If someone is being paid £200 to assess an application then the more entrants recruited then greater the amount of money sloshing around in the network of companies organising the competition. The same goes for the briefing events and road shows. A £1 million funding program, which attracts 1000 applicants, could see £200,000 spent on assessing applications. This is before the bill comes in for event management.

The extent to which overheads eat into R&D awards can be gauged by the fact that £5000 grants are regarded as being too small to assess economically and are, instead, handed out on a first come first served basis to any project that fogs a mirror.

Quality of ideas is also an issue as contestants (and that is what they have become) are expected to give detailed descriptions of their innovation to a room full of potential competitors. They can also expect to have detailed plans and specifications picked over by unknown parties. Basically, if you have a good idea – and any sense - you keep it to yourself and seek funding elsewhere, abroad if necessary.

Perhaps the penny has finally dropped and Whitehall now realises a large part of the UK’s industrial R&D budget is being frittered away on coffee, Danish pastries, biros and notepads. Vince Cable recently announced targeted R&D spending on a range of technology in what looks like a return to the old Khrushchev style ‘Let’s try growing wheat on permafrost,’ approach to innovation.

There was a golden age of R&D in the UK that saw innovators bring backroom ideas to market, especially in the electronics and microcomputer sector. Funding for this was via two incredibly simple financial mechanisms; tax breaks and capital allowances. For the innovator revenues were lumpy with a rush of spending at the end of the tax year. However the money was spent on ideas that improved the competitiveness and profitability of companies. Funding R&D through tax breaks saw money allocated by people who had a grasp on their company’s requirements as firm as the grip shareholders exerted on management’s testicles. This was the era when some of the judges on Dragon’s Den and The Apprentice made their fortunes. Perhaps they could help Vince Cable recruit a new team of apprentices.

Peter Kruger

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