MRC CONSULTATION ON ECONOMIC IMPACT Please access the online form at: http://survey.mrc.ac.

uk/economic_impact_consultation
Background The MRC wishes to strengthen the understanding of the link between research and economic and societal impact. The aim of this work will be to provide policy recommendations to improve strategies for the support of research, and in particular funding for health research. There is a pressing requirement to deliver new insight into the economic and societal impact of research within this spending review period. The issue of implementing a programme of research in this area was raised at MRC Council (May 2011) and MRC Strategy Board (May 2011), discussed at RCUK Impact Group, and supported at a meeting of the Office for Strategic Co-ordination in Health Research (OSCHR) in June. The argument was made in 2010 that public investment in research should be maintained as this investment provides an excellent return to the UK. Evidence was presented to Government that continued support for research and development was essential to drive innovation and improve the productivity of the UK economy. Research into innovation is, of course, an established academic field in its own right, and research councils will take care not to duplicate work which will happen anyway. We acknowledge that interest in the link between research and economic and societal impact has grown significantly in recent years (certainly since 2006 with the publication of the Warry Report1), and organisations such as the Council for Industry and Higher Education (CIHE)2 and the Department for Business Innovations and Skills (BIS)3 have relevant current work underway. However Government and the public expect that funding agencies will continue to develop evidence for the case for investment in research, and apply learning to optimise the support for this research. Research councils are expected not only to assess their own effectiveness, and gather evidence that will shape future policies, but also to ensure there are focussed, timely studies on the performance of their sectors overall. To achieve this it is important to gather evidence about the performance of wider research and innovation ecosystems that put the past performance and future plans of research councils into context.

The Warry Report: Increasing the Economic impact of the Research Councils (July 2006) was the report of the Research Council Economic Impact Group, chaired by Peter Warry, to the Director General of Science and innovation at BIS (then DTI). The report can be found at http://www.vitae.ac.uk/cms/files/DTI-Warry-Report-July-2006.pdf.3072.download 2 In July, 2011, the Council for Industry and Higher Education (CIHE) and the UK-Innovation Research Centre (UK~IRC) launched a Task Force to answer the question: how does the UK maximise the value of publicly-funded research? The CIHE and UK~IRC believe that by uniting leading figures in industry and academia they will deliver an answer. http://www.cihe.co.uk/cihe-ukirc-launch-a-new-task-force-onenhancing-value-in-the-uk-reseach-base/ 3 The BIS Growth Review calls on business and industry to challenge Government Departments on the measures they are taking to allow the private sector to flourish. Details can be found here http://www.bis.gov.uk/policies/growth/growth-review

Online consultation In order to create a set of priorities that can be used to commission, tender or call for research proposals to help the research councils in this area, we are consulting widely with researchers, policymakers and other stakeholders in health research. The results of this consultation will be discussed at a workshop to be held on the 26th October 2011. Attendance at this event will be by invitation only, but you may indicate your interest in joining the meeting using the survey form at http://survey.mrc.ac.uk/economic_impact_consultation/. The online form includes a list of questions that have arisen from preliminary discussions across MRC, with other research councils, and with MRC Strategy Board and Council members. These are not meant to be exhaustive, but are provided to stimulate discussion about the most important processes that should be examined, and we welcome any comment. We are seeking feedback on the importance of these questions, and whether any others should be added. We are not asking respondents to try to answer these questions. The detail of the online form is included in the annex to this paper. Respondents should bear in mind that: the MRC is committed to delivering its 2009-2014 strategic plan Research changes lives, and has set out actions to achieve this in its current delivery plan.4 the consultation focuses on questions that go beyond internal programmatic evaluations and reviews. Plans for MRCs internal evaluations are being worked up in parallel, and we will use the consultation to add extra dimensions to these, and to identify where programmatic and wider studies should/should not be closely linked. there is a need for all areas of public spending to examine what contribution can be made to economic growth, and for this thinking to assist Treasury plans to stimulate the economic recovery.5 the MRC last supported work in this area jointly with the Wellcome Trust and the Academy of Medical Sciences in 2007/08 resulting in the publication of the report Medical Research: Whats it worth?6

The online form also captures information about you, your expertise, and your availability for the workshop in October. Your input may be published as part of the report of this consultation and will be attributed to you. If you have any questions about this process, the consultation documents, or the online form please contact economicimpact@headoffice.mrc.ac.uk The consultation is arranged into the following sections: 1 2 Your details The link between research and Your name and contact details. Can we better explain this link, by examining research and development investment, research intensity, innovation,

MRC Delivery Plan 2011/12 2014/15 http://www.mrc.ac.uk/consumption/idcplg?IdcService=GET_FILE&dID=30667&dDocName=MRC007642& allowInterrupt=1 5 Growth Review (Department for Business Innovation and Skills and Treasury, 2010) http://www.bis.gov.uk/policies/growth/growth-review 6 Health Economics Research Group, Office of Health Economics, RAND Europe. Medical Research: Whats it worth? Estimating the economic benefits from medical research in the UK. London: UK Evaluation Forum; 2008. http://www.wellcome.ac.uk/About-us/Publications/Reports/Biomedicalscience/WTX052113.htm

economic growth

technological change and its impact on productivity? What are the key gaps in knowledge that matter most for decisions about the health sector? What is the best evidence we can draw upon concerning the contribution that research makes to increasing life expectancy and quality of life? Can we identify which sorts of research have been most important, and whether high research investemtn in a country matter for quality and length of life? Are common sense or populist approaches to increasing quality life supported by the economic benefits and costs of extending quality life? Where are the conflicts ?

The contribution that research makes to quality of life

The benefits from research to industry and health users

How does public and charitable research stimulate business investment in research, total and inward investment to the UK, and employment? Is there more to understand about what promotes engagement between academia and industry? Can we improve quantification of changes not easily monetised (such as changes in skills in the workforce and uptake of new ideas), and better explain successes in health research? Can we capture the contribution of research to innovations and improvements in the health system, how much of this results from R&D internal and external to the NHS?

Translational progress

Can we establish/strengthen estimates of payback from research in this area? Alongside exploration of the performance of translational programmes themselves, what are the uncertainties in the UK innovation system that should be explored? Is there more we should do to track the influence of areas seen as key to growth (such as experimental medicine and regenerative medicine)? Where might changes in industry R&D policies, or changes in scientific opportunity affect performance of translational schemes and are these changes measurable? What external (i.e. not under RCs direct control) factors in the University sector (tech transfer policies; NHS interactions; international collaboration; concentration and clustering) are most important to assess?

Other priority questions

What are the economic benefits/drawbacks of globalisation of R&D and academic knowledge. Will decisions on research collaborations driven by academic motives and tactics give the best result for the UK overall, or should other factors be considered? What is the added value of EC funding? Can we detect skill shortages in the labour market in a timely way? Medical research funding, and MRCs in particular, is concentrated in relatively few Universities. Would further concentration aid economic impact, or harm it? What data and approaches are needed to strengthen our evaluation programme?

Any other comments

Annex 1 Detail of the online form at http://survey.mrc.ac.uk/economic_impact_consultation/ FOR REFERENCE ONLY (Please fill out the form online) 1. Welcome/Your details (required information) Name Affliation (e.g. University, Company, Learned Society etc.) Are you responding to this consultation as an individual, or on behalf of the organisation above? Email contact 2. The links between research and GDP growth The economic downturn has highlighted the pressing need to find ways to stimulate economic growth. The broad process of innovation is cited as a key driver of productivity, and research and development (R&D) is highlighted as a crucial component of this. Q5 Can we better explain the links between research and growth in GDP, and in particular the contribution of publicly and charitable funded health research to the economic recovery? There appears to be differences in research productivity and research intensity in different sectors (e.g. life sciences, engineering). Are there quantifiable differences between research and development in different sectors and growth in GDP? Is the UK better or worse than others in achieving a growth yield from R&D? Is the UK getting better or worse over time? Where are the UK successes in translating research investment into increased economic growth? What do we know/can estimate concerning the trends for growth in the pharmaceutical and biotechnology sectors in the UK and internationally? What can we expect from this sector over the next 20 years in terms of contribution to GDP, job creation etc.?

Q6

Q7 Q8 Q9

3.

Quantifying the contribution that health research makes to quality of life A common criticism of health research is that it is leading to longer lives but not necessarily a greater quality of life. There is evidence that in some areas the economic benefit of additional QALYs significantly exceeds healthcare costs7, but there is also growing concern about the burden on society as people live longer but need care for conditions such as dementia, and new health challenges such as obesity emerge as lifestyles change. We need to better express the economic and social benefit of health research, so that this information connects with the public and policy makers.

Health Economics Research Group, Office of Health Economics, RAND Europe. Medical Research: Whats it worth? Estimating the economic benefits from medical research in the UK. London: UK Evaluation Forum; 2008. http://www.wellcome.ac.uk/About-us/Publications/Reports/Biomedicalscience/WTX052113.htm

Q10 Q11

Are we getting healthier? What proportion of this improvement can be attributed to biomedical research, public health advice, engineering etc? Is the satisfaction/wellbeing of the public improved by research and innovation?

4.

Quantifying benefits to industry and the health system from the immediate downstream effects of research and development Are there better ways in which we can quantify the benefits of research via its impact on the private sector? What are the most robust approaches to examine the translation of knowledge into economic impact? Is there data available that we should be exploiting or do we have to compile this?

4.1.

The amount that UK and international businesses spend on research in the UK (BERD) Companies in the life science sector are research intensive, and there are many interactions with RCUK funded academics. Should we be accessing/collecting firm-level data to better understand how publicly/charitable funded research affects BERD? Inward investment (for example in financial investment from outside the UK or from the private sector toward UK GDP) The life science sector attracts a high proportion of foreign direct investment projects (only the software and engineering sectors attract greater numbers of projects), what additional data do we need to understand the interaction between publicly/charitable funded research and inward investment? Research and development employment How can we better examine the link between publicly and charitable funded research and employment in R&D, or other activities? Does the UK need a STAR METRICS8 programme to collect improved scientific workforce data? What are the downstream effects of increasing the number of people with skills gained through research training in the workforce? Growth in diversity of technologies in use in a sector Is there data that we can access regarding RCUK research influence on the range of technologies in use in the UK, the speed at which innovations are adopted, and comparisons across sectors and countries? Are there approaches to quantify or better define the process of the uptake of ideas? Companies engaging with publicly or charitable funded researchers Is there more that we should do to understand the types of partnership (cofunding, co-authorship of papers, consultancy, exchange of

Q12

4.2.

Q13

4.3. Q14 Q15 Q16

4.4. Q17

Q18

4.5. Q19

NSF/NIH STAR METRICS programme http://sites.nationalacademies.org/PGA/fdp/PGA_057189

materials/expertise/staff), the diversity of partnerships between publicly/charitably funded researchers and the private sector, and the effect this has on innovation and growth? Q20 Is there more that we should do to understand differences in requirements for different partner organisations, for example large pharma, biotechnology or medical device companies, spin outs and small enterprises? Should we examine the transmission of spill-over benefits from the private sector to R&D in the public and charitable sector? Successes in health improvement Are there improvements that can be made to the way that public and charitable research funding agencies capture information about successes in health improvement, analyse this data, and present the results? How can we best track the translation of new ideas into improved healthcare? What are the best measures of uptake by the NHS of the results of public and charitable R&D? How much of this impact results from R&D internal and external to the NHS?

Q21

4.6. Q22

Q23 Q24

5.

Impact of translational investments MRC has made significant investments in translational research, including new ways to manage research programmes and partner with industry9. These investments include initiatives co-ordinated with other funders and industry to build up capacity and excellence in areas seen as key to growth, such as experimental medicine and regenerative medicine. The MRC also has significant long-term investments in Africa and wishes to strengthen the way that the impact of this work is presented. Details of outputs and outcomes from all MRC funded research for the last five years have been captured using MRC e-Val providing a unique resource for analysing the link between investment in research and impact. It is essential that we can communicate the impact that these initiatives have made in terms of progress against the MRCs strategic plan33.

Q25 Q26 Q27 Q28

Can we expand upon and better present the evidence for relative payback from translational investments? Is there evidence that some research schemes/routes to funding provide a faster or higher rate of return to the economy? How should we track and analyse changes in strategic areas such as regenerative medicine and experimental medicine? Given that UK research is exploited internationally, and some public/charitable research is directed toward international development, are there approaches to capture the global return on investment from public and charitable R&D? Is there more that we can do to examine the benefits globally and locally of international research, for example MRC investments in Uganda and the Gambia?

Q29

Further information on MRCs translational research strategy can be found at http://www.mrc.ac.uk/Ourresearch/ResearchInitiatives/Translationalresearch/index.htm

6.

Other priority questions Are there other issues where it would really help to have evidence, which do not just examine a linear progression from science to benefits? For example, in 2010 Haskell and Wallis10 examined whether there were spillover benefits from public sector investment in intangibles (such as tax credits), and compared spillover benefits from investment in R&D via the research councils, and civil and defence sectors. Are there other such econometric approaches and comparisons that we should examine?

6.2. Q30 6.3. Q31

Is there a greater or lower return on investment from EU awards? Can we calculate the added value of EU funding for research in the UK? Does investment in technology transfer add value or slow things up? Can we access data concerning technology transfer in the UK, and improve upon estimates of the contribution made by technology transfer offices and other routes to commercialising research? Are skills/employment market factors becoming rate limiting in exploiting R&D? Are there signals that can be identified in the labour market concerning skills shortages in R&D, and opportunities for these to inform RCUK strategy? Is investment in R&D in the health sector good at creating very high skill jobs but worse than other sectors in translating these into larger numbers of high skill manufacturing jobs ? Is there data that we should obtain/collect on the flow of people into and out of the scientific workforce? Clustering R&D investment Medical research funding, and MRCs in particular, is concentrated in relatively few Universities. Would further concentration aid economic impact, or harm it? Evaluation data and approaches Is there sufficient alignment between funders, institutions and the private sector to ensure that good quality information about research in the UK is available to policymakers? What should be the focus of evaluation programmes now, to support decisions in future?

6.4.

Q32 Q33

Q34

6.5. Q35

6.6. Q36

Q37

10

Public Support for Innovation, Intangible Investment and Productivity Growth in the UK Market Sector (Haskell and Wallis, 2010) working paper http://www.ceriba.org.uk/pub/CERIBA/PublicSupportCeriba/innovation_JHGW_final_16Feb2010.pdf

7.

Additional comments/workshop event (required information) Additional comments (for example are there significant areas not addressed in thequestions above, should we include further background and existing data in the background paper?)

Have you any suggestions regarding experts/organisations that we should seek views from? Are you interested in, and available to attend the workshop event on the 26th October 2011? Which of the areas outlined above do you feel best placed to comment on? (Please tick all that apply) The links between research and GDP growth Quantifying the contribution that health research makes to quality of life Quantifying benefits to industry and the health system from the immediate downstream effects of research and development Impact of translational investments Other priority questions THANKS FOR YOUR INPUT