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The announcement on 19 February of a new UK government agency to promote ‘transformational science and technology’ inevitably raises a number of questions, notwithstanding the very positive justifications for the new body that the government has offered.
The agency, named the Advanced Research & Invention Agency (ARIA), will have real but not massive funds at its disposal with something over £200 million a year set aside for the rest of this parliament. To put this in perspective, the MoD’s own research spend in 2018/19 was £546 million.
More importantly, the announcements made to date lack clarity both on what the new body is to do and on how it is to work.
WHAT MIGHT IT DO?
The government intends that ARIA should target ‘high-risk, high-reward’ science and so should not be blamed for failed projects. To reduce the chance of its less successful efforts being criticised, it is to enjoy less transparency over its spending than other government bodies and will not be subject to Freedom of Information demands. The challenge of specifying high-risk/high-reward research should not be understated: technical risk can be seen as a relatively well-understood field in which NASA’s Technology Readiness Levels approach and progress in natural sciences are particularly useful. However, anticipating and identifying which technology advances are likely to be turned into commercially successful products is quite another matter, requiring very different insight.
The government’s press release indicated but did not assert that the ARIA money could be used to do both research and development – it is ‘to fund the most inspiring inventors to turn their transformational ideas into new technologies, discoveries, products and services’. However, the government’s resource accounting and budgeting system distinguishes clearly between ‘research’ and ‘development’ activities, with spending on the latter being classified as capital expenditure.
Development is product-focused and a more expensive phase than enabling research. Normally, government research funding for the civil world is seen as justifiable when it is focused on raising levels of technology readiness to the point where companies can see both potentially profitable applications and a much-reduced risk in the technologies. This ought to give them the confidence to take over the financing of further work.
The extent to which the new body’s efforts will focus on the needs and challenges of the defence sector is also not yet clear.
On the one hand, the announcement of the proposed centre came from Kwasi Kwarteng, secretary of state at the Department for Business, Energy and Industrial Strategy (BEIS). The associated press release stressed ‘ground-breaking technologies that could transform people’s lives for the better’ in areas such as disease control and climate change.
On the other hand, the inspiration for the idea was clearly provided by the success of the US Defense Advanced Research Projects Agency (DARPA). A middle-ground possibility is that, reflecting Chinese stress on ‘fusion technologies’ that link both the defence and commercial world, the agency could serve both military and civil causes. At least one media report anticipated that ARIA would have a significant defence agenda.
The new agency will need a legislated basis, a process that may throw light on some of the issues above. This is not expected to come into being until 2022. By this time, there should also be further clarity about how it is to work.
HOW MIGHT IT WORK?
The government’s vocabulary and assertions lead to several questions. For instance, will most ARIA money be spent internally on the agency’s own researchers and inventors, or will it primarily be a grant-awarding body to private sector groups judged to have the best or most exciting prospects? How will requests for funding be prioritised and by whom? A grant structure should appear more suitable than a contractual basis since a grant involves a commitment to execute a work programme rather than to deliver a specified output.
Which commercial bodies will be given access to ARIA-funded research and on what terms? Will such research be left solely with the contractor that undertook it? Will wider access be limited to companies beneficially owned in the UK or will it include multinationals with significant development and production activities in the UK? If the latter are included, will restrictions be placed on their capacity to export the technology to their home state or elsewhere?
What will ARIA’s relationship be with the UK venture capital market? Should the agency be viewed as an acknowledgement of the limited availability of venture capital in the UK, and will the new government body also look (in some cases) for co-funding from venture capital sources? In areas where ARIA sponsors research at very low technology readiness levels, will it expect venture capital money to take over after a certain level of progress has been demonstrated? Could ARIA also be seen as a risk-reduction measure to reduce the pressure on potential innovators to take money from overseas sources, not least China, as part of the UK effort to control the unauthorised leakage of valuable technology?
Certainly after its political founders have left office, ARIA’s directors will have to justify how its success should be assessed. Failures can be tolerated, as in pharmaceutical companies, but only if there is strong evidence of having generated some big wins.
With these questions in mind, there are also issues about how the agency will fit into the wider picture of government research spending.
ARIA’s living space will need to be coordinated with that of UK Research and Innovation (UKRI), a non-departmental government body which coordinates the work of the universities’ research councils, and also its business-focused sub-unit, Innovate UK. UKRI’s planned spend in 2020/21 is just over £9 billion. Not surprisingly, its CEO, Ottoline Leyser, anticipated that ARIA and UKRI would work closely together.
Within defence, relevant bodies that will need coordination with ARIA include the Defence Science and Technology Laboratory, a government agency with an operating income of £722 million in 2019/20 which also works in the broader security space, and the Defence and Security Accelerator (DASA) which issues small-scale grants, especially to smaller enterprises. Part of DASA’s mission is to ‘find, fund and support industry, embracing small and medium-sized enterprises and academia to develop their innovative ideas into exploitable products and services for defence and security customers’. It spent £22 million on projects in 2018/19 and its potential overlap with ARIA is apparent. Also standing in the innovation space is the MoD’s own Defence Innovation Unit, and the innovation-focused bodies in the individual commands.
Potentially interfacing with ARIA are the Growth Partnerships that bring government and industry together. These separately address the defence, aerospace, cyber, space, security and resilience sectors. The Defence Growth Partnership works ‘to secure a truly competitive, sustainable and globally successful UK Defence sector that provides leading-edge capability and through-life support for our Armed Forces and International customers, as well as bringing wider economic benefits to the UK’.
Extra money for national research seems sensible in this age of rapid technological change and fierce intergovernmental political, military and economic competition. But it is not clear that the ARIA initiative has yet been thoroughly thought through, even in terms of how it will fit in with wider government support for research. Were it a project emerging from the middle level of the MoD or BEIS, in its present public form, its business case would not survive contact with the Treasury.
Moreover, even the body’s title sits awkwardly at a time when scholars of innovation rarely use the term ‘invention’, and instead see major changes and new products as emerging from the integration of multiple complementary technologies – this is true even of the humble wheeled suitcase.
Some of the points here, and others, have already been raised by the House of Commons Committee on Science and Technology and the legislation process needed for the new body will provide time for both further government thinking and, of course, parliamentary scrutiny.
The views expressed in this Commentary are the authors', and do not represent those of RUSI or any other institution.
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