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Both the government and the Labour Party last week seized upon plans
to set up a network of new ‘intermediate institutes’ to transfer technology
from universities to industry. The proposals were made in a report by the
Prince of Wales Working Group on Innovation. The day after its publication
the government announced plans for a pilot scheme and Labour promised a
national network if it wins the election.

This week, Peter Lilley, the Secretary of State for Trade and Industry,
expanded on his plans, saying that he expected the pilot scheme to grow
into a larger network. ‘The pilot scheme is not a substitute for a long-term
programme,’ said Lilley. ‘We are going to learn from this experience.’

The new centres are modelled on Germany’s Fraunhofer Institutes. Their
job will be to transfer technology from academia to industry in key disciplines
such as microelectronics. They will be funded partly by government and partly
from commercial contract research.

Unlike existing contract research organisations in Britain, the
new centres will concentrate on transferring technology by transferring
people. The centres will take on graduate engineers, train them to PhD level
in commercial surroundings and allow them to move on into industry. ‘Nine
times out of ten it is people transfer that transfers technology,’ said
Lilley. ‘These students will go into industry with that much greater experience.’

The Department of Trade and Industry has allocated £2 million
for the first year of a pilot scheme. Five centres, probably run jointly
by universities and existing contract research organisations, will each
take on 20 students in October.

The Prince’s working group calls the new bodies ‘Faraday Centres’, while
Labour plumped for ‘Newton Institutes’. The DTI is leaving a diplomatic
pause before announcing its preferred title. Apart from names, however,
there are important differences in the way the parties believe the centres
should be organised and funded.

The government follows the working group’s recommendations for building
a network out of existing institutions. Money would come from private sources,
as in Germany, said Lilley. He added: ‘The Fraunhofer institutes are not
massive public expenditure programmes. They work on contract income.’ Labour,
by contrast, is edging towards building new institutes. Funding would come
partly from unspent money already in the DTI’s budget.

Bob Whelan, the chief executive of the Centre for Exploitation of Science
and Technology, who first proposed the new centres last year, said he was
extremely pleased that his concept ‘had been so widely acclaimed’. But he
warned against trying to transplant the German model. ‘We cannot just construct
a Fraunhofer system in the UK. We have intermediate institutions and we
have to build on the best of those,’ he said.

Labour’s science spokesman, Jeremy Bray, emphasised the need for
a balance between advanced research and postgraduate training in the new
centres. ‘Existing independent research organisations play very little role
in training postgraduate engineers. And in some the amount of research has
shrunk so that they have become little more than consulting organisations.
Newton Institutes must be first class institutions in their own fields.’