CDN, of course you must be right, the robustness of any “stage-gating” process has to be crucial for any R&D. And sometimes stuff just doesn’t work out, and you’ll have to accept that. But Ballard is still going as a fuel cell company, so Canada got some benefit from their PEM program, didn’t it? I suspect the problem there is one of where a particular technology (fuel cells) fits into a much bigger picture (getting a different infrastructure for powering automobiles). Not sure I would agree that the USA’s moon program didn’t have a precursor R&D program – surely the massive military rocket and satellite program was what that built on.

Stephen, your examples of long-term benefits of research are good ones. But I think you are illustrating my point about the need to consider the wider innovation system when arguing what benefits you get from blue-sky research. In those cases, the blue sky research was able to provide economic benefits only because it existed in an environment in which inventions could be turned into products and taken to market. The worry is that that environment, now, doesn’t exist or is at least less favourable; perhaps it isn’t so much the impact agenda that makes it impossible to wait a long time for the pay-off from such blue sky research, as the demand of venture capitalists for a big return in 5-10 years.

But it is the so-called ‘impact agenda’ that imposes the greatest strictures on innovation in biomedicine. On one hand, it is right that any grant writer should have to think about and comment on the impact their work may have, particularly when using public funds. But it is the tightly linked expectation that research must deliver economic benefits, implicit in the utterings of Willetts and Cable, that puts investigators in a straightjacket. Much of the most profitable research (in terms of return to a national economy) can take years to deliver. I can give two brief examples in an area with which I am familiar, therapeutic monoclonal antibodies that block new blood vessel growth, and thus have value in the treatment of cancer.

The first concerns a small protein named VEGF that stimulates blood vessel growth. VEGF was discovered as the result of blue skies research, and the antibody that blocks its activity was patented some ten years before entering clinical use. Last year that antibody had worldwide sales of >$6bn, with a derivative used to treat blindness adding a further $3bn. Another more recently developed antibody against a different target, was patented in 2004, licensed in 2008 and has yet to go to market. However, the licensing deal was worth €500M in milestone payments, and if it goes to market double digit royalties will follow.

What these examples illustrate is that if innovation in the UK is to yield similar returns, which is clearly what government and tax payer would like, the impact agenda becomes meaningless. The fundamental, basic, blue-skies research that primed these massive money-spinning drugs, would almost certainly not have been supported under the constraints imposed by the demands of short-term impact. A second point, related to your question of whether the UK is politically and economically receptive to innovation, is that when or if a UK investigator stumbles upon a therapeutic with such potential, will there be a UK company standing by ready to take up the license? Selling the rights to a US, Swiss or German company might make for one happy vice-chancellor and a handful of wealthy academics, but the lions share of the global revenues along with the manufacturing jobs, will remain outside the UK.

For innovation to yield economic benefit, there needs to be proper investment in basic science (as in Germany), with investigators rather than research councils taking responsibility for the direction of their research. You mention that there is a feeling that the economic benefits of science funding have been over-sold. If this is true, it is not because funding is inadequate in the UK (though that is a handicap), it is because funding is being strategically and unwittingly manipulated in such a way as to ensure low returns.

We need to scale down the UK university system so that it provides really effective, high-level education and with the expectation that only 10% of the remaining academics will undertake (internationally leading) research. Of this, we may see only a tiny fraction leading to any commercial returns.