Mr. Ian Cooper

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Mr. Ian Cooper

• Deputy Director, UK Water Research Centre
• CEO, British Hydromechanics Research Group
• Advisor,World Bank Technology Projects
• Philippines, Chile, Mexico, Pakistan, India,
  Turkey
• Director, Operations UK Royal Society

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RD Institute RestructuringInnovation
Competitiveness Practitioners Workshop 19-21
April 2004

• Ian Cooper
• Deputy Director UK Water Research Centre
• CEO British Hydromechanics Research Group
• Advisor to World Bank Technology Projects in
• Philippines, Chile, Mexico, Pakistan, India,
  Turkey, Mexico
• Director Operations The Royal Society

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RD Institute Restructuring

• Why is it important?
• International experience
• What we are trying to achieve
• What have we got to get right
• Key steps in the transformation process
• Results
• Key lessons

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Why is it important?

• The role of science engineering technology
  (set) in a modern economy
• Scarce resources to be best used
• Industry worldwide funding higher proportion of
  total spend on RD
• Governments worldwide funding lower proportion of
  total spend on RD
• But only as a part of a total package

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Some statistics (OECD)

• Industrial funding as of total RD spend OECD
  average 20 increase in 5yrs, USA 33 in 5yrs
  
• Government funding as of total RD spend OECD
  average 16 reduction in 5 yrs, USA 23 in 5 yrs
• Gross domestic expenditure on RD (GERD) as of
  GDP 2000 EU 1.89, USA 2.72, Turkey 0.64
• Number of researchers 2000 EU 971k, USA 1.26m,
  Turkey 23k
• of GERD financed by industry1991-28, 2001-45
• of GERD financed by Government 1991-70,
  2001- 47

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Where has this been done?

• UK RAs, DERA, NPL, AEA etc
• Other European countries FhG, TNO etc
• Mexico SEP CONACYT
• Philippines ITDI, MIRDC
• Chile CONACYT
• China
• India CSIR
• South Africa CSIR
• Australia CSIRO
• Turkey MRC

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What are we trying to achieve?

• Make the best use of scarce resources (people and
  facilities) to promote economic growth
• Ensure the relevance of research institutes in a
  modern economy
• Provide scientific and technological support to
  local industry to assist in improving their
  competitive position
• Sustain and improve the scientific and
  technological quality of research
• Maintain high quality curiosity driven research

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Typical problems prior to restructuring

• Largely Government funded focus on maintaining
  or increasing this source of funding
• Generally a haven for the Countrys best
  technical talent
• Not market orientated expensive toy for the
  scientific establishment
• Many small projects aimed at reinventing the
  wheel
• Emphasis on RD and not many other services
• Antagonistic relationship with industry
• Financially and commercially illiterate

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What characterises a successful RI?

• Identify their markets and potential clients
• Are service orientated and have various ways,
  formal and informal of interacting with current
  and potential clients
• Ensure quality of people and services match best
  international standards
• Build feedback mechanisms with clients and
  technical community
• Have client confidentiality and IPR policies
• Innovative approaches to building new
  capabilities learn from others
• Renews its science and technology
• Adopts best international practice for business
  processes
• Financially and commercially aware

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Government has an important role

• Motivate the restructuring process
• Ensure structures avoid bureaucracy
• RIs need flexibility and autonomy (but with
  accountability)
• Stimulate demand (especially for SMEs)
• Provide relevant legal structures ( including
  IPR)
• Provide policy framework
• Provide support for strategic blue skies RD

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What have we got to get right?

• Reform is not partial needs a clear vision
• Essential that there is strong leadership and a
  competent core team
• The reform works to meet demand
• Well thought out business plan
• Key business processes reformed marketing,
  commercial, financial (MIS), project management,
  IPR exploitation
• Key reforms undertaken governance, quality
  systems, overhead reduction, training, HR
  policies, infrastructure renewal, legal

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8 steps in restructuring

• Establish a sense of urgency
• Form a powerful coalition
• Create a clear vision and objectives
• Communicate this vision
• Empower others to act on the vision
• Plan for and create short term wins
• Consolidate improvements and produce still more
  change
• Institutionalise the new approaches

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The results

• CSIR India Prof Mashelkar Economist article 3
  April 2004 Innovative India
• CSIR South Africa 4x increase in turnover/head
  in 7 years, 6x increase in number of patents
  filed over 4 years, 250 growth in contract
  research income in 6 years.
• Many other examples

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The results Turkey MRC

• Self sufficiency ratio increased from 13 1999 to
  49 2003 and 65 2004 (target)
• Contract income increased from 2002 to 2003 by
  5.7m
• Private sector income increased 200 2001-2003
• Number of industrial services 19991800,
  2003-7925
• Contract income/staff 1999-4543, 2003-17500
• Central admin costs reduced by 800k 2002-2003
• Research staff 52 of all staff 2000 will be 66
  2004
• Support staff 45 of all staff 2000 will be 33
  2004
• Scientific output increased 317 publications
  2001, 411 2003
• Set up technology park

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Key Lessons - MRC

• Strong leadership a key to success clear vision
• Time spent in business planning is not wasted
  scenarios
• Improve staff communication/involvement
• Tackle the difficult operational, process, legal
  and HR issues early not late if not they delay
  the transformation
• Need a robust, simple to use and effective MIS
  early in the process
• A strong PIU and change manager to coordinate the
  many parallel activities taking place
• Learn from others it has been done
• It is difficult and will take time

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RememberIt must be considered that there is
nothing more difficult to carry out nor more
doubtful of success, nor more dangerous to handle
than to initiate a new order of things.For the
reformer has enemies in all those who profit by
the old order and only lukewarm defenders in all
those who would profit by the new
orderMachiavelli
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But also rememberthe reward for success is
very significant for the Institute, for the
researchers, for local industry and for the
national economy
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Mr. Ian Cooper

• Deputy Director, UK Water Research Centre
• CEO, British Hydromechanics Research Group
• Advisor,World Bank Technology Projects
• Philippines, Chile, Mexico, Pakistan, India,
  Turkey
• Director, Operations UK Royal Society