13th MEETING OF EDF INNOVATION SUB-GROUP ON 1^st FEBRUARY 2008

Attendees: Frank Bryan, IOD (Chair)

Gerry McCormac, QUB

Bernie Hannigan, UU

Bob Barbour, CforC

Stephen Kingon, Invest NI

Fiona Hepper, DETI

Linda Bradley, DEL

Anne Conaty, DETI

Tony Simpson, DETI

Conor Dunbar, DETI

Stephen Moore, DETI

Stephen Roper, InnovationLab

Apologies: Danny McCaughan, McCaughan Associates

Tracy Meharg, Invest NI

Graeme Hutchinson, DETI

Fergus Devitt

WELCOME / APOLOGIES

1. Frank Bryan (Chair) welcomed Members and noted apologies from Danny McCaughan, Tracy Meharg and Graeme Hutchinson. He also welcomed Stephen Roper and Tony Simpson, who were attending the meeting in relation to the discussion on the Innovation in Tradable Services research project.

2. The Chair reported that the minutes of the Sub-Group’s 12^th meeting on 18 October 2007 had been agreed with Members via email and posted on the EDF website.

MATTERS ARISING

Review of Postgraduate Funding and Policy

3. The Chair reminded Members, that at the last meeting, DEL officials had advised a project group had been established to oversee the review of postgraduate policy and funding. He also reminded Members that DEL had advised that a notice was to be issued seeking tenders to undertake the review. He invited Linda Bradley to provide an update.

4. Linda Bradley circulated a paper which highlighted specific issues which had been raised by QUB and UU for consideration in the review.

5. She reported that three tenders have been received and that a meeting is being held on Monday (4th February) to consider. She advised that once the methodology is agreed, a list of stakeholders for consultation will be drawn up. She noted that Fergus Devitt, who is chairing the review steering group, will update the Innovation sub-group during the course of the review, which is due to report in June.

ACTION: DEL to provide an update on the progress of the review at the next Innovation Sub-Group meeting.

Joint Universities paper to the EDF Innovation sub-group.

6. Linda advised that a project group has been established by DEL to take forward the proposals in the joint universities' paper to EDF and noted that the first meeting was held on the 31st October. She reminded Members that the paper had included 4 strands and that the first meeting was used to scope the activity required for each strand. She reported that, given other work being progressed by DEL and Invest NI, the project team will mainly concentrate on North/South issues. She noted that it had been agreed that the project team would meet again when there was greater clarity over the amount of funding that would be available from the new 'Funding for Innovation' stream. She concluded that updates on activity on the other 3 strands would be provided at subsequent project group/Innovation Sub-Group meetings and that the project group is due to meet again on 25th February.

7. Frank Bryan thanked Linda for the update and commented on the importance of keeping track of progress on each of the four strands identified in the Universities paper.

ACTION: DEL to provide an update on activity of all 4 strands at the next Innovation Sub-Group meeting.

Technology Hubs / Centres of Excellence Evaluation

8. The Chair drew Members’ attention to paper 2, the draft Centres of Excellence Action Plan and invited Fiona Hepper to provide an update.

9. Fiona noted that this is a first draft of the action plan, that the evaluation is close to being finalised and that, once complete, the plan will be submitted to the DETI Minister for approval. She also noted that, whilst DETI hadn’t yet had time to go through the plan in detail, initial indications are that the Centres of Excellence is well aligned with UK and EU policies. Looking to the future, she noted that, whilst all projects will be considered, it is likely that priority will be given to industry led projects involving the universities.

10. She concluded by advising Members that DETI would still be happy to receive comments on the draft action plan.

11. A discussion on the evaluation and the draft action plan followed during which the following issues were discussed: the all Island of Ireland approach; the need to manage a transition away from Selective Financial Assistance and the marketing of the Centres of Excellence (CoE). In relation to the latter point, it was highlighted there may be potential for the Business Alliance to play a key role in promoting the CoE programme. It was agreed that the Sub-Group should consider initiatives to stimulate industry demand for the programme at a future meeting.

12. The Chair concluded the discussion by noting he would raise the issue of how to stimulate industry demand for the Centres of Excellence programme with his colleagues in the Business Alliance.

ACTION: Chair to discuss with the Business Alliance and report back to the next Innovation Sub-Group meeting.

MATRIX: NI Science Industry Panel

13. Anne Conaty tabled a paper which provided a summary of the position on MATRIX and the Horizon programme.

14. She reported that good progress was being made by all panels and highlighted that a key and common finding is that market opportunities are cross sectoral.

15. Whilst the draft report was generally welcomed, some concerns were highlighted by QUB over the assessment of research quality within the university by the consultants. It was agreed that the Matrix Secretariat and QUB would discuss these concerns. Some reservations were also expressed by the Private Sector, which the Matrix Secretariat confirmed it was aware of, and had been addressed and resolved. Frank Bryan requested a progress update on the outcome of further discussions with QUB at the next meeting, hopefully to receive confirmation that all outstanding issues have been satisfactorily addressed / resolved.

ACTION: Progress update on the outcome of discussions between Matrix and QUB at the next Innovation Sub-Group meeting

Skills for Innovation

16. Linda Bradley reported that, following the development of the Regional Innovation Strategy, the Skills for Innovation project has focused on looking at human inhibitors of innovation. She noted that Terms of Reference are currently being agreed which will allow consultants to conduct a literature review of the current body of knowledge in order to identify human inhibitors in Northern Ireland businesses. This work will investigate academic work in the disciplines of sociology, social science, psychology, business and management and, drawing on the best international research, will then look more closely at research of specific relevance to the Northern Ireland situation.  The work will specifically identify underlying reasons for human inhibitors to innovation in business and make recommendations as to how these could be minimised.

17. She concluded that a report will be delivered, along with a presentation of key findings, from which the group will agree proposals for possible interventions to reduce/minimise/overcome human inhibitors to innovation.

Innovation Fund

18. Fiona Hepper provided a short update on the Innovation Fund. She outlined that the £90 million fund has been ring fenced by DFP and that it was also part funded by the Republic of Ireland. She explained that DETI had primary responsibility for managing the fund, that details on the projects would be included in the Regional Innovation Strategy Action Plan and that the departments benefiting were DEL, DE, DETI, DHSS, DCAL and DARD.

19. She also explained that a number of projects had a cross border dimension.

REGIONAL INNOVATION STRATEGY ACTION PLAN / ETI COMMITTEE

20. The Chair reminded Members that DETI had been developing a new Regional Innovation Strategy Action Plan (RISAP) in partnership with its Inter-Departmental Working Group on Innovation and other key stakeholders from business, academia and the wider public sector. He noted that members had received a copy of the draft RISAP on 14 December 2007.

21. He advised that the DETI Minister had forwarded the draft RISAP to the ETI Committee and that the ETI committee had asked the Innovation Sub-Group (as well as other key stakeholders, including MATRIX and the Statutory Committees of the Northern Ireland Assembly and Departments) for its comments on the draft Action Plan.

22. He reminded Members that the Sub-Group could either provide written or oral comments and that his view was the Sub-Group should provide written comments. There was general agreement that the Sub-Group should provide written comments.

23. Fiona Hepper provided a short overview of the draft RISAP and highlighted the main comments received to date and next steps.

24. A discussion followed during which Members outlined the key comments they wished to include in the Sub-Group’s response to the ETI Committee. In general terms, the Sub-Group agreed it was content with the draft RISAP. It was also highlighted that the Sub-Group’s comments would focus primarily on points of emphasis as, collectively and individually, Members of the Sub-Group had been involved and consulted on the development of the plan from its inception and have helped shape its content.

ACTION: EDF Secretariat to draft a response from the Innovation Sub-Group Chair to the ETI Sub-Group and agree with Members.

INNOVATION IN TRADABLE SERVICES RESEARCH

25. The Chair welcomed Professor Stephen Roper, InnovationLab Ltd. He reminded Members that studies of innovation in Northern Ireland to date had generally focused on R&D in the manufacturing sector. However, he also noted that Northern Ireland is becoming a largely service dominated economy, with the service sector accounting for 73% of output and 79% of jobs. He advised that DETI had commissioned InnovationLab to carry out research into ‘Innovation in Northern Ireland’s Tradable Services’ to improve the evidence base for policy development in the service sector.

26. He explained the project had two phases. Phase 1 of the project was a detailed examination of service sector innovation in Northern Ireland, which aimed to determine the extent of innovation in NI tradable service firms; detail how this compares both nationally and internationally; clarify the relationship between innovation and export sales; and provide an assessment of appropriate policy measures to stimulate innovation activity in the NI tradable services sector. Phase 2 builds on the findings of Phase 1 and investigated further two key questions:

• What determines service innovation in Northern Ireland? and

• What impact does innovation have on service firms’ exporting and productivity?

27. Stephen Roper delivered his presentation and then responded to questions from Members.

28. The main findings of the research were as follows:

• Northern Ireland’s service sector is consistently less innovative than counterparts in UK and other regions. However, there is a wide range of sectoral diversity and Computer Services, R&D, and Other Business Services are more innovative in Northern Ireland than in the UK;

• Innovating services firms have much better business performance than non-innovative firms, with greater exports, higher productivity and faster sales and employment growth;

• While service innovation does not directly impact on productivity, it does indirectly improve productivity through its positive effect on exports; and

• Engaging in innovation will not make a firm become an exporter, but has a positive effect on the external sales of those already exporting.

29. Members thanked Stephen Roper for his presentation and discussed a number of the issues raised by the research.

30. Tony Simpson detailed the next steps relating to the research, namely: the report will be finalised, submitted to the ETI committee for consideration and then published for a period of public consultation.

31. The Chair thanked Stephen Roper for his presentation, highlighted there were a number of interesting conclusions and indicated that the Innovation Sub-Group looked forward to the publication and policy response to the final report.

ANY OTHER BUSINESS

Private Sector Membership

32. The Chair advised Members that he would like to increase the number of private sector representatives on the Sub-Group and that he had approached David Dobbin for suggestions. He invited Members (private and Government) to also consider and put forward names of others who might be invited.

ACTION: Members to suggest individuals for consideration as potential Innovation Sub-Group Members.

33. Anne Conaty offered to suggest some individuals from the MATRIX working groups.

ACTION: DETI to suggest some names from the MATRIX working groups for consideration as potential Innovation Sub-Group Members.

Date of Next Meeting

34. It was agreed the next meeting should be held in April.

ACTION: EDF Secretariat to liaise with Members on a date for the next meeting in April.

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ISSUE	ACTIONS ARISING	LEAD	TIMESCALE
Review of Postgraduate Funding and Policy	DEL to provide an update on the progress of the review at the next Innovation Sub-Group meeting.	DEL	At next meeting
Joint Universities paper to the EDF Innovation sub-group	DEL to provide an update on activity of all 4 strands at the next Innovation Sub-Group meeting.	DEL	At next meeting
Technology Hubs / Centres of Excellence Evaluation	Chair to discuss with the Business Alliance and report back to the next Innovation Sub-Group meeting.	Chair	At next meeting
MATRIX – NI Science Industry Panel	DETI and QUB to discuss concerns on the draft report and give a verbal update at the next meeting	DETI and QUB	At next meeting
Regional Innovation Strategy Action Plan / ETI Committee	EDF Secretariat to draft a response from the Innovation Sub-Group Chair to the ETI Sub-Group and agree with Members.	EDF Secretariat	11 February 2008
Private Sector Membership	Members to suggest some names as potential Innovation Sub-Group Members.	EDF Members	In advance of next meeting.
Private Sector Membership	DETI to suggest some names from the MATRIX working groups for consideration as potential Innovation Sub-Group Members	DETI	In advance of next meeting.
Date of next meeting	EDF Secretariat to liaise with Members on a date for the next meeting in April.	EDF Secretariat	By end of March