FST BLOG

Developing a UK ARPA

• 20 January 2021
• General
• Adam Clarke

During his time at the heart of the Downing Street operation, Dominic Cummings divided opinion. But what is clear is that his support for R&D helped secure government announcements that, when delivered, will help ensure UK universities, businesses and others can protect and enhance their leading role in research and innovation. His departure from No 10 cast doubt on this agenda, in particular the future of UK ARPA, a new funding agency modelled on the United States' Defence Advanced Research Projects Agency (DARPA).

Happily, it looks like the government's commitment to R&D extends well beyond one individual. In November, the Chancellor of the Exchequer announced not only a multi-year funding settlement for R&D, but also confirmed £50 million will be available through UK Research and Innovation's (UKRI) for "high-risk, high payoff" research in 2021-22. This presumably represents a down payment on the £800 million pledged for five years of UK ARPA in the March 2020 budget.

This funding for UK ARPA is doubly welcome in light of the fact that the Brexit deal struck in December will see the UK in most of Horizon Europe, but excluded from the European Innovation Council Fund, which underpins the EIC Accelerator instrument. The EIC Accelerator provides researchers and businesses with grants and equity backed by the European Investment Bank (EIB) to research consortiums and small and medium-sized enterprises (SMEs) in radically different and ambitious future technologies. However, the terms of the deal mean the EU bank cannot make new financial investments in UK companies, and so this pot of funding is now off the table. 

As in a range of other policy areas, leaving the EU will give the UK an opportunity to do things differently, and ARPA will not be a simple like-for-like replacement for this revenue stream for UK science. The aim should be to take the best elements of the European programmes to the next level. For example, where EIC award holders received assistance in identifying commercial opportunities for new technology, the UK's new research funding agency should look take a more activist role in working with customers to identify specific innovation needs, transform research so it can generate revenues and create jobs, and create new markets for research outputs. 

EIC support is available to researchers and businesses working in any area of technology but if we at are to deliver investment at the scale required to deliver breakthroughs in strategically important and hugely complex challenges such as net zero, UK ARPA will need to focus its efforts more tightly on a small number of high-profile, high-impact missions. In short, success will require willingness to invest much more - over longer project timescales - on fewer, meatier research programmes that have the potential to genuinely move the needle and deliver economic, environmental and social benefits.

In the US, DARPA's sustainability and achievements are built on a close relationship with its primary client, the Department of Defence (DoD). The challenge for ARPA is that no single UK government agency operates on anywhere near the same financial scale in terms of R&D investment. DARPA's overriding national defence mission combined with the economic clout of the DoD also means there is less emphasis on commercial applications that will be the case here. UK ARPA will need to engage customers across the public sector, and beyond where possible.

Building a diverse, engaged customer base across the public and private sectors will be essential if the new agency is to identify appropriate research challenges, develop successful solutions that may require entirely new technologies and - critically - reach a point where commercial delivery has been significantly de-risked.

On the public sector side, new frameworks governing engagement between UK ARPA, research teams and bodies such as the National Health Service may be required. The recent public procurement green paper recognises the potential that government purchasing policies have as a strategic lever to help drive innovation through fostering markets for new products and services.

Reforming public procurement to help drive innovation has the potential to be genuinely transformative, not only in terms of ensuring UK ARPA can deliver research breakthroughs successfully, but also across the wider economy. As the UK begins to chart a path outside of the EU it's right that we look at whether opportunities exist to use this new flexibility to diverge from European rules in this area, while respecting the terms of the free trade deal that is now in force.

According to the Institute for Government, in 2017/18 the total UK public sector procurement spend was around £284 billion. If even a small proportion of this investment was ring-fenced to support the development of innovative solutions to public service delivery, this would deliver billions of pounds a year of innovation pull potential from central Government funding. It would act as a force multiplier for ARPA, making it easier to generate high value jobs in the UK and translate breakthroughs into technologies and services that are scalable and marketable.

Getting this part right will be fundamental in dictating whether UK ARPA can be successful. However radical or transformative the research that new agency will support, its outputs must have real-world applications. Innovations are not really innovations unless they are being used.

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