Lord Sainsbury's review of the Government's science and innovation policies was published on 5 October 2007.

The review finds Britain has significantly improved its innovation performance in recent years, but still needs to do more to produce the best possible conditions to stimulate innovation in industry. In accepting Lord Sainsbury's recommendation the Government announced the following new policies and measures:

• A new package of support for technology and innovation in business. The Technology Strategy Board will develop and lead a strategic programme worth £1bn over the next three years, in partnership with the Research Councils and the Regional Development Agencies (RDAs);
• The development of a detailed strategy for science and innovation by the Department of Innovation, Universities and Skills (DIUS) which will incorporate plans for implementation of the Review;
• New measures to improve further the teaching of science, technology, engineering and mathematics (STEM) subjects, by boosting investments in the training of specialist science teachers, improving STEM careers advice, doubling the number of science and engineering school clubs, and establishing a National Science Competition to showcase young people's achievements across ages and disciplines;
• Improved knowledge transfer between the research base and business through an improved Higher Education Innovation Fund, building up support for business-facing universities, and a doubling of the number of Knowledge Transfer Partnerships to boost research-business links;
• Better support for early-stage high-technology companies through a reformed Small Business Research Initiative with more effective use of Government procurement to drive business innovation, a national proof-of-concept fund, and the support of RDAs for incubators, high-technology clusters and business readiness services;
• Increasing international collaborations to help attract researchers from abroad and link British researchers with the best and brightest researchers globally. Expanding the 'Science Bridge' scheme to build links with leading scientific nations;
• DIUS will produce an annual Cross-Government Innovation Report. This will report on the innovation activities of DIUS, including the Technology Strategy Board (TSB), other government departments and the Regional Development Agencies.

The following extracts from the review are of particular relevance to the activities of Knowledge Transfer Networks:

• Expanded TSB role (p5) The Review recommends that the Technology Strategy Board (TSB) is given a new leadership role, working with the RDAs, the Research Councils, government departments and the economic regulators to co-ordinate public sector technological innovation activity, leverage public sector resources and simplify access to funds for business. With increased resources the TSB should extend into new areas, such as the services sectors (including the creative industries) in which technological innovation is important. It should develop an international strategy, and it should work more closely with UK Trade and Industry (UKTI) to enhance the UK’s position as a centre for investment by world-leading companies.
  
  
• Knowledge Transfer Partnerships (p6,p63,p148) The successful Knowledge Transfer Partnerships (KTPs) that place newly qualified graduates in companies, and for which there is high industry demand, should be doubled in number, subject to the Business Support Simplification Programme (BSSP). ... A standard nationwide mini KTP scheme should be introduced in all regions to facilitate shorter, light-touch collaboration (3–12 months). For some time there has been a demand for shorter, less expensive mini-KTPs, and we believe that they could perform a useful function. They may also be of particular interest to the creative industries, service sectors and SMEs. ... RDAs should increase their support for the KTP scheme and invest in and support the new mini-KTP scheme, which will allow for shorter placements and hence increase the flexibility of the programme.
  
  
• Small Business Research Initiative (p7,p131) The Small Business Research Initiative (SBRI), by which departments spend 2.5 per cent of their R&D budget on research contracts with SMEs, should be reformed to resemble more closely the successful US scheme. SBRI should fulfil departmental objectives and provide valuable support to early-stage high-technology companies. It should be managed in conjunction with the TSB. ... Government departments should be required twice a year to notify to the TSB in a standard form those technological areas where they would like to support projects. The TSB would then be responsible for publishing twice a year, at fixed dates, a list of the projects notified to it by government departments so that SMEs are readily able to find them. The awarding of contracts should also be administered by the TSB, with assessment of proposals being made jointly with the relevant government departments.
  
  
• European programmes (p7,p54,p157) The TSB should develop an international strategy that considers support for the European EUREKA programme and FP7 initiatives. ... The preliminary focus of the TSB has been on domestic support for technological innovation. There is, however, a need for the TSB to start to consider the international agenda and to give greater support to technological collaboration between UK small and medium-sized enterprises (SMEs) and their counterparts in Europe.
  
  
• Roadmapping (pp52-53) TSB should encourage the production of technology road maps by all fast-growth, high-tech industries as a way to raise their level of innovation and to align technology capability with consumer demand. ... The TSB should be made the repository for information about technology’s role in the competitive strategies of different industries and should be responsible for providing this when it is needed by other organisations.
  
  
• Future of Higher Education Innovation Fund (p60) HEIF4 funding should be allocated entirely on the basis of a formula, and the formula should be constructed so that the money that was allocated on the basis of a competition now goes largely to business-facing universities. We have devised and discussed with DIUS and HEFCE a formula that gives less weight to the size of the university and more to income received from SMEs. This should result in the large research universities getting slightly more money in HEIF4, and many other universities getting larger sums, with an incentive for all to do more work with SMEs. We recommend that this formula be adopted for HEIF4.
  
  
• TSB and Research Councils (p61) Building on the success of the RCs’ existing collaborations with the TSB, Budget 2007 announced that the Director General of Science and Innovation will agree specific targets with each RC for the amount of collaborative R&D they will conduct jointly with the TSB. The RCs have agreed that the total resources to be committed by them to the new joint funding mechanism will be no less than £120 million over the CSR period. Individual targets for the RCs and the TSB will be finalised as part of the science budget allocations process later in the year. This represents a step change in the impact of RC and TSB support for business innovation and will maximise the capacity of investment from the science base to attract matching funding from other sources.
  
  
• TSB and Regional Development Agencies (p147) We believe that the RDAs should increase their support for the TSB’s collaborative R&D programme and improve the process by which their funds are allocated. Support for collaborative R&D can greatly help companies in their regions to innovate and grow, and RDAs have limited resources with which to assess technological developments or specific proposals from companies and universities. Further, it is inefficient for companies to have to deal with a multitude of organisations to secure funding for a project. ... The RDAs, TSB and SICs will collaborate to support innovation priorities that deliver the National Technology Strategy and Regional Economic Strategies. Utilising the Single Pot and European Regional Develoment Funds, each RDA will earmark investment to match fund TSB programmes on a case-by-case basis or as part of a regional prospectus. This will lead to a total investment from the RDA network of £180 million over three years, starting in 2008, subject to appropriate projects being identified that benefit the regions.
  
  
• Role of government departments (p120) The R&D budgets of government departments need to be better managed and not used to support operational activities in times of difficulty. There are also four key areas where this Review believes departments should concentrate their efforts and where significant improvements could be made. These are user-driven R&D, procurement, Innovation Platforms, and the Small Business Research Initiative.
  
  
• Monitoring (p119) The Director of Innovation in DIUS should be tasked each autumn to produce an Innovation Report on the innovation activities of DIUS, including the Technology Strategy Board, other government departments and the Regional Development Agencies. This Innovation Report should cover, among other things, the support given to user-driven research by the TSB and the performance of Knowledge Transfer Networks. It should also show the funding given by RDAs to encourage innovation in the regions under the four categories of: user-driven research; knowledge transfer; support for high-technology clusters around universities; and support for fast-growth, high-value-added businesses. The report should also cover the innovation activities of other government departments, including the publication of their science and innovation strategies and their funding of R&D, and whether any money has been directed from R&D budgets to support other activities.

The full Review is available here as a pdf download.