Advanced Research and Invention Agency Bill (Second sitting)

Aaron Bell Excerpts

Wednesday 14th April 2021 Public Bill Committees

[The Chair]

Next, I have Aaron Bell and then Daniel Zeichner.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

Q Thank you, Ms Cummins. It is a pleasure to serve under your chairmanship. I thank all our witnesses and those who gave evidence to the Science and Technology Committee, which was greatly appreciated.

I have two related questions for the panel. First, notwithstanding your responses to Mr Flynn about the need for a mission, which it seems is going to be delivered by the chair and the chief executive of ARIA, how important is it that ARIA remains autonomous and free to pursue whatever its aims are, without interference from Government Ministers?

Secondly, what advice can you give the Committee about the funding methods ARIA might use? The Bill envisages potentially grants, loans, prizes, grant-prize hybrids, investments in companies. Could any of you give us advice on what has worked well in other settings? I would like to start with Dr Highnam, please.

Dr Highnam: On the funding mechanisms, we are an agency in the Department of Defense in the US Government, and we have a number of options available to us, which we make use of depending on the context. Of those that you listed, the only one that we do not do is take investment positions in companies. That is not what we do. You can make a proposal to us for research. You may offer a cost-share, depending on whether it is a major company and very systems-oriented work, all the way to a standard research grant to a university or small business, or a combination of those things.

We have a number of other options in between, including a modified form of commercial contract called an OTA—other transaction authority. They are referred to as OTs and are a very useful tool. DARPA was the first user of that about 20 some years ago. It is a great way of doing business.

To the first question, we are an agency in the US Government. We work in the Executive branch. We work and deal closely with Congress on all manner of things. We have flexibilities as an agency. We have ways of doing business and we are very careful to make sure that the wins that we achieve are well-known, and that we work within those boundaries. Again, the Administrations and Congress over the years have watched and helped DARPA, and have been incredibly supportive. The agency—Regina and I can both say this—keeps delivering as a culture and a mission place, because back in ’57,’58, they got a good recipe, and that culture persists despite 25% or higher personnel turnover. It is part of the Government, with all the benefits. All the—“constraints” is the wrong word—rules that come with that are there for a reason, and DARPA gets the job done.

[Aaron Bell]

Q Thank you. Yes, the culture is so important. Dr Dugan, could you answer on the point about autonomy and funding mechanisms?

Dr Dugan: I want to attach independence and autonomy to desired goals and outcomes here. The reason the agency sits so independently with respect to its decision making is to find this intersection, and get through the Heilmeier questions, as Peter has talked about. I would often refer to it as figuring out how to get a project inside Pasteur’s quadrant—the idea of having a very specific outcome in mind and having the science and engineering to support the idea that you could achieve it. That is a difficult analysis. That is the creativity that Peter is talking about.

You cannot mandate that from outside the agency. That work happens on the part of the technical teams inside the agency who are assessing the state of the science and the engineering. They are working in service to the mission of the organisation with an understanding of national security goals, and they are finding that intersection. It is the single hardest thing that we do in the agency: forming programmes in that spirit. It is not possible to do that by mandate outside the organisation.

That independence of decision making and the crafting of those programmes in that spirit are coupled, and that is part of the reason why the agency has been so successful over years. I think independence is in service to those outcomes and those breakthrough objectives.

[Aaron Bell]

Q On the funding streams, could you perhaps tell us a little about how Wellcome Leap works with other bodies to fund or otherwise encourage research?

Dr Dugan: Much as Peter described, we use a variety of strategies. As you may have seen over the last year, one of the things that we did was to build a health breakthrough network, which now has almost 30 signatories on six continents. The goal there is to speed contracting, so that we can move down to days or weeks what would more typically be months or even as long as a year in contracting. The particular way that we work is through contracts; we do not actually do grants. I also think that this position of not taking equity is important, because the non-profit element of it is part of the differentiation, and we have an entire commercial sector that is good at assessing value and figuring out return on investment. That is not what is pivotal or differentiating for the organisation—neither for Wellcome Leap nor for DARPA.

[Aaron Bell]

Q Professor Azoulay, would you like to comment on either the autonomy point or the funding mechanisms?

Professor Azoulay: Yes, absolutely. First, I second what my colleagues have said and agree wholeheartedly. I would say that in terms of the modes of investment, the track record of Government agencies taking investment positions in companies is not very good, to put it mildly. It is interesting that it is something that neither ARPA-E nor DARPA actually does.

At the same time, it is important to point out that one way for an ARPA project to transition is to give birth to a start-up company. I know for a fact that in the context of ARPA-E, at least, that is something that is happening on a fairly regular basis, and that is actually tracked as one of the outcomes that one could look like, in addition to maybe much more traditional intermediate outcomes such as scientific papers and patents.

The more general point about autonomy is very important. It is really difficult. It requires forbearance on your part because the kinds of missions and impacts that you are trying to achieve at a very high level are long-term goals fundamentally. I might be overdoing it, but I have a sense that if you start ARIA today, you will not know if it has actually fulfilled its high-level mission for at least 15 years, and that might even be too optimistic.

[Aaron Bell]

Understood. Thank you.

[The Chair]

Next we have Daniel Zeichner, followed by Jerome Mayhew.

--- Later in debate ---

[Amanda Solloway]

Q Thank you. Sticking with you, Sir Adrian, I was thinking that we have heard an awful lot about the importance of ARIA recruiting people from a variety of backgrounds. I wonder how we attract the best people, from industry in particular.

Adrian Smith: Is that a question for me? It is probably a better question for Felicity. Going back to the earlier comments, a fundamental is to trust long-term commitment from the Government that we are really in this, and we have a plan with clear funding milestones and we will stick to that plan. That is what will give the international community the message that we are in it to be really serious. That serves two purposes: for the narrative of the UK, and as an attractor for brilliant people, whether they are in research or industry around the world, to come and join in this long-term challenge.

Professor McDonald: How do we attract them? The scale of the ambition will be a major attractor to someone, with that executive excitement and experience that they will bring. Large-scale ambition and, as we said earlier, a commitment to the long term to making this work for the UK, in that it is a long-term integrated approach. I suggest that the CEO would have to have experience beyond academia; preferably, as you have suggested, Minister, including industrial experience—that ability to take the journey from concept through to proof of concept, demonstration at scale and deployment. Ultimately, commercial exploitation is key.

I can assure you that the engineering community will be well engaged with this as we help to bring forward individuals of the right stature. Industry expertise and understanding should be a prerequisite for ARIA personnel. An interesting example, which many of our colleagues in the Committee will be familiar with, is the vaccine taskforce: bringing together industrial expertise—traditionally competitive companies large and small within their supply chain—with Government officials and the National Institute for Health Research. That was a fantastic microcosm of large-scale, high-risk and ultimately high-reward outcomes. In many ways, that gives us a precursor for some of the approaches and cultural changes that would be needed to take that forward. For the chief executive or chair of the board, it would be great to have industry-relevant background, a commitment to innovation and excitement about the scale and potential impact of the work that they are taking on.

Felicity Burch: I listened to a number of the earlier sessions, and I was delighted to hear about the focus from so many stakeholders on the need to build a diverse team within ARIA, but also thinking about the diversity of the community that we engage in it. One of my reflections is that we are trying to build something that looks a bit like US DARPA, but we are 60-plus years on now, and the international, national and social picture is completely different. We have an opportunity to build something that really excites, for the next generation of researchers and business people.

If you look at businesses that are trying to achieve those same goals and the practices they put in place to try to recruit brilliant people, you will see that, first and foremost, purpose really matters. Clearly defining the mission of what ARIA is trying to achieve when we get the team in place, making sure that it is something that excites people, having a clear market, and also solving national and international social problems will help encourage really bright, brilliant people to get involved.

Secondly, it starts with the senior team. We are building this team from scratch, and we need to make sure when the team is being recruited that it is diverse in the broadest sense possible—that we see women, ethnic minorities, and those with disabilities represented on the senior team for ARIA to really send a signal that the way we want to innovate in the UK is diverse and that we want to make the most of all our talents around the country.

[Aaron Bell]

Q I thank all three of you for your time today. I have one brief question for Ms Burch and then one for Sir Adrian. In terms of the funding ideas and streams available through ARIA, would the CBI and your members welcome the potential of investments in companies or joint ventures with ARIA?

Felicity Burch: One of the really exciting opportunities from ARIA is the potential for joint ventures and engagement. Essentially, my answer here is pretty short. Go ahead and do it, but make sure you engage with business communities a bit further down the line in exactly the design of how those funding mechanisms might work. Different businesses at different stages of their journey will be interested in different funding mechanisms.

[Aaron Bell]

Q Thank you. Sir Adrian, speaking to your professional interest and expertise as a Bayesian statistician, which I share as a layman, how can we use Bayesian statistics to help decide which projects to fund and also when to pull the plug?

Adrian Smith: I was not expecting that question. The problem with the kind of mission that we would like to see in ARIA is probably that there are very few precedents. So where we are going to get our prior information from to deploy my wonderful Bayesian analysis, I am not quite sure. Let me use that to point out something else. It will be very interesting to see how we creep up on a mission and why ARIA would be appropriate for that mission. There are two things that you will all know about and I am involved in. I am on the board of the UK Atomic Energy Authority, and fusion, you could say, is the ultimate mission of all time. The mechanism there is with an authority and long-term Government funding in a different model. Solving the problem of batteries you could say would be an absolute fundamental mission, but there we have set up the Faraday Institution. I suppose the question as we go along is: what makes ARIA the right kind of place for what mission, given that we have lots of missions and lots of other ways of trying to solve them?

[Aaron Bell]

Perhaps we need someone with particular expertise in portfolio management as well, because it seems the risk/reward of these missions is so key. I will leave it there.

[Stephen Metcalfe]

Q Good afternoon, all. I have a quick question for Felicity. We heard earlier from Dr Highnam from DARPA about the high level of churn among the project managers and that they move between academia, business and, in their case, DARPA and that creates the right culture. Presumably it requires flexibility from the businesses themselves. Do you see your members embracing that kind of secondment into a research body such as ARIA, even though it may not lead to anything?

Felicity Burch: I have not talked to them directly about this in the context of ARIA, but I can reflect on conversations about business and university collaboration more generally. I think our members do see value in seconding people to research teams to learn new skillsets. Likewise, we would love to see more people from university sectors being seconded into businesses. Were there a world-leading agency like ARIA, being able to say, “My people have worked on one of these teams” would be quite a prestigious thing for businesses. I guess the flipside of that is this: how do we make sure that we build ARIA to be that prestigious body that businesses feel comfortable seconding their people to?

I think that time and again we hear businesses saying that that fluidity of people between the business sector, the university sector and the research sector more generally is really important for successful innovation and building an ecosystem. I am sure that if any business pointed to any one individual, they might not want to lose them, but I think this is much more about how we build a really flexible and really brilliant innovation ecosystem, and to that extent I think that businesses would be really happy to see those moves.