1. The impact of the Innovation, Research and Technology Sector on the UK economy A Report from Oxford Economics Commissioned by AIRTO Published November 2014

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3. The Study Methodology The data presented is obtained from : Survey responses to Oxford Economics from AIRTO members Published information from other sector companies and organisations Case studies on specific activities within the sector Other published economic data available to Oxford Economics Using standard methodologies and analysis applied by Oxford Economics 3

4. The IRT Sector 56 AIRTO members and 170 selected other businesses Public Sector Research Establishments (PSREs) Research and Technology Organisations (RTOs) including the Catapults Private Contract Research Organisations (CROs) Selected university enterprise/technology transfer departments Selected industry research and development departments Selected business support organisations Turnover £6.9Bn pa. Total contribution to UK GVA £32Bn-£36Bn 80% by turnover are members of AIRTO 4

5. Sector network Much larger than the Fraunhofer network Much wider range of activity A network of networks Employs 57,200 mainly technical, highly qualified staff – comparable to 20 research intensive universities 5

6. AIRTO members 6

7. AIRTO members - what they do 7

8. TWI Structural Integrity Case Study Life extension of drilling rigs for Sedco Forex (now Transocean). Programme for seven rigs reaching the end of their original fatigue design life. Involved fatigue improvement techniques and calculation of fatigue life after repairs and modifications. Rigs continue to operate well past original design life, instead of replacing at $200m each. Life extension for an additional 20 years cost 10% of cost of replacement. 60% of work carried out by Sedco Forex with 40% specialist TWI support. Enhancing productivity of capital assets 8

9. Expertise in Applied research Translational research Innovation Technology Demonstration Commercialisation Scale up Testing Regulation Compliance Asset management Business support 9

10. Driving innovation - reducing risk Universities Industry 10

11. Well qualified work force 75% workforce qualified to degree level 12% workforce on postgraduate courses As employers: 73% of AIRTO members offer work experience 70% of AIRTO members undertake schools outreach 50% of AIRTO members offer internships 11

12. Regional coverage 12

13. Working with LEPs 13

14. Sectoral coverage 14

15. BRE BREEAM Case Study First voluntary assessment method for buildings in the world, launched 1990. Encourages developers and customers to go further and faster than required by regulation. Suite of products now available. >1 million buildings registered for assessment. 250,000 have certified BREEAM assessment ratings. Method assesses nine criteria: energy, transport, health and wellbeing, water, materials, waste, pollution, land use and ecology. Balanced scorecard approach – overall performance can be achieved in a range of different ways. Environmental Assessment Methods for Construction Worldwide 15

16. Revenue by source ClientsSMEs Private Core Govt PLCs/private companies (15) 5%31% 27% PSREs/universities(10) 8%30% 38% CLG/non-profit-distributing (31)20%53% 5% 16

17. Revenue globally 17

18. MIRA Case Study 842 acre MIRA Technology Park in Leicestershire. 35 major laboratory test facilities and 93km proving ground. Host to 30 leading global companies, both vehicle original equipment manufacturers and their supply chain. Planning consent for further expansion of R&D floor space targeted at attracting businesses wanting to establish a UK R&D operation. Anticipate 2,000 jobs will be created, the majority being high value technology posts. MIRA Technology Park 18

19. Productivity Productivity:45% higher than UK average 3% real terms increase since 2006 19 020406080 Computer consultancy activities IRT sector Architectural activities Market research, public opinion polling Scientific research and development Technical testing and analysis Motion picture, video and TV production 000 £ (GVA per employee per year) Source: ONS, Oxford Economics

20. Sector turnover and GVA £6.9Bn turnover Supports:£7.6Bn direct & supply chain GVA 141,100 jobs £2.9Bn tax receipts Total impact on UK GVA:£32Bn-£36Bn ( from all sources) 2.3-2.6% of UK total £13.1Bn tax receipts Non–monetary contributions to society (e.g. to environmental and other policy goals) are on top of this. 20

21. Leverage of government support £Bn 21

22. AIRTO’s Vision and Ambition to 2025 For the IRT Sector to increase in real terms 4% pa:- innovation in UK business/public services, as measured by contribution to GVA delivery of ideas and services, as measured by the number of private clients and government public services working with the Sector collaborations between business, government, academia and finance, including those involving overseas clients capacity to supply specialist skills, facilities and access to finance, including a commensurate increase in privately funded r&d and services and to increase the number of scientists and technical staff employed to ~92,000, yielding a productivity increase of ~10%. 22

23. The ‘ask’ of Industry and Government The Sector (and Industry) need to… Set ambitious goals Champion the value of the sector as a significant UK asset Capitalise on the academic research base Government is asked to… Invest in the long-term capital infrastructure of the non-for-profit organisations Use public procurement to pull through innovation Invest in building the UK skills-base Use the knowledge of the sector to help inform national innovation policy 23

24. Summary Very large network Highly productive Highly qualified workforce Well aligned with government and industry priorities Adapts to changing demand Very effective at leveraging government investment Scope to scale up economic impact still further 24

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26. Further information: AIRTO Ltd National Physical Laboratory Hampton Road Teddington Middlesex TW11 0LW Tel: +44(0)20 8943 6600 Fax: + 44 (0)20 8614 0470 e-mail: enquiries@airto.co.uk www.airto.co.uk Dr Jane Gate Director of Operations Tel: +44(0)20 8943 6354 e-mail: jane.gate@airto.co.ukenquiries@airto.co.uk www.airto.co.ukjane.gate@airto.co.uk 26