The UK needs an industrial revolution - Can graphene deliver?

With a widening trade deficit and calls to rebalance the UK economy, could graphene play a significant role in driving a long term strategy of industrial resurgence or will this become another example of British ingenuity lost to overseas competition.

The Department for Business, Innovation and Skills (BIS) commissioned a report at the end of last year comparing the UK research base internationally with its peers. The figures within the report indicate that whilst the UK represents only 0.9% of the global population, it produces 15.9% of the world's most highly-cited research articles. The recognition internationally of the nation's quality of research is a powerful testament of the intellectual capital generated by British scientists and hugely important in competing against today's technology focused economies. Whilst this data suggests the UK may be "punching above its weight" as the Universities and Science Minister David Willetts puts it, a recent Office for National Statistics (ONS) report however also states that UK R&D spending overall fell 3% in real terms compared to 2011 to £27bn in 2012 (with the majority of UK R&D expenditure accounted for by businesses, approx. 64%). As a proportion of GDP this represents 1.72%, compared to the Euro area average of 2.06%, which in itself is far lower than that of Japan, South Korea, China and the USA. 

The BIS findings also show that the UK percentage share of global articles in Engineering, Physical Sciences and Mathematics seems to be waning, with more traction made in Humanities and Social Sciences. The figures lead to concerns over the UKs position to seize future opportunities globally from its Manufacturing sector as 72% of the UK business R&D is accounted for by manufacturers.

More broadly, despite the overall strength of UK research quality, this sits in glaring contrast against a declining industrial base over the past few decades which calls into question the ability of its domestic industrial base to fully utilise this research capability as a driver for economic growth. As the former French President Nicolas Sarkozy once said "Britain has no industry left". 

Amidst the backdrop of calls from the Confederation of British Industry (CBI) and the Chancellor to rebalance the economy with a new approach to industrial policy, the UK trade deficit continues to widen. What's more, according to Reuters "Last year's rebound in the British economy was mostly led by consumer spending, and the Bank of England wants to see the recovery broaden out to include more exports. " Over half UK exports (53%) are manufactured goods, so clearly to address the trade deficit by shifting to more export driven activity there needs to be a strong focus on innovation across the industrial sector. Could graphene form a part of this strategy?

It is perhaps unfair to pin the hopes of an industrial sector revival on a single emerging material which still has a long road towards commercialisation and application, but certainly graphene is being considered a strategically important resource by many nations. This week for example the Polish graphene producer Nano Carbon, part-funded by the Polish treasury, has now been acquired by the military (under the defence group Polska Grupa Zbrojeniowa) which now owns a 51% stake. A state-level industrialisation base for graphene has also emerged in China.

It is however, for the most part, down to young private enterprises to innovate and deliver high-impact solutions to the market; the industry "gazelles".

As you might expect from a UK based discovery, there is certainly a fair share of graphene producers and innovators in the UK including 2-DTech, Applied Graphene Materials, Cambridge Graphene Platform, Cambridge Nanosystems, Haydale, Perpetuus Carbon, Thomas Swan. Most notably of late, Haydale, a functionalization specialist that has developed a proprietary "split-plasma" process to enable further applications for graphene, marketed under its HDPlas™ materials range, has just completed its float on AIM (LON:HAYD).

There is growing market capacity globally for graphene, but are British businesses establishing uses for this emerging material? If patents are any indicator, then the country is in danger of falling behind as according to figures from copyright consultants CambridgeIP, UK businesses and universities hold a mere 54 patents, in comparison to 1,754 in the US and 2,204 in China . However, activity to support the commercialisation and exploitation of graphene is well under way with construction started last year on the £61m National Graphene Institute (NGI), a facility that will boast state of the art research capabilities for collaboration between universities and the world's leading companies.

In his budget speech this year the Chancellor George Osborne also announced £14m funding for the The Graphene Applications Innovation Centre, to be based at the Centre for Process Innovation (CPI) in Sedgefield and supported with funds from the BIS. The centre will focus more on developing and proving near-term applications with graphene producers and end-users by supporting prototyping and scaling-up of manufacturing processes. 

The Cambridge Graphene Centre is another major research institute which has attracted interest from UK industry partners including Dyson and BAE Systems.

In a wider context , initiatives like the Graphene Applications Innovation Centre at the CPI, which is part of the government's High Value Manufacturing Catapult program, are filling the industry gap and playing a much needed role to get ideas of the ground especially for industry "gazelles" who gain from access to facilities, expertise, collaboration in large hubs (proven to accelerate ideas creation) and goes some way to address the needs of British manufacturing. 

More importantly however, without further investment into these types of facilities the UK will continue to see a drain of intellectual capital flowing from its research base into overseas businesses. Too often we see entrepreneurs emerging from universities and research institutes to commercialise technology when their ambitions do not extend beyond developing the technology, valuing the intellectual property and dressing up the business for sale to a multinational. In bucking this trend there are now examples of businesses utilising the Catapult centres and forging ahead into protoyping with ambitions for production such as PolyPhotonix, as CEO Richard Kirk pointed out in an interview with the Guardian, "Unless you make the leap into investing in the factory and manufacturing, you miss out on the learning-by-doing. The big boys get the benefit instead," he says. "In order for this to be a success, I have to have a factory at the end of it. Otherwise, for the taxpayer, there is no point funding me." 

Although public sector investments like these initiatives are usually welcome, capital expenditure from government certainly does not determine that an application will be commercially viable. Crucially it is the flow of investment from privately owned enterprises that provides a more accurate yardstick, but the market needs to be organised, transparent and fair to lower risk and attract investors. This is the challenge for emerging material sectors like graphene. Before manufacturers can adopt graphene into new industrial products (not just tennis rackets and other gimmick or niche applications) they need to be able to establish commercial variables such as price, supply availability, material standard and indemnification. Since manufacturers have obligations and priorities to their customers they simply cannot commit to a new product line without ensuring there is a critical mass of supply certainty with the underlying raw materials in manufacture-use.


Performance of the UK research base: international comparison - 2013 (Elsevier)

UK Gross Domestic Expenditure on Research and Development, 2012 (ONS)

Gross expenditure on research and development as a % of GDP from 1981 to 2010. (Data from Eurostat).

IP Insight™ Report - Graphene (CambridgeIP)

UK inventors face fight to turn brilliant ideas into reality on factory floor (Katie Allen, The Observer)