Home
Royal Society Hidden Wealth Report

RoyalSociety
From Dr James Wilsdon
Director, Royal Society Science Policy Centre:

I am pleased to announce the launch of the Society’s report Hidden wealth: the contribution of science to service sector innovation, which is available for download at http://royalsociety.org/downloaddoc.asp?id=6511. Services make up about three-quarters of the UK economy. The report highlights the wider significance of science, technology, engineering, and mathematics (STEM) to the services sector, and makes a number of recommendations that I hope will be of interest to you.

We conclude that STEM is deeply embedded within the UK service sectors and has an extensive impact on service innovation processes, which is often hidden. Although STEM is important in services sector innovation now, it is also likely to play an important part in the future of services, as many services are on the cusp of a transition to more personalised and interconnected systems, which will require significant advances in STEM.

I would particularly like to draw your attention to the following recommendations that identify ways in which the contribution of STEM to innovation in services can be strengthened:

·       A need for greater engagement between the academic services community and services forms, in order to ensure that opportunities to exploit STEM in services are properly recognised, and to align research and market opportunities. We recommend that the Technology Strategy Board (TSB) and Research Councils initiate services-related Grand Challenges to address these issues.
·       The Sector Skills Councils should undertake a large-scale exploration of STEM skill needs in services sectors to inform the development of more suitable undergraduate and postgraduate courses that better meet the needs of service sectors. This should be overseen by the UK Commission for Employment and Skills.
·       An increase in the scale of knowledge exchange between services organisations and the academic STEM community through the creation of specific services Knowledge Transfer Partnerships by the TSB.
·       With regards to financial services:
o    The creation of world-leading centres of modelling and risk assessment that are relevant to and actively engaged with financial services institutions.
o    The Bank of England, Financial Services Authority and the Research Councils should explore ways for the science base to contribute to more effective modelling of systemic risk in financial services.
o    The Financial Services Authority and the Financial Services Skills Council should institute and mandate competency levels for those with managerial roles in the understanding of mathematical modelling and risk in complex systems.
o    Finally, the Funding Councils should review the contents of financial engineering and related courses in the UK and, in association with Higher Education Institutions, ensure the provision of appropriate curriculum elements such as considerations of risk, safety tolerances, testing, adherence to published standards, wider understanding of economic contexts, and also any ethical considerations.
·       Improving the understanding of services and service innovation models supported by STEM by policymakers, researchers and funders through the development of a greater body of academic research into services innovation. This initiative should be led by the Economic and Social Research Council, with other research funders providing additional support.
·       The need to foster innovation in the public services is high on the government’s agenda at present. We urge the Cabinet Office and the Department for Business, Innovation, and Skills (BIS) should establish a team to undertake detailed work on how STEM can be exploited more successfully to foster public sector innovation.
·       Finally, because the sector is mutating rapidly we recommend that official statistics on the services sector be improved.

I hope you find the report useful and would welcome your comments on it. If you wish to discuss issues in the report further I would be happy to arrange a meeting with members of the working group. We will be monitoring the implementation of these recommendations. If you wish to make any comments on the report or would like any hard copies, please contact Dr Rochana Wickramasinghe ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ).