True innovation comes from individuals, who are better served by idiosyncratic foundations than bureaucratic institutions

Many people probably know that the first Apple computer was built by two non-graduates (Steve Jobs and Steve Wozniak) and that Bill Gates dropped out of Harvard to start Microsoft. But did you know that patents filed by small firms are significantly more likely than those from large firms to be in the top 1 per cent of most frequently cited patents and twice as likely to be in the top 1 per cent of patents identified as high impact?

Again, many people probably know that pupils from the "tiger economies" of East Asia have for decades come top in international comparisons of maths and science attainment. But did you know that these countries' education ministries are deeply concerned that their pupils mostly want to work for big companies and that their education systems are killing off creativity? The common thread is that novel ideas remain largely the preserve of unorthodox individuals. Big companies do incremental improvements extraordinarily well. But the breakthroughs, whether personal computers, oral contraceptives, jet engines or zips, come disproportionately from people working outside the consensus and outside big organisations.

It seems strange, in a world that is being transformed by the IT revolution, to question the speed of technical progress. However, most of the ideas whose products are currently working through society date back 40 years or more. In some key areas, such as energy and transport, little really new has happened for half a century. In industry, venture capital can and does help the innovator. But many people now worry about the increased bureaucratisation of academic science and the general pressure towards uniform thinking in an education system required to generate mass credentials.

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In academic research, there are problems associated with governments' conviction that they can steer funding for national purposes, and their addiction to promoting "quality" through bureaucracy. The biggest source of trouble, though, is the short-term nature of so much funding. The pressure to generate repeated grant applications is compounded by the need to publish rapidly and frequently. In the UK we associate this with the research assessment exercise, but it is by no means confined to this country. All governments are accountability-crazy, while a globalised academic labour market looks for "objective" indicators of performance.

Short-term funding and pressure to publish tend to perpetuate disciplinary consensus. As Thomas Kuhn pointed out in his book on scientific revolutions, it is hard to break down belief in an established theory - and not just because senior academics are self-interested. Consensus emerges because it seems to offer good explanations and ways of solving problems. The danger now is that change may become harder than ever. A young researcher has to be a real risk-taker not to opt for incremental advances within established disciplinary boundaries.

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Peer review sometimes gets the blame. Obviously it helps perpetuate consensus - but for most of us, who are not potential world-beaters, it is a useful discipline and protection. So long as research money comes from the government, accountability is going to dominate, and I would rather depend on peer review than any alternative method. The real problem is surely not peer review but peer review combined with a virtual monopoly of funding sources.

In his recent book Pioneering Research , the physicist Donald Braben argues the case for a crisis in scientific research. But he also describes the success of a short-lived venture that he ran for BP, which invested in blue-skies research. It backed small groups working on non-mainstream ideas, for a number of years: the key point being to back the researcher, not a particular highly circumscribed project. Braben emphasises how profitable (in research and financial terms) the investment was. What struck me was that it was also remarkably cheap.

The BP venture ended when individuals moved on. This is always likely in large bureaucratic organisations. Far-sighted officials may back interesting ideas, but they cannot speak for those who succeed them. The individuals who can make a long-term difference to the structure of research are those who create foundations, which can and do back individuals and unorthodox ideas. It is a dismal aspect of British life how few exist. The impact of the Wellcome Trust is obvious, but in social science, which I know far better, it is striking how much difference a foundation such as Nuffield can make with limited resources. Having learnt that innovative science is not always so expensive, I am doubly keen on having more foundations. What are Britain's rich doing with their money? Is it all going on racehorses?

Alison Wolf is Sir Roy Griffiths professor of public sector management, King's College London.

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