Examination of Witnesses (Questions 60 - 66)
WEDNESDAY 18 MARCH 1998
DR ALAN
RUDGE and PROFESSOR
RICHARD BROOK
60. Is the trend upwards in terms of the percentage you give
or does it stay much the same?
(Professor Brook) These are not large changes. I think
the council does benefit from the position at the moment. About
35 per cent of the proposals sent to us are successful. At 35
per cent you can persuade people that they are not wasting their
time when they write a proposal. I have written to the academic
community to warn them that they increased the number of proposals
coming to us last year by 20 per cent and if they carry on doing
that, when we look forward to the budget lines for the EPSRC as
they are currently instated the success rates will drop dramatically.
Mr Beard
61. In relation to the exploitation of work when it gets
further down stream and developed, particularly in small- and
medium-sized companies, do you think tax credits have got a role
to play?
(Dr Rudge) I guess I am putting my citizen hat on
rather than as Chairman of EPSRC. I start off broadly from the
position which says almost anything you do in that area to encourage
innovation is something which ought to be investigated. I cannot
say that is going to be necessarily a great success. I do believe
that we should be experimenting. If I could make a general point.
Over the past four years in the managing of the EPSRC we have
taken on board these principles of flow, of the landscape, of
generating the right kind of knowledge, of emphasising and improving
the flow into industry and have tried to manage it. When the council
meets we discuss these things and the executive come up with ideas
about how we can improve this or that aspect in a managed way.
It is a managed process. You can say that preceding that it pays
to do some piloting to try to find out what works. I think we
need to look at the whole innovatory cycle, if you like, particularly
including small companies, to see what is it we can do to improve
it. Tax credits is one idea and I do not know if that is better
or worse than another but it is certainly something that is worth
experimenting with.
Dr Williams
62. How does our situation compare with other countries in
the European Union in terms of tax credits? If we had better incentives
here, would it help to attract more research and development in
this country?
(Professor Brook) My response to that is that it is
always extremely difficult to compare systems because you can
look at one variable and say that it may be different in Germany
than it is in the UK but the whole context is different, the training
systems are different, and therefore it is difficult to make valid
statements about the influence of one parameter without looking
at it very closely. I have not got that experience.
(Dr Rudge) You have to look at the total industrial
environment and the cost of money is one of the key elements in
that people will risk at a certain ratio and they will not at
another. When interest rates were very high I remember particularly
that it was very difficult to get people to invest and long-term
research was 24 months.
63. Could I ask more generally about the balance of flow
in terms of the siting of international investment in research
and development. Is there an outflow from this country or do we
profit internationally from more research and development being
placed in Britain? Is there any kind of evidence of a drain from
R&D?
(Dr Rudge) It is a very difficult one. First of all,
research and development is about people primarily. They are the
people who contain the knowledge, if you like. We benefit in the
UK from foreign students coming in, bright foreign students, and
have done in the past. We benefit to some extent from industries
coming into the UK and putting research centres here. At the same
time there is no doubt that a lot of the research activity that
is done by research organisations in the UK is for overseas companies,
a very significant amount goes overseas. I have not tried to sum
the balance.
Chairman
64. If, on reflection when you leave this Committee, Dr Rudge,
you have further thoughts on that particular subject you might
like to drop us a line. If you have nothing to tell us we will
not expect a letter from you. If there are things you find out
when you get back and talk to your staff, we would welcome a little
bit more on that particular question from Dr Williams. May I put
the final question to each one of you in turn. Do you think, Dr
Rudge and Professor Brook, that a case could be made for creating
a separate organisation specifically charged with technology exploitation
to encourage the exploitation of research supported by your council
and which could have a similar type of set-up to the Medical Research
Council? My main question is do you think there is a case for
creating an organisation specifically charged with exploiting
technological inventions?
(Professor Brook) First of all, I am impressed by
the precedent of the British Technology Group.
65. You are not impressed?
(Professor Brook) I would be impressed by it as an
example. I think you can learn something from it and the experience
which it has had. I think my personal reaction to the question
would be to say that a very profitable line would be to strengthen
the initiatives which the EPSRC has taken in these schemes involving
collaboration between industry and the university sector. There
is no doubt that they elicit very strong enthusiasm from industry.
The industrial CASE award where we give the studentship to the
company and say we will do the same next year and the year after
gives them a longer perspective, it is worth making sure that
the studentships are effectively placed. We have now a sufficient
portfolio of what I would say are really persuasive collaborations
between the industrial sector and universities. I would like to
see those driven forward and appraised rather than looking back
to BTG. That would be my personal reaction.
66. You would rather water the existing plant than pull it
up and look at the roots?
(Professor Brook) That is my initial reaction.
(Dr Rudge) I think I would follow that up by saying
I explained to you that we have adopted this principle of flow
as being the key. I would summarise it by saying knowledge flow.
I would rather if there were resources available that we concentrate
on making that more effective than start some organisation that
is investing in technology. I made the point about technology,
that it is a small component of what we are talking about. What
we really want in this country is to ensure that we are investing
our research investment and we are building knowledge in the right
areas, the right skills, and we are getting a good flow of that
knowledge into the community at large. That is really what we
are about. Anything that would benefit that would gain my support
certainly. I think there are better ways of doing it than just
picking on investment in technology.
Chairman: Thank you very much. On that note we have come
to the end of our time. It has been a long session with you. We
thank you for tolerating our questions. We thank you for the quality
of your answers. If there are one or two points we still have,
would you be kind enough to respond to a letter from our Clerk.
Many thanks in getting our new inquiry off to a good start. We
will make sure you have a copy of the report in due course. We
are most grateful to you. Thank you.
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