Select Committee on Science and Technology Minutes of Evidence

Memorandum submitted by the Defence Evaluation and Research Agency (DERA)

INTRODUCTION

  1.  This memorandum is in response to the Committee's invitation which expressed particular interest to learn about the "dual-use" approach employed by DERA.

SUMMARY

  2.  Through its approach to the exploitation of dual use technology, DERA believes that it has found a good way of ensuring that its research and huge knowledge base can provide benefit for UK wealth creation. Moreover, MOD can benefit because DERA gains greater "practitioner" experience in civil technologies. A key feature of DERA's approach has been the creation of dual-use technology centres. Now, in response to new Government policy, DERA is investigating with companies how its technology may be given wider exposure through more extensive partnering and joint ventures. DERA has this year restructured itself so that it can address directly the needs of its non-MOD customers. It has also found a new way to set up joint projects between DERA and industry that are very rapid and matched to the much faster pace of innovation today.

BACKGROUND TO DERA

  3.  The Defence Evaluation and Research Agency was formed from the core of MOD's non-nuclear scientific and technical assets and was launched as a "trading fund" in April 1993, initially as the Defence Research Agency. DERA's core role is to provide the technical capability to enable MOD to act as intelligent customers for complex weapons, equipments and systems, to specify requirements, to inform procurement choices which deliver military capability and value, and to support operational use of equipments by the armed forces.

  4.  DERA is the largest single research and technology organisation of its kind in Western Europe. MOD spends some £900 million with DERA; about half of this is for research and of this about one third is sub-contracted to industry and academic institutions via extramural research. DERA's work for non-MOD customers is about £120 million and is growing at around 30 per cent per annum. Some of this work is for defence companies and enables DERA's knowledge and capabilities to be exploited in the equipment and systems which MOD procures from industry. Some work is for other Government departments where this is technically synergistic with DERA's defence work (eg research funded through the DTI CARAD programme in support of civil aerospace). Some is for foreign governments and indirectly assists UK foreign relations and defence exports, the latter by supporting UK industry efforts overseas. Some supports UK wealth creation by exploiting DERA's knowledge and capabilities.

WHY DUAL-USE?

  5.  DERA's mission is to harness science and technology to UK defence needs and currently DERA is constrained by the terms of its Framework Document from doing work for non-MOD customers other than where this will result in overall benefit to the MOD. It is, however, also required by its Framework Document to ensure that its activities accord with the Government's policies for wealth creation and to co-operate with industry to ensure the exploitation of its output. DERA's approach to dual-use technology has therefore been necessarily modest but nevertheless successful and trail blazing in terms of showing what is possible. Recently, however, the Government has published proposals that would widen DERA's role for supporting UK wealth creation (reference 1). In the same vein, the Government has also published a consultation paper on investing in R&D (reference 2) which emphasises the importance to the UK economy of increasing industry R&D and industry's access to technology. The future options for DERA have also been examined as part of the Strategic Defence Review; options include partnering, joint ventures and technology transfer between DERA and UK industry, and controlled privatisation.

  6.  Defence equipment depends increasingly on technology developed in civil companies and for civil markets, and, to fulfil its role for MOD, DERA needs to have expertise in these technologies derived from working with civil companies. For example, command and control systems depend very largely on civil information technology, even though in the past much of the technology, including the Internet, originated from defence research.

  7.  Technologies which are still largely defence will become increasingly civil in the next decade. For example, sensors such as radar and thermal imagers will become much cheaper and will be introduced into consumer products, in cars, homes and civil security applications. By exploiting defence technology now, companies can position themselves in what will be rapidly growing civil markets. At the same time, cheap sensors will dramatically affect military equipments and defence companies.

  8.  Emerging civil technologies will create future military risks and hence drive defence needs. One example is chemical and biological warfare where biotechnologly is opening up a wide range of potential threats. Another example is information warfare. In these areas there is considerable defence benefit from working closely with civil organisations. At the same time there is also a vital need to protect sensitive defence information including information from allies such as the United States. MOD and DERA take great care to scrutinise potential collaborations and information sharing to ensure adequate safeguarding.

DERA'S DUAL-USE TECHNOLOGY APPROACH

  9.  DERA launched its "dual-use" approach in 1994 and has so far set up 6 dual-use technology centres (DUTCs). The primary objective of the DUTCs has been to promote technology transfer from DERA to industry, but "spin-in" to DERA of expertise from civil companies is another important objective. The goals of DUTCs include:

—  achieving greater leverage from defence research and a greater contribution to wealth creation, particularly by enabling industry and academia to exploit DERA facilities, technology and know-how in DERA terms;

—  maintaining a leading-edge awareness of relevant technologies world-wide for industry and MOD;

—  making more effective use of work in academia and research institutions;

—  providing a critical mass, cross-fertilisation and combinations of expertise that individual companies cannot maintain internally;

—  providing cost effective knowlege, skills and technology transfer;

—  building a strong network of collaboration among civil and defence companies and DERA.

  10.  Each DUTC was set up to meet a specific need and has been encouraged to develop its own characteristics. A number of different models have evolved.

—  shared facility—set-up jointly by DERA and external organisation(s), which would otherwise be too costly to stakeholders acting in isolation (case: the Farnborough Supercomputing Centre);

—  unified capability—expertise and capabilities are pooled in a new centre (case: the Structural Materials Centre);

—  translator model—a group is set up to interface between the problems and needs of commercial organisations and the expertise and capabilities in DERA (case: the Information Processing and Telecommunications (IPT) Innovation Centre);

—  knowledge sharing—rainbow teams of DERA and industry staff share expertise and develop best practice (case: the Software Engineering Centre);

—  joint venture—capabilities are combined to provide a jointly owned national capability (case: the Centre for Marine Technology);

—  dual use project—individual projects are undertaken jointly by DERA and industry (case: thermal imaging dual use technology project).

EXAMPLES OF DUAL-USE IN PRACTICE

  11.  An area where the dual-use approach operates very well is in the programme of research which is jointly funded by MOD and DTI under the CARAD programme. Rolls Royce reports that it gains high benefit from DERA research and capabilities in the area of propulsion and aeroengines. A major factor is that this programme is very well integrated between DERA and Rolls Royce.

  12.  Building on the benefit of integrated programmes, DERA is working with companies to increase the number and scale of joint projects it has with industry. This also reflects the shift in MOD policy towards a stronger emphasis on technology transfer and partnering. Last September DERA launched a variant of its Pathfinder Scheme, named Priority Pathfinder. This scheme funds integrated teams of DERA and Industry on projects of joint benefit to MOD and to companies. Some projects are dual use and involve DERA working with civil companies exploring the application of civil technology for defence and at the same time providing advances applicable to civil markets.

  13.  In November 1997, against a DERA funding budget of £10 million, some 201 proposals were received for Priority Pathfinder from 81 companies. These had a total value of £65 million and an industry private venture contribution of £23 million. From these proposals, projects to a total value of about £16 million have been selected and all of these will be under contract by the end of March. The speed with which the Priority Pathfinder scheme operates, developing, competing and contracting joint projects in only a few months, is in itself an important step forward, much better matched to the rapid pace of civil markets and the product develop times of civil companies. DERA and MOD are currently examining whether the Priority Pathfinder model might be expanded in future years; this also depends on the outcome of the current review of future options for DERA which is being carried out as part of the Strategic Defence Review.

THE CONTRIBUTION OF KNOWLEDGE MANAGEMENT AND NETWORKING

  14.  It is also worth mentioning that DERA is investing strongly in the emerging practices and technology of knowledge management and is working with the world leading organisations in this area. Better knowledge management and networking will enable DERA to make maximum use of world technology and to make this available to both MOD and non-MOD organisations; it will enable the huge and very wide-ranging knowledge base within DERA to be much more accessible to non-MOD organisations. Knowledge management also involves a radical culture change in DERA to be a knowledge-based knowledge-sharing networked organisation.

 NEW GOVERNMENT POLICIES AND DERA'S FUTURE DUAL-USE APPROACH

  15.  The Government has recently published a consultative Green Paper (reference 1) on a proposal for a defence diversification agency. This includes a selection of brief case studies of technology transfer from DERA to civil applications: thermal imaging for fire-fighting and security applications, doughnut shaped compressed air cylinders, metal-organic vapour phase epitaxy, flat panel loudspeaker technology, real time all vehicle simulators for traffic management, solution for interference in satellite communications.

  16.  The Green Paper includes the following proposals relating to DERA's future dual-use approach.

—  Without detracting from its defence purposes, DERA could devote effort on a much greater scale than so far attempted to converting the benefits of its research into wealth creation in the civil sector [paragraph 16].

—  A Defence Diversification Agency (DDA) should be set up as part of DERA to give new impetus to the Government's diversification effort. The DDA would provide knowledge of what is available, encourage access to DERA laboratories, stimulate transfer of MOD's Intellectual Property Rights and seek partnership with companies for programmes of co-development and adaption. The DDA would create a database about future equipment needs, technological trends, sources of advice and assistance and relative market assessments, and make this available on a confidential basis to industry to encourage dual-use spin-out and spin-in. The DDA would provide a one-stop shop source of information [paragraphs 17 and 18].

—  DERA's capabilities should be made more accessible to non-defence industry using Business Links and other means to make contact with DERA specialists [paragraphs 19 and 20]. (DERA already operates the South-East England Information Relay Centre for the EC which assists companies in finding technology partners).

—  Science-based economic growth centres might be encouraged around key defence laboratories creating clusters of companies exploiting DERA's knowledge and technology [paragraphs 21 to 25]. (Preliminary work has already been undertaken on the potential for market-facing science parks next to DERA laboratories, which may encourage new start-up companies).

—  There should be close co-ordination of the activities of the DDA in technology transfer with those of other Departments and Agencies with responsibilities for industrial sponsorship and regional regeneration [paragraph 27]. The DDA should complement rather than duplicate the functions of Regional Development Agencies and parallel bodies in Scotland, Wales and Northern Ireland [paragraph 35].

—  Foresight, through its diverse range of participating business sectors, could both stimulate civil opportunities, and broaden the gateway, for the application of defence research and development [paragraph 31]. (DERA has participated strongly in Foresight, particularly through the Defence and Aerospace Panel, DERA is now increasing its involvement with other Foresight panels and with other groups providing understanding of civil markets and quality of life).

—  It is the Government's intention that DERA's role in promoting the civil application of defence technology should be undertaken very much as a partnership with industry [paragraph 37].

  17.  These proposals, if implemented, would enable DERA to build on the start it has made in exploiting potential dual use technology for the economic benefit of UK and increase its value to both the civil sector and to MOD.

REFERENCES:

  1.  Green Paper: Defence Diversification: Getting the Most Out of Defence Technology, Cmnd 3861, HMSO, March 1998.

  2.  Budget 98—Innovating for the Future: Investing in R&D, HM Treasury/DTI, http://www.hm-treasury.gov.uk, March 98.

24 April 1998

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Prepared 4 June 1998