Examination of Witnesses (Questions 100 - 126)
WEDNESDAY 29 APRIL 1998
MR
JOHN
CHISHOLM
and DR
ADRIAN
MEARS
100. One out of how many did you not get, roughly?
(Dr Mears) One out of 42.
101. We are not going to argue about that! Mr Chisholm, can
you give us any examples? I know you are restricted in some areas,
but there might be some examples you can give us of a Pathfinder
project.
(Mr Chisholm) Dr Mears runs the Pathfinder programme
so he would be a good witness for this.
(Dr Mears) There are many different types of Pathfinder
projects.
102. Just give us one that you think would be of interest
or something you are proud of, just so we have a flavour of what
it does.
(Dr Mears) Most of them are military and there will
be projects to develop some new approach in electronic warfare,
for example. But you could take almost any area of defence and
there would be projects there which are tackling some element
of it. The main characteristic of the project would be that the
company itself, for example in an electronic warfare case, sees
that it could produce a product which it might expect to sell
maybe to other markets or provide to MoD. So the characteristic
of a project tends to be that it is in those sorts of areas where
a company can see that its contribution and the intellectual property
which it is getting can be exploited into a product. There are
a few cases in substantially civil technology where one is looking
at that technology being applied in the defence context but where
the company at the same time not only gets an idea of whether
the technology can come into the defence market but also the project
may provide a more compact or more robust technology for use in
civil markets. A characteristic of defence work is that we are
often dealing with things which are light, compact and can stand
extreme environments.
(Mr Chisholm) There is a shipbuilder that had the
idea that by actually integrating the two together—rather
than building your ship structure first and then trying to fit
the electronics in later—you gain a major advantage. They
made that proposal to us and it is something which is important
to them in their other markets and so we said yes, we could see
the advantage to our customers and how that would fit in with
the advice that we want to give to customers. So we put in a certain
amount of money and they put in a certain amount of money and
the output is a product which forms part of their inventory of
things which they can sell on broader markets.
103. Clearly you have been able to move more quickly from
launch to implementation as a result of Priority Pathfinder. Do
you think other government-sponsored collaborative projects such
as, for example, LINK could benefit from the approach that you
have developed for Priority Pathfinder?
(Mr Chisholm) In a sense I could give a bouquet here
to the DTI. We have in a sense borrowed ideas from the DTI here.
104. The important thing is, whether you are borrowing from
them or them from you, you are talking to each other and you are
both getting the best out of what you are both doing.
(Mr Chisholm) Absolutely.
Mr Turner
105. Your memorandum mentions the Information Relay Centre
in the south-east. What is the precise role of this Information
Relay Centre that you run for the European Commission? How successful
is it?
(Mr Chisholm) What it does is it provides a very similar
type of networking capability. What happens is we provide a call
centre for people who have technical problems. They ring us and
we put them in touch with technology providers, sometimes in our
laboratories, quite frequently not, who might be able solve it.
It is a kind of marriage-broking service and that is the best
way to describe it. The added feature in that case is the linkage
to European technology programmes and the funding that might be
available from the European Community through the Framework programmes.
If people come forward with notions which we can see might fit
Framework objectives we make that suggestion to them and we can
put them in touch with organisations elsewhere in Europe. As you
know, a Framework programme needs international collaboration.
We put them in touch with similar organisations elsewhere and
say: "Why don't you form a team to make proposals for Framework
programmes." We have done quite a lot of marriage-broking.
(Dr Mears) It also operates as a marriage broker for
technological collaboration and it can do so internationally.
In the last year there were 13 cases where they have put one company
in touch with another directly negotiating IPR transfer. An example
there would be a United Kingdom company put together with a Norwegian
company which is now selling a product based on merging the technologies
of those two companies. There were 13 instances last year of that
sort of activity in addition to assisting companies wanting to
take part in the Framework Programmes.
106. What use do DERA make of Business Links and how do you
think that that relationship would alter if the DDA is established
along the lines suggested in the Green Paper?
(Mr Chisholm) The information that I have because
I have pressed this point with my people is that Business Links
are potentially very helpful indeed. Many of the companies that
approach us in the first instance have not got their particular
issue so well formed in their mind that they know what it is.
Is it a technical problem? Is it a business problem? Is it a marketing
problem? And so they need a little bit of steerage in order to
focus on exactly what the issue is. Where we can add value is
when it is actually a technology issue and so what we find is
that, in those areas of the country where the Business Links process
is working well, it all depends on individuals. As you probably
know, the good people who have come into the Business Link network
are people typically at the more experienced end of their careers
who have something to offer. Where you have energetic people like
that involved in the Business Links then the referrals from them
to our network tend to be high-quality people who have been given
a little bit of help to think through their issues so they pose
their problems in ways which we can quickly grapple with and add
value to their problem. Where that is not working so well then
it is a little bit more messy.
107. How would the DDA cut across this, if at all?
(Mr Chisholm) I think the DDA simply builds upon that
experience. The DDA is not designed to help people with personnel
problems or marketing problems. It is designed to help people
gain access to technology and to have an assessment of where they
stand in technological terms.
108. It is reasonable to expect certainly in your research-related
activities that you are going to have quite a lot of overlap with
the Environment and Physical Sciences Research Council. Is this
so?
(Mr Chisholm) The EPSRC is an organisation with whom
we have some quite rich links one way or another. We have joint
funding programmes with them already. We have a degree of cross
referrals between us. I think we are quite distinctly different
organisations. They are clearly a funding organisation whereas
we are principally a doing organisation.
109. But you do have mechanisms that allow a synergy between
the two?
(Mr Chisholm) Indeed we do.
(Dr Mears) We have concordats with the EPSRC and NERC
which provide for full exchange so we know their programmes and
they have access to our programmes and we have a steering group
for the programmes we jointly fund with all research councils
apart from PPARC.
Mr Turner: What a good thing we do not have a "cold
war" any more; it would make all these things complicated!
Dr Williams
110. Could I come in briefly. Are there any EPSRC programmes
based in DERA? Do they actually sponsor any projects in any of
the other establishments?
(Mr Chisholm) Good question.
(Dr Mears) I am not aware of any. We have a number
of projects in universities we jointly sponsor through the joint
grant scheme. I am not personally aware of any project.
111. Particularly technology centres?
(Mr Chisholm) We would not qualify for funding directly
from the EPSRC because we are not an academic institution. If
we are funded at all by EPSRC, and given the size of my organisation
I cannot guarantee we are not, it would be as a subcontract to
a university which had EPSRC funding. That is quite possible.
(Dr Mears) We have made our facilities available free
of charge to universities in projects which we are funding jointly
with the EPSRC. ESPRC would not be buying our facilities, for
example.
(Mr Chisholm) But you mention the—
112. The technology centres.
(Mr Chisholm) One of the dual-use technology centres
is the Farnborough Supercomputer Centre.
Chairman
113. Supercomputer? I was hearing superglue!
(Mr Chisholm) I am sorry, I should try and speak more
clearly! There was considerable discussion with the research councils
as to whether that could be made more use of in the academic environment.
In the end it did not come to anything because of technical reasons
but it might have done.
(Dr Mears) It might do in the future.
Dr Williams
114. I was just thinking of parallels, that the Biological
Research Council does devote part of its money to various institutes,
the Food Institute and so on. In a sense the dual-use technology
centres do sound like these intermediary bodies so maybe it is
a direction for the future.
(Mr Chisholm) You are right and indeed in our life
sciences area we have containment facilities which are very interesting.
(Dr Mears) to the MRC and BBSRC.
115. That would be at Porton Down, would it?
(Dr Mears) That is right and that may well develop
in the way you suggest. It might be worth mentioning that the
Centre for Marine Technology, another technology centre, links
with the Oceanographic Centre which is at Southampton University.
Oceanography is covered by NERC and not EPSRC. There is a close
relationship and DERA collaborate quite strongly with NERC in
that area.
Mr Atkinson
116. Mr Chisholm, you and I were in some protracted correspondence
some years ago on a completely unrelated issue relating to Porton
Down when I was trying to probe exactly what happened to those
National Service conscripts who thought they were volunteering
for research into the common cold when of course they were researching
something completely different. I would like to ask some questions
about intellectual property rights and patents. How many of DERA's
patents earn significant royalty income? Are there any international
sources of such income and are there any remaining constraints
on technology transfer following the demise of COCOM that are
affecting you?
(Mr Chisholm) I cannot give you the exact number of
patents that earn significantly. It is better to think in terms
of patent families anyway because patents are more exploited in
terms of families of patents that give you a portfolio that you
can build a case around. The one that is by far our most productive
family is liquid crystal patents. Those have more than £10
million a year in their best years, although they are rather past
their best years now and because we continue to research in that
area we are very hopeful that we will recover and repeat and exceed
those figures in years to come. It happens to be an area which
is well suited to patent protection where we can relatively straightforwardly
earn good monies. There are other areas, e.g. the acoustic wave
area, which we thought was going to be important in things like
radar. It turns out to be important for cellular telephones. We
are beginning to build up our income from that area. There are
on-going earners for rather more mundane things like emergency
bridging where we have patents. So after you go past the sort
of big earners you get into a dozen or so middle or small earners
and then a whole lot of things which barely cover their cost of
patenting. From the people I have spoken to, other players in
the patent game, I think that is not at all unfamiliar. At any
one time you will have a few big winners, a lot of things which
are not going to go anywhere and a few hopefuls, which is pretty
much our position. Inevitably our biggest earners are international.
It is our ability to pursue patent income from the consumer product
companies overseas which earns us our major patent incomes.
117. Are there any restraints on technology transfer?
(Mr Chisholm) We obviously do have constraints on
technology transfer. Any technology transfer has to be subject
to the normal licence approval just like any commercial company.
118. In Rolls Royce's submission to us they suggest: "intellectual
property has no value to the country unless it can be brought
to the market in saleable products" and that "the retention
of such property by entities which cannot exploit them in this
way is a waste of a national asset". So what is DERA's policy
on the retention of intellectual property rights over its discoveries?
(Mr Chisholm) We would not recognise Rolls Royce's
submission as a matter of fact. We do not retain anything because
we like to put it on the wall and look at it each day. In all
the intellectual property that we have we seek to find routes
to exploitation and we do so vigorously. We have a policy of first
seeking exploitation from UK-based companies, but, in the interests
of the taxpayer, if that is not maturing in a sensible timescale
we will then seek exploitation from wherever we can get it.
Dr Kumar
119. You have been involved with a number of Foresight panels,
particularly the Defence and Aerospace Panel. I heard an excellent
presentation the other day by Trevor Trueman, the Director of
Engineering for British Aerospace, praising all the work of the
panels. Do you want to make any comments on how far the work of
the panels has influenced your own activities?
(Mr Chisholm) I am on the Steering Group of Foresight
and Dr Mears is on the panel so I will ask him to speak for the
panel in just a moment. So far as the overall Foresight Programme
which I will speak for is concerned, we regard it as very important
as an activity that has been extraordinarily useful to us. You
will have heard me say repeatedly this afternoon that establishing
networks is absolutely crucial to technology exploitation. It
is almost the most important thing to try and do because it not
only passes things down it, it enables both ends to get better
at doing their particular jobs. I was one of the founder members
of the Foresight Programme. The reason why I was a champion from
the start was because I saw it as filling a vital gap in the UK
of networks, providing networks between providers of technologies
and potential users of technology. I think we have been quite
vigorous participants in that network-building process, not only
in the defence and aerospace area, which, frankly, was not bad
already, but also in the other panels, for instance the High-Tech
Panel, the Materials Panel and, more recently, the Marine Panel.
We have tried to make use of the processes of Foresight.
120. Are there any particular examples you want to give on
the research side that you have been successful for MoD on?
(Mr Chisholm) Let me ask Adrian to speak from the
point of view of the Defence and Aerospace Panel because I think
that is where the major activity lies.
(Dr Mears) If you think of research projects, obviously
there has been Foresight Challenge, but the key benefit from the
Defence and Aerospace Panel has been in the setting of the strategy
and the actions that have followed from that. If you want me to
I can cite one example. The strategy that was produced by the
subgroup on research and technology relating to the way forward
on system engineering was very influential. It has helped thinking
in the Strategic Defence Review about new ways of doing procurement.
Some of the activities which have come out of the panel have had
a major influence and benefits for the way ahead. I think the
panel produced a very useful report back in 1994/95, partly because
it had on it a very good group of well chosen people who actually
were the people who had the power and influence, and it implemented
that report and it has been quite influential in promoting technology
transfer and the exploitation of DERA's research. The strategy
it has developed for research and technology has been done in
conjunction with the trade associations and professional institutions,
so it is establishing a framework nationally for increasing the
coherence between universities, industry and governments in a
number of different technical areas. I think it has got a pretty
good success rate, but a lot of the benefit has been from this
networking and strategy, pointing the way ahead and proposing
new ways of doing things.
(Mr Chisholm) If I could add a civil example from
quite a different field and that is the financial services field.
We put in a successful proposal to Foresight Challenge with various
financial services institutions for applying the technology which
comes out of the defence field in risk reduction and understanding
of human behaviour in situations into the financial market arena
where clearly understanding and control of risk is a problem that
the finance community share.
121. I was told that the technology can only read 50 per
cent of cheques properly. Will it be able to read 100 per cent
of cheques properly as time goes on?
(Mr Chisholm) That is another technical challenge.
Chairman
122. Mr Chisholm, to what extent has Foresight led to the
identification of defence technology or research which is non-defence
related or which has non-defence uses perhaps? It will be defence-related,
of course it will, because it has been done by your organisation
but has a non-defence use?
(Mr Chisholm) How can I best answer that? In relation
to the Defence and Aerospace Panel there are aspects particularly
of aerospace which are direct applications of defence-derived
technology and in those technologies the relationship tends to
be so close that the spin-off into those markets is very easy.
Actually the spin goes both ways and increasingly it is in the
other direction but it makes a lot of sense to have a Defence
and Aerospace Joint Panel because of the good connections between
the civil and defence fields. In relation to other panels, our
participation for instance in the Materials Panel or the Marine
Panel, there again although we are much smaller players in a much
bigger field it gives an opportunity for networks to be strengthened
between our laboratories and players in the civil field. For instance,
in the materials world the TI Group now have an office in our
Structural Materials Centre so that they can participate in our
Structural Materials Centre and gain the advantage of the knowledge
within that.
123. Foresight will be used, will it not, to help to determine
the priorities which should be set against a whole range of existing
projects or ideas but it can also be used to identify perhaps
where there is a vacuum and an idea is needed. To what extent
has it been used that way to trigger ideas for your organisation
and for the Ministry of Defence?
(Mr Chisholm) In the phase that we have gone through
so far, Foresight 1 so to speak, the Foresight process was less
well geared to that and the participants were new to the game
and the main product has been the networking I have been talking
about. I suspect in the next round of Foresight the thing you
are referring to there, which is getting a better strategic vision
and understanding of where the gaps might lie, is a more likely
product than it has been in this round.
124. It could be a more creative way of using Foresight.
I am not saying it is not creative. Dr Gibson is here, he might
well say it was, but I am not saying that! I am saying if you
use Foresight in the second of my two examples where you are looking
for gaps and vacuums, that could perhaps through brain-storming
or lateral thinking or whatever be a bit more creative than trying
to use Foresight against the existing plethora of ideas you are
wanting to concentrate on.
(Mr Chisholm) Perhaps the example I used earlier on
about the financial services market might be an example. It was
not obvious that war gaming and real time simulations in manning
the loop would have the application of helping major banks reduce
their risks but once we thought about it, it does.
125. Reducing their risk by reading 100 per cent of Dr Kumar's
cheques!
(Mr Chisholm) Not quite in that connection.
126. Unless there are any other questions that are pressing
from the Committee, may we thank you both for a very interesting
and slightly different session of this Select Committee by bringing
before us you, Mr Chisholm and Dr Mears, from DERA, an organisation
we did not know too well until this afternoon. You have given
us an insight into the whole technical and research area that
is closed very often to the public and to the House, although
not so much now as perhaps it was five or six years ago. We are
delighted by what we hear about your organisation and we are grateful
to you for assisting us in our inquiry. It is early stages of
our inquiry and our report is some way off, but thank you very
much indeed for coming and for the help you have given us.
(Mr Chisholm) Thank you for your time.
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