4. ASPECTS
OF CURRENT
ARRANGEMENTS OF
GOVERNMENT FUNDED
RESEARCH
4.1 Rolls-Royce products benefit from government
funded research carried out in various locations: universities,
government research establishments (primarily DERA) and within
the Company. Funding for these activities from HMG is channelled
through EPSRC (Universities only), MoD PE, DTI CARAD and the EU
Framework programmes, in addition to Rolls-Royce's own funds.
Very limited use is made of independent research and technology
organisations because of their restricted range of skills and
relatively high costs.
4.2 Each of these funding sources has its
own objectives and only a proportion, often 50 per cent, of the
cost of a project is supported. Where the objectives of the funding
source are aligned with those of the company, the projects are
usually successful and of benefit to the company and the UK economy.
When the objectives are not aligned, success can still be achieved
but it is always more difficult and less efficient for all participants.
Thus DTI, whose primary objectives are related to the prosperity
of industry, have been successful, through the CARAD programme,
in making significant contributions to technology generation,
transfer and collaboration despite very limited funds. Establishing
and maintaining alignment between the MoD technology objectives
and the military business is more difficult because of the Company's
need to develop products which will generate revenue in the relatively
short (five year) timescales, whilst MoD is planning strategically
for 10-15 years in the future. When the business climate changes,
the Company will adapt its strategy but the MoD has no corresponding
need to change. Consequently the Company may become less committed
to some elements of the programme and will restrict the private
funds it is willing to devote to them. This problem is compounded
by the MoD's drive to increase the ratio of private sector funding
in their programmes with industry.
4.3 In government laboratories, the situation
is similar. Alignment of their objectives with those of industry
is the key to successful technology transfer. This requires a
mature view from industry on the nature of innovation especially
in the avoidance of short-termism and the willingness to take
risks, as discussed in section three above. Its objectives will
then be expressed in a form recognisable and useful to research
establishments.
4.4 Rolls-Royce is involved in a number
of schemes designed to promote collaboration in research in the
UK. Many of these are funded by the company itself, particularly
in universities. Government schemes, such as the LINK scheme,
provide useful supplements to this activity particularly in "pump
priming" of new ventures where both parties need encouragement
to institute new ventures. Some schemes, such as IMI, have too
little funding available.
4.5 Intellectual property has no value to
the country unless it can be brought to the market in saleable
products. The retention of such property by entities (such as
DERA) which cannot exploit them in this way is a waste of national
assets, particularly if obtained through HMG funding. Release
to foreign companies, even if a licence fee is obtained, is not
in the national interest unless a proportion of the revenue from
the exploitation is also forthcoming. It is therefore vital that
the bodies such as DERA maintain close links with UK companies
so that intellectual property can be effectively exploited.
4.6 The value of intellectual property is
also transitory. In general, therefore, the Company always sets
in place clear agreements on IPR before commencing any external
R & T work. Problems will potentially arise when a third party
(such as an overseas subsidiary) requires access to information
which has been generated using UK government funds. In general
DTI and MoD are sufficiently flexible in this regard although
processes to obtain release can be slow.
4.7 The Foresight, Defence and Aerospace
Panel has effectively mobilised the industry to provide strong
inputs to government, and has built effective networks across
the major players and down into many layers of the food chain.
DTI has expressed its support for the proposals but repeatedly
states that no money has been made available to support the initiatives.
The current DTI support to Aerospace R & T through the CARAD
(Civil Aerospace Research and Development) programme remains under
threat under current public expenditure conditions. MoD has provided
more practical support, by including some dual use elements in
the programmes it supports. Overall, however, the effect has been
limited and funding continues to decline.
4.8 EPSRC has a number of initiatives to
support technology transfer which are productive. For Rolls-Royce,
the most useful have been where funds have aligned with Company
funds in UTCs and related activities. The ROPA scheme, for example,
recognises the investment made by industry in academia and allows
staff in those institutions to broaden their research in fields
related but not identical to industrial projects.
