Examination of Witnesses (Questions 242
- 259)
WEDNESDAY 13 MAY 1998
PROFESSOR MIKE
EDWARDS OBE and DR
LESLEY MITCHELL
Dr Jones
242. Professor Edwards, welcome back to our
Committee. I apologise to you and Dr Mitchell for keeping you
waiting a little while; I hope it was not too much of a problem
for you. I will do the same again; we will go straight into the
questions and then at the end, if there is something that we have
not covered that you want to pick up on, I will give you the opportunity
to come back in. Could I start out by referring to your criticism
of the terms of reference of the inquiry which you say are founded
on questionable assumptions. We are very happy to be criticised;
perhaps you would expand on your criticism?
(Professor Edwards) Could I introduce
first Dr Mitchell who is Director of Technology and Engineering
for BNFL Magnox Generation.
243. Welcome, Dr Mitchell; we had a debate this
morning on your area of interest.
(Professor Edwards) Now to the point of criticism
which I will try to address. I think there is a concern amongst
Fellows of the Academy that there is a perception that innovation
comes from companies dabbling into the science base, picking out
a bit of technology and one for one translating it to innovation
and making competitive advantage through that. I think it is the
experience of Fellows both in industry and in the Academy that
that is not really the path by which innovation happens. It is
a very complex process, usually originating in the market place
and identifying markets' need and then a whole series of complex
processes to say what is required to support innovation, what
technology is required, does that need support from the university
sector or, in the case of a company like Unilever, do we have
the resources to handle that? There is not a one-for-one transfer
out of background research in research councils and universities
into companies to lead to innovation in the marketplace. I think
it worries Fellows of the Academy that the questioning goes along
those lines.
Mr Beard
244. Do you dispute that we have a history of
having developed things academically which have been exploited
elsewhere?
(Professor Edwards) Indeed, yes. I agree.
245. That is the origin of the problem which
you are addressing.
(Professor Edwards) There are some very large examples
of missed opportunity but I think that for most companies the
innovation that they do does not depend on this one-to-one transfer
from the science base into companies.
246. We are not saying that; we are saying that
Britain is very good at generating ideas in the physical sciences,
particularly in engineering; there is a long history of them being
exploited in Japan and America. Why not be exploited here?
(Professor Edwards) We would wish to correct that
and I think an understanding of the innovation process and proper
transfer arrangements would remove that problem that certainly
has occurred in the past. Certainly companies like mine, and I
am sure that of Dr Mitchell, would not wish to see research in
the university sector buried and not being exploited by us.
Dr Jones
247. There has been criticism that the engineering
industries have not been as successful as bio-technology and pharmaceutical
companies in exploiting the science base. Do you think that is
justified, first of all? Secondly, you refer to the framework
and how it could be improved? Does it exist for one set of companies
and not for others?
(Professor Edwards) I will give a response and I am
sure Dr Mitchell will come in with his comments. I think there
are some companies in the sectors which engineering serves that
are not so research-sensitive and their success or failure does
not necessarily depend on transfer of research from the science
base. There are others that do and I hope on those occasions the
transfer is reasonably good, but it can always be improved. I
do not think if you look at the whole sector or areas of sectors
and say that if companies are not successful it is because they
have not got innovation from the science base.
Mr Beard
248. Are you applying that to the machine tools
industry—the fact we have not got an electronics industry
worth speaking of in Britain and the fact that the indigenous
motor car industry has largely gone out of business? Surely that
is a refutation of what you are saying?
(Professor Edwards) I do not think so. Please come
in, Dr Mitchell, to help me. I think in those industries there
is more than just exploitation of the science base that causes
the problems in those industries.
249. What do you think it is then?
(Professor Edwards) There are a whole set of arrangements
about financial support generally from government, trade union
relationships, a whole array of things. It may be that in some
cases this transfer has been the problem but I do not think it
is the entire source and I think it is wrong to focus on this.
(Dr Mitchell) I think the motor industry, and to some
degree earlier the aircraft industry, actually failed to coalesce
organisationally and left itself developing too wide a range of
products and basically not meeting what was an evolving international
market. It was not slow to innovate. I think what was British
Leyland was actually one of the most innovative car companies
ever; it introduced a number of innovative designs but it was
not successful putting them into the market.
Dr Jones
250. There has also been some criticism of engineering-based
companies, that they do not spend enough on research in comparison
with, say, pharmaceutical companies. In the evidence that Sir
Ralph Robins gave us he said that was because of the different
nature of the businesses concerned. Would you agree with that?
(Professor Edwards) I think that must be correct if
you take the pharmaceutical industry as a basis for comparison.
I think the Academy welcomes the R&D scorecard that is published
that does look at company performance comparing that with its
R&D spend. R&D spend is only one measure of success and
it is possible to spend research money unwisely and fail.
251. We heard from the Society of Chemistry
about an American project which is relating to technology demonstrator
programmes and they were commending such schemes. How important
are these? Do you have a concern about lack of government support
for technology demonstrator programmes? Is this a problem and
what should the Government be doing about it?
(Dr Mitchell) I think this is an area of weakness,
making international comparisons. I think one of the questions
is that in the UK we tend to equate pre-competitive research,
research that government believes it should fund, with small scale.
In engineering terms I do not think that is true. In aerodynamics,
in the chemical industry, there are very basic problems associated
with the scaling up processes to demonstrate the viability. I
think the aircraft industry looks in many cases for demonstration
projects. My own industry, the nuclear industry, would never have
got to where it is today, by which I mean its safety record, not
the lack of market, had it not used demonstration. Also I would
look in my background at the clean coal demonstration. I do not
believe that the United Kingdom will have a presence in future
coal technology unless someone recognises the demonstration of
clean coal technology at an intermediate level is a fundamental
step. If you enter France you will find they are doing this although
they are dominated by the nuclear industry but they are doing
it to build an international business.
Dr Gibson
252. How much do companies in the engineering
sector rely on that science base? How can you quantify that? As
you say, there is no one-to- one. How would you describe the relationship?
(Professor Edwards) I think it is difficult to talk
about engineering as I see it. It is not a sector, it is a range
of disciplines and it serves, for example, a whole range of sectors
in the classical DTI or Foresight sense of having industrial sectors.
Engineering supports, for example, the pharmaceutical sector,
it supports the chemical sector, it supports food and drink and
one needs engineering research to support all those industries.
It will support them all to different extents. Currently, of course,
it is supporting the pharmaceutical industry which one might expect
to be stronger than it would be in some of the other industries.
253. You said that the transfer was not good.
How bad is it?
(Professor Edwards) I think there are some very good
examples of transferring in engineering. I think EPSRC has embraced
quite boldly the move to get some of its programmes towards transfer,
and indeed towards industrial sectors. If I talk of the innovative
manufacturing initiative that the EPSRC runs, that is a special
fund to put money into industrial sectors that build on engineering.
One is road transport, one is the process industries, which includes
pharmaceuticals, the others are construction and the fourth one
is aerospace. We put money into those sectors on an industry-led
basis. We expect industry to say what are the targets, what technology
could it exploit? Those targets are put before academics and we
try to engage the best academics to research on those targets
alongside the participating companies from the sectors. It is
50 per cent at least industry-funded and then the industry and
the best researchers in the country work together on targets that,
if satisfied, it is known that the companies can exploit. That
is a very good way of transferring technology and a model we will
be looking to extend. There is one other example. We were talking
earlier about the training of PhDs. EPSRC has looked at the Engineering
Doctorate scheme which is to have a PhD person actually in a company
trained for four years with the university's support. So it is
still first rate gold standard research but done in a company
and the company and the university work together, share resources,
and again it is known that the technology will be transferred
because the company asked for the project to be set up. Those
are very good examples of technology transfer and we need to build
on those, but not totally at the expense of forgetting blue skies
research.
254. Let us think for a minute about government
funding for research. You talked about fair competition for research.
Do you think if there is a role for government in funding, or
assisting industry to fund research, that research should be nearer
the market product, the marketplace, than pre-competitive research
indicates? Are there not risks involved there? Could you say something
about how you assess the risks?
(Professor Edwards) I think the Government should
fund a range of activities. It is fine to fund money into the
exploitation projects, and I have illustrated a couple of those
that have done well, but there has to be a balanced portfolio.
There has to be a significant sum of money that is spent on blue
skies research being driven by curiosity rather than by application
and then, picking up Mr Beard's point, one hopes that this curiosity-driven
research will be picked up and exploited. It would be wrong of
research councils to put too much of their money into transfer
and exploitation projects.
255. Come on, you are a scientist, quantify
that for me. Give me a ratio between the two?
(Professor Edwards) This is a personal view, but I
think the Academy would share it, something of the order of 30
per cent of Research Council funding minimum should be on blue
skies curiosity-driven research.
256. Do you agree with that?
(Dr Mitchell) I think that it is not an unreasonable
proposition. The main thing that industry looks for from the university
sector is to provide products in the form of trained people as
well as innovative ideas. We look to them to be at the forefront
of the world of knowledge. If we take away that driver in substantial
part from the university that is wrong. That is not to say that
we do not subscribe to the view that you cannot improve the relationship
between the other 70 per cent and industry.
Mr Beard
257. Could you just clarify the answer you gave
to Dr Gibson. You said 30 per cent of the EPSRC funding should
be on curiosity-driven research but my impression is it is 100
per cent. It is not a targeted programme, is it; it is there to
provide that basic infrastructure to research and understanding
in whatever subject, the physical sciences?
(Professor Edwards) There are some programmes within
the research councils that are focused on particular technical
sectors and particular areas and they are not blue skies research,
it does not allow academics freedom to tackle anything. Bids are
only welcome and will only be considered in those areas. Several
of the programmes that I have talked about, for example the innovative
manufacturing initiative, have a specific target for the research
and the research is excellent but it is driven by an application
target. So that fund of EPSRC's money will not be used—and
it is quite significant—for blue skies research where academics
can follow their own interest/ instincts.
Dr Jones
258. That is a small proportion of the budget.
From one extreme, PPARC, nearly all their research is blue skies
research, obviously it will vary from research council to research
council. I am surprised that you put only 30 per cent on blue
skies after you emphasised its importance. You say it should be
around 30 per cent when I thought it was much higher than that
anyway.
(Professor Edwards) It has been certainly less than
that. I used to chair the Process Engineering Committee of the
EPSRC and there when we did an analysis we had ten per cent of
our funding that was not directed at special areas. So we had
a separation technology initiative, a powder technology initiative,
and they were the priority areas and people bidding outside those
areas at the time would not be considered. We have tried to change
the balance, to move the balance away from that.
Dr Gibson
259. I have never seen that said before; should
I have known about that?
(Professor Edwards) I think there is a significant
proportion of funding in research councils which is what you call
directed research into preferred areas. Foresight are examples
of that.
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