Examination of Witnesses (Questions 260
- 279)
WEDNESDAY 13 MAY 1998
PROFESSOR MIKE
EDWARDS OBE and DR
LESLEY MITCHELL
Dr Jones
260. It has been suggested that Foresight has
not had that much impact on the kinds of projects which have been
supported by the research councils.
(Professor Edwards) But the money that it is spending,
and they do look at their spend into Foresight areas, goes into
those specialised nominated areas.
Mr Beard
261. But if you are talking about Foresight
as being a target, they are very, very loose targets, are they
not; it is almost like hitting the earth from the moon?
(Professor Edwards) Some parts of it, yes. I just
make the plea, when we are talking about the importance of technology
transfer, not to forget generation of science otherwise we will
have nothing to transfer. If companies like Unilever say: "We
should research in this area, that area, another area" and
then when I go to universities I will not see new and exciting
things and I wish to see new and exciting things in universities.
Dr Turner
262. You suggest one of the difficulties inherent
in funding research jointly between government and industry is
the restriction placed on exploitation. Do you agree with the
proposition that we have had put before us that the retention
of intellectual property by government bodies which cannot exploit
them is a waste of a national asset? Do you agree with that?
(Dr Mitchell) I think that it is obviously beneficial
to have the intellectual property in the hands of those who can
exploit it. I am a great believer in getting the drivers in the
right place. I think that in the broad scene of intellectual property,
I would like to endorse the answers you got from the previous
witnesses in the sense of the importance of intellectual property
because within the Academy you will find different views about
the importance of legal protection versus the incentive to keep
ahead of the competitors. By and large it is exactly the same
as the previous witnesses were saying. If you are in a fast moving
business, wasting your time going through the legality of the
process is not the way you do it, you stay ahead and it is the
only way to go. If you are in a more stable business then you
look for protection and there are horses for courses. I would
say that I think I have wasted a considerable amount of time in
the legalities of intellectual property debates with universities
where it has been self-evident that the value of the intellectual
property was not going to be very great. What it does is to turn
it into an impediment.
263. Do you see any benefit in government agencies
retaining intellectual property as a means of generating income?
Would you expect people like DERA, who hold a lot of intellectual
property, to release it or keep it and capitalise it?
(Dr Mitchell) You gave us a larger question about
DERA, would you like me to move on to answer that question?
264. Yes.
(Dr Mitchell) I think that the broad answer is no.
When I look at the amount of money that is involved in the DERA
budget I think that it is self-evident there must be a large amount
of benefit for the UK to exploit. The Academy would strongly support
the diversification initiative but it is not entirely clear what
form that initiative should take. It starts with a statement of
principle. I note the contradiction at the front end, DERA is
very secretive, if you like, and conscious of the security issues.
When we actually get to the product development, we are perfectly
happy to embrace manufacturing companies. That seems to me complicated
because the more useful the product the more open we are prepared
to be. I think there is an a priori case that there is
something which can be improved here.
265. Do you see any way around the sorts of
impediments that property rights can generate in terms of simply
holding things up?
(Dr Mitchell) I think I need to separate two issues.
One is property rights and the other one is the DERA issue.
266. Perhaps I muddied the waters by using that
as an example.
(Dr Mitchell) In my industry, the nuclear industry,
we do share a common interest with the Ministry of Defence. I
find the discussions there slightly frustrating. There are actually
two barriers to exchanging knowledge. The first is that there
is a barrier where the people define what information they are
prepared to tell me exists. The second barrier, even when I know
it exists, is whether I can see it or not. This leads to a very
one sided debate. I cannot prove the point because I cannot talk
about what I do not know but I rather suspect that there are lots
of issues put into the national security area where I can work
out exactly what is going on from my technical knowledge of defence.
I think it is overplayed. Going back to answer the DERA question,
my view is somebody needs to take a critical look at what the
core business is in modern management jargon. What is it that
needs to be protected? That is the start of the debate. It cannot
be done from outside, people outside do not know. Then we go back
to the other question, the IP question, and say I think that in
terms of dealing with IP with universities in particular where
it is very much at the front end, it is often very unclear how
the IP will be exploited, what its real value is. I would go for
a quick and easy solution to the problem, almost a formula rather
than a debate because the debate is too esoteric in relation to
the knowledge.
(Professor Edwards) Might I make one point on Government
owning IPR. There is the case, for example, of the BBSRC institutes
where they have their researchers who do excellent research in
areas of relevance to BBSRC and the industry, they will patent
their work. I think to me it seems wrong to say they should not
benefit at all from that, there is clearly a question of balance.
I would not like a rule to say that those people that have patentable
activity should not benefit in some way. I think there is a need
to reward people for being creative and innovative. They will
have to let go of that to someone else to exploit it but I think
they should benefit in some way.
267. What effect do you think there has been
from the privatisation of a lot of what used to be government-owned
laboratories and research institutes, including the CEGB of course,
so I expect a full answer from you? What effect do you think this
has had on the contribution that those bodies would have formerly
made towards innovation?
(Dr Mitchell) Let me separate two things. Let me say
what I think is the Academy's view. I think it has a concern that
this is a substantial reduction in effectively the government-funded
R&D base of the country. I think it is true that all but BT
have substantially reduced their R&D investment as privatised
companies. Now if I switch to something that is my personal experience.
I had my early career in the research department of the CEGB,
indeed my final act in the CEGB was to divide the research assets
between the successor companies. After ten years of living in
a different world I have to say I have mixed views. It is not
all bad, there are some good things. When I look back to what
the CEGB was doing, it was actually setting itself up as a guardian
of energy policy, something that really was the province of what
was then the Department of Energy and today a sub-department of
the DTI. I do not think that was right. The other thing, looking
back, was that the CEGB found itself doing quite a lot of plant
research. The reason it did it was economic. With an industry
like the CEGB if plant is unavailable it begins to cost you large
amounts of money very quickly, so in order to protect against
this you pour resource into technically what was the manufacturer's
business. This is quite different from the way in which most of
the rest of the world operates where there are generating utilities
separate from substantially-funded plant manufacturers. You have
to get the drivers in the right place. It is much better to get
the plant right in the first place by putting the research with
the people who are designing it and building it than it is to
have it as a corrective action. In a sense you can say that the
break-up of the CEGB led to a step in that direction but I think
we did not do the second thing because the UK plant manufacturers
have actually gone into decline with the gas fired stations, so
it has not been picked up. Also I would say that the CEGB led
a number of technical subjects in this country, fracture mechanics
was an example. I think that was a loss to the UK generally and
even affected the university world because there were fewer people
in the outside world stimulating the university research. There
has been a significant loss to them.
(Professor Edwards) There is a feeling from all Fellows
that the loss of some of this research base is quite significant
in the UK.
268. So we may find ourselves paying for that
economically ten years down the line?
(Professor Edwards) Yes. I think those people that
still exist are looking at transferring what is currently there
rather than generating new technology.
Dr Kumar
269. In your submission commenting on Foresight
you said: "That which started as a good initiative has lost
speed and focus..." I am sure the Secretary of State would
disagree with you violently on that. Can you tell us what have
been the good things about Foresight at least and what changes
would you make because the next round is coming? What advice would
you give to the Secretary of State if you would like to see anything
different?
(Professor Edwards) It is difficult for the Secretary
of State to argue with perception. It is the perception of Fellows
that things could be done to build on a good start. We need to
improve the awareness, as we mentioned particularly in SMEs, and
I think give more clarity on the timescale of the exercise. This
is not a quick one-off exercise but a longer term activity. There
is not the awareness around everyone that that is the case. In
terms of improving, I think the next time around attention needs
to be paid to the cross-sectoral activity where much of this was
focused purely on single sector thinking. Generally I think the
feeling in the first scheme, although supported strongly by the
Academy and the second scheme will be, was that Foresight should
be seen as an umbrella which shapes the other activities and alters
the balance in the Research Councils' activities or the DTI activity,
not something which is there on its own but shaping the other
things, not in addition just to the other things. In those the
perception has not been put across as effectively as it might
be.
270. What are the good things that Foresight
has done?
(Professor Edwards) The good things would be clearly
the dialogue between industry and universities. Clearly industry
saying the sorts of things that it could do in the marketplace
if certain technology was available and academics then saying
what technology they think will be available. It is a matching
of what the marketplace could exploit and what the technology
base could offer. This is a very good activity and hopefully it
will address the sorts of things that Mr Beard mentioned earlier
where we missed major opportunities. This clear statement of what
could be exploited by industry and what is available in the university,
matching those is a very good thing. All companies to be successful
have done that for a long time. Companies like Unilever always
looked at what do the consumers want, what are the opportunities
in the marketplace, what technology can fill that gap, and then
matching the two. It clearly works in companies and there it is
a competitive activity. If we are better at that than our competitors
we win in the marketplace. I am not sure about how effective Foresight
is on a national basis for the country to do it. I can see why
companies do it, because it is making money for them to be good
at it, I am not sure about the national dimension of the exercise,
but it is still good overall.
271. You also mentioned funding. You said that
there was not enough money. If there is money how should it be
targeted next time?
(Professor Edwards) That is a view of some of the
Fellows that money is available in small sectors. Maybe this reflects
a disappointment. This was a separate activity that was going
to add a lot of funding. I think the perception is it has not
added a lot of funding and may have missed an opportunity to do
even more.
272. Would you target it specifically?
(Professor Edwards) My view is I think research money
should be much more closely targeted, whilst still doing blue
skies research, our 30 per cent. I think the rest should be very
targeted to areas where companies say that they can exploit the
technology. I would like to see a much greater focusing of the
larger sums of money on fewer projects for the UK really to make
advances in the few areas that it feels to be important.
Dr Jones
273. Do you think there should be greater emphasis
on disseminating the results of the Foresight process to, particularly,
small and medium sized enterprises?
(Professor Edwards) Indeed, of course. I think it
would help enormously, it is still early days, if there were some
quantitative measures of success and targets to aim for that can
be ticked off as one goes down the Foresight process. I think
that is not clear at present.
(Dr Mitchell) Within the Academy there is not a unique
view about the value of Foresight, I think some of that is reflected
in the comments in the written evidence. I can give you what I
admit is my view. The networks are fine but they are actually
too narrow and they are largely technically based. We are not
the people who have not heard of Foresight but I was not too surprised
by the answer that the previous witnesses gave to you. I think
arguably you see too much "technology push" in that
sense, the Sector groups are technical people meeting to decide
what the future of the world is. I see it as being analogous to
a corporate strategy. The evolution of a corporate strategy would
have a lot of market pull. The view of market pull would not be
confined to the technologists. The normal process of evolving
a company strategy is to look at the marketplace and look at the
technical capability independently and look for the gaps because
the gaps are where there is potential business. Looking forward,
I think, is an exercise that most major companies have developed
in one form or another. In the great UK tradition we come to Foresight
which is, in effect, creating a national strategy but we re-invent
the wheel, we start as though we have never heard of the idea
of developing a strategy, a well-established process in every
company. The other point I would make is that I do not think you
are ever going to spot the real winners because if anybody thinks
they have got a real winner they are not going to sit in a public
committee and tell you what it is.
Dr Jones
274. You mentioned the previous witnesses. You
heard what they had to say about EPSRC's funding Faraday centres.
Have you any comment to make on what they had to say?
(Dr Mitchell) This is small and medium enterprises?
The comment I make on the Faraday centres is the link that they
are looking to make in the small and medium sized enterprises,
is that it?
275. No, they were specifically suggesting there
was inadequate funding and maybe the EPSRC should not have gone
down that route.
(Professor Edwards) My experience is that there is
not a lot of funding. It is a good vehicle for bringing together
universities and their local small and medium companies, that
is good. From my experience the funding is limited to the occasional
research studentship which is three year support for a research
worker and that is generally not what small companies need. Do
all companies need three years' research? Probably not. I think
it is one of a range of things in its early phase and we need
to look at it to see how it grows and help it to grow, grow the
good things about it.
Mr Beard
276. Do you think the newly-proposed Defence
Diversification Agency will have better access to defence-related
research of the engineering industry?
(Dr Mitchell) I think I answered many of the points
a few minutes ago. I think that the aim should be to ensure that
it does because I think that there is so much investment there.
I think that the views in the Academy as a whole are that it favours
the initiative. Those who come from the defence sector are concerned
that it does not destroy existing relationships by being too radical
before the process is understood. I think most are anxious but
believe that you can get two way benefit. They believe in some
areas the external world is ahead of the defence world, you can
get a useful input into the defence programme by entraining a
load of ideas. They also believe that there is work that is being
done within DERA's activities that could well be discharged by
other parties. They are concerned that the formula which has been
invented could put DERA into a privileged position in competing
on the basis of substantial investment made for another purpose
against them in another marketplace. I think there are legitimate
concerns but there is an anxiety to get it right. Because of the
security issues you can only get it right from inside because
the outside world does not see the total picture.
277. Is your judgment that it will be got right
or are there obstacles?
(Dr Mitchell) I think it is a matter of determination.
I gave my answer before. I would start by taking a critical review
of what is the core business of DERA in terms of national security.
It is my belief that a billion pounds entrains a lot of things
which would not be legitimately within that core. I cannot prove
that point, it is just a lot of money. If you look at what most
other companies are doing today, most companies are concentrating
on their core business and saying: "That is my business,
that is what I do well, I do not want to do the peripheral thing
because somebody else is structured to do that". I think
that kind of approach has to come from within and it has to be
instructed from on high. There is no way the external world can
deliver that solution.
278. Do you see then that the existence of the
Diversification Agency is likely to change the relationship between
government and private research in the engineering and physical
sciences field?
(Dr Mitchell) I think it would be very disappointing
if it did not at the end of the day.
279. Which way would you expect it to change?
(Dr Mitchell) I think I indicated that, I think you
can get benefit in both directions. I think you can get involvement
of industry in the defence programme, it could be a wider benefit.
I think you can get benefit in defence by bringing ideas from
outside that are excluded because you have a stable in-house organisation
building itself as—excuse the word—something of a
dinosaur, organisations that live for a long time. I have seen
the problems before, know what the answers are and you need somebody
with new input from time to time.
(Professor Edwards) There was a concern from the Academy
looking at the proposals for the Diversification Agency that in
fact the value of transferring technology out into other companies
might not be all that high.
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