Examination of Witnesses (Questions 681
- 699)
MONDAY 10 MAY 2004
PROFESSOR DUC-TROUNG
PHAM
Q681 Chairman: Welcome, Professor.
For the record, could you introduce yourself and tell us what
you do?
Professor Pham: Yes. My name is
Duc Pham. I am the Director for the Manufacturing Engineering
Centre of Cardiff University. I am also Professor of Manufacturing
Engineering.
Q682 Chairman: Can you tell us the
rationale behind the establishment of the engineering centre and
how you attracted funds to set it up?
Professor Pham: The Manufacturing
Engineering Centre is an R&D centre that does applied, strategic
and also basic research in the field of advanced manufacturing.
We established it because in Wales there were no such centres,
and there is a need for such a centre to support local industry
as well as industry across the UK.
Q683 Chairman: The funding?
Professor Pham: We are receiving
funding from all sources. The National Assembly gives us quite
a substantial amount. That is money from Europe, Objective 1/Objective
2 funding. We also receive funding from central government. This
is competitive funding, like EPSRC (Engineering and Physical Science
Research Council) Funding. There is DTI funding, and as well as
funding from Europe directly, the various framework programmes.
About a third of our funding comes directly from industry as well.
Q684 Albert Owen: In your submission
to us you say that the MEC has attracted more than 200 industrial
partners. Can you tell us how many of those, or what percentage
of them are based in Wales?
Professor Pham: A large number.
I cannot give you an exact percentage. I can try and find that
out later for you. It is a large number of Welsh SMEs.
Q685 Albert Owen: Are those across
Wales?
Professor Pham: Yes, although
we tend, because of our location, to work closely with companies
in the east and south-west of Wales.
Q686 Albert Owen: Do you have a partner
or satellite within other parts of Wales dealing with other SMEs?
Professor Pham: Not at the moment,
but we have applied for funding for the continuation or extension
of our Superman project, and if that funding is given we intend
to set up an organisation in North Wales.
Q687 Albert Owen: Can you give us
a flavour of how these partnerships are set up and how you interact
with industry? Do you go looking for these companies, or do they
know about you, or do you advertise and they come to you? How
does it work?
Professor Pham: In several ways;
we have a multi-faceted marketing exercise that works with the
Web. We have a marketing unit at our centre that publishes newsletters
on a quarterly basis, distributed to 2,000 organisations in Wales
and across the UK. Then we have people going out to visit companies,
selling our services and also helping companies. Then there is
word of mouth: our partners tell other people, and they come to
us. There are several ways of marketing our work.
Q688 Albert Owen: You mentioned Objective
1 in your response and the fact that you are going to set up a
satellite in North Wales. Do you think you are under-represented
there? Is that why you are going up there, because not many people
in the north or in other parts of Wales outside the south-east
are aware of you in the same way that local companies are?
Professor Pham: I think they might
be aware of us, but because of the communication difficulties
they would perhaps find it easier to work with other places like
Liverpool and the north.
Q689 Mr Edwards: Of the £25
million in grants that you receive, how much is from the public
sector and how much is from the private sector; and do you think
the balance is right?
Professor Pham: I think roughly
30% is from the private sector, and the rest is from the public
sector. In order for us to be able to continue our advanced research,
public funding is needed. The private sector would not pay for
the long-term advanced research; it would pay for solution of
short-term problems, or medium-term problems at most. For us to
continue to be able to work on advanced problems and advanced
technologies that would help companies in the future, then we
need public funding. I think the balance is roughly right.
Q690 Mr Edwards: Given the expertise
you have, if companies make greater profits as a result of your
input, do you get any share of that profit?
Professor Pham: We have such arrangements
with companies. If companies come to us, they could come to us
in several ways. One way could be to get very short-term help,
and that would be free. That is one of our missions, to give free
assistance to companies that qualify—SMEs in the Objective
1 area for instance. By short-term help I mean about two days'
free assistance to companies. If they come for longer projects,
they pay at a subsidised rate, and after that they owe us nothing,
apart from paying us for the work; so they do not have to share
profits with us. The third way is for companies to come to us
for a long-term project. It depends how much they pay. If they
pay fully, then all the results belong to them. If they pay less
than the full amount, the economic amount, then there are arrangements
with our university for sharing intellectual property rights.
We do not have companies where such rights have had to be shared
and money has arisen from such projects here.
Q691 Mr Edwards: Do you act for companies
outside Objective 1 areas?
Professor Pham: Normally. So far
we have charged them fully, so we do not share profits with them.
Q692 Julie Morgan: Can you tell us
from your experience what are the main strengths and weaknesses
of manufacturing in Wales?
Professor Pham: May I start with
the weaknesses first? In Wales we do not have many large manufacturing
companies. We have mainly SMEs. That means that there is not a
strong R&D base in Wales. Because of that, then our centre
becomes important. If there are many large companies, all of which
have R&D, then maybe they do not need us, but because there
are many, many SMEs in Wales that do not have R&D facilities,
they can come to us; and because of that there is more funding
for us to help these SMEs. That is a strength for us; I am not
sure whether it would be a strength for Wales. On the other hand,
I know that the Government tries to encourage SMEs because they
form the fabric of industry. Wales already has a lot of SMEs,
and that could be regarded as a strength.
Q693 Julie Morgan: You are saying
that what could be regarded as a weakness, lack of R&D, is
a strength because your services are needed.
Professor Pham: Yes.
Q694 Julie Morgan: You are also saying
that the number of SMEs in Wales is a strength.
Professor Pham: Yes. Large companies
can fold up, and if one large company folds up, then you lose
all the jobs for that company. Large numbers of SMEs do not fold
up at once, so you have more robustness. That is what I mean by
strength for Wales.
Q695 Julie Morgan: Are there any
other strengths and weaknesses you would identify for manufacturing
in Wales?
Professor Pham: Yes. Traditionally,
Wales had heavy industries like steel and coal. The skills from
those industries are now available because, for instance, there
is no coal industry in Wales. So the infrastructure is there.
If companies from outside want to come and set up shop there,
they are not short of skilled manpower. I do not think this will
last for long. The people from those industries will grow old,
and will obviously need to be replaced; but for a while this skilled
manpower still exists. That is also a strength for Wales.
Q696 Julie Morgan: What about communications?
Professor Pham: Do you mean communications
as an industry or communications between north and south?
Q697 Julie Morgan: The second.
Professor Pham: That is a difficulty,
yes. Going from where we are to the north takes three and a half
to four hours. Whenever one of our colleagues goes up there, at
least a day is spent travelling up and down. It is more expensive.
People tend not to go as a result; or our colleagues have adopted
the approach where they try to make several appointments before
they go, in order to save time. Communication is a problem; you
are right.
Q698 Mr Edwards: Can you say something
about your own background and how you were appointed to this present
position?
Professor Pham: I am Vietnamese
by birth. After I finished my high school, I went to New Zealand
with a scholarship to study in New Zealand. I did all my studies
there, and I was appointed to a lectureship at the University
of Birmingham, where I stayed for nine years. Then I came to Wales
as a professor in 1988.
Q699 Albert Owen: To take you back
to the north/south divide, surely for hi-tech industries the Internet
is a useful tool and would save on travelling? Are you saying
that the broadband system within Wales is not sufficient at this
time?
Professor Pham: There is a certain
amount of communication you can do, quite a lot that you can do
electronically; but face-to-face meetings are always important
for business, and you have to see people at least once or twice
in person. That is where the distance and the lack of quick roads
and motorways is a problem.
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