Select Committee on Defence Minutes of Evidence

Examination of Witnesses (Questions 220-228)


28 FEBRUARY 2006

  Q220 Mr Hancock: You said 30% of your effort is now directed to the American market. What proportion of that 30% is carried out here in the UK?

  Sir John Chisholm: The majority of the volume of work is done in the US, but the research part of the work is done predominantly in the UK.

  Q221 Chairman: You drew a contrast earlier when you were talking to John Smith about the approach of the Defence Industrial Strategy to the manufacturing sectors and that to research, technology and innovation. Could you describe that contrast?

  Sir John Chisholm: In allocating government funds in the civil research sector, which are predominantly allocated by the OST, their policies have become strongly focussed upon placing the work in the country's strongest research centres; that is a clear policy. There is not such a policy yet, for the reasons that we have described, in the UK because the Defence Industrial Strategy has not yet got to that stage. What we are articulating in our evidence is that we would have expected a policy of that sort to emerge both because it is consistent with what the government's policy is on the civil side and also because it is consistent with the rest of the DIS. When the DIS comes to consider other sectors the DIS says that in order to preserve sovereignty and the ability of the UK to provide the Armed Forces with the best products it should focus upon the areas of real capability in the country.

  Q222 Mr Havard: Are you familiar with this concept, which I am only just grappling with, that Lord Drayson came out with about technology trees? It seems to me that the technology he seems to be describing starts fundamentally at the university level and then the laboratories will feed into it and then the SMEs, up to the prime who will deliver the product. That is the production process, turning a concept into a process. The research part of that is implicit in it. Are you familiar with this concept?

  Sir John Chisholm: I am familiar with the concept.

  Q223 Mr Havard: Is that something that is going to drive this research and technology sub-strategy?

  Sir John Chisholm: It relates to the answer I gave to Mr Hancock earlier on, that in order to get from niches of technology into something which is useful to soldiers, sailors and airmen at the end of the day you need an integrating process and this is the tree that you referred to. We play a role in that tree in bringing together technologies from the niches at the bottom end, some of which we do rely on our laboratories for but many we source from other people and we bring that together into technologies which we ourselves insert further up the tree into the equipment suppliers who often then insert that into the prime contractors and the systems of systems integrators. So there is exactly that tree where we play a role which is near the bottom but not at the bottom because below us are the niche providers in the SMEs and in the universities.

  Q224 Mr Havard: So that is going to generate in part the whole question about the placing of the funding and the processes that go with the whole process then. Is that what I am going to see out of a strategy that comes from research and technology?

  Sir John Chisholm: I assume that that will inform the strategy.

  Q225 Mr Hancock: This question is about the relationship between your US customers and the British side of the organisation. We are constantly told about the problems of technology exchanges and the restrictions that the Americans put on it. Are the same restrictions being put on you with regard to British-based technology and the way you can share that with the Americans?

  Sir John Chisholm: We have to seek export licences.

  Q226 Mr Hancock: Is that easier for you to get for the UK than it is for you to get from the US to bring it to the UK?

  Sir John Chisholm: I would just make a general comment. My perception is that it is an easier process to go from the UK to the US than from the US to the UK, absolutely.

  Q227 Mr Hancock: Is that going to cause you problems as more of your market is in the United States?

  Sir John Chisholm: We have a huge capability in the UK and nowhere as strong a capability in the US. So our strategy is very much focused on serving our UK customers and also serving US customers from the UK. That is good for the UK. Our predominant technology flow is in the direction from the UK to the US. That is an issue for us because it sometimes limits our access to the US and it limits what we can do in the US.

  Q228 Chairman: Sir John, thank you very much indeed. Is there anything you would like to add to what you have said or do you think that in your memorandum and what you have been able to say today you have covered the ground?

  Sir John Chisholm: You have been very generous with the time you have allocated to me, Chairman. I am very happy.

  Chairman: Thank you very much indeed for your evidence.

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