Technology Innovation Centres

Written evidence submitted by Society of Motor Manufacturers and Traders (SMMT) (TIC 64)

TECHNOLOGY INNOVATION CENTRES

About SMMT

1. The Society of Motor Manufacturers and Traders (SMMT) is the leading trade association for the UK motor industry, providing expert advice and information to its members as well as to external organisations. It represents companies throughout the automotive sector ranging from vehicle manufacturers, component and material suppliers to power train providers and design engineers. The motor industry is a crucial sector of the UK economy, generating a manufacturing turnover of £51 billion, contributing over 10% of the UK’s total exports and supporting around 800,000 jobs.

2. SMMT welcomes the opportunity to respond to this inquiry into Technology Innovation Centre s (TICs) and would be pleased to provide further information on issues raised in this submission.

Summary of comments

3. In summary the automotive industry supports the formation of TICs and calls for:

· The a utomotive i ndustry to be a priority area for the formation of a new Technology Innovation Centre – building upon existing work of the Automotive Council, together with the TSB, to identify low-carbon technology opportunities and strengths within the UK.

· Adequate funding for both the establishment and con tinued investment in TIC s to ensure a real contribution to rebalancing the economy and future sustainable growth .

· Limited funds to be targeted to areas of best value for money – such as the areas of world leading expertise in the UK identified by the auto motive industry.

· Clarity over future continued funding for TSB innovation competitions – TIC funding should be additional to the previous work of the TSB no t instead of if UK competitiveness for R&D and innovation is to be improved.

Introduction

4 . In September, the Centre for Economics and Business Research (CEBR) published an SMMT commissioned report on R&D, investment and credit in the automotive sector. Th e paper reflected on the significant investment auto motive companies make in the UK. The report also found that the UK is behind other countries in supporting investment which is intrinsically liked to long-term g rowth . The role TICs can play as a n additional tool to help leverage investment in innovation in the UK is important and the committee sh ould consider their competitiveness in comparison to not just the Frau nhofer Institutes , but similar initiatives in other European member states and globally.

5. As a global industry we have relationships between automotive businesses and academia in many countries around the world . There is significant global competition when business decisions are made on which country they should invest in to undertake innovative research and development. The automotive sector is well-placed for a TIC and it would be an additional factor influencing the attractiveness of the UK as a place to invest and as a place to do business. The world-class research undertaken by the automotive sector in the UK, and its readiness at the forefront of low-carbon technology development (see paragraph 11 ), give us a strong basis for further development and investment opportunities.

A focus on growth

6 . The coalition government has recognised the need to rebalance the economy and the need for private sector investment and job creation. As a dynamic and globally competitive industry, the automotive sector sees itself as key to achieving this a mbition . The automotive industry is a significant part of the economy and a contributor to prosperity and growth , exporting more than 75% of domestic production and generating revenues of £55 billion .

7 . Government initiatives, such as Regional Growth Funds and TICs are welcomed by industry. However, it is essential that government and industry work together to identify the priority needs and maximise the impact of the fund. It must be ensured that limited funds are not spread too thinly but targeted and focused where they can have the biggest impact.

The Automotive Council – identifying priority technologies and targeting support

8 . The UK Automotive Council represents a strong collaborative partnership between industry and government ; and has established a clear, long-term strategy for the UK automotive sector. It seeks to make the UK a leading player in the transition to ultra-low carbon vehicles with particular emphasis on encouraging R&D and rebuilding the UK supply-base for current and emerging technologies.

9. The Automotive Council’s Technology Group has developed a long-term technology roadmap that represents a shared vision of manufacturers and suppliers in the UK of how new innovations in r educing CO 2 will come to market [1] .

10. The Technology Group, together with the Technology Strategy Board (TSB) has utilised this roadmap as a basis to eva luate which areas of future low carbon technology the UK has the greatest expertise in, when compared to other global automotive producers [2] . Th is evaluation incorporated the views of global automotive manufacturers, suppliers and SMEs – the future purchasers an d suppliers of this technology.

11. The headline technology the Council identified the UK as well placed for globally, include:

· Internal combustion engine (ICE)

· Energy storage and energy management

· Lightweight vehicles and powertrain structures

· Power electronic and electrical machines

· Intelligent transport systems (ITS )

12. The report also went further, highlighting where in the sub-technologies for each area, the UK has expertise to bring leading technologies to market in the short, medium or long-term if competitive levels of industry and public sector investment are secured. The shorter term strengths relate to where expertise is already within manufacturers or the supply chain. The medium to longer term expertise sits across industry and/or UK academia.

13. SMMT believes this collaborative effort of the automotive industry, government and its agencies provides an excellent basis for the development of a TIC to support opportunities in the UK auto industry. It is a sectoral approach and a basis for directing funding to areas of highest potential for the UK. The UK automotive has significant potential for greater collaborative working, research and development.

Funding and resources of the Technology Strategy Board

14 . In 2011, the Automotive Council Technology Group will complete work on funding and academic partnerships; focusing on the development of collaborative projects and partnerships. Industry already has extensive experience of working with a range of partners, for example through TSB competitions , which bring together companies of all sizes and academia , with significant value-added outcomes for industry.

15. SMMT is concerned that the level of funding the TSB will have for collaborative research and future technology competitions is still very unclear. Over the last 4 years, through its Innovation Platform Programmes these have made a very significant contribution to UK industry with relatively modest sums. For instance the most recent major TSB competition secure d the development in the UK of three new plug-in hybrid vehicles by Lotus, Nissan and JLR.

16. The delivery of TICs should be additional to and not instead-of continued TSB funding of innovation competitions.

17. Another concern is the adequate resourcing of the TSB in terms of people and funds to take on the responsibility and initial funding for TICs as well as their core programmes. In addition the TSB is also being asked to take on the previous role of the R egional D evelopment A gencies (RDAs) in supporting innovation investment at the sub-national level . Resourcing must reflect this expanded remit.

SMMT

02 December 2010