Memorandum by the Engineering and Technology
Board
The Engineering and Technology Board (ETB) welcomes
the opportunity to submit written evidence to the inquiry. The
ETB is an independent organisation that promotes the essential
role of science, engineering and technology in society. The ETB
partners business and industry, Government and the wider STEM
community:
— producing evidence on the state of
engineering,
— sharing knowledge within engineering,
and
— inspiring young people to choose
a career in engineering, matching employers' demand for skills.
We have confined our comments to Section A.
"The current state of the Single Market", specifically
the question "Should there be a greater role for technology
and research in facilitating the Single Market?"
1.0 Over the last 25 years research has
been carried out and technology developed by member states under
the Framework Programme. This initiative has generated widespread
networks of collaborators from universities and industry through
pre-competitive research projects, often involving staff interchanges
and hence significant transfer of knowledge and skills.
1.1 The seventh Framework Programme is now
in the early stages of calling for submissions. It has evolved
from the earlier programmes and now operates at three levels depending
upon the size of the initiative. The largest projects, under the
level 3 Joint Technology Initiative, can be over one billion euros
in value with half of this contributed by the industry partners.
1.2 Considerable effort is required to put
together consortia for projects of this size across many states
and through a complex supply chain. This is justified for the
larger projects but cumbersome for the smaller ones.
1.3 Some sectors, such as aerospace and
information and communications technologies (ICT), have been particularly
proactive in developing the strategies that underpin the programme.
The research is thus well-targeted and there is a concurrence
of objectives between partners. A downside of this is that it
may be difficult for new partners to join in.
1.4 Other sectors such as marine and rail
are following the aerospace lead to form Technology Platforms.
RESEARCH
2.0 The Framework Programme has strong support
from the research community, though funding at the 50% level can
preclude the participation of research companies who can find
it difficult to obtain matching funds. It is accepted, however,
that the 50% funding rule is required by WTO rules.
2.1 Engineering Departments in UK Universities
are very active participants in the Framework Programme which
forms a significant part of their research portfolio. The research
tends to be applied, rather than "blue skies" and calls
for significantly more reporting and project review than other
programmes.
2.2 While the benefits of the collaboration
between universities and business are highly valued there are
concerns about the relative attractiveness of Framework projects.
The level of indirect costs that can be claimed by the university
partners is, however, often cited as insufficient to cover the
full costs so that a department could not function on this class
of research alone.
2.3 This apparent disincentive results in
a lower priority being given to projects in the Framework programme.
Funding from other sources, which provide the full economic costs,
for basic research is highly competitive, highly esteemed and
may be attracting our best researchers. Hence, opportunities for
transitioning basic research into applied research and technology
development are being missed.
2.4 This is being addressed to a greater
extent in the Seventh Framework programme. There is, however,
still a deficit that, it may be argued, could be effectively filled
by top up funds through the Research Council. We recommend
that consideration should be given to the Research Council providing
such top up funds.
2.5 This Framework Programme is complemented
by an increasing mobility of students and researchers, UK universities
offering studentships in engineering receive many high quality
applications particularly from the new member states. This can
be taken in conjunction with data from the Higher Education Policy
Institute (HEPI Report 31, June 2007) which cites that the UK
attracts more European Union students than any other member state,
with almost 60,000 in 2005-06 and a 15.5% increase in applicants
for 2007, according to UCAS. This is particularly important for
the UK university system since we face a demographic downturn
of over 10% in the number of potential students in the 18-20 age
group from now to 2020.
2.6 Thus, much has been done and there is
a clear momentum in developing and transferring technology with
the member states, with the UK playing a leading role in exploiting
its intellectual science and technology assets.
GOVERNMENT'S
ROLE IN
STIMULATING INNOVATION
3.0 However, the generation of knowledge
and technologies is not enough to create a competitive Knowledge
Economy. Other nations, particularly the US have programmes that
are more effective in exploiting technology in order to support
an ever increasing standard of living for its citizens.
3.1 While the UK has developed mechanisms
for improved technology transfer, such as the DTI's Knowledge
Transfer Partnerships scheme, it is generally regarded that the
United States programmes that support the generation and scale
up of small businesses that have grown into some giant corporations
are unmatched in Europe.
3.2 It is generally regarded that more intelligent
use of procurement in stimulating the exploitation of new technologies
is an essential building block of a competitive Knowledge Economy
both in the UK and Europe. The United States are world leaders
in this while we still seem to be talking about it rather than
exploiting the opportunity. In the UK alone Government procurement
stands at about £150 billion per annum. We recommend that
the Government earmarks a small percentage of this in strategic
technologies and sectors (such as energy and technologies associated
with mitigating the effects of climate change) to provide the
stimulus for a step change in the growth of new technology based
businesses.
SUPERCOMPUTING
4.0 One area of technology where there is
a clear gap in Europe compared to other nations is in the access
to supercomputing facilities. These facilities are essential to
support the whole eco-system formed by our technology based companies.
Over the last twenty years or so the dependence upon large physical
infrastructure, such as large scale wind tunnels and test facilities
has declined to very low levels. Simulation generally replaces
the need for these. European industry is at a real disadvantage
compared to competitors in terms of access to large scale computing
power. We recommend that European businesses' access to new
world class European supercomputers is increased.
DUAL USE
TECHNOLOGIES
5.0 The United States has a very large defence
budget which, among other things, supports the generation of technologies
that are exploited for both military and civil commercial benefit.
These are sometimes called Dual Use Technologies. The European
Union does not have a budget on this scale nor does it create
technologies through this route on anything like that of the United
States. This is a missed opportunity for a Europe wide market.
We recommend that consideration is given to how Europe could
learn from the United States' success in this the encouragement
and exploitation of dual use technologies.
STIMULATING GROWTH
IN NEW
MARKETS
6.0 While the Framework Programme has been
hugely successful in generating new technologies into existing
markets there is a potential problem with new technologies (perhaps
nanotechnologies are an example) where there is not an existing
market. We recommend that, in parallel with the development
of these technologies, thought is given to what steps might be
taken to seed and stimulate the growth of these new markets, including
the aforementioned use of procurement.
THE LISBON
AGENDA
7.0 An economic action and development plan
for the European Union was set out by the European Commission
in 2000, the Lisbon Agenda. The aim was to address the
low productivity and stagnation of economic growth across the
European Union with a view to making Europe the most competitive
and most dynamic knowledge-based economy in the world by 2010.
The ambitious goals were to raise economic growth by 3% across
the European Union, and to increase employment rates to 70% of
the population by 2010.
7.1 A mid term review in 2005 indicated
that the European Union was failing to meet the 2000 targets and
economic growth rates in the European Union were only 1.6% in
2005 compared to 3.46% in the USA and 10.2% in China. The targets
were then revised to focus on the economic context only. The target
of investing 3% of GDP in research and development was maintained,
while the United Kingdom reduced its own target to 2.5%.
7.2 There appears to be a lack of incentive
for industry to invest in research and development up to these
levels. A key role of the new Technology Strategy Board will be
to help the UK meet its 2.5% target, within the context of the
relatively low economic growth in the European Union.
7.3 Related to this is the apparent lack
of focus on skills in the UK and European Union member states'
technology strategies. While the UK seems to be maintaining the
level of young people entering science, technology, engineering
and mathematics degree courses, anecdotally, this is not the case
throughout Europe. If the UK, for example, were to increase its
research and development spend by 50% then there will be a large
increase in employment opportunities in engineering and technology
and a lack of skilled people in the pipeline to fill the vacancies.
7.4 Thus the consequence of the Lisbon Agenda
would be the need for a coordinated approach in the promotion
of careers in the engineering and technology sector. This should
be as part of an integrated approach to innovation rather than
focussing simply upon a technology centric economic policy. That
is, the bringing together of technology and the associated skills
to apply and exploit it. We recommend that the next Framework
concentrates on exploitation routes for technologies developed
by the networks generated by previous Frameworks.
3 July 2007
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